<PAGE>
[LOGO]
CENTURA LARGE CAP EQUITY FUND
CENTURA MID CAP EQUITY FUND
CENTURA SMALL CAP EQUITY FUND
CENTURA GOVERNMENT INCOME FUND
CENTURA NORTH CAROLINA TAX-FREE BOND FUND
CENTURA MONEY MARKET FUND
ANNUAL REPORT
APRIL 30, 1999
<PAGE>
TABLE OF CONTENTS
Message From Your Chairman
Page 2
Large Cap Equity Fund
Page 6
Mid Cap Equity Fund
Page 13
Small Cap Equity Fund
Page 21
Government Income Fund
Page 28
North Carolina Tax-Free Bond Fund
Page 34
Money Market Fund
Page 41
Notes to Financial Statements
Page 45
Independent Auditors' Report
Page 53
1
<PAGE>
DEAR SHAREHOLDERS:
We are pleased to present this report for Centura Funds' fiscal year ended
April 30, 1999. In addition to solid investment performance, this past year
provided a renewed focus and significant enhancements for Centura Fund
shareholders.
A YEAR OF POSITIVE CHANGE
Our intent to more sharply focus certain Centura Funds and to enhance the
Funds' overall functionality as an integrated family of investments was
reflected in additions and changes made this past year. June 1, 1998 the Centura
Money Market Fund began operations, providing a cash equivalent option for
Centura Fund shareholders. August 1, 1998 the Centura Equity Growth and Equity
Income Funds became the Centura Mid Cap Equity and Large Cap Equity Funds.
The Mid Cap Equity Fund invests primarily in medium sized U.S. companies and
targets the S&P MidCap 400 Index as its performance benchmark. The Large Cap
Equity Fund invests in large U.S. companies and targets the S&P 500 index as its
benchmark. These changes better define these Funds and help eliminate potential
overlap in holdings. For our shareholders this provides better diversification
potential and may help provide greater relative investment consistency.
Targeting specific investment classes and benchmarks also allows shareholders
and investment advisors to better employ asset allocation strategies and make
more substantive performance comparisons.
Recent events further our intent to provide integrated, clearly defined
investment options. Changing the name of the Federal Securities Income Fund to
the Centura Government Income Fund more clearly reflects its investment policy.
The addition of the Centura Quality Income Fund* fills an important segment in
our investment lineup. And finally, the conversion of the Southeast Equity Fund
to the Centura Small Cap Equity Fund further solidifies our positioning of
Centura Funds as a family of investments.
The change in name from Federal Securities Income to Government Income Fund
is purely a name change and does not affect the investment policy of the Fund.
The change is intended to more clearly reflect the nature of the Fund. It will
continue to invest primarily in U.S. Government securities with maturities no
greater than 10 years.
The Centura Quality Income Fund* seeks current income and capital
appreciation by investing in a diversified portfolio of investment grade fixed
income securities. As we anticipate this Fund maintaining a higher concentration
of non-government securities and a longer average maturity, it is positioned as
a more aggressive fixed income offering relative to the Centura Government
Income Fund. The Quality Income Fund* targets the Lehman Brothers
Government/Corporate Index as its performance benchmark.
Given that the Centura Southeast Equity Fund has historically invested in
small company stocks, its transition to the Centura Small Cap Equity Fund is a
more subtle change than it may appear on the surface. The greatest impact of
this evolution is the removal of the geographic boundaries that constrained the
Fund. While it may continue to invest in those companies "in our own
Southeastern U.S. backyard," it may now also take advantage of small company
opportunities outside our region. In addition to better defining this Fund as a
complimentary, core investment option, we believe this move provides enhanced
potential for diversification and performance. Going forward, the Centura Small
Cap Equity Fund will target the S&P SmallCap 600 Index as its performance
benchmark.
EQUITY MARKETS
It is likely that the period encompassed by our fiscal year will be
remembered as a significant milestone, with the Dow crossing the 10,000 mark.
Less likely to be remembered, but probably more important to investors, was the
stark contrast in performance between various sectors, investment styles, and
capitalization tiers of the equity market. While highly visible market advances
have continued in large company stocks, the small and mid sized companies have,
on average, yielded lackluster or even negative returns. It has truly been a
market of haves and have-nots.
For the 12 months ended April 30, 1999 the Dow was up 21.10% for the year
with the S&P 500 Index providing a total return of 21.82%. This contrasts with
smaller company indices. The S&P MidCap 400 Index was up a mere 6.43% for the
year and the S&P SmallCap 600 Index was down 14.29%. Characteristic
of this period was the out-performance by growth indices over value, and
large-caps over mid and small-caps. Also characteristic was an ever-shrinking
list of stocks participating in the market's advance. Things couldn't have been
better for blue chip investors. Inflation, real economic growth, real income
growth, consumer sentiment, pandemic corporate enthusiasm, productivity,
consumer spending, capital spending, employment, unit labor costs, and interest
rates, all seemed to benefit blue chip investors while leaving the rest of the
market behind.
- -------
*Commenced Operations June 10, 1999.
2
<PAGE>
The rare exception to the breakaway performance of large company stocks
occurred in the last month of our reporting period. April, 1999 saw significant
out-performance by mid and small cap stocks with the S&P MidCap 400 and SmallCap
600 indices providing one month returns of 7.89% and 6.61% respectively. This
compared to the S&P 500 Index's performance of 3.87%. While this event did not
make the headlines, it could be a harbinger of things to come. At the very
least, it demonstrates why we feel it is important to offer distinctly different
investment options, and why we feel investors should consider a diversified
investment allocation, despite recent history.
FIXED INCOME MARKETS
Interest rates increased significantly during the first 4 months of 1999.
The yield on the two year Treasury increased by 52 basis points from 4.53% at
December 31, 1998 to 5.05% at April 30, 1999. The yield on the 30 year Treasury
increased by 57 basis points from 5.09% on December 31, 1998 to 5.66% on April
30, 1999. Because interest rates and bond values move in opposite directions,
increases in rates are bad news for the bond market. Most of this increase was
in response to a fear that the Fed would have to raise rates to keep the economy
from overheating. While we feel that this fear may have been overblown, you
always have to respect what the market is telling you.
Economic growth, as measured by Gross Domestic Product (GDP), was up 4.5%
for the first quarter. This is well above the Fed stated target range of 2.5% to
3%. The unemployment rate for April fell to a 29 year low of 4.3% and oil prices
have been increasing over the last few weeks. These indicators, signaling
accelerating economic growth, tight labor markets, and increasing energy prices
typically create inflationary fears and increase the likelihood of a rate
increase by the Federal Reserve.
On the other hand, other economic indicators help decrease inflationary
fears, and thus the fear of a tightening by the Federal Reserve. The most
recognized indicator of inflation, the Consumer Price Index, continues to show
no sign of increasing prices. Industrial commodity prices are also flat.
Additionally, gains in productivity seem to be keeping wage increases modest.
In conclusion, we expect long term rates, as measured by the 30 year U.S.
Treasury bond, to range between 5.25% and 6.00% for the next few months. We
still expect the short end of the yield curve to remain unchanged until the
latter part of the year. After that, we expect that the Fed may have to raise
short term rates to cool off a very strong economy.
LOOKING FORWARD
World financial markets could well be on the mend. Three main forces are at
work: the healing of the global economy, the lack of any meaningful
interest-rate pressures, and an ever-powerful world liquidity cycle. There has
been a strong rise in the NAPM New Export Order Index in the past three months
and even industrial materials' prices appear to have stopped falling. This is
important to point out because the extraordinarily poor relative performance of
the industrial cyclical sectors since mid-1997 can be largely explained, in our
opinion, by the emerging-market debt crisis. It is no accident that throughout
most of this time, the Purchasing Managers' Index of manufacturing exports
deteriorated. The NAPM's New Export Order Index peaked in July 1997 and declined
into the fourth quarter of last year. In the same period, industrial materials
prices collapsed almost 30%. To be sure, cyclical stocks are also responsive to
the domestic economy, which of course has done very well in the past six
quarters. But even here we would argue that the ongoing global malaise has kept
U.S. economic growth expectations in check. Thus the case for a recovery in
industrial cyclicals rests to a large extent on what happens abroad and it is
encouraging to see signs that the macro underpinnings for world financial
markets are definitely improving. If history is any guide, a recovery in the
cyclicals should lead to a broadening of the market's performance, both in terms
of large versus smaller companies and in terms of value indices versus growth
indices. It is noteworthy, however, that the cyclicals have rallied in the first
half of each year since the early 90's only to have cold water thrown on their
party in the second half of the year. As for the domestic economy, instead of
pointing to any slowdown that would adversely affect economically sensitive
sectors, key leading indicators such as the money supply continue to point to
very strong growth into early next year. The advent of the year 2000 should
itself contribute to real GDP growth. Even companies that are now close to Y2K
compliance will still begin to accumulate work-in-process inventories in the
second half of the year, just in case their smaller or foreign suppliers meet
with computer difficulties that might delay necessary shipments. In our opinion
this could be one of the factors which has recently been putting upward price
pressures on a broad list of industrial materials. Since industrial stocks
generally do well as industrial prices rise, there is a good chance that they
will perform well in the second half of the year for the first time since 1986.
Remember that 1986, as now, was a period of recovery for global energy prices.
The above thoughts point to a rosy scenario, but it has been said that we
investment professionals are paid to worry so let's consider some of the factors
which could derail the recent parabolic moves in the indices. On an
international front, three risks are
3
<PAGE>
emerging. First, economic growth rates for Europe have been cut sharply, from
2.5% eight months ago to something between 1.5% and 2.0%. Europe represents
roughly 15% of S&P 500 profits versus 5% to 6% from Japan/Asia and 3% to 4% from
Latin America. A pronounced slowdown in Europe could put at risk earnings
forecasts for the S&P 500 this year (keep in mind the recent rate cuts by
several European Central Banks, which stimulate growth in the economy). Second,
although recent restructuring in Japan will have a positive long-term effect,
there will likely be short-term negative economic consequences as unemployment
ratchets higher. Lastly, while the markets thus far have identified Kosovo as a
socio-political, not an economic event, the end may not be so near. Markets may
not react so favorably to guerrilla warfare or the idea that heretofore expected
tax cuts may be used to finance the growing cost of this latest military crisis.
Most recently, concerns of the possibility of rising interest rates over the
near term and the implications for growth stock valuations, in particular
large-cap growth stocks such as technology and healthcare have arisen. During
March and April of 1999 we have seen money rotate out of these areas and into
the more economically sensitive sectors, such as basic materials and energy. If
this is in fact pointing to higher than expected economic growth and the
international markets do continue to improve, we could soon be facing a market
which begins to focus on a Federal Reserve whose next step will be to raise
short-term rates to cool things off a bit. This will likely become a greater
focus as we get past the recent earnings season and move into the middle of the
year.
THE FUNDS
Centura Funds continued to provide solid performance for shareholders this
past fiscal year. The following provides insight regarding each Fund. We will
illustrate this discussion with the performance of Class C shares. Note,
however, that class A and B share performances were more moderate due to their
higher expenses (see the graphs on their respective pages).
THE CENTURA LARGE CAP EQUITY FUND (Formerly the Centura Equity Income Fund)
Given the overall performance of large company stocks, it was not surprising
that the Centura Large Cap Equity Fund rewarded its shareholders handsomely this
past year. The Fund (Class C shares) provided a total return of 19.94% for the
one-year period ended April 30, 1999. This compares to a return from the S&P 500
Index of 21.82% and the performance of the average Growth and Income Fund, as
tracked by Lipper Analytical Services, of 9.60%. Particularly given that the
Fund did not strongly correlate with the S&P 500 prior to its August conversion,
we are very pleased with its performance.
The Large Cap Equity Fund's performance has benefited from overweightings in
some of the market's best performing sectors, such as technology and healthcare,
relative to the S&P 500 Index. The Fund continues to overweight these sectors,
as we believe they will continue their leadership in an improving world economy.
THE CENTURA MID CAP EQUITY FUND (Formerly the Centura Equity Growth Fund)
Although single digit performance may appear paltry in contrast to the best
known, most quoted stock indices, we must remind ourselves that none of these
popular benchmarks measure mid-sized company performance. It is also necessary
to understand the value of distinctly different investments that do not all
respond the same to a given set of market conditions. Without these
distinctions, we'd have no need for more than one equity fund and would not
benefit from diversifying assets among different investment types.
With a total return of 8.93% (Class C shares) for the one year period ended
April 30, 1999, the Fund outperformed both its benchmark, the S&P MidCap 400
Index, and the average mid cap equity fund(1) which provided returns of 6.43%
and 2.98% respectively. We are very pleased with the Fund's healthy relative
performance.
THE CENTURA SMALL CAP EQUITY FUND (Formerly the Southeast Equity Fund)
While it may seem like an absurd assertion that a -7.84% one-year return is
good performance, in this case it is. While the one year total return of the
Centura Small Cap Equity Fund ended April down nearly 8% (Class C shares), the
average small cap equity fund, as measured by Lipper Analytical Services, was
off in excess of 11%. The Fund's benchmark, the S&P SmallCap 600 Index, was down
14.29% for the same period. If beating our benchmark index is our goal, the
Small Cap Equity Fund had a great year, with outperformance of nearly 6.5%.
It is times like this past year that test the patience of small cap
investors. It is also a good time to remember that big ups and big downs are the
nature of small stocks. This past calendar year provided an excellent example of
this. Going into the fourth quarter of 1998 small company stocks, as measured by
the S&P SmallCap 600 Index, were down 16.08% but rebounded 17.58% in the fourth
quarter. During this same period, the Centura Small Cap Equity Fund (then the
Southeast Equity Fund, Class C shares) was off 12% only to rebound 24% in the
fourth quarter, finishing 1998 up in excess of 9%.
While we can make no guarantees regarding future performance, we believe
small company stocks remain a potentially attractive investment class that
should not be overlooked. Additionally, we believe the Centura
4
<PAGE>
Small Cap Equity Fund is a viable investment vehicle to capture its potential.
- ---------
(1) Source: Lipper Analytical Services
THE CENTURA GOVERNMENT INCOME FUND (Formerly the Federal Securities Income Fund)
The Centura Government Income Fund (Class C shares) provided a total return
of 5.64% (Class C shares) for the one year period ended April 30, 1999. This
compares to 6.35% for the Lehman Brothers Intermediate Government Bond Index and
5.51% for the average short/intermediate U.S. Government Fund, according to
Lipper Analytical Services.
During the first half of our fiscal year world economic concerns created a
flight to the safety and liquidity of U.S. Treasury securities to the virtual
exclusion of other fixed income options. This, in turn, increased the value of
treasuries relative to other fixed income securities. The Fund's relative
underweighting in treasuries impacted performance relative to the Lehman
Brothers Intermediate Government Bond Index.
More recently, as the world economic prospects have improved, the trends
that negatively impacted our performance have been turning in our favor. As
these trends tend to be cyclical in nature, we continue to be optimistic about
future relative performance.
5
<PAGE>
THE CENTURA NORTH CAROLINA TAX-FREE BOND FUND
The Centura North Carolina Tax-Free Bond Fund (Class C shares) returned
6.22% for the one year period ended April 30, 1999. This compared to the Fund's
benchmark, the Lehman 5-Year Municipal Index, which returned 6.49%, and Lipper
State Intermediate Municipal Index return of 5.49%.
Though not as liquid as treasury securities, municipal securities were
perceived as relatively safe investments during the emotional markets of the
year. Consequently, higher quality markets like North Carolina's, weathered the
storms of late summer well.
THE CENTURA MONEY MARKET FUND
The Centura Money Market Fund began operations June 1, 1998. From that time
through our fiscal year end, April 30, 1999, the Fund (Class C shares) provided
a total return of 4.70%. As the Fund approaches its first anniversary it
continues to provide shareholders with a competitively yielding liquid
investment option. At the end of our fiscal year the Fund (Class C shares)
provided a 30 day yield of 4.69% compared to a 4.60% average for IBC First Tier
Institutional funds.
6
<PAGE>
LARGE CAP EQUITY FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS A
WITH LOAD
(RETRUN REFLECTS
CLASS A MAXIMUM SALES LIPPER EQUITY LIPPER GROWTH &
WITHOUT LOAD LOAD OF 4.50%) S&P 500* INCOME AVERAGE* INCOME AVERAGE*
<S> <C> <C> <C> <C> <C>
12/90 $10,000 $9,550 $10,000 $10,000 $10,000
12/91 $11,822 $11,285 $13,055 $12,705 $12,925
12/92 $13,002 $12,411 $14,056 $13,992 $14,107
12/93 $14,617 $13,953 $15,460 $15,992 $15,932
12/94 $14,526 $13,868 $15,663 $15,694 $15,799
12/95 $18,551 $17,707 $21,525 $20,452 $20,663
12/96 $22,264 $21,252 $26,492 $24,237 $24,949
12/97 $29,618 $28,278 $35,330 $30,757 $31,836
12/98 $32,853 $31,360 $45,428 $34,553 $36,611
4/99 $35,726 $34,103 $49,539 $37,103 $39,212
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 19.58% 14.23% 21.82% 9.18% 9.60%
5 YEAR 20.19% 19.10% 21.17% 18.79% 20.08%
SINCE INCEPTION 16.52% 15.87% 26.88% 16.88% 17.63%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS B
WITH LOAD
(RETURN REFLECTS THE
APPROPRIATE CONTINGENT
DEFERRED SALES CHARGE
CLASS B (MAXIMUM DEFERRED SALES LIPPER EQUITY
WITHOUT LOAD LOAD IS 5.00%)) S&P 500* INCOME AVERAGE*
<S> <C> <C> <C> <C>
12/90 $10,000 $9,500 $10,000 $10,000
12/91 $11,771 $11,271 $13,055 $12,705
12/92 $12,877 $12,477 $14,056 $13,992
12/93 $14,406 $14,106 $15,460 $15,992
12/94 $14,083 $13,883 $15,663 $15,694
12/95 $18,089 $17,989 $21,525 $20,452
12/96 $21,592 $21,592 $26,492 $24,237
12/97 $28,046 $28,046 $35,330 $30,757
12/98 $31,372 $31,372 $45,428 $34,553
4/99 $34,057 $34,057 $49,539 $37,103
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 18.76% 13.76% 21.82% 9.18%
5 YEAR 19.45% 19.35% 21.17% 18.79%
SINCE INCEPTION 15.85% 15.85% 26.88% 16.88%
<CAPTION>
LIPPER GROWTH &
INCOME AVERAGE*
<S> <C>
12/90 $10,000
12/91 $12,925
12/92 $14,107
12/93 $15,932
12/94 $15,799
12/95 $20,663
12/96 $24,949
12/97 $31,836
12/98 $36,611
4/99 $39,212
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 9.60%
5 YEAR 20.08%
SINCE INCEPTION 17.63%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS C LIPPER EQUITY LIPPER GROWTH &
(NO LOAD) S&P 500* INCOME AVERAGE* INCOME AVERAGE*
<S> <C> <C> <C> <C>
12/90 $10,000 $10,000 $10,000 $10,000
12/91 $11,898 $13,055 $12,705 $12,925
12/92 $13,134 $14,056 $13,992 $14,107
12/93 $14,861 $15,460 $15,992 $15,932
12/94 $14,651 $15,663 $15,694 $15,799
12/95 $19,019 $21,525 $20,452 $20,663
12/96 $22,923 $26,492 $24,237 $24,949
12/97 $30,049 $35,330 $30,757 $31,836
12/98 $33,973 $45,428 $34,553 $36,611
4/99 $36,990 $49,539 $37,103 $39,212
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 19.94% 21.82% 9.18% 9.60%
5 YEAR 20.60% 21.17% 18.79% 20.08%
SINCE INCEPTION 17.01% 26.88% 16.88% 17.63%
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS. 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 S&P 500 is an unmanaged index generally representative of the domestic
stock market. The LIPPER GROWTH & INCOME AVERAGE AND LIPPER EQUITY INCOME
AVERAGE are representative of the average of the total returns reported by all
of the mutual funds designated by Lipper, Inc. that fall into this category.
Due to change in investment objective and policies, going forward the Lipper
Equity Income Average will be replaced by Lipper Growth and Income Average
because of its better representation of the Fund's new investment policies.
Previously used indices are shown here for transitional purposes.
The inception date for performance purposes is December 31, 1990. The quoted
performance of the Centura Large Cap Equity Fund (formerly 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 investment objective,
policies and techniques of the Commingled Accounts were equivalent in all
material aspect to those 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, their
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.
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>
CENTURA FUNDS, INC. SCHEDULE OF PORTFOLIO INVESTMENTS
LARGE CAP EQUITY FUND APRIL 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
COMMON STOCKS (99.2%)
<CAPTION>
MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
AEROSPACE/DEFENSE (1.5%)
AlliedSignal, Inc....................... 20,000 $ 1,175,000
Raytheon Co............................. 15,000 1,053,750
------------
2,228,750
------------
AIRLINES (0.5%)
AMR Corp. (b)........................... 11,000 767,938
------------
AUTOMOBILES & TRUCKS (2.2%)
Ford Motor Co........................... 25,000 1,598,438
General Motors Corp..................... 18,000 1,600,875
------------
3,199,313
------------
BANKING & FINANCIAL SERVICES (14.1%)
American Express Co..................... 5,000 653,438
Banc One Corp........................... 30,000 1,770,000
Bank of New York Co., Inc............... 30,000 1,200,000
BankAmerica Corp........................ 25,000 1,799,999
Chase Manhattan Corp.................... 25,000 2,068,749
Citigroup, Inc.......................... 31,000 2,332,749
Fannie Mae.............................. 25,000 1,773,438
Fifth Third Bancorp..................... 25,000 1,792,188
First Union Corp........................ 20,000 1,107,500
MBNA Corp............................... 50,000 1,409,375
Mellon Bank Corp........................ 15,000 1,114,688
Morgan Stanley Dean Witter Discover..... 15,000 1,487,813
State Street Corp....................... 15,000 1,312,500
Washington Mutual, Inc.................. 20,000 822,500
------------
20,644,937
------------
CHEMICALS (1.7%)
E.I. du Pont de Nemours & Co............ 20,000 1,412,500
Monsanto Co............................. 25,000 1,131,250
------------
2,543,750
------------
COMMERCIAL SERVICES (0.4%)
Cendant Corp. (b)....................... 30,000 540,000
------------
COMPUTER INDUSTRY (16.5%)
America Online, Inc. (b)................ 15,000 2,141,250
BMC Software (b)........................ 15,000 645,938
Cisco Systems, Inc. (b)................. 25,000 2,851,563
Compaq Computer Corp.................... 10,000 223,125
Dell Computer Corp. (b)................. 50,000 2,059,375
EMC Corp. (b)........................... 8,000 871,500
Hewlett-Packard Co...................... 10,000 788,750
Intel Corp.............................. 50,000 3,059,374
International Business Machines Corp.... 15,000 3,137,812
Microsoft Corp. (b)..................... 70,000 5,691,874
Oracle Corp. (b)........................ 45,000 1,217,813
Sun Microsystems, Inc. (b).............. 22,000 1,315,875
------------
24,004,249
------------
CONSUMER GOODS AND SERVICES (6.3%)
Clorox Co............................... 7,500 865,313
Colgate-Palmolive Co.................... 12,000 1,229,250
<CAPTION>
COMMON STOCKS, CONTINUED:
MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
Dow Jones & Co., Inc.................... 15,000 $ 817,500
Fort James Corp......................... 12,000 456,000
Gillette Co............................. 20,000 1,043,750
Kimberly-Clark Corp..................... 10,000 613,125
Mattel, Inc............................. 20,000 517,500
Philip Morris Companies, Inc............ 30,000 1,051,875
Procter & Gamble Co..................... 21,000 1,970,062
Unilever N.V............................ 11,000 714,313
------------
9,278,688
------------
DIVERSIFIED OPERATIONS (4.7%)
General Electric Co..................... 50,000 5,275,000
Tyco International Ltd.................. 20,000 1,625,000
------------
6,900,000
------------
ELECTRONIC COMPONENTS/INSTRUMENTS (3.6%)
Applied Materials, Inc. (b)............. 15,000 804,375
Honeywell, Inc.......................... 10,000 947,500
KLA Instruments Corp. (b)............... 20,000 992,500
Solectron Corp. (b)..................... 20,000 970,000
Texas Instruments....................... 15,000 1,531,875
------------
5,246,250
------------
ENERGY (7.7%)
Duke Energy Corp........................ 10,000 560,000
Enron Corp.............................. 15,000 1,128,750
Exxon Corp.............................. 26,000 2,159,625
Halliburton Co.......................... 8,000 341,000
Mobil Corp.............................. 12,000 1,257,000
Royal Dutch Petroleum Co................ 35,000 2,054,063
Schlumberger Ltd........................ 15,000 958,125
Southern Co............................. 30,000 811,875
Unocal Corp............................. 10,000 415,625
USX-Marathon Group...................... 27,000 843,750
Williams Cos., Inc...................... 15,000 708,750
------------
11,238,563
------------
ENTERTAINMENT (1.1%)
The Walt Disney Co...................... 10,000 317,500
Time Warner, Inc........................ 18,000 1,260,000
------------
1,577,500
------------
FOOD AND BEVERAGES (4.9%)
Anheuser Busch Co., Inc................. 20,000 1,462,500
Bestfoods............................... 20,000 1,003,750
Coca Cola Co............................ 26,000 1,768,000
McDonald's Corp......................... 35,000 1,483,125
PepsiCo, Inc............................ 40,000 1,477,500
------------
7,194,875
------------
HEALTH CARE (12.3%)
Abbott Laboratories..................... 20,000 968,750
American Home Products Corp............. 17,000 1,037,000
Amgen, Inc. (b)......................... 20,000 1,228,750
Bausch & Lomb, Inc...................... 13,000 975,000
Bristol-Myers Squibb Co................. 30,000 1,906,875
Eli Lilly & Co.......................... 25,000 1,840,625
Guidant Corp............................ 20,000 1,073,750
</TABLE>
CONTINUED
7
<PAGE>
CENTURA FUNDS, INC. SCHEDULE OF PORTFOLIO INVESTMENTS
LARGE CAP EQUITY FUND APRIL 30, 1999
<TABLE>
<CAPTION>
COMMON STOCKS, CONTINUED:
MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
Johnson & Johnson....................... 8,000 $ 780,000
Medtronic, Inc.......................... 15,000 1,079,063
Merck & Co., Inc........................ 35,000 2,458,749
Pfizer, Inc............................. 20,000 2,301,249
Schering-Plough Corp.................... 25,000 1,207,813
Warner-Lambert Co....................... 17,000 1,154,938
------------
18,012,562
------------
INSURANCE (3.3%)
American International Group............ 22,000 2,583,624
Jefferson-Pilot Corp.................... 15,500 1,044,313
MGIC Investment Corp.................... 25,000 1,214,063
------------
4,842,000
------------
MACHINERY & EQUIPMENT (0.4%)
Caterpillar, Inc........................ 10,000 643,750
------------
METALS (0.4%)
Alcoa, Inc.............................. 10,000 622,500
------------
POLLUTION CONTROL (0.8%)
Waste Management, Inc................... 21,700 1,226,050
------------
RETAIL (5.3%)
Dayton Hudson Corp...................... 15,000 1,009,688
Home Depot, Inc......................... 30,000 1,798,125
Lowes Co................................ 20,000 1,055,000
Wal-Mart Stores, Inc.................... 70,000 3,220,000
Walgreen Co............................. 25,000 671,875
------------
7,754,688
------------
TELECOMMUNICATIONS (10.8%)
Ameritech Corp.......................... 10,000 684,375
Ascend Communications, Inc. (b)......... 8,000 773,000
AT&T Corp............................... 52,500 2,651,249
Bell Atlantic Corp...................... 30,000 1,728,750
BellSouth Corp.......................... 20,000 895,000
Lucent Technologies, Inc................ 16,000 962,000
MCI Worldcom, Inc. (b).................. 35,000 2,869,999
SBC Communications, Inc................. 35,000 1,960,000
Sprint Corp............................. 10,000 1,025,625
Sprint Corp. (PCS Group)................ 14,500 614,438
Tellabs, Inc. (b)....................... 15,000 1,643,438
------------
15,807,874
------------
TELECOMMUNICATIONS--EQUIPMENT (0.4%)
Level One Communications, Inc. (b)...... 10,000 513,750
------------
TRANSPORTATION & SHIPPING (0.3%)
Burlington Northern Santa Fe Corp....... 12,000 439,500
------------
TOTAL COMMON STOCKS.................................. 145,227,487
------------
<CAPTION>
INVESTMENT COMPANIES (1.2%)
<S> <C> <C>
Centura Money Market Fund............... 1,478,260 1,478,260
Goldman Sachs Financial Square Prime
Money Market Fund..................... 126,307 126,307
<CAPTION>
INVESTMENT COMPANIES, CONTINUED:
MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
Provident Institutional Temporary
Investment Fund....................... 126,307 $ 126,307
------------
TOTAL INVESTMENT COMPANIES........................... 1,730,874
------------
TOTAL INVESTMENTS
(Cost $115,188,362)(a)(100.4%)..................... 146,958,361
Liabilities in excess of other assets (0.4%)......... (628,818)
------------
TOTAL NET ASSETS (100.0%)............................ $146,329,543
------------
------------
</TABLE>
- ---------
Percentages indicated are based on net assets of $146,329,543.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $16,925. Cost for federal tax purposes differs from value
by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation... $ 34,135,103
Unrealized depreciation... (2,382,029)
-------------
Net unrealized
appreciation............ $ 31,753,074
-------------
-------------
</TABLE>
(b) Represents non-income producing security.
N.V. -- Naamloze Vennootschap (Dutch corporation)
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
CENTURA FUNDS, INC.
LARGE CAP EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (cost
$115,188,362)......................... $146,958,361
Interest and dividends receivable....... 136,586
Receivable for capital shares
issued................................ 22,000
Receivable for investments sold......... 339,501
Prepaid expenses and other assets....... 5,538
------------
TOTAL ASSETS.......................... 147,461,986
LIABILITIES:
Payable to custodian for overdraft...... $1,054,699
Payable for capital shares
redeemed.............................. 2,656
Accrued expenses and other payables:
Investment advisory fees.............. 11,431
Administration fees................... 2,449
Distribution fees..................... 3,686
Other................................. 57,522
----------
TOTAL LIABILITIES..................... 1,132,443
------------
NET ASSETS:
Capital................................. 110,895,573
Undistributed net investment
income................................ 20,965
Accumulated net realized gains from
investment transactions............... 3,643,006
Net unrealized appreciation from
investments........................... 31,769,999
------------
NET ASSETS.............................. $146,329,543
------------
------------
Class A
Net Assets............................ $ 2,335,465
Shares................................ 169,088
Redemption price per share............ $ 13.81
------------
------------
Maximum Sales Charge--Class A......... 4.50%
Maximum Offering Price
(100%/(100% - Maximum Sales Charge)
of net asset value adjusted to the
nearest cent) per share............. $ 14.46
------------
------------
Class B
Net Assets............................ $ 4,137,550
Shares................................ 302,062
Offering price per share*............. $ 13.70
------------
------------
Class C
Net Assets............................ $139,856,528
Shares................................ 10,133,530
Offering and redemption price per
share............................... $ 13.80
------------
------------
</TABLE>
- ---------
* Redemption price of Class B shares varies based on length of time held.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest income......................... $ 8,877
Dividend income......................... 1,582,403
-----------
TOTAL INCOME.......................... 1,591,280
EXPENSES:
Investment advisory fees................ $634,643
Administration fees..................... 135,995
Distribution fees--Class A.............. 8,634
Distribution fees--Class B.............. 27,563
Custodian fess.......................... 22,665
Fund accounting fees.................... 34,471
Transfer Agent fees..................... 21,567
Other................................... 77,331
--------
Total Expenses before voluntary fee
reductions.......................... 962,869
Expenses voluntarily reduced.......... (92,847)
-----------
Net Expenses.......................... 870,022
-----------
NET INVESTMENT INCOME................... 721,258
-----------
REALIZED/UNREALIZED GAINS FROM
INVESTMENTS:
Net realized gains from investment
transactions.......................... 7,713,037
Net change in unrealized appreciation
from investments...................... 13,359,563
-----------
Net realized/unrealized gains from
investments........................... 21,072,600
-----------
Change in net assets resuling from
operations............................ $21,793,858
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
CENTURA FUNDS, INC.
LARGE CAP EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1999 1998
------------ -----------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income................. $ 721,258 $ 1,482,896
Net realized gains from investment
transactions........................ 7,713,037 5,422,320
Net change in unrealized appreciation
from investments.................... 13,359,563 9,444,095
------------ -----------
Change in net assets resulting from
operations............................ 21,793,858 16,349,311
------------ -----------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income............ (13,064) (17,787)
In excess of net investment income.... -- (526)
From net realized gains from
investment transactions............. (127,442) (83,795)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income............ (11,602) (15,848)
In excess of net investment income.... -- (1,642)
From net realized gains from
investment transactions............. (216,872) (124,900)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income............ (704,359) (1,418,361)
From net realized gains from
investment transactions............. (7,078,053) (5,725,838)
------------ -----------
Change in net assets from shareholder
distributions......................... (8,151,392) (7,388,697)
------------ -----------
Change in net assets from capital
transactions.......................... 63,961,637 6,514,129
------------ -----------
Change in net assets.................... 77,604,103 15,474,743
NET ASSETS:
Beginning of period..................... 68,725,440 53,250,697
------------ -----------
End of period........................... $146,329,543 $68,725,440
------------ -----------
------------ -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
CENTURA FUNDS, INC.
LARGE CAP EQUITY FUND
FINANCIAL HIGHLIGHTS, CLASS A
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30,
1999 1998 1997 (a)
----------- ----------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period........................... $12.60 $10.91 $10.00
----------- ----------- -------------
Investment Activities
Net investment income............ 0.10 0.26 0.14
Net realized and unrealized gains
from investments............... 2.19 2.90 0.93
----------- ----------- -------------
Total from Investment
Activities..................... 2.29 3.16 1.07
----------- ----------- -------------
Distributions
Net investment income............ (0.10) (0.26) (0.14)
Net realized gains............... (0.98) (1.21) (0.02)
----------- ----------- -------------
Total Distributions.............. (1.08) (1.47) (0.16)
----------- ----------- -------------
Net Asset Value, End of Period..... $13.81 $12.60 $10.91
----------- ----------- -------------
----------- ----------- -------------
TOTAL RETURN (EXCLUDES SALES
CHARGE).......................... 19.58% 30.36% 10.69%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000)............................ $2,335 $1,490 $ 338
Ratio of expenses to average net
assets........................... 1.14% 0.90% 0.99%(b)
Ratio of net investment income to
average net assets............... 0.72% 2.05% 2.15%(b)
Ratio of expenses to average net
assets*.......................... 1.51% 1.55% 1.65%(b)
Portfolio turnover rate**.......... 114% 39% 24%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM OCTOBER 1, 1996 (COMMENCEMENT OF OPERATIONS) TO APRIL
30, 1997.
(b) ANNUALIZED.
(c) NOT ANNUALIZED.
FINANCIAL HIGHLIGHTS, CLASS B
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30,
1999 1998 1997 (a)
----------- ----------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period........................... $12.55 $10.88 $10.00
----------- ----------- -------------
Investment Activities
Net investment income (loss)..... (0.01) 0.17 0.11
Net realized and unrealized gains
from investments............... 2.20 2.88 0.90
----------- ----------- -------------
Total from Investment
Activities..................... 2.19 3.05 1.01
----------- ----------- -------------
Distributions
Net investment income............ (0.06) (0.17) (0.11)
Net realized gains............... (0.98) (1.21) (0.02)
----------- ----------- -------------
Total Distributions.............. (1.04) (1.38) (0.13)
----------- ----------- -------------
Net Asset Value, End of Period..... $13.70 $12.55 $10.88
----------- ----------- -------------
----------- ----------- -------------
TOTAL RETURN (EXCLUDES REDEMPTION
CHARGE).......................... 18.76% 29.39% 10.15%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000)............................ $4,138 $2,182 $ 427
Ratio of expenses to average net
assets........................... 1.90% 1.64% 1.71%(b)
Ratio of net investment income
(loss) to average net assets..... (0.09%) 1.30% 1.52%(b)
Ratio of expenses to average net
assets*.......................... 2.01% 2.05% 2.12%(b)
Portfolio turnover rate**.......... 114% 39% 24%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM OCTOBER 1, 1996 (COMMENCEMENT OF OPERATIONS) TO APRIL
30, 1997.
(b) ANNUALIZED.
(c) NOT ANNUALIZED.
CONTINUED
11
<PAGE>
CENTURA FUNDS, INC.
LARGE CAP EQUITY FUND
FINANCIAL HIGHLIGHTS, CLASS C
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30,
1999 1998 1997 (a)
----------- ----------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period........................... $ 12.58 $ 10.89 $ 10.00
----------- ----------- -------------
Investment Activities
Net investment income............ 0.12 0.29 0.15
Net realized and unrealized gains
from investments............... 2.21 2.89 0.91
----------- ----------- -------------
Total from Investment
Activities..................... 2.33 3.18 1.06
----------- ----------- -------------
Distributions
Net investment income............ (0.13) (0.28) (0.15)
Net realized gains............... (0.98) (1.21) (0.02)
----------- ----------- -------------
Total Distributions.............. (1.11) (1.49) (0.17)
----------- ----------- -------------
Net Asset Value, End of Period..... $ 13.80 $ 12.58 $ 10.89
----------- ----------- -------------
----------- ----------- -------------
TOTAL RETURN....................... 19.94% 30.72% 10.65%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000)............................ $139,857 $65,053 $52,486
Ratio of expenses to average net
assets........................... 0.92% 0.67% 0.75%(b)
Ratio of net investment income to
average net assets............... 0.82% 2.37% 2.45%(b)
Ratio of expenses to average net
assets*.......................... 1.02% 1.08% 1.17%(b)
Portfolio turnover rate**.......... 114% 39% 24%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM OCTOBER 1, 1996 (COMMENCEMENT OF OPERATIONS) TO APRIL
30, 1997.
(b) ANNUALIZED.
(c) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
MID CAP EQUITY FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS A
WITH LOAD
(RETURN REFLECTS
CLASS A MAXIMUM SALES S&P MIDCAP LIPPER MID-CAP
WITHOUT LOAD* LOAD OF 4.50%) 400* AVERAGE* S&P 500*
<S> <C> <C> <C> <C> <C>
12/90 $10,000 $9,550 $10,000 $10,000 $10,000
12/91 $13,032 $12,439 $15,010 $14,555 $13,055
12/92 $15,060 $14,374 $16,798 $16,076 $14,056
12/93 $17,717 $16,911 $19,143 $18,392 $15,460
12/94 $16,422 $15,690 $18,459 $18,115 $15,663
12/95 $21,853 $20,859 $24,171 $23,670 $21,525
12/96 $27,096 $25,862 $28,812 $27,627 $26,492
12/97 $34,691 $33,130 $38,106 $32,951 $35,330
12/98 $41,469 $39,581 $45,390 $36,693 $45,428
4/99 $40,858 $38,998 $45,845 $38,424 $49,539
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 8.59% 3.71% 6.43% 2.98% 21.82%
5 YEAR 19.53% 18.44% 19.83% 16.30% 26.88%
SINCE INCEPTION 18.41% 17.75% 20.05% 17.15% 21.17%
<CAPTION>
LIPPER GROWTH
AVERAGE*
<S> <C> <C> <C> <C>
12/90 $10,000
12/91 $13,759
12/92 $14,941
12/93 $16,775
12/94 $16,527
12/95 $21,785
12/96 $26,036
12/97 $32,779
12/98 $39,688
4/99 $42,476
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 13.64%
5 YEAR 20.59%
SINCE INCEPTION 18.54%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS B
WITH LOAD
(RETURN REFLECTS THE
APPROPRIATE CONTINGENT
DEFERRED SALES CHARGE
CLASS B (MAXIMUM DEFERRED SALES S&P LIPPER MID-CAP
WITHOUT LOAD LOAD IS 5.00%)) MIDCAP 400* AVERAGE* S&P 500*
<S> <C> <C> <C> <C> <C>
12/90 $10,000 $9,500 $10,000 $10,000 $10,000
12/91 $12,982 $12,482 $15,010 $14,555 $13,055
12/92 $14,941 $14,541 $16,798 $16,076 $14,056
12/93 $17,521 $17,221 $19,143 $18,392 $15,460
12/94 $15,984 $15,784 $18,459 $18,115 $15,663
12/95 $21,288 $21,188 $24,171 $23,670 $21,525
12/96 $26,232 $26,232 $28,812 $27,627 $26,492
12/97 $33,056 $33,056 $38,106 $32,951 $35,330
12/98 $39,572 $39,572 $45,390 $36,693 $45,428
4/99 $38,896 $38,896 $45,845 $38,424 $49,539
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 7.83% 3.12% 6.43% 2.98% 21.82%
5 YEAR 18.66% 18.56% 19.83% 16.30% 26.88%
SINCE INCEPTION 17.71% 17.71% 20.05% 17.15% 21.17%
<CAPTION>
LIPPER GROWTH
AVERAGE*
<S> <C>
12/90 $10,000
12/91 $13,759
12/92 $14,941
12/93 $16,775
12/94 $16,527
12/95 $21,785
12/96 $26,036
12/97 $32,779
12/98 $39,688
4/99 $42,476
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 13.64%
5 YEAR 20.59%
SINCE INCEPTION 18.54%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS C S&P MIDCAP LIPPER MID-CAP LIPPER GROWTH
(NO LOAD) 400* AVERAGE* S&P 500* AVERAGE*
<S> <C> <C> <C> <C> <C>
12/90 $10,000 $10,000 $10,000 $10,000 $10,000
12/91 $13,102 $15,010 $14,555 $13,055 $13,759
12/92 $15,217 $16,798 $16,076 $14,056 $14,941
12/93 $17,990 $19,143 $18,392 $15,460 $16,775
12/94 $16,546 $18,459 $18,115 $15,663 $16,527
12/95 $22,259 $24,171 $23,670 $21,525 $21,785
12/96 $27,680 $28,812 $27,627 $26,492 $26,036
12/97 $35,176 $38,106 $32,951 $35,330 $32,779
12/98 $42,601 $45,390 $36,693 $45,428 $39,688
4/99 $42,010 $45,845 $38,424 $49,539 $42,476
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 8.93% 6.43% 2.98% 21.82% 13.64%
5 YEAR 19.81% 19.83% 16.30% 26.88% 20.59%
SINCE INCEPTION 18.81% 20.05% 17.15% 21.17% 18.54%
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS. 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 S&P 500 is an unmanaged index generally representative of the domestic
stock market. The S&P MIDCAP 400 is an unmanaged index generally
representative of the domestically traded common stocks of mid-size companies.
The LIPPER MID-CAP AVERAGE and the LIPPER GROWTH AVERAGE are representative of
the average of the total returns reported by all of the mutual funds
designated by Lipper, Inc. that fall into their respective category.
Due to change in investment policies, going forward the S&P 500 and Lipper
Growth Average will be replaced by S&P MidCap 400 and Lipper Mid-Cap Average
because of their better representation of the Fund's new investment policies.
Previously used indices are shown here for transitional purposes.
The inception date for performance purposes is December 31, 1990. The quoted
performance of the Centura Mid Cap Equity Fund (formerly 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 investment objective,
policies and techniques of the Commingled Accounts were equivalent in all
material aspect to those 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, their
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.
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.
13
<PAGE>
CENTURA FUNDS, INC. SCHEDULE OF PORTFOLIO INVESTMENTS
MID CAP EQUITY FUND APRIL 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
COMMON STOCKS (94.0%)
<CAPTION>
MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
ADVERTISING (0.3%)
Snyder Communications, Inc. (b)......... 16,000 $ 470,000
------------
AEROSPACE/DEFENSE (1.4%)
Cordant Technologies, Inc............... 18,000 830,250
Litton Industries, Inc. (b)............. 14,000 876,750
Precision Castparts..................... 16,000 684,000
------------
2,391,000
------------
AUTO PARTS (1.3%)
Federal Mogul Corp...................... 20,000 877,500
Lear Corp. (b).......................... 16,000 734,000
SPX Corp. (b)........................... 10,000 653,125
------------
2,264,625
------------
AUTOMOBILES & TRUCKS (1.1%)
Harley-Davidson, Inc.................... 32,000 1,908,000
------------
BANKING & FINANCIAL SERVICES (11.6%)
A.G. Edwards, Inc....................... 20,000 700,000
Charter One Financial, Inc.............. 26,000 812,500
Dime Bancorp, Inc....................... 37,000 853,313
E*Trade Group, Inc. (b)................. 22,000 2,540,999
Finova Group, Inc....................... 20,000 966,250
First Security Corp..................... 42,000 798,000
First Tennessee National Corp........... 27,000 1,164,375
Greenpoint Financial Corp............... 27,000 945,000
M & T Bank Corp......................... 2,000 1,118,000
Marshall & Ilsley Corp.................. 30,000 2,099,999
North Fork Bancorp., Inc................ 29,000 652,500
Old Kent Financial Corp................. 22,000 1,039,500
Paine Webber Group, Inc................. 37,000 1,736,687
T. Rowe Price Assoc., Inc............... 35,000 1,319,063
TCF Financial Corp...................... 29,000 841,000
Trustmark Corp.......................... 30,000 633,750
Zions Bancorporation.................... 25,000 1,667,188
------------
19,888,124
------------
BUILDING & CONSTRUCTION (0.3%)
Clayton Homes, Inc...................... 50,000 556,250
------------
BUILDING PRODUCTS (1.2%)
Southdown, Inc.......................... 9,000 576,563
Vulcan Materials Co..................... 33,000 1,575,750
------------
2,152,313
------------
BUSINESS EQUIPMENT & SERVICES (0.6%)
Comdisco, Inc........................... 25,500 670,969
Manpower, Inc........................... 19,000 429,875
------------
1,100,844
------------
CHEMICALS (2.5%)
Cabot Corp.............................. 36,000 972,000
Cytec Industries, Inc. (b).............. 40,000 1,137,500
Hanna (M.A.) Co......................... 75,000 1,214,063
RPM Inc. Ohio........................... 68,000 956,250
------------
4,279,813
------------
COMMERCIAL SERVICES (1.2%)
Concord EFS, Inc. (b)................... 29,000 967,875
<CAPTION>
COMMON STOCKS, CONTINUED:
MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
Convergys Corp. (b)..................... 61,000 $ 1,136,125
------------
2,104,000
------------
COMPUTER INDUSTRY (7.0%)
Cadence Design Systems, Inc. (b)........ 40,000 542,500
Citrix Systems, Inc. (b)................ 18,000 765,000
Comverse Technology, Inc. (b)........... 14,000 897,750
Diebold, Inc............................ 18,000 433,125
Electronic Arts, Inc. (b)............... 15,000 762,188
Fiserv, Inc. (b)........................ 15,000 878,438
Intuit, Inc. (b)........................ 12,000 1,033,499
NCR Corp. (b)........................... 22,000 901,999
Platinum Tech. (b)...................... 27,000 688,500
Quantum Corp. (b)....................... 44,000 786,500
Siebel Systems, Inc. (b)................ 21,000 807,188
Sterling Commerce, Inc. (b)............. 30,000 939,374
Storage Technology Corp. (b)............ 29,000 560,063
Sungard Data Systems, Inc. (b).......... 28,000 894,250
Symantec Corp. (b)...................... 5,000 99,375
Synopsys, Inc. (b)...................... 17,000 801,125
Tech Data Corp. (b)..................... 13,000 303,875
------------
12,094,749
------------
CONSUMER GOODS AND SERVICES (3.1%)
Dial Corp............................... 40,000 1,360,000
Jones Apparel Group, Inc. (b)........... 25,000 825,000
Leggett & Platt, Inc.................... 50,000 1,153,125
Quintiles Transnational Corp. (b)....... 37,000 1,500,814
Robert Half International, Inc. (b)..... 24,000 573,000
------------
5,411,939
------------
DATA PROCESSING & REPRODUCTION (0.3%)
Sterling Software (b)................... 26,000 537,875
------------
DIVERSIFIED OPERATIONS (2.1%)
Carlisle Co............................. 18,000 882,000
Sundstrand Corp......................... 13,000 932,750
Teleflex, Inc........................... 19,000 827,688
Viad Corp............................... 31,000 1,024,937
------------
3,667,375
------------
DRUGS (1.1%)
Forest Laboratories, Inc.--Class A
(b)................................... 18,000 801,000
Medimmune, Inc. (b)..................... 9,000 496,125
Sepracor, Inc. (b)...................... 8,000 676,000
------------
1,973,125
------------
EDUCATION (0.6%)
Apollo Group, Inc.--Class A (b)......... 40,000 990,000
------------
ELECTRONIC COMPONENTS/INSTRUMENTS (10.0%)
Altera Corp. (b)........................ 25,000 1,806,249
American Power Conversion (b)........... 27,000 891,000
Analog Devices, Inc. (b)................ 49,000 1,721,125
Avnet, Inc.............................. 15,000 636,563
Hubbell, Inc. Class B................... 15,000 717,188
Jabil Circuit, Inc. (b)................. 14,000 651,875
Linear Technology Corp.................. 36,000 2,047,499
Maxim Integrated Products, Inc. (b)..... 35,000 1,959,999
Molex, Inc.............................. 33,000 1,064,250
SCI Systems, Inc. (b)................... 40,000 1,522,500
</TABLE>
CONTINUED
14
<PAGE>
CENTURA FUNDS, INC. SCHEDULE OF PORTFOLIO INVESTMENTS
MID CAP EQUITY FUND APRIL 30, 1999
<TABLE>
<CAPTION>
COMMON STOCKS, CONTINUED:
MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
Symbol Technologies, Inc................ 17,000 $ 811,750
Teradyne, Inc. (b)...................... 23,000 1,085,313
Vitesse Semiconductor (b)............... 19,000 879,938
Xilinx, Inc. (b)........................ 30,000 1,368,750
------------
17,163,999
------------
ENERGY (6.5%)
Diamond Offshore Drilling, Inc.......... 20,000 661,250
El Paso Energy Corp..................... 44,000 1,617,000
K N Energy, Inc......................... 45,000 928,125
Keyspan Energy Corp..................... 33,000 882,750
Murphy Oil Corp......................... 13,000 610,188
Noble Drilling Corp. (b)................ 35,000 686,875
Repsol SA, ADR.......................... 51,000 841,500
Teco Energy, Inc........................ 57,000 1,214,813
Tosco Corp.............................. 65,000 1,738,749
Transocean Offshore, Inc................ 28,000 831,250
YPF SA, ADR............................. 28,000 1,176,000
------------
11,188,500
------------
FERTILIZERS (0.7%)
IMC Global, Inc......................... 47,000 1,175,000
------------
FOOD AND BEVERAGES (3.7%)
Dole Food Co............................ 17,000 539,750
Flowers Industries, Inc................. 30,000 637,500
Hormel Foods Corp....................... 20,000 735,000
Interstate Bakeries Corp................ 35,000 778,750
Suiza Foods (b)......................... 20,000 751,250
Tyson Foods, Inc........................ 70,000 1,448,125
Whitman Corp............................ 90,000 1,473,750
------------
6,364,125
------------
HEALTH CARE (7.0%)
Beckman Coulter, Inc.................... 10,000 481,875
Bergen Brunswig Corp., Class A.......... 40,000 760,000
Biogen, Inc. (b)........................ 17,000 1,616,062
Carter-Wallace, Inc..................... 27,000 474,188
Chiron Corp. (b)........................ 38,000 764,750
Dentsply International, Inc............. 20,000 523,750
Elan Corporation PLC--Spons ADR (b)..... 15,000 772,500
Health Management Associates, Inc.
(b)................................... 50,000 781,250
Hillenbrand Industry, Inc............... 20,000 938,750
Mylan Laboratories, Inc................. 39,000 884,813
Omnicare, Inc........................... 15,000 360,938
Pacificare Health (b)................... 9,000 718,031
Steris Corp. (b)........................ 20,000 355,000
Stryker Corp............................ 20,000 1,223,749
Sybron International (b)................ 35,000 969,063
Trigon Healthcare, Inc. (b)............. 12,900 409,575
------------
12,034,294
------------
INSURANCE (3.0%)
AFLAC, Inc.............................. 56,000 3,038,000
American Municipal Bond Assurance
Corp.................................. 15,000 905,625
Nationwide Financial Services........... 10,000 463,750
<CAPTION>
COMMON STOCKS, CONTINUED:
MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
Reliastar Financial Corp................ 19,000 $ 698,250
------------
5,105,625
------------
MEDIA (3.0%)
Belo (A.H.) Corp.--Com A................ 35,000 756,875
Chancellor Media Corp. (b).............. 15,000 823,125
Houghton Mifflin Co..................... 10,000 446,250
Media General, Inc., Class A............ 20,000 1,040,000
Univision Communications, Inc. (b)...... 15,000 868,125
Washington Post Co...................... 2,200 1,262,800
------------
5,197,175
------------
OFFICE EQUIPMENT & SERVICES (1.3%)
Lexmark International Group, Inc. (b)... 18,000 2,223,000
------------
PACKAGING (0.5%)
Sonoco Products Co...................... 34,000 877,625
------------
PAPER PRODUCTS (0.5%)
Chesapeake Corp......................... 25,000 812,500
------------
POLLUTION CONTROL (0.7%)
Allied Waste Industries, Inc. (b)....... 67,000 1,185,063
------------
RESEARCH & DEVELOPMENT (1.2%)
Centocor Inc. (b)....................... 19,000 843,125
Dexter Corp............................. 13,000 533,813
Genzyme Corp--General Division (b)...... 16,000 604,000
------------
1,980,938
------------
RESTAURANTS (1.1%)
Starbucks Corp. (b)..................... 50,000 1,846,875
------------
RETAIL (6.6%)
Abercrombie & Fitch Co. Class A (b)..... 13,000 1,236,625
Barnes & Noble, Inc. (b)................ 12,000 417,000
Bed Bath & Beyond, Inc. (b)............. 27,000 963,563
Best Buy Company, Inc. (b).............. 45,000 2,148,750
Dollar Tree Stores, Inc. (b)............ 22,000 803,000
Family Dollar Stores.................... 35,000 844,375
Office Depot, Inc. (b).................. 90,000 1,980,000
Officemax, Inc. (b)..................... 65,000 658,125
Ross Stores, Inc........................ 14,000 643,125
Saks, Inc. (b).......................... 42,000 1,189,125
Warnaco Group Class A................... 20,000 533,750
------------
11,417,438
------------
TELECOMMUNICATIONS (4.5%)
ADC Telecommunications, Inc. (b)........ 36,000 1,721,250
Cincinnati Bell, Inc.................... 35,000 791,875
Comsat Corp............................. 50,000 1,625,000
Qualcomm, Inc. (b)...................... 18,000 3,600,000
Telephone & Data Systems, Inc........... 1,000 59,875
------------
7,798,000
------------
TEXTILES & TOOLS (0.9%)
Cintas Corp............................. 22,200 1,526,250
------------
TRANSPORTATION & SHIPPING (0.9%)
Airborne Freight Corp................... 50,000 1,600,000
------------
</TABLE>
CONTINUED
15
<PAGE>
CENTURA FUNDS, INC. SCHEDULE OF PORTFOLIO INVESTMENTS
MID CAP EQUITY FUND APRIL 30, 1999
<TABLE>
<CAPTION>
COMMON STOCKS, CONTINUED:
MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
UTILITIES (6.2%)
Florida Progress Corp................... 21,000 $ 808,500
Idacorp, Inc............................ 49,000 1,543,499
Interstate Energy Corp.................. 50,000 1,440,625
Kansas City Power And Light Co.......... 50,000 1,337,500
Montana Power Co........................ 8,000 596,500
Pinnacle West Capital................... 17,000 659,813
Potomac Electric Power Co............... 50,000 1,462,500
Scana Corp.............................. 25,000 587,500
Washington Gas Light Co................. 35,000 824,688
Wisconsin Energy Corp................... 51,000 1,370,625
------------
10,631,750
------------
TOTAL COMMON STOCKS.................................. 161,918,189
------------
<CAPTION>
INVESTMENT COMPANIES (5.8%)
<S> <C> <C>
Centura Money Market Fund............... 1,334,092 1,334,092
Goldman Sachs Financial Square Prime
Money Market Fund..................... 2,448,399 2,448,399
Provident Institutional Temporary
Investment Fund....................... 2,448,399 2,448,399
S&P Mid Cap 400 Depositary Receipt...... 50,000 3,723,438
------------
TOTAL INVESTMENT COMPANIES........................... 9,954,328
------------
TOTAL INVESTMENTS
(Cost $152,060,582)(a)(99.8%)...................... 171,872,517
Other assets in excess of liabilities (0.2%)......... 327,605
------------
TOTAL NET ASSETS (100.0%)............................ $172,200,122
------------
------------
</TABLE>
- ---------
Percentages indicated are based on net assets of $172,200,122.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $48,865. Cost for federal tax purposes differs from value
by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation... $ 29,133,698
Unrealized depreciation... (9,370,628)
-------------
Net unrealized
appreciation............ $ 19,763,070
-------------
-------------
</TABLE>
(b) Represents non-income producing security.
ADR -- American Depositary Receipt
AG -- Aktiengesellschaft (West German stock company)
PLC -- Public Liability Company
SA -- Sociedad Anonimal (Spanish Corporation)
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
CENTURA FUNDS, INC.
MID CAP EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (cost
$152,060,582)......................... $171,872,517
Cash.................................... 163,563
Interest and dividends receivable....... 160,906
Receivable for investments sold......... 4,945,120
Deferred organization costs............. 548
Prepaid expenses and other assets....... 8,489
------------
TOTAL ASSETS.......................... 177,151,143
LIABILITIES:
Payable for investments purchased....... $4,855,380
Payable for capital shares redeemed..... 5,971
Accrued expenses and other payables:
Investment advisory fees.............. 13,255
Administration fees................... 2,840
Distribution fees..................... 18,366
Other................................. 55,209
----------
TOTAL LIABILITIES..................... 4,951,021
------------
NET ASSETS:
Capital................................. 122,446,939
Accumulated net realized gains from
investment transactions............... 29,941,248
Net unrealized appreciation from
investments........................... 19,811,935
------------
NET ASSETS.............................. $172,200,122
------------
------------
Class A
Net Assets............................ $ 14,034,071
Shares................................ 915,216
Redemption price per share............ $ 15.33
------------
------------
Maximum Sales Charge--Class A......... 4.50%
Maximum Offering Price
(100%/(100% - Maximum Sales Charge)
of net asset value adjusted to the
nearest cent) per share............. $ 16.05
------------
------------
Class B
Net Assets............................ $ 19,269,410
Shares................................ 1,287,484
Offering price per share*............. $ 14.97
------------
------------
Class C
Net Assets............................ $138,896,641
Shares................................ 9,034,810
Offering and redemption price per
share............................... $ 15.37
------------
------------
</TABLE>
- ---------
* Redemption price of Class B shares varies based on length of time held.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest income (net of foreign
witholding tax of $5,418)............. $ 45,686
Dividend income......................... 2,729,653
------------
TOTAL INCOME.......................... 2,775,339
EXPENSES:
Investment advisory fees................ $1,308,830
Administration fees..................... 280,464
Distribution fees--Class A.............. 67,221
Distribution fees--Class B.............. 179,498
Custodian fees.......................... 46,734
Fund accounting fees.................... 33,860
Transfer agent fees..................... 119,299
Other................................... 132,968
----------
Total expenses before voluntary fee
reductions.......................... 2,168,874
Expenses voluntarily reduced.......... (33,610)
------------
Net Expenses.......................... 2,135,264
------------
NET INVESTMENT INCOME................... 640,075
------------
REALIZED/UNREALIZED GAINS FROM INVESTMENTS:
Net realized gains from investment
transactions.......................... 50,106,956
Net change in unrealized appreciation
from investments...................... (39,184,235)
------------
Net realized/unrealized gains from
investments........................... 10,922,721
------------
Change in net assets resulting from
operations............................ $ 11,562,796
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
CENTURA FUNDS, INC.
MID CAP EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1999 1998
------------ ------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income................. $ 640,075 $ 929,505
Net realized gains from investment
transactions........................ 50,106,956 25,429,484
Net change in unrealized appreciation
from investments.................... (39,184,235) 32,952,332
------------ ------------
Change in net assets resulting from
operations............................ 11,562,796 59,311,321
------------ ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income............ (33,754) (34,856)
From net realized gains from
investment transactions............. (1,648,360) (2,494,669)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income............ (7,844) --
In excess of net investment income.... -- (2,655)
From net realized gains from
investment transactions............. (2,269,176) (3,086,722)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income............ (629,028) (876,414)
From net realized gains from
investment transactions............. (18,498,984) (37,488,913)
------------ ------------
Change in net assets from shareholder
distributions......................... (23,087,146) (43,984,229)
------------ ------------
Change in net assets from capital
transactions.......................... (28,294,520) 31,216,606
------------ ------------
Change in net assets.................... (39,818,870) 46,543,698
NET ASSETS:
Beginning of year..................... 212,018,992 165,475,294
------------ ------------
End of year........................... $172,200,122 $212,018,992
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
CENTURA FUNDS, INC.
MID CAP EQUITY FUND
FINANCIAL HIGHLIGHTS, CLASS A
<TABLE>
<CAPTION>
FOR THE
FOR THE YEAR ENDED APRIL 30, PERIOD ENDED
-------------------------------- APRIL 30,
1999 1998 1997 1996 1995 (a)
------- ------- ------ ------ -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 16.14 $ 15.33 $14.31 $10.70 $10.00
------- ------- ------ ------ -------------
Investment Activities
Net investment
income............... 0.03 0.05 0.06 0.03 0.06
Net realized and
unrealized gains from
investments.......... 1.15 4.92 1.58 3.67 0.70
------- ------- ------ ------ -------------
Total from Investment
Activities........... 1.18 4.97 1.64 3.70 0.76
------- ------- ------ ------ -------------
Distributions
Net investment
income............... (0.04) (0.05) (0.06) (0.05) (0.06)
Net realized gains..... (1.95) (4.11) (0.56) (0.04) --
------- ------- ------ ------ -------------
Total Distributions.... (1.99) (4.16) (0.62) (0.09) (0.06)
------- ------- ------ ------ -------------
Net Asset Value, End of
Period................. $ 15.33 $ 16.14 $15.33 $14.31 $10.70
------- ------- ------ ------ -------------
------- ------- ------ ------ -------------
TOTAL RETURN (EXCLUDES
SALES CHARGE).......... 8.59% 36.55% 11.55% 34.72% 7.64%(d)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of
period (000)........... $14,034 $13,935 $8,501 $5,740 $ 968
Ratio of expenses to
average net assets..... 1.28% 1.23% 1.30% 1.26% 1.29%(c)
Ratio of net investment
income to average net
assets................. 0.20% 0.31% 0.42% 0.27% 0.63%(c)
Ratio of expenses to
average net assets*.... 1.53% 1.48% 1.55% (b) 1.32%(c)
Portfolio turnover
rate**................. 142% 49% 67% 46% 44%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM JUNE 1, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1995.
(b) THERE WERE NO WAIVERS OR REIMBURSEMENTS DURING THE PERIOD.
(c) ANNUALIZED.
(d) NOT ANNUALIZED.
FINANCIAL HIGHLIGHTS, CLASS B
<TABLE>
<CAPTION>
FOR THE
FOR THE YEAR ENDED APRIL 30, PERIOD ENDED
-------------------------------- APRIL 30,
1999 1998 1997 1996 1995 (a)
------- ------- ------ ------ -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 15.88 $ 15.20 $14.24 $10.69 $10.00
------- ------- ------ ------ -------------
Investment Activities
Net investment income
(loss)............... (0.07) (0.05) (0.04) (0.06) 0.03
Net realized and
unrealized gains from
investments.......... 1.12 4.84 1.57 3.65 0.69
------- ------- ------ ------ -------------
Total from Investment
Activities........... 1.05 4.79 1.53 3.59 0.72
------- ------- ------ ------ -------------
Distributions
Net investment
income............... (0.01) -- (0.01) -- (0.03)
Net realized gains..... (1.95) (4.11) (0.56) (0.04) --
------- ------- ------ ------ -------------
Total Distributions.... (1.96) (4.11) (0.57) (0.04) (0.03)
------- ------- ------ ------ -------------
Net Asset Value, End of
Period................. $ 14.97 $ 15.88 $15.20 $14.24 $10.69
------- ------- ------ ------ -------------
------- ------- ------ ------ -------------
TOTAL RETURN (EXCLUDES
REDEMPTION CHARGE)..... 7.83% 35.55% 10.78% 33.73% 7.23%(d)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of
period (000)........... $19,269 $18,225 $9,761 $6,194 $1,362
Ratio of expenses to
average net assets..... 2.04% 1.98% 2.05% 2.02% 2.03%(c)
Ratio of net investment
income (loss) to
average net assets..... (0.55%) (0.43%) (0.33%) (0.48%) 0.00%(c)
Ratio of expenses to
average net assets*.... (b) (b) (b) (b) 2.06%(c)
Portfolio turnover
rate**................. 142% 49% 67% 46% 44%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM JUNE 1, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1995.
(b) THERE WERE NO WAIVERS OR REIMBURSEMENTS DURING THE PERIOD.
(c) ANNUALIZED.
(d) NOT ANNUALIZED.
CONTINUED
19
<PAGE>
CENTURA FUNDS, INC.
MID CAP EQUITY FUND
FINANCIAL HIGHLIGHTS, CLASS C
<TABLE>
<CAPTION>
FOR THE
FOR THE YEAR ENDED APRIL 30, PERIOD ENDED
-------------------------------------- APRIL 30,
1999 1998 1997 1996 1995 (a)
-------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 16.16 $ 15.33 $ 14.31 $ 10.70 $ 10.00
-------- -------- -------- -------- -------------
Investment Activities
Net investment
income............... 0.07 0.09 0.09 0.07 0.07
Net realized and
unrealized gains from
investments.......... 1.15 4.94 1.58 3.65 0.70
-------- -------- -------- -------- -------------
Total from Investment
Activities........... 1.22 5.03 1.67 3.72 0.77
-------- -------- -------- -------- -------------
Distributions
Net investment
income............... (0.06) (0.09) (0.09) (0.07) (0.07)
Net realized gains..... (1.95) (4.11) (0.56) (0.04) --
-------- -------- -------- -------- -------------
Total Distributions.... (2.01) (4.20) (0.65) (0.11) (0.07)
-------- -------- -------- -------- -------------
Net Asset Value, End of
Period................. $ 15.37 $ 16.16 $ 15.33 $ 14.31 $ 10.70
-------- -------- -------- -------- -------------
-------- -------- -------- -------- -------------
TOTAL RETURN............. 8.93% 36.89% 11.82% 34.97% 7.71%(d)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of
period (000)........... $138,897 $179,859 $147,213 $133,714 $84,004
Ratio of expenses to
average net assets..... 1.03% 1.00% 1.05% 1.04% 1.04%(c)
Ratio of net investment
income to average net
assets................. 0.46% 0.56% 0.67% 0.55% 0.79%(c)
Ratio of expenses to
average net assets*.... (b) (b) (b) (b) 1.07%(c)
Portfolio turnover
rate**................. 142% 49% 67% 46% 44%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM JUNE 1, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1995.
(b) THERE WERE NO WAIVERS OR REIMBURSEMENTS DURING THE PERIOD.
(c) ANNUALIZED.
(d) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
SMALL CAP EQUITY FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS A
WITH LOAD LIPPER
(RETURN REFLECTS SMALL CAP
CLASS A MAXIMUM SALES LOAD RUSSELL 2000 FUNDS S&P SMALLCAP
WITHOUT LOAD OF 4.50%) INDEX* AVERAGE* 600*
<S> <C> <C> <C> <C> <C>
12/94 $10,000 $9,550 $10,000 $10,000 $10,000
12/95 $12,048 $11,449 $12,844 $13,214 $12,996
12/96 $14,755 $14,083 $14,963 $15,651 $15,767
12/97 $19,426 $18,542 $18,308 $18,704 $19,801
12/98 $21,155 $20,192 $17,842 $18,563 $19,543
4/99 $20,730 $19,787 $18,386 $18,451 $18,960
AVERAGE ANNUAL TOTAL RETURN
1 YEAR (8.05) (12.21) (9.25) (11.17) (14.29)
SINCE INCEPTION 18.35% 17.09% 15.09% 14.94% 15.91%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS B
WITH LOAD
(RETURN REFLECTS
THE APPROPRIATE CONTINGENT
DEFERRED SALES CHARGE
(MAXIMUM DEFERRED LIPPER
CLASS B SALES LOAD RUSSELL 2000 SMALL CAP
WITHOUT LOAD IS 5.00%)) INDEX* FUNDS AVERAGE*
<S> <C> <C> <C> <C>
12/94 $10,000 $9,500 $10,000 $10,000
12/95 $11,997 $11,497 $12,844 $13,214
12/96 $14,619 $14,219 $14,963 $15,651
12/97 $19,108 $18,808 $18,308 $18,704
12/98 $20,645 $20,445 $17,842 $18,563
4/99 $20,177 $20,077 $18,386 $18,451
AVERAGE ANNUAL TOTAL RETURN
1 YEAR (8.79)% (12.99)% (9.25)% (11.17)%
SINCE INCEPTION 17.62% 17.48% 15.09% 14.94%
<CAPTION>
S&P SMALLCAP
600*
<S> <C>
12/94 $10,000
12/95 $12,996
12/96 $15,767
12/97 $19,801
12/98 $19,543
4/99 $18,960
AVERAGE ANNUAL TOTAL RETURN
1 YEAR (14.29)%
SINCE INCEPTION 15.91%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LIPPER
SMALL CAP
CLASS C RUSSELL 2000 FUNDS S&P SMALLCAP
(NO LOAD) INDEX* AVERAGE* 600*
<S> <C> <C> <C> <C>
12/94 $10,000 $10,000 $10,000 $10,000
12/95 $12,099 $12,844 $13,214 $12,996
12/96 $14,894 $14,963 $15,651 $15,767
12/97 $19,656 $18,308 $18,704 $19,801
12/98 $21,456 $17,842 $18,563 $19,543
4/99 $21,043 $18,386 $18,451 $18,960
AVERAGE ANNUAL TOTAL RETURN
1 YEAR (7.84)% (9.25)% (11.17)% (14.29)%
SINCE INCEPTION 18.76% 15.09% 14.94% 15.91%
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS. 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 RUSSELL 2000 INDEX is a broad-based unmanaged index that represents the
general performance of domestically traded common stocks of small- to mid-size
companies. The S&P SMALLCAP 600 INDEX is an unmanaged index generally
representative of the domestic stock market of small-sized companies. The
LIPPER SMALL CAP FUNDS AVERAGE is representative of the average of the total
returns reported by all of the mutual funds designated by Lipper, Inc. that
fall into this category.
Due to change in investment policies, going forward the Russell 2000 Index will
be replaced by S&P SmallCap 600 Index because of its better representation of
the Fund's new investment policies. Previously used index is shown here for
transitional purposes.
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.
The inception date for performance purposes is January 1, 1995. The quoted
performance of the Centura Small Cap Equity Fund (formerly 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 investment
objective, policies and techniques of the Commingled Accounts were equivalent in
all material aspect to those 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, their
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.
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.
21
<PAGE>
CENTURA FUNDS, INC. SCHEDULE OF PORTFOLIO INVESTMENTS
SMALL CAP EQUITY FUND APRIL 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
COMMON STOCKS (94.6%)
<CAPTION>
MARKET
SHARES VALUE
----------- --------------
<S> <C> <C>
AEROSPACE/DEFENSE (4.0%)
Aeroflex, Inc. (b)...................... 8,000 $ 117,000
Heico Corp.............................. 35,700 792,093
Nichols Research Corp. (b).............. 29,500 623,188
--------------
1,532,281
--------------
BANKING & FINANCIAL SERVICES (8.0%)
CCB Financial Corp...................... 15,000 866,250
Cenit Bancorp, Inc...................... 50,000 1,000,000
Choicepoint, Inc. (b)................... 10,000 593,750
Hamilton Bancorp, Inc. (b).............. 22,500 579,375
--------------
3,039,375
--------------
BUILDING & CONSTRUCTION (4.7%)
Coachmen Industries, Inc................ 25,000 471,875
Texas Industries, Inc................... 5,000 154,375
Westower Corp. (b)...................... 37,000 1,184,000
--------------
1,810,250
--------------
CHEMICALS (0.8%)
Cambrex Corp............................ 6,000 153,750
Macdermid, Inc.......................... 4,000 167,750
--------------
321,500
--------------
COMMERCIAL SERVICES (2.6%)
Ace Cash Express, Inc. (b).............. 51,000 745,875
Plexus Corp. (b)........................ 7,000 233,625
--------------
979,500
--------------
COMPUTER INDUSTRY (2.2%)
Ciber, Inc. (b)......................... 6,000 113,250
Datastream Systems, Inc. (b)............ 30,000 253,125
Harbinger Corp. (b)..................... 20,000 218,750
National Instruments Corp. (b).......... 7,000 238,000
--------------
823,125
--------------
CONSUMER GOODS AND SERVICES (1.7%)
Cash America International, Inc......... 50,000 637,500
--------------
ELECTRONIC COMPONENTS/INSTRUMENTS (14.6%)
Alpha Industries, Inc. (b).............. 7,000 246,750
Artesyn Technologies, Inc. (b).......... 33,500 603,000
Benchmark Electronics, Inc. (b)......... 30,000 1,008,749
C&D Technologies, Inc................... 20,000 516,250
Dallas Semiconductors................... 13,000 552,500
DII Group, Inc. (b)..................... 24,500 759,499
Dupont Photomask, Inc. (b).............. 12,500 546,875
Lattice Semiconductor Corp. (b)......... 5,000 204,375
Photronics, Inc. (b).................... 29,400 703,763
Unitrode Corp. (b)...................... 25,000 442,188
--------------
5,583,949
--------------
ENERGY (8.1%)
Catalytica, Inc. (b).................... 45,000 615,938
Global Industries Ltd. (b).............. 55,000 677,187
Midcoast Energy Resources............... 64,375 1,094,374
National-Oilwell, Inc. (b).............. 30,000 390,000
Piedmont Natural Gas Co., Inc........... 10,000 318,750
--------------
3,096,249
--------------
<CAPTION>
COMMON STOCKS, CONTINUED:
MARKET
SHARES VALUE
----------- --------------
<S> <C> <C>
ENGINEERING (1.1%)
Stolt Comex Seaway, SA ADR (b).......... 35,000 $ 437,500
--------------
FOOD AND BEVERAGES (2.9%)
Fresh America Corp. (b)................. 30,000 553,125
Smithfield Foods, Inc. (b).............. 23,000 543,375
--------------
1,096,500
--------------
FOREST PRODUCTS (2.0%)
Buckeye Technologies, Inc. (b).......... 27,000 391,500
Deltic Timber Corp...................... 14,000 388,500
--------------
780,000
--------------
HEALTH CARE (7.3%)
Alpharma, Inc........................... 15,000 442,500
Applied Analytical Industries, Inc.
(b)................................... 32,500 365,625
Coventry Health Care, Inc. (b).......... 7,600 69,825
Datascope Corp. (b)..................... 10,000 284,375
Express Scripts, Inc. Class A (b)....... 1,500 110,438
Medco Research, Inc. (b)................ 30,000 663,750
Medquist, Inc. (b)...................... 10,000 342,500
Pharmaceutical Product Development, Inc.
(b)................................... 10,000 291,250
Zonagen, Inc. (b)....................... 10,000 228,750
--------------
2,799,013
--------------
INSURANCE (7.2%)
American Heritage Life Investment
Corp.................................. 30,000 695,625
FPIC Insurance Group, Inc. (b).......... 15,000 675,000
INSpire Insurance Solutions (b)......... 30,000 652,500
Protective Life Corp.................... 19,000 744,563
--------------
2,767,688
--------------
LEISURE (1.8%)
Action Performance Companies, Inc.
(b)................................... 20,000 677,500
--------------
MACHINERY & EQUIPMENT (2.2%)
Advanced Energy Industries (b).......... 13,000 359,937
Asyst Technologies, Inc. (b)............ 17,000 311,313
Helix Technology Corp................... 10,000 176,563
--------------
847,813
--------------
MEDIA (8.8%)
Consolidated Graphics, Inc. (b)......... 11,000 468,875
Cox Radio, Inc. (b)..................... 12,500 609,375
Gemstar International Group, Ltd. (b)... 4,000 421,500
Jones Intercable, Inc. Class A (b)...... 11,000 510,125
Media General, Inc., Class A............ 15,000 779,999
Medialink Worldwide, Inc. (b)........... 8,000 134,000
TV Guide, Inc. (b)...................... 10,000 421,250
--------------
3,345,124
--------------
METALS (0.7%)
Commonwealth Industries, Inc............ 26,400 254,100
--------------
OFFICE EQUIPMENT & SERVICES (1.3%)
Global Imaging Systems, Inc. (b)........ 35,000 503,125
--------------
</TABLE>
CONTINUED
22
<PAGE>
CENTURA FUNDS, INC. SCHEDULE OF PORTFOLIO INVESTMENTS
SMALL CAP EQUITY FUND APRIL 30, 1999
<TABLE>
<CAPTION>
COMMON STOCKS, CONTINUED:
MARKET
SHARES VALUE
----------- --------------
<S> <C> <C>
RENTAL--AUTO & EQUIPMENT (2.0%)
Rent Way, Inc. (b)...................... 27,500 $ 749,375
--------------
RETAIL (4.8%)
Goody's Family Clothing, Inc. (b)....... 36,000 324,000
Pier 1 Imports, Inc..................... 65,000 479,375
Rowe Furniture Corp..................... 15,500 161,781
Shopko Stores, Inc. (b)................. 8,000 274,500
Tropical Sportswear International (b)... 27,500 603,282
--------------
1,842,938
--------------
TELECOMMUNICATIONS (1.5%)
Gilat Satellite Networks Ltd. (b)....... 5,000 260,000
Superior Telecom, Inc................... 12,500 311,719
--------------
571,719
--------------
TELECOMMUNICATIONS-EQUIPMENT (4.3%)
Antec Corp. (b)......................... 15,000 406,875
Commscope, Inc. (b)..................... 25,000 609,375
Microwave Power Devices (b)............. 15,000 192,188
Powertel, Inc. (b)...................... 20,000 435,000
--------------
1,643,438
--------------
TOTAL COMMON STOCKS.................................. 36,139,562
--------------
<CAPTION>
INVESTMENT COMPANIES (7.7%)
<S> <C> <C>
Centura Money Market Fund............... 1,496,724 1,496,724
Goldman Sachs Financial Square Prime
Money Market Fund..................... 779,238 779,238
Provident Institutional Temporary
Investment Fund....................... 680,175 680,175
--------------
TOTAL INVESTMENT COMPANIES........................... 2,956,137
--------------
TOTAL INVESTMENTS
(Cost $35,250,293)(a)(102.3%)...................... 39,095,699
Liabilities in excess of other assets (2.3%)......... (884,136)
--------------
TOTAL NET ASSETS (100.0%)............................ $ 38,211,563
--------------
--------------
</TABLE>
- ---------
Percentages indicated are based on net assets of $38,211,563.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of approximately $135,785. Cost for federal tax purposes differs from value
by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation... $ 5,712,842
Unrealized depreciation... (2,003,221)
------------
Net unrealized
appreciation $ 3,709,621
------------
------------
</TABLE>
(b) Represents non-income producing security.
SA -- Sociedad Anonimal (Spanish Corporation)
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
CENTURA FUNDS, INC.
SMALL CAP EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (cost
$35,250,293).......................... $39,095,699
Interest and dividends receivable....... 18,734
Receivable for investments sold......... 259,849
Deferred organization costs............. 8,986
Prepaid expenses and other assets....... 5,164
-----------
TOTAL ASSETS.......................... 39,388,432
LIABILITIES:
Payable to custodian for overdraft...... $ 778
Payable for investments purchased....... 1,115,675
Payable for capital shares redeemed..... 24,750
Accrued expenses and other payables:
Investment advisory fees.............. 2,935
Administration fees................... 629
Distribution fees..................... 4,713
Other................................. 27,389
----------
TOTAL LIABILITIES..................... 1,176,869
-----------
NET ASSETS:
Capital................................. 33,596,780
Accumulated net realized gains from
investment transactions............... 769,377
Net unrealized appreciation from
investments........................... 3,845,406
-----------
NET ASSETS.............................. $38,211,563
-----------
-----------
Class A
Net Assets............................ $ 3,046,073
Shares................................ 240,131
Redemption price per share............ $ 12.69
-----------
-----------
Maximum Sales Charge--Class A......... 4.50%
Maximum Offering Price
(100%/(100% - Maximum Sales Charge)
of net asset value adjusted to the
nearest cent) per share............. $ 13.29
-----------
-----------
Class B
Net Assets............................ $ 5,108,048
Shares................................ 408,673
Offering price per share*............. $ 12.50
-----------
-----------
Class C
Net Assets............................ $30,057,442
Shares................................ 2,363,312
Offering and redemption price per
share............................... $ 12.72
-----------
-----------
</TABLE>
- ---------
* Redemption price of Class B shares varies based on length of time held.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividend income......................... $ 384,488
-----------
TOTAL INCOME.......................... 384,488
EXPENSES:
Investment advisory fees................ $259,395
Administration fees..................... 55,585
Distribution fees--Class A.............. 15,765
Distribution fees--Class B.............. 49,928
Custodian fees.......................... 9,448
Fund accounting fees.................... 33,360
Transfer agent fees..................... 43,247
Other................................... 54,567
--------
Total expenses before voluntary fee
reductions.......................... 521,295
Expenses voluntarily reduced.......... (7,882)
-----------
Net Expenses.......................... 513,413
-----------
NET INVESTMENT LOSS..................... (128,925)
-----------
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized gains from investment
transactions.......................... 979,331
Net change in unrealized appreciation
from investments...................... (3,995,280)
-----------
Net realized/unrealized gains (losses)
from investments...................... (3,015,949)
-----------
Change in net assets resulting from
operations............................ $(3,144,874)
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
CENTURA FUNDS, INC.
SMALL CAP EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30,
1999 1998 (a)
----------- -------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income (loss).......... $ (128,925) $ 94,888
Net realized gains from investment
transactions........................ 979,331 4,803,926
Net change in unrealized appreciation
from investments.................... (3,995,280) 7,061,973
----------- -------------
Change in net assets resulting from
operations............................ (3,144,874) 11,960,787
----------- -------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income............ -- (1,298)
In excess of net investment income.... -- (1,536)
From net realized gains from
investment transactions............. (264,286) (103,629)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
In excess of net investment income.... -- (1,083)
From net realized gains from
investment transactions............. (427,621) (159,881)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income............ -- (102,073)
From net realized gains from
investment transactions............. (2,390,898) (1,557,628)
----------- -------------
Change in net assets from shareholder
distributions......................... (3,082,805) (1,927,128)
----------- -------------
Change in net assets from capital
transactions.......................... 4,919,060 29,486,523
----------- -------------
Change in net assets.................... (1,308,619) 39,520,182
NET ASSETS:
Beginning of period................... 39,520,182 --
----------- -------------
End of period......................... $38,211,563 $ 39,520,182
----------- -------------
----------- -------------
</TABLE>
- ---------
(a) For the period from May 2, 1997 (commencement of operations) to April 30,
1998.
SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>
CENTURA FUNDS, INC.
SMALL CAP EQUITY FUND
FINANCIAL HIGHLIGHTS, CLASS A
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30,
1999 1998 (a)
----------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.... $14.99 $10.00
----------- -------------
Investment Activities
Net investment income (loss).......... (0.06) 0.03
Net realized and unrealized gains
(losses) from investments........... (1.20) 5.87
----------- -------------
Total from Investment Activities...... (1.26) 5.90
----------- -------------
Distributions
Net investment income................. -- (0.03)
In excess of net investment income.... -- (0.01)
Net realized gains.................... (1.04) (0.87)
----------- -------------
Total Distributions................... (1.04) (0.91)
----------- -------------
Net Asset Value, End of Period.......... $12.69 $14.99
----------- -------------
----------- -------------
TOTAL RETURN (EXCLUDES SALES CHARGE).... (8.05%) 60.75%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)....... $3,046 $3,000
Ratio of expenses to average net
assets................................ 1.48% 1.46%(b)
Ratio of net investment income (loss) to
average net assets.................... (0.43%) 0.09%(b)
Ratio of expenses to average net
assets*............................... 1.73% 1.82%(b)
Portfolio turnover rate**............... 130% 71%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM MAY 2, 1997 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1998.
(b) ANNUALIZED.
(c) NOT ANNUALIZED.
FINANCIAL HIGHLIGHTS, CLASS B
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30,
1999 1998 (a)
----------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.... $14.90 $10.00
----------- -------------
Investment Activities
Net investment loss................... (0.14) (0.03)
Net realized and unrealized gains
(losses) from investments........... (1.22) 5.82
----------- -------------
Total from Investment Activities...... (1.36) 5.79
----------- -------------
Distributions
In excess of net investment income.... -- (0.02)
Net realized gains.................... (1.04) (0.87)
----------- -------------
Total Distributions................... (1.04) (0.89)
----------- -------------
Net Asset Value, End of Period.......... $12.50 $14.90
----------- -------------
----------- -------------
TOTAL RETURN (EXCLUDES REDEMPTION
CHARGE)............................... (8.79%) 59.50%(d)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)....... $5,108 $4,938
Ratio of expenses to average net
assets................................ 2.23% 2.21%(c)
Ratio of net investment loss to average
net assets............................ (1.19%) (0.66%)(c)
Ratio of expenses to average net
assets*............................... (b) 2.32%(c)
Portfolio turnover rate**............... 130% 71%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM MAY 2, 1997 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1998.
(b) THERE WERE NO WAIVERS OR REIMBURSEMENTS DURING THE PERIOD.
(c) ANNUALIZED.
(d) NOT ANNUALIZED.
CONTINUED
26
<PAGE>
CENTURA FUNDS, INC.
SMALL CAP EQUITY FUND
FINANCIAL HIGHLIGHTS, CLASS C
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30,
1999 1998 (a)
----------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period.... $ 14.99 $ 10.00
----------- -------------
Investment Activities
Net investment income (loss).......... (0.02) 0.06
Net realized and unrealized gains
(losses) from investments........... (1.21) 5.86
----------- -------------
Total from Investment Activities...... (1.23) 5.92
----------- -------------
Distributions
Net investment income................. -- (0.06)
Net realized gains.................... (1.04) (0.87)
----------- -------------
Total Distributions................... (1.04) (0.93)
----------- -------------
Net Asset Value, End of Period.......... $ 12.72 $ 14.99
----------- -------------
----------- -------------
TOTAL RETURN............................ (7.84%) 60.98%(d)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)....... $30,057 $31,583
Ratio of expenses to average net
assets................................ 1.23% 1.16%(c)
Ratio of net investment income (loss) to
average net assets.................... (0.19%) 0.46%(c)
Ratio of expenses to average net
assets*............................... (b) 1.27%(c)
Portfolio turnover rate**............... 130% 71%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM MAY 2, 1997 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1998.
(b) THERE WERE NO WAIVERS OR REIMBURSEMENTS DURING THE PERIOD.
(c) ANNUALIZED.
(d) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS
27
<PAGE>
GOVERNMENT INCOME FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS A
WITH LOAD LEHMAN BROTHERS LIPPER
(RETURN REFLECTS INTERMEDIATE SHORT-INTERMEDIATE
CLASS A MAXIMUM SALES GOVERNMENT U.S. GOVERNMENT
WITHOUT LOAD LOAD OF 2.75%) BOND INDEX* AVERAGE*
<S> <C> <C> <C> <C>
12/90 $10,000 $9,725 $10,000 $10,000
12/91 $11,111 $10,808 $11,409 $11,308
12/92 $11,722 $11,401 $12,200 $11,985
12/93 $12,479 $12,138 $13,198 $12,833
12/94 $12,240 $11,906 $12,968 $12,613
12/95 $13,860 $13,481 $14,838 $14,230
12/96 $14,206 $13,818 $15,440 $14,814
12/97 $15,210 $14,795 $16,632 $15,845
12/98 $16,300 $15,855 $18,041 $16,927
4/99 $16,312 $15,867 $18,040 $17,010
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5.38% 2.46% 6.35% 5.51%
5 YEAR 5.94% 5.36% 6.99% 6.31%
SINCE INCEPTION 6.05% 5.70% 7.34% 6.58%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS B
WITH LOAD
(RETURN REFLECTS THE
APPROPRIATE CONTINGENT
DEFERRED SALES CHARGE LEHMAN BROTHERS LIPPER
(MAXIMUM DEFERRED INTERMEDIATE SHORT-INTERMEDIATE
CLASS B SALES LOAD GOVERNMENT U.S. GOVERNMENT
WITHOUT LOAD IS 3.00%)) BOND INDEX* AVERAGE*
<S> <C> <C> <C> <C>
12/90 $10,000 $9,700 $10,000 $10,000
12/91 $11,056 $10,756 $11,409 $11,308
12/92 $11,609 $11,309 $12,200 $11,985
12/93 $12,293 $11,993 $13,198 $12,833
12/94 $11,984 $11,784 $12,968 $12,613
12/95 $13,467 $13,367 $14,838 $14,230
12/96 $13,712 $13,712 $15,440 $14,814
12/97 $14,591 $14,591 $16,632 $15,845
12/98 $15,580 $15,580 $18,041 $16,927
4/99 $15,566 $15,566 $18,040 $17,010
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 4.96% 2.01% 6.35% 5.51%
5 YEAR 5.31% 5.15% 6.99% 6.31%
SINCE INCEPTION 5.46% 5.46% 7.34% 6.58%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS LIPPER
INTERMEDIATE SHORT-INTERMEDIATE
CLASS C GOVERNMENT U.S. GOVERNMENT
(NO LOAD) BOND INDEX* AVERAGE*
<S> <C> <C> <C>
12/90 $10,000 $10,000 $10,000
12/91 $11,154 $11,409 $11,308
12/92 $11,836 $12,200 $11,985
12/93 $12,655 $13,198 $12,833
12/94 $12,457 $12,968 $12,613
12/95 $14,141 $14,838 $14,230
12/96 $14,545 $15,440 $14,814
12/97 $15,592 $16,632 $15,845
12/98 $16,772 $18,041 $16,927
4/99 $16,781 $18,040 $17,010
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5.64% 6.35% 5.51%
5 YEAR 6.23% 6.99% 6.31%
SINCE INCEPTION 6.41% 7.34% 6.58%
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS. 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 LEHMAN BROTHERS INTERMEDIATE GOVERNMENT BOND INDEX is an unmanaged index
generally representative of the Government bond market. The LIPPER SHORT-
INTERMEDIATE U.S. GOVERNMENT AVERAGE is representative of the average of the
total returns reported by all of the mutual funds designated by Lipper, Inc.
that fall into this category.
The inception date for performance purposes is December 31, 1990. The quoted
performance of the Centura Government Income Fund (formerly 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
investment objective, policies and techniques of the Commingled Accounts were
equivalent in all material aspect to those 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, their 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.
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.
28
<PAGE>
CENTURA FUNDS, INC. SCHEDULE OF PORTFOLIO INVESTMENTS
GOVERNMENT INCOME FUND APRIL 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
U.S. TREASURY NOTES (11.4%)
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- ------------
<S> <C> <C>
4.00%, 10/31/00......................... $ 6,000,000 $ 5,913,000
4.75%, 2/15/04.......................... 5,000,000 4,900,000
4.75%, 11/15/08......................... 3,000,000 2,866,860
------------
TOTAL U.S. TREASURY NOTES............................ 13,679,860
------------
<CAPTION>
U.S. GOVERNMENT AGENCY OBLIGATIONS (83.4%)
<S> <C> <C>
FEDERAL FARM CREDIT BANK (1.7%)
5.84%, 11/21/03......................... 2,000,000 2,015,780
------------
FEDERAL HOME LOAN BANK (16.5%)
6.24%, 6/23/00(b)....................... 5,000,000 5,054,700
5.62%, 1/12/01.......................... 4,500,000 4,521,870
6.09%, 12/23/02......................... 5,000,000 5,103,100
5.98%, 6/18/08.......................... 5,000,000 4,992,600
------------
19,672,270
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION (9.7%)
6.50%, 2/1/04, Pool # N97461............ 2,951,085 2,959,377
6.50%, 9/1/04, Pool# N97771............. 3,508,078 3,517,936
6.13%, 2/27/06.......................... 5,000,000 5,096,900
------------
11,574,213
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (55.5%)
6.00%, 11/1/03, Pool #50948............. 2,029,976 2,038,218
6.00%, 1/1/04, Pool #50968.............. 1,299,331 1,302,982
6.50%, 7/1/04, Pool # 250995............ 3,555,816 3,564,705
6.50%, 10/1/04, Pool #251243............ 3,713,264 3,722,547
6.00%, 11/1/04, Pool #251413............ 4,418,976 4,414,823
6.50%, 11/1/07, Pool #251509............ 3,100,090 3,119,466
6.00%, 1/1/08, Pool #251627............. 3,083,048 3,065,690
6.00%, 2/1/08, Pool #251660............. 7,990,468 7,945,482
5.75%, 2/15/08.......................... 5,000,000 4,965,500
5.50%, 3/1/08, Pool #395059............. 1,168,942 1,156,127
5.50%, 4/1/08, Pool #411900............. 1,159,017 1,146,311
6.00%, 4/1/08, Pool# 251725............. 1,121,930 1,125,083
5.50%, 5/1/08, Pool #431606............. 233,394 231,148
6.00%, 6/1/08, Pool# 251827............. 874,876 877,335
6.00%, 6/1/08, Pool# 418487............. 5,942,889 5,962,938
6.00%, 8/1/08, Pool #251904............. 4,231,007 4,242,897
5.50%, 12/1/08, Pool #252243............ 8,519,644 8,426,244
5.50%, 2/1/09, Pool #252317............. 4,871,163 4,817,761
6.00%, 3/1/09, Pool #252387............. 4,232,596 4,245,587
------------
66,370,844
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS.............
99,633,107
------------
<CAPTION>
INVESTMENT COMPANIES (4.7%)
MARKET
SHARES VALUE
----------- ------------
<S> <C> <C>
Centura Money Market Fund............... 1,500,000 $ 1,500,000
Goldman Financial Square Treasury Short
Term Money Market Fund................ 2,374,204 2,374,204
Provident Institutional Temporary
Investment Fund....................... 1,737,119 1,737,119
------------
TOTAL INVESTMENT COMPANIES........................... 5,611,323
------------
TOTAL INVESTMENTS
(Cost $118,890,408)(a)(99.5%)...................... 118,924,290
Other assets in excess of liabilities (0.5%)......... 588,028
------------
TOTAL NET ASSETS -- 100.0%........................... $119,512,318
------------
------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
<CAPTION>
UNDERLYING
OPTION PAR
VALUE MARKET
(NOTIONAL AMOUNT) VALUE
------------------ ---------------
<S> <C> <C>
OPTIONS OUTSTANDING AT END OF PERIOD
CONSIST OF:
U.S. Treasury Note, 4.75%, 2/15/04
(Strike price 98.609, expires on
5/17/99) 5,000,000 $ (35,547)
---------------
Total written put options (premium
received $19,922) $ (35,547)
---------------
---------------
</TABLE>
- ---------
Percentages indicated are based on net assets of $119,512,318.
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation... $ 376,129
Unrealized depreciation... (357,872)
-----------
Net unrealized
appreciation............ $ 18,257
-----------
-----------
</TABLE>
(b) Security segregated in relation to the Fund's outstanding written option
contract commitment.
SEE NOTES TO FINANCIAL STATEMENTS
29
<PAGE>
CENTURA FUNDS, INC.
GOVERNMENT INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (cost
$118,890,408)......................... $118,924,290
Cash.................................... 124,748
Interest and dividends receivable....... 1,038,791
Deferred organization costs............. 674
Prepaid expenses and other assets....... 5,973
------------
TOTAL ASSETS.......................... 120,094,476
LIABILITIES:
Distributions payable................... $502,442
Option contract written, at value--
premiums received $19,922............. 35,547
Accrued expenses and other payables:
Investment advisory fees.............. 3,938
Administration fees................... 1,969
Distribution fees..................... 237
Other................................. 38,025
--------
TOTAL LIABILITIES..................... 582,158
------------
NET ASSETS:
Capital................................. 119,193,454
Accumulated net realized gains from
investment transactions and option
contracts............................. 300,607
Net unrealized appreciation from
investments and option contracts...... 18,257
------------
NET ASSETS.............................. $119,512,318
------------
------------
Class A
Net Assets............................ $ 677,552
Shares................................ 67,536
Redemption price per share............ $ 10.03
------------
------------
Maximum Sales Charge--Class A......... 2.75%
Maximum Offering Price
(100%/(100% - Maximum Sales Charge)
of net asset value adjusted to the
nearest cent) per share............. $ 10.31
------------
------------
Class B
Net Assets............................ $ 195,232
Shares................................ 19,474
Offering price per share*............. $ 10.03
------------
------------
Class C
Net Assets............................ $118,639,534
Shares................................ 11,823,321
Offering and redemption price per
share............................... $ 10.03
------------
------------
</TABLE>
- ---------
* Redemption price of Class B shares varies based on length of time held.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest income......................... $7,134,031
Dividend income......................... 256,658
----------
TOTAL INCOME.......................... 7,390,689
EXPENSES:
Investment advisory fees................ $389,332
Administration fees..................... 194,666
Distribution fees--Class A.............. 2,667
Distribution fees--Class B.............. 1,637
Custodian fees.......................... 32,446
Fund accounting fees.................... 34,565
Transfer agent fees..................... 28,907
Other................................... 86,654
--------
Total expenses before voluntary fee
reductions.......................... 770,874
Expenses voluntarily reduced.......... (1,743)
----------
Net Expenses.......................... 769,131
----------
NET INVESTMENT INCOME................... 6,621,558
----------
REALIZED/UNREALIZED GAINS FROM INVESTMENTS:
Net realized gains from investment
transactions and option contracts..... 777,883
Net change in unrealized appreciation
from investments and option
contracts............................. (118,464)
----------
Net realized/unrealized gains from
investments........................... 659,419
----------
Change in net assets resulting from
operations............................ $7,280,977
----------
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
30
<PAGE>
CENTURA FUNDS, INC.
GOVERNMENT INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1999 1998
------------ ------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income................. $ 6,621,558 $ 7,228,918
Net realized gains from investment
transactions and option contracts... 777,883 2,499,631
Net change in unrealized appreciation
from investments and option
contracts........................... (118,464) 545,699
------------ ------------
Change in net assets resulting from
operations............................ 7,280,977 10,274,248
------------ ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income............ (25,895) (27,502)
From net realized gains from
investment transactions and option
contracts........................... (10,321) --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income............ (7,086) (7,553)
From net realized gains from
investment transactions and option
contracts........................... (3,965) --
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income............ (6,588,577) (7,193,863)
From net realized gains from
investment transactions and option
contracts........................... (2,541,338) --
------------ ------------
Change in net assets from shareholder
distributions......................... (9,177,182) (7,228,918)
------------ ------------
Change in net assets from capital
transactions.......................... (10,320,659) 8,575,052
------------ ------------
Change in net assets.................... (12,216,864) 11,620,382
NET ASSETS:
Beginning of period................... 131,729,182 120,108,800
------------ ------------
End of period......................... $119,512,318 $131,729,182
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
31
<PAGE>
CENTURA FUNDS, INC.
GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS, CLASS A
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1999 1998 1997 1996 1995 (a)
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.19 $ 9.94 $10.01 $ 9.97 $10.00
----------- ----------- ----------- ----------- -------------
Investment Activities
Net investment
income............... 0.50 0.55 0.56 0.57 0.52
Net realized and
unrealized gains
(losses) from
investments.......... 0.04 0.25 (0.07) 0.04 (0.03)
----------- ----------- ----------- ----------- -------------
Total from Investment
Activities........... 0.54 0.80 0.49 0.61 0.49
----------- ----------- ----------- ----------- -------------
Distributions
Net investment
income............... (0.50) (0.55) (0.56) (0.57) (0.52)
Net realized gains..... (0.20) -- -- -- --
----------- ----------- ----------- ----------- -------------
Total Distributions.... (0.70) (0.55) (0.56) (0.57) (0.52)
----------- ----------- ----------- ----------- -------------
Net Asset Value, End of
Period................. $10.03 $10.19 $ 9.94 $10.01 $ 9.97
----------- ----------- ----------- ----------- -------------
----------- ----------- ----------- ----------- -------------
TOTAL RETURN (EXCLUDES
SALES CHARGE).......... 5.38% 8.21% 5.07% 6.20% 5.02%(d)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of
period (000)........... $ 678 $ 531 $ 481 $ 526 $ 247
Ratio of expenses to
average net assets..... 0.84% 0.84% 0.82% 0.85% 0.86%(c)
Ratio of net investment
income to average net
assets................. 4.85% 5.42% 5.63% 5.61% 5.58%(c)
Ratio of expenses to
average net assets*.... 1.09% 1.09% 1.07% (b) 0.89%(c)
Portfolio turnover
rate**................. 104% 121% 26% 34% 42%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM JUNE 1, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1995.
(b) THERE WERE NO WAIVERS OR REIMBURSEMENTS DURING THE PERIOD.
(c) ANNUALIZED.
(d) NOT ANNUALIZED.
FINANCIAL HIGHLIGHTS, CLASS B
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1999 1998 1997 1996 1995 (a)
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.18 $ 9.94 $10.01 $ 9.97 $10.00
----------- ----------- ----------- ----------- -------------
Investment Activities
Net investment
income............... 0.45 0.50 0.50 0.50 0.45
Net realized and
unrealized gains
(losses) from
investments.......... 0.05 0.24 (0.07) 0.04 (0.03)
----------- ----------- ----------- ----------- -------------
Total from Investment
Activities........... 0.50 0.74 0.43 0.54 0.42
----------- ----------- ----------- ----------- -------------
Distributions
Net investment
income............... (0.45) (0.50) (0.50) (0.50) (0.45)
Net realized gains..... (0.20) -- -- -- --
----------- ----------- ----------- ----------- -------------
Total Distributions.... (0.65) (0.50) (0.50) (0.50) (0.45)
----------- ----------- ----------- ----------- -------------
Net Asset Value, End of
Period................. $10.03 $10.18 $ 9.94 $10.01 $ 9.97
----------- ----------- ----------- ----------- -------------
----------- ----------- ----------- ----------- -------------
TOTAL RETURN (EXCLUDES
REDEMPTION CHARGE)..... 4.96% 7.58% 4.46% 5.40% 4.32%(d)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of
period (000)........... $ 195 $ 131 $ 194 $ 176 $ 118
Ratio of expenses to
average net assets..... 1.35% 1.36% 1.40% 1.61% 1.61%(c)
Ratio of net investment
income to average net
assets................. 4.32% 4.93% 5.04% 4.84% 4.86%(c)
Ratio of expenses to
average net assets*.... 1.60% 1.61% 1.65% (b) 1.64%(c)
Portfolio turnover
rate**................. 104% 121% 26% 34% 42%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM JUNE 1, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1995.
(b) THERE WERE NO WAIVERS OR REIMBURSEMENTS DURING THE PERIOD.
(c) ANNUALIZED.
(d) NOT ANNUALIZED.
CONTINUED
32
<PAGE>
CENTURA FUNDS, INC.
GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS, CLASS C
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1999 1998 1997 1996 1995 (a)
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 10.19 $ 9.94 $ 10.01 $ 9.97 $ 10.00
----------- ----------- ----------- ----------- -------------
Investment Activities
Net investment
income............... 0.52 0.57 0.59 0.60 0.54
Net realized and
unrealized gains
(losses) from
investments.......... 0.04 0.25 (0.07) 0.04 (0.03)
----------- ----------- ----------- ----------- -------------
Total from Investment
Activities........... 0.56 0.82 0.52 0.64 0.51
----------- ----------- ----------- ----------- -------------
Distributions
Net investment
income............... (0.52) (0.57) (0.59) (0.60) (0.54)
Net realized gains..... (0.20) -- -- -- --
----------- ----------- ----------- ----------- -------------
Total Distributions.... (0.72) (0.57) (0.59) (0.60) (0.54)
----------- ----------- ----------- ----------- -------------
Net Asset Value, End of
Period................. $ 10.03 $ 10.19 $ 9.94 $ 10.01 $ 9.97
----------- ----------- ----------- ----------- -------------
----------- ----------- ----------- ----------- -------------
TOTAL RETURN............. 5.64% 8.48% 5.33% 6.47% 5.28%(d)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of
period (000)........... $118,640 $ 131,068 $119,434 $109,775 $ 93,807
Ratio of expenses to
average net assets..... 0.59% 0.59% 0.58% 0.61% 0.63%(c)
Ratio of net investment
income to average net
assets................. 5.11% 5.68% 5.88% 5.88% 5.97%(c)
Ratio of expenses to
average net assets*.... (b) (b) (b) (b) 0.66%(c)
Portfolio turnover
rate**................. 104% 121% 26% 34% 42%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM JUNE 1, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1995.
(b) THERE WERE NO WAIVERS OR REIMBURSEMENTS DURING THE PERIOD.
(c) ANNUALIZED.
(d) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS
33
<PAGE>
NORTH CAROLINA TAX-FREE BOND FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS A
WITH LOAD LEHMAN BROTHERS LIPPER STATE
(RETURN REFLECTS 5-YEAR INTERMEDIATE
CLASS A MAXIMUM SALES MUNICIPAL MUNICIPAL
WITHOUT LOAD LOAD OF 2.75%) INDEX* AVERAGE*
<S> <C> <C> <C> <C>
1/91 $10,000 $9,725 $10,000 $10,000
12/91 $10,590 $10,304 $11,141 $10,985
12/92 $11,123 $10,822 $11,990 $11,781
12/93 $11,979 $11,655 $13,038 $12,897
12/94 $11,474 $11,164 $12,871 $12,455
12/95 $12,881 $12,533 $14,369 $14,011
12/96 $13,206 $12,849 $14,978 $14,519
12/97 $14,266 $13,881 $15,934 $15,508
12/98 $15,059 $14,652 $16,865 $16,319
4/99 $15,129 $14,719 $17,094 $16,429
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5.96% 3.06% 6.49% 5.65%
5 YEAR 5.54% 4.96% 6.04% 5.67%
SINCE INCEPTION 5.15% 4.80% 6.64% 6.14%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CLASS B
WITH LOAD
(RETURN REFLECTS
THE APPROPRIATE
CONTINGENT DEFERRED
SALES CHARGE LEHMAN BROTHERS LIPPER STATE
(MAXIMUM DEFERRED 5-YEAR INTERMEDIATE
CLASS B SALES LOAD MUNICIPAL MUNICIPAL
WITHOUT LOAD IS 3.00%)) INDEX* AVERAGE*
<S> <C> <C> <C> <C>
1/91 $10,000 $9,700 $10,000 $10,000
12/91 $10,548 $10,248 $11,141 $10,985
12/92 $11,027 $10,727 $11,990 $11,781
12/93 $11,838 $11,538 $13,038 $12,897
12/94 $11,268 $10,968 $12,871 $12,455
12/95 $12,556 $12,356 $14,369 $14,011
12/96 $12,775 $12,775 $14,978 $14,519
12/97 $13,729 $13,729 $15,934 $15,508
12/98 $14,453 $14,453 $16,865 $16,319
4/99 $14,495 $14,495 $17,094 $16,429
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5.53% 2.53% 6.49% 5.65%
5 YEAR 4.93% 4.77% 6.04% 5.67%
SINCE INCEPTION 4.61% 4.61% 6.64% 6.14%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS LIPPER STATE
5-YEAR INTERMEDIATE
CLASS C MUNICIPAL MUNICIPAL
(NO LOAD) INDEX* AVERAGE*
<S> <C> <C> <C>
1/91 $10,000 $10,000 $10,000
12/91 $10,635 $11,141 $10,985
12/92 $11,224 $11,990 $11,781
12/93 $12,153 $13,038 $12,897
12/94 $11,685 $12,871 $12,455
12/95 $13,152 $14,369 $14,011
12/96 $13,517 $14,978 $14,519
12/97 $14,634 $15,934 $15,508
12/98 $15,490 $16,865 $16,319
4/99 $15,574 $17,094 $16,429
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 6.22% 6.49% 5.65%
5 YEAR 5.83% 6.04% 5.67%
SINCE INCEPTION 5.52% 6.64% 6.14%
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS. 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 LEHMAN BROTHERS 5-YEAR MUNICIPAL INDEX is an unmanaged index generally
representative of the municipal bond market. The LIPPER STATE INTERMEDIATE
MUNICIPAL AVERAGE of the total returns reported by all of the mutual funds
designated by Lipper, Inc. that fall into this category.
Investing in a regional fund may involve more risk, since the companies are
located within the same geographical area.
The Fund's income may be subject to certain state and local taxes and, depending
on your tax status, the federal alternative minimum tax.
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 investment objective, policies and techniques of
the Commingled Accounts were equivalent in all material aspect to those 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, their 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.
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.
34
<PAGE>
CENTURA FUNDS, INC. SCHEDULE OF PORTFOLIO INVESTMENTS
NORTH CAROLINA TAX-FREE BOND FUND APRIL 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
NORTH CAROLINA MUNICIPAL OBLIGATIONS (98.7%)
<CAPTION>
SECURITY PRINCIPAL MARKET
DESCRIPTION AMOUNT VALUE
- ---------------------------------------- ----------- -----------
<S> <C> <C>
Cabarrus County GO, 5.30%, 2/1/08,
Callable 2/1/07 @ 100.5, (MBIA
Insured).............................. $ 935,000 $ 1,004,994
Cabarrus County GO, 5.30%, 2/1/10,
Callable 2/1/07 @ 101.5, (MBIA
Insured).............................. 900,000 962,001
Carteret County GO, 5.40%, 5/1/09,
Callable 5/1/06 @ 101.5, (MBIA
Insured).............................. 1,000,000 1,072,830
Catawba County Memorial Hospital Project
Revenue, 4.40%, 10/1/08, (AMBAC
Insured).............................. 1,000,000 1,002,190
Centennial Authority North Carolina
Hotel Tax Revenue, Arena Project,
4.65%, 9/1/06, (FSA Insured).......... 1,000,000 1,032,890
Charlotte Mecklenberg Hospital Authority
GO, 6.00%, 1/1/04, Callable 1/1/02 @
102................................... 620,000 664,671
Charlotte Mecklenberg Hospital Authority
GO, 4.90%, 1/15/10, Callable 1/15/07 @
102................................... 1,000,000 1,022,030
Charlotte UTGO, Refunding, 5.10%,
6/1/09, Callable 6/1/05 @ 102......... 500,000 529,060
Cleveland County UTGO, Refunding, 5.10%,
6/1/07, Callable 6/1/03 @ 102, (FGIC
Insured).............................. 1,400,000 1,470,168
Concord North Carolina Utilities Systems
RB, 6.00%, 12/1/10, Callable 12/1/02 @
102, Sinkable 12/1/06 @ 100, (MBIA
Insured).............................. 1,630,000 1,787,685
Craven County GO, 5.40%, 6/1/02, (MBIA
Insured).............................. 1,000,000 1,051,590
Cumberland County Civic Center Project
CP, Series A, 6.20%, 12/1/07, Callable
12/1/04 @ 102, (AMBAC Insured)........ 1,535,000 1,737,436
Cumberland County GO, 4.80%, 3/1/03,
(FGIC Insured)........................ 500,000 519,205
Dare County CP, Series A, 4.50%, 5/1/04,
(MBIA Insured)........................ 1,000,000 1,028,180
Durham County GO, 5.75%, 2/1/07,
Callable 2/1/02 @ 102................. 880,000 941,530
Durham County Public Improvements,
4.60%, 3/1/04......................... 500,000 517,160
Educational Facilities Finance Agency,
Duke University Project, Series B,
4.70%, 10/1/08, Callable 10/1/06 @
102................................... 300,000 310,497
Fayetteville Public Works Commission
Revenue, Series A, 5.25%, 3/1/08,
Callable 3/1/05 @ 102, (AMBAC
Insured).............................. 1,280,000 1,361,408
Gaston County Public Facilities Project
CP, 4.75%, 12/1/05, (MBIA Insured).... 1,000,000 1,040,370
Gaston County UTGO, 5.70%, 3/1/05,
Callable 3/1/04 @ 100.5, (MBIA
Insured).............................. 1,000,000 1,077,461
Housing Finance Agency Revenue, 4.40%,
9/1/03, AMT........................... 400,000 401,704
<CAPTION>
NORTH CAROLINA MUNICIPAL OBLIGATIONS, CONTINUED:
SECURITY PRINCIPAL MARKET
DESCRIPTION AMOUNT VALUE
- ---------------------------------------- ----------- -----------
<S> <C> <C>
Housing Financial Agency, Series 4A,
4.45%, 1/1/07, AMT.................... $ 250,000 $ 250,000
Housing Financial Agency, Series 4A,
4.45%, 7/1/07, AMT.................... 250,000 250,000
Housing Financial Agency, Series A1,
Refunding, 4.65%, 1/1/04.............. 500,000 502,805
Housing Financial Agency, Series A1,
Refunding, 4.75%, 1/1/05.............. 500,000 503,800
Iredell County, 4.75%, 2/1/12, Callable
2/1/07 @ 102.......................... 1,000,000 1,006,120
Iredell County Memorial Hospital
Revenue, 5.10%, 10/1/11, Callable
10/1/07 @ 101, (AMBAC Insured)........ 1,000,000 1,037,630
Lee County GO, 5.00%, 4/1/06, (MBIA
Insured).............................. 1,000,000 1,053,400
Mecklenburg County UTGO, Series B,
4.80%, 3/1/06......................... 1,000,000 1,043,430
Moore Medical Care Community Hospital
Revenue, 5.20%, 10/1/13, Callable
10/1/03 @ 102......................... 300,000 303,822
New Hanover County Medical Center
Project Revenue, 4.25%, 10/1/10,
Callable 10/1/09 @ 101, (MBIA
Insured).............................. 500,000 485,220
North Carolina Municipal Power Agency
#1, Catawba Electric Revenue,
Refunding, 5.25%, 1/1/09, (MBIA
Insured).............................. 1,500,000 1,593,975
Onslow County UTGO, 5.60%, 3/1/05....... 1,000,000 1,081,680
Orange County UTGO, Refunding, 5.10%,
6/1/03................................ 1,050,000 1,104,632
Piedmont Triad Airport Authority
Revenue, Refunding, 6.75%, 7/1/10,
Callable 7/1/00 @ 102, Sinkable 7/1/06
@100, (MBIA Insured).................. 500,000 527,020
Pitt County Memorial Hospital Revenue,
5.38%, 12/1/10, Callable 12/1/05 @
102................................... 1,000,000 1,080,460
Pitt County Public Facilities CP, Series
A, 5.35%, 4/1/07, (MBIA Insured)...... 625,000 670,581
Raleigh UTGO, Refunding, 6.40%,
3/1/02................................ 1,250,000 1,318,750
State Public School Buildings GO, 4.60%,
4/1/11, Callable 4/1/09 @ 101......... 500,000 502,950
Union County Enterprise System Water
Utility Improvement Revenue, 5.35%,
6/1/09, Callable 6/1/06 @ 102, (MBIA
Insured).............................. 500,000 536,595
Union County GO, Refunding, 4.80%,
5/1/05, (MBIA Insured)................ 1,000,000 1,042,050
University of North Carolina, Dining
System RB, 5.30%, 5/15/12, Callable
5/15/07 @ 102......................... 870,000 915,866
University of North Carolina, Utility
System RB, Refunding, 5.00%, 8/1/09,
Callable 8/1/02 @ 102................. 1,460,000 1,504,384
Wake County, 4.50%, 3/1/10, Callable
3/1/06 @ 102.......................... 500,000 502,745
</TABLE>
CONTINUED
35
<PAGE>
CENTURA FUNDS, INC. SCHEDULE OF PORTFOLIO INVESTMENTS
NORTH CAROLINA TAX-FREE BOND FUND APRIL 30, 1999
<TABLE>
<CAPTION>
NORTH CAROLINA MUNICIPAL OBLIGATIONS, CONTINUED:
SHARES OR
SECURITY PRINCIPAL MARKET
DESCRIPTION AMOUNT VALUE
- ---------------------------------------- ----------- -----------
<S> <C> <C>
Wake Forest University Education
Facility, 5.00%, 11/1/12, Callable
11/1/07 @ 102, Sinkable 11/1/09 @
100................................... $ 500,000 $ 513,365
Wilkes County UTGO, Refunding, 5.20%,
6/1/05, Callable 6/1/03 @ 101......... 1,275,000 1,342,703
Winston Salem CP, Series A, 5.30%,
6/1/09, Callable 6/1/06 @ 102,
Sinkable 6/1/08 @ 100................. 1,000,000 1,067,930
Winston Salem State University Revenue,
Refunding, 4.75%, 1/1/10, Callable
1/1/09 @ 101, (MBIA Insured).......... 500,000 505,605
Winston Salem State University Revenue,
Refunding, 4.85%, 1/1/11, Callable
1/1/09 @ 101, (MBIA Insured).......... 500,000 505,245
Winston Salem Water & Sewer System RB,
6.30%, 6/1/06, Prerefunded 6/1/02 @
102................................... 1,000,000 1,094,070
-----------
TOTAL NORTH CAROLINA MUNICIPAL OBLIGATIONS...........
44,381,893
-----------
<CAPTION>
INVESTMENT COMPANIES (1.2%)
<S> <C> <C>
Institutional Liquid Assets Tax-Free
Money Market Fund..................... 265,515 265,515
PNC Investment Money Market Fund........ 265,515 265,515
-----------
TOTAL INVESTMENT COMPANIES........................... 531,030
-----------
TOTAL INVESTMENTS
(Cost $43,074,800)(a) -- 99.9%..................... 44,912,923
Other assets in excess of liabilities -- 0.1%........ 45,844
-----------
TOTAL NET ASSETS -- 100.0%........................... $44,958,767
-----------
-----------
</TABLE>
- ---------
Percentages indicated are based on net assets of $44,958,767.
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation... $ 1,863,230
Unrealized depreciation... (25,107)
------------
Net unrealized
appreciation............ $ 1,838,123
------------
------------
</TABLE>
AMBAC -- American Municipal Bond Assurance Corp.
AMT -- Alternative Minimum Tax
CP -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Corp.
FSA -- Financial Security Assurance
GO -- General Obligation
MBIA -- Municipal Bond Insurance Association
RB -- Revenue Bond
UTGO -- Unlimited Tax General Obligation
SEE NOTES TO FINANCIAL STATEMENTS
36
<PAGE>
CENTURA FUNDS, INC.
NORTH CAROLINA TAX-FREE BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (cost
$43,074,800).......................... $44,912,923
Cash.................................... 48,589
Interest and dividends receivable....... 661,960
Deferred organization costs............. 255
Prepaid expenses and other assets....... 5,166
-----------
TOTAL ASSETS.......................... 45,628,893
LIABILITIES:
Distributions payable................... $144,426
Payable for investments purchased....... 500,000
Accrued expenses and other payables:
Investment advisory fees.............. 1,479
Administration fees................... 641
Distribution fees..................... 1,365
Other................................. 22,215
--------
TOTAL LIABILITIES..................... 670,126
-----------
NET ASSETS:
Capital................................. 43,069,907
Undistributed net investment income..... 3,737
Accumulated net realized gains from
investment transactions............... 47,000
Net unrealized appreciation from
investments........................... 1,838,123
-----------
NET ASSETS.............................. $44,958,767
-----------
-----------
Class A
Net Assets............................ $ 4,870,080
Shares................................ 465,852
Redemption price per share............ $ 10.45
-----------
-----------
Maximum Sales Charge--Class A......... 2.75%
Maximum Offering Price
(100%/(100% - Maximum Sales Charge)
of net asset value adjusted to the
nearest cent) per share............. $ 10.75
-----------
-----------
Class B
Net Assets............................ $ 570,129
Shares................................ 54,520
Offering price per share*............. $ 10.46
-----------
-----------
Class C
Net Assets............................ $39,518,558
Shares................................ 3,780,244
Offering and redemption price per
share............................... $ 10.45
-----------
-----------
</TABLE>
- ---------
* Redemption price of Class B shares varies based on length of time held.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest income......................... $2,059,729
Dividend income......................... 27,502
----------
TOTAL INCOME.......................... 2,087,231
EXPENSES:
Investment advisory fees................ $155,132
Administration fees..................... 66,486
Distribution fees--Class A.............. 24,752
Distribution fees--Class B.............. 5,577
Custodian fees.......................... 11,084
Fund accounting fees.................... 36,694
Transfer agent fees..................... 21,784
Other................................... 46,188
--------
Total expenses before voluntary fee
reductions.......................... 367,697
Expenses voluntarily reduced.......... (102,084)
----------
Net Expenses.......................... 265,613
----------
NET INVESTMENT INCOME................... 1,821,618
----------
REALIZED/UNREALIZED GAINS FROM
INVESTMENTS:
Net realized gains from investment
transactions.......................... 138,635
Net change in unrealized appreciation
from investments...................... 725,806
----------
Net realized/unrealized gains from
investments........................... 864,441
----------
Change in net assets resulting from
operations............................ $2,686,059
----------
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
37
<PAGE>
CENTURA FUNDS, INC.
NORTH CAROLINA TAX-FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1999 1998
----------- -----------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income................. $ 1,821,618 $ 1,768,128
Net realized gains from investment
transactions........................ 138,635 235,790
Net change in unrealized appreciation
from investments.................... 725,806 903,842
----------- -----------
Change in net assets resulting from
operations............................ 2,686,059 2,907,760
----------- -----------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS
From net investment income............ (192,663) (181,765)
From net realized gains from
investment transactions............. (23,290) --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income............ (18,881) (15,117)
From net realized gains from
investment transactions............. (2,692) --
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income............ (1,610,074) (1,571,246)
From net realized gains from
investment transactions............. (176,469) --
----------- -----------
Change in net assets from shareholder
distributions......................... (2,024,069) (1,768,128)
----------- -----------
Change in net assets from capital
transactions.......................... 1,665,646 5,080,448
----------- -----------
Change in net assets.................... 2,327,636 6,220,080
NET ASSETS:
Beginning of period................... 42,631,131 36,411,051
----------- -----------
End of period......................... $44,958,767 $42,631,131
----------- -----------
----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
38
<PAGE>
CENTURA FUNDS, INC.
NORTH CAROLINA TAX-FREE BOND FUND
FINANCIAL HIGHLIGHTS, CLASS A
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1999 1998 1997 1996 1995 (a)
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.30 $ 9.98 $10.04 $ 9.98 $10.00
----------- ----------- ----------- ----------- -------------
Investment Activities
Net investment
income............... 0.41 0.43 0.43 0.42 0.39
Net realized and
unrealized gains
(losses) from
investments.......... 0.20 0.32 0.03 0.13 (0.02)
----------- ----------- ----------- ----------- -------------
Total from Investment
Activities........... 0.61 0.75 0.46 0.55 0.37
----------- ----------- ----------- ----------- -------------
Distributions
Net investment
income............... (0.41) (0.43) (0.43) (0.42) (0.39)
Net realized gains..... (0.05) -- (0.09) (0.07) --
----------- ----------- ----------- ----------- -------------
Total Distributions.... (0.46) (0.43) (0.52) (0.49) (0.39)
----------- ----------- ----------- ----------- -------------
Net Asset Value, End of
Period................. $10.45 $10.30 $ 9.98 $10.04 $ 9.98
----------- ----------- ----------- ----------- -------------
----------- ----------- ----------- ----------- -------------
TOTAL RETURN (EXCLUDES
SALES CHARGE).......... 5.96% 7.61% 4.71% 5.50% 3.77%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of
period (000)........... $4,870 $4,664 $3,823 $3,927 $ 429
Ratio of expenses to
average net assets..... 0.82% 0.69% 0.69% 0.68% 0.42%(b)
Ratio of net investment
income to average net
assets................. 3.89% 4.19% 4.31% 3.98% 4.46%(b)
Ratio of expenses to
average net assets*.... 1.26% 1.29% 1.30% 1.04% 0.92%(b)
Portfolio turnover
rate**................. 11% 29% 34% 80% 121%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM JUNE 1, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1995.
(b) ANNUALIZED.
(c) NOT ANNUALIZED.
FINANCIAL HIGHLIGHTS, CLASS B
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1999 1998 1997 1996 1995 (a)
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.30 $ 9.98 $10.04 $ 9.98 $10.00
----------- ----------- ----------- ----------- -------------
Investment Activities
Net investment
income............... 0.36 0.38 0.37 0.34 0.32
Net realized and
unrealized gains
(losses) from
investments.......... 0.21 0.32 0.03 0.13 (0.02)
----------- ----------- ----------- ----------- -------------
Total from Investment
Activities........... 0.57 0.70 0.40 0.47 0.30
----------- ----------- ----------- ----------- -------------
Distributions
Net investment
income............... (0.36) (0.38) (0.37) (0.34) (0.32)
Net realized gains..... (0.05) -- (0.09) (0.07) --
----------- ----------- ----------- ----------- -------------
Total Distributions.... (0.41) (0.38) (0.46) (0.41) (0.32)
----------- ----------- ----------- ----------- -------------
Net Asset Value, End of
Period................. $10.46 $10.30 $ 9.98 $10.04 $ 9.98
----------- ----------- ----------- ----------- -------------
----------- ----------- ----------- ----------- -------------
TOTAL RETURN (EXCLUDES
REDEMPTION CHARGE)..... 5.53% 7.09% 4.11% 4.72% 3.09%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of
period (000)........... $ 570 $ 511 $ 430 $ 393 $ 275
Ratio of expenses to
average net assets..... 1.32% 1.18% 1.27% 1.44% 0.99%(b)
Ratio of net investment
income to average net
assets................. 3.38% 3.70% 3.73% 3.30% 3.89%(b)
Ratio of expenses to
average net assets*.... 1.76% 1.78% 1.88% 1.80% 1.49%(b)
Portfolio turnover
rate**................. 11% 29% 34% 80% 121%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM JUNE 1, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1995.
(b) ANNUALIZED.
(c) NOT ANNUALIZED.
CONTINUED
39
<PAGE>
CENTURA FUNDS, INC.
NORTH CAROLINA TAX-FREE BOND FUND
FINANCIAL HIGHLIGHTS, CLASS C
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1999 1998 1997 1996 1995 (a)
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 10.30 $ 9.98 $ 10.04 $ 9.98 $ 10.00
----------- ----------- ----------- ----------- -------------
Investment Activities
Net investment
income............... 0.43 0.46 0.46 0.44 0.41
Net realized and
unrealized gains
(losses) from
investments.......... 0.20 0.32 0.03 0.13 (0.02)
----------- ----------- ----------- ----------- -------------
Total from Investment
Activities........... 0.63 0.78 0.49 0.57 0.39
----------- ----------- ----------- ----------- -------------
Distributions
Net investment
income............... (0.43) (0.46) (0.46) (0.44) (0.41)
Net realized gains..... (0.05) -- (0.09) (0.07) --
----------- ----------- ----------- ----------- -------------
Total Distributions.... (0.48) (0.46) (0.55) (0.51) (0.41)
----------- ----------- ----------- ----------- -------------
Net Asset Value, End of
Period................. $ 10.45 $ 10.30 $ 9.98 $ 10.04 $ 9.98
----------- ----------- ----------- ----------- -------------
----------- ----------- ----------- ----------- -------------
TOTAL RETURN............. 6.22% 7.89% 4.97% 5.78% 4.08%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of
period (000)........... $39,519 $37,456 $32,159 $37,009 $34,885
Ratio of expenses to
average net assets..... 0.56% 0.44% 0.44% 0.44% 0.41%(b)
Ratio of net investment
income to average net
assets................. 4.15% 4.44% 4.56% 4.32% 4.64%(b)
Ratio of expenses to
average net assets*.... 0.76% 0.79% 0.80% 0.80% 0.91%(b)
Portfolio turnover
rate**................. 11% 29% 34% 80% 121%
</TABLE>
* DURING THE PERIOD, CERTAIN FEES WERE VOLUNTARILY REDUCED. IF SUCH VOLUNTARY
FEE REDUCTIONS HAD NOT OCCURRED, THE RATIO WOULD HAVE BEEN AS INDICATED.
** PORTFOLIO TURNOVER IS CALCULATED ON THE BASIS OF THE FUND AS A WHOLE
WITHOUT DISTINGUISHING BETWEEN THE CLASSES OF SHARES ISSUED.
(a) FOR THE PERIOD FROM JUNE 1, 1994 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1995.
(b) ANNUALIZED.
(c) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS
40
<PAGE>
CENTURA FUNDS, INC. SCHEDULE OF PORTFOLIO INVESTMENTS
MONEY MARKET FUND APRIL 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
COMMERCIAL PAPER (65.0%)
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
----------- --------------
<S> <C> <C>
AUTOMOBILES & TRUCKS (4.7%)
Chrysler Corp., 4.80%, 5/5/99........... $ 3,000,000 $ 2,998,400
--------------
BANKING & FINANCIAL SERVICES (33.2%)
American Express Corp., 5.00%, 6/3/99... 2,500,000 2,488,930
Associates Corp., 4.82%, 5/18/99........ 1,000,000 997,729
Associates Corp., 4.90%, 8/18/99........ 2,000,000 1,971,054
BancAmerica Corp., 4.82%, 5/6/99........ 2,000,000 1,998,661
Ford Motor Credit Co., 4.84%, 7/12/99... 1,000,000 990,420
Ford Motor Credit Co., 4.95%,
10/27/99.............................. 2,000,000 1,952,466
General Electric Capital Corp., 4.96%,
5/17/99............................... 2,000,000 1,995,600
General Electric Capital Corp., 5.06%,
11/22/99.............................. 1,000,000 972,268
General Motors Acceptance Corp., 4.82%,
7/20/99............................... 2,000,000 1,978,800
General Motors Acceptance Corp., 4.84%,
7/26/99............................... 1,000,000 988,581
Merrill Lynch & Co., Inc., 4.91%,
5/21/99............................... 2,000,000 1,994,556
Smith Barney Holding Co., 4.85%,
5/20/99............................... 2,000,000 1,994,891
Smith Barney Holding Co., 4.95%,
6/7/99................................ 1,000,000 995,077
--------------
21,319,033
--------------
COMPUTER INDUSTRY (3.1%)
IBM Corp., 4.81%, 5/18/99............... 2,000,000 1,995,467
--------------
ENERGY (14.0%)
Chevron Corp., 4.77%, 5/5/99............ 1,000,000 999,470
Chevron Corp., 4.80%, 6/1/99............ 2,000,000 1,991,768
Duke Energy Corp., 4.79%, 5/10/99....... 3,000,000 2,996,415
Texaco, Inc., 4.79%, 5/19/99............ 3,000,000 2,992,830
--------------
8,980,483
--------------
ENTERTAINMENT (3.8%)
The Walt Disney Co., 4.93%, 9/24/99..... 2,500,000 2,451,333
--------------
FOOD AND BEVERAGES (3.1%)
H.J. Heinz Co., 4.94%, 6/4/99........... 2,000,000 1,990,990
--------------
OFFICE EQUIPMENT & SERVICES (3.1%)
Xerox Corp., 4.92%, 6/24/99............. 2,000,000 1,985,630
--------------
TOTAL COMMERCIAL PAPER............................... 41,721,336
--------------
<CAPTION>
U.S. GOVERNMENT AGENCY MORTGAGES (17.5%)
<S> <C> <C>
FEDERAL HOME LOAN BANK (10.9%)
5.54%, 7/15/99.......................... 2,000,000 2,002,370
5.60%, 7/30/99.......................... 2,000,000 2,003,837
6.03%, 10/1/99.......................... 3,000,000 3,014,217
--------------
7,020,424
--------------
<CAPTION>
U.S. GOVERNMENT AGENCY MORTGAGES, CONTINUED:
SHARES OR
PRINCIPAL AMORTIZED
AMOUNT COST
----------- --------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION (6.6%)
5.87%, 8/2/99 MTN....................... $ 1,000,000 $ 1,002,157
4.52%, 10/28/99......................... 2,000,000 1,956,300
6.18%, 1/31/00.......................... 1,250,000 1,260,343
--------------
4,218,800
--------------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGES...............
11,239,224
--------------
<CAPTION>
REPURCHASE AGREEMENTS (14.0%)
<S> <C> <C>
Lehman Brothers, 4.80%, 5/3/99
(Purchased on 4/30/99, proceeds at
maturity $9,003,600; Collateralized by
$9,135,000 FHLB, 5.83%, 9/22/03,
market value $9,180,000).............. 9,000,000 9,000,000
--------------
TOTAL REPURCHASE AGREEMENTS.......................... 9,000,000
--------------
<CAPTION>
INVESTMENT COMPANIES (3.5%)
<S> <C> <C>
Goldman Sachs Financial Square Prime
Money Market Fund..................... 1,097,360 1,097,360
Provident Institutional Temporary
Investment Fund....................... 1,167,176 1,167,176
--------------
TOTAL INVESTMENT COMPANIES........................... 2,264,536
--------------
TOTAL INVESTMENTS
(Amortized Cost $64,225,096)(a)(100.0%)............ 64,225,096
Liabilities in excess of other assets (0.0%)......... (13,514)
--------------
TOTAL NET ASSETS (100.0%)............................ $ 64,211,582
--------------
--------------
</TABLE>
- ---------
(a) Cost for federal income tax and financial reporting purposes are the same.
FHLB -- Federal Home Loan Bank
MTN -- Medium Term Notes
SEE NOTES TO FINANCIAL STATEMENTS
41
<PAGE>
CENTURA FUNDS, INC.
MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (cost
$55,225,096).......................... $55,225,096
Repurchase agreements, at value ( cost
$9,000,000)........................... 9,000,000
Cash.................................... 434
Interest and dividends receivable....... 237,358
Deferred organization costs............. 25,681
Prepaid expenses and other assets....... 6,227
-----------
TOTAL ASSETS.......................... 64,494,796
LIABILITIES:
Distributions payable................... $243,804
Accrued expenses and other payables:
Investment advisory fees.............. 144
Administration fees................... 216
Distribution fees..................... 20
Other................................. 39,030
--------
TOTAL LIABILITIES..................... 283,214
-----------
NET ASSETS:
Capital................................. 64,211,582
-----------
Net Assets.............................. $64,211,582
-----------
-----------
Class A
Net Assets............................ $ 27,138
Shares................................ 27,138
Offering and redemption price per
share............................... $ 1.00
-----------
-----------
Class C
Net Assets............................ $64,184,444
Shares................................ 64,184,444
Offering and redemption price per
share............................... $ 1.00
-----------
-----------
</TABLE>
- ---------
(a) For the period from June 1, 1998 (commencement of operations) to April 30,
1999.
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED APRIL 30, 1999 (a)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest income......................... $2,597,307
Dividend income......................... 102,017
----------
TOTAL INCOME.......................... 2,699,324
EXPENSES:
Investment advisory fees................ $155,707
Administration fees..................... 77,853
Distribution fees--Class A.............. 74
Custodian fees.......................... 12,975
Fund accounting fees.................... 28,614
Transfer agent fees..................... 20,728
Other................................... 79,019
--------
Total expenses before voluntary fee
reductions or reimbursements........ 374,970
Expenses voluntarily reduced or
reimbursed.......................... (268,913)
----------
Net Expenses.......................... 106,057
----------
NET INVESTMENT INCOME................... 2,593,267
----------
Change in net assets resulting from
operations............................ $2,593,267
----------
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
42
<PAGE>
CENTURA FUNDS, INC.
MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED
APRIL 30,
1999 (a)
-------------
<S> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net investment income........................... $ 2,593,267
-------------
Change in net assets resulting from operations.... 2,593,267
-------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income...................... (616)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net investment income...................... (2,592,651)
-------------
Change in net assets from shareholder
distributions................................... (2,593,267)
-------------
Change in net assets from capital transactions.... 64,211,582
-------------
Change in net assets.............................. 64,211,582
NET ASSETS:
Beginning of period............................. --
-------------
End of period................................... $ 64,211,582
-------------
-------------
</TABLE>
- ---------
(a) For the period from June 1, 1998 (commencement of operations) to April 30,
1999.
SEE NOTES TO FINANCIAL STATEMENTS
43
<PAGE>
CENTURA FUNDS, INC.
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS, CLASS A
<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED
APRIL 30,
1999 (a)
-------------
<S> <C>
Net Asset Value, Beginning of Period.............. $ 1.00
-------------
Investment Activities
Net investment income........................... 0.038
-------------
Total from Investment Activities................ 0.038
-------------
Distributions
Net investment income........................... (0.038)
-------------
Total Distributions............................. (0.038)
-------------
Net Asset Value, End of Period.................... $ 1.00
-------------
-------------
TOTAL RETURN...................................... 3.91%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)................. $ 27
Ratio of expenses to average net assets........... 0.92%(b)
Ratio of net investment income to average net
assets.......................................... 4.15%(b)
Ratio of expenses to average net assets*.......... 1.46%(b)
</TABLE>
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred,
the ratio would have been as indicated.
(a) For the period from June 1, 1998 (commencement of operations) to April 30,
1999.
(b) Annualized.
(c) Not annualized.
FINANCIAL HIGHLIGHTS, CLASS C
<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED
APRIL 30,
1999 (a)
-------------
<S> <C>
Net Asset Value, Beginning of Period.............. $ 1.00
-------------
Investment Activities
Net investment income........................... 0.046
-------------
Total from Investment Activities................ 0.046
-------------
Distributions
Net investment income........................... (0.046)
-------------
Total Distributions............................. (0.046)
-------------
Net Asset Value, End of Period.................... $ 1.00
-------------
-------------
TOTAL RETURN...................................... 4.70%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)................. $ 64,184
Ratio of expenses to average net assets........... 0.20%(b)
Ratio of net investment income to average net
assets.......................................... 5.00%(b)
Ratio of expenses to average net assets*.......... 0.72%(b)
</TABLE>
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred,
the ratio would have been as indicated.
(a) For the period from June 1, 1998 (commencement of operations) to April 30,
1999.
(b) Annualized.
(c) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS
44
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
1. ORGANIZATION
Centura Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment
company. The Company was organized as a Maryland corporation on March 1,
1994. At April 30, 1999 the Company consisted of six separate investment
portfolios: Centura Large Cap Equity Fund (formerly Centura Equity Income
Fund), Centura Mid Cap Equity Fund (formerly Centura Equity Growth Fund),
Centura Small Cap Equity Fund (formerly Centura Southeast Equity Fund),
Centura Government Income Fund (formerly Centura Federal Securities Income
Fund), Centura North Carolina Tax-Free Bond Fund and Centura Money Market
Fund which commenced operations on June 1, 1998 (individually, the "Fund",
and collectively, the "Funds").
The Funds' investment objectives are as follows:
LARGE CAP EQUITY FUND -- Long-term capital appreciation. The Fund normally
invests at least 65% of its total assets in equity securities of large U.S.
companies each having $1 billion or more in market capitalization at the time
of purchase by the Funds. Investments include common stocks, convertible
preferred stocks and convertible bonds, notes and debentures.
MID CAP EQUITY FUND -- Long-term capital appreciation. The Fund normally
invests at least 65% of its total assets in equity securities of mid-sized
companies that fall within the range of companies in the S&P Mid Cap 400
Index at the time of purchase by the Fund. The Fund invests primarily in a
diversified portfolio of publicly traded common and preferred stocks and
securities convertible into or exchangeable for common stock.
SMALL CAP EQUITY FUND -- Long-term capital appreciation. The Fund normally
invests at least 65% of its total assets in the equity securities of small
companies. Small companies are defined as those with market capitalizations
that fall within the range of the companies in the S&P SmallCap 600 Index at
the time of purchase by the Fund.
GOVERNMENT INCOME FUND -- Relatively high current income consistent with
relative stability of principal and safety. The Fund normally invests at
least 65% of its total assets in U.S. Government obligations (those that are
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities). In general, its investments will have maximum maturities
of ten years.
NORTH CAROLINA TAX-FREE BOND FUND -- High current income that is free from
both federal income tax and North Carolina personal income tax, together with
relative safety of principal. The Fund invests primarily in obligations
issued by the State of North Carolina, its political subdivisions, and their
agencies and instrumentalities, the income from which, in the opinion of the
issuer's bond counsel, is exempt from regular federal and North Carolina
personal income taxes.
MONEY MARKET FUND -- As high a level of current income as is consistent with
preservation of capital and liquidity. The Fund invests in a broad range of
high quality, short-term, money market instruments that have remaining
maturities not exceeding 397 days. The Fund is required to maintain a
dollar-weighted average portfolio maturity no greater than 90 days.
The Funds, except the Money Market Fund, offer three classes of shares known
as Class A, Class B and Class C shares. The Money Market Fund offers only
Class A and Class C Shares. Class A shares are offered with a maximum
front-end sales charge of 4.50% for the Large Cap Equity Fund, Mid Cap Equity
Fund, and Small Cap Equity Fund; 2.75% for the Government Income Fund and
North Carolina Tax-Free Bond Fund. Class B shares are offered at net asset
value but are subject to a contingent deferred sales charge ("CDSC")
consistent with Funds' prospectus. In addition, Class A and Class B shares
pay ongoing distribution fees. Class B shares will convert automatically to
Class A shares on the first business day of the month following the seventh
anniversary of their purchase date. 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.
CONTINUED
45
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 1999
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. The Money Market Fund reflects its securities at amortized
cost, which approximates market value.
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, when
applicable, is recorded as accrued. Dividends are recorded on the
ex-dividend date.
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.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
The Large Cap Equity Fund, Mid Cap Equity Fund, and Small Cap Equity Fund
declare and pay dividends of substantially all of its net investment income
monthly. The Government Income Fund, North Carolina Tax-Free Bond Fund and
Money Market 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.
As of April 30, 1999, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments made to
capital:
<TABLE>
<CAPTION>
ACCUMULATED ACCUMULATED NET
UNDISTRIBUTED NET REALIZED GAIN/(LOSS)
INVESTMENT INCOME ON INVESTMENTS
------------------ ---------------------
<S> <C> <C>
Mid Cap Equity Fund..................... $ 30,511 $(6,655,948)
Small Cap Equity Fund................... 128,925 (103,835)
</TABLE>
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.
DETERMINATION OF NET ASSET VALUE AND ALLOCATION OF EXPENSES:
Expenses directly attributable to a Fund are charged to that Fund; other
expenses are allocated proportionately among each Fund within the Company in
relation to the net assets of each Fund or on another reasonable basis. In
calculating net asset value per share of each class, investment income,
realized and unrealized gains and losses and expenses other than class
specific expenses, are allocated daily to each class of shares based upon
the proportion of net assets of each class at the beginning of each day.
Class specific expenses, as determined under applicable law and regulatory
policy, are borne by the class incurring the expense.
CONTINUED
46
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 1999
FINANCIAL INSTRUMENTS
The Funds may purchase and write (sell) put and call options on securities,
currencies and indices of securities (collectively, an "underlying asset").
These transactions are to hedge against changes in interest rates, security
prices, currency fluctuations and other market developments, or for purposes
of earning additional income (i.e. speculation).
The risk associated with purchasing an option is that the Fund pay a premium
whether or not the option is exercised. Additionally, the Funds bear the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for
in the same manner as other securities owned. The cost of securities acquired
through the exercise of call options is increased by the premiums paid. The
proceeds from securities sold through the exercise of put options are
decreased by the premiums paid.
In writing an option, the Funds contract with a specified counterparty to
purchase (written put option) or sell (written call option) a specified
quantity (notional amount) of an underlying asset at a specified price during
a specified period upon demand of the counterparty. The risk associated with
writing an option is that the Funds bear the market risk of an unfavorable
change in the price of an underlying asset, and may be required to buy or
sell an underlying asset under the contractual terms of the option at a price
different from the current market value. Written options involve financial
risk which may exceed amounts reflected in the accompanying financial
statements.
The table below reflects the Government Income Fund's activity in written
options, all of which were for purposes of earning additional income, during
the fiscal year. The Notional Amount column represents the notional amount of
underlying assets subject to such written options. The Premiums column
represents the premiums paid from the option counterparties to the Fund in
connection with entering into the written options. No other Funds engaged in
written option contracts during the year ended April 30, 1999.
OPTION ACTIVITIES FOR THE YEAR ENDED APRIL 30, 1999:
<TABLE>
<CAPTION>
PUT OPTIONS CALL OPTIONS
---------------------- ----------------------
NOTIONAL NOTIONAL
AMOUNT PREMIUMS AMOUNT PREMIUMS
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Balance at beginning of
year........................ 10,000,000 $ 41,797 -- $ --
Options written............... 80,000,000 364,453 40,000,000 127,734
Options expired............... (55,000,000) (221,875 ) -- --
Options exercised............. (25,000,000) (145,313 ) (35,000,000) (111,328 )
Options terminated............ (5,000,000) (19,140 ) (5,000,000) (16,406 )
----------- --------- ----------- ---------
Options outstanding at end of
period...................... 5,000,000 $ 19,922 -- $ --
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
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.
BISYS Fund Services, Inc. ("BISYS") serves as the Funds' 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. Services provided
under the Transfer Agency Agreements include providing personnel and
facilities to perform shareholder servicing and transfer agency related
services. The terms of the Administrative Services Contracts and Fund
Accounting Contracts provide for annual fees based on a percentage of average
daily net assets. The Transfer Agency Agreement provides for a per account
fee in connection with shareholder servicing. The Fund Accounting Agreement
and Transfer Agency Agreement further provide that out-of-pocket expenses are
reimbursed.
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.
CONTINUED
47
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 1999
Each of the Funds has adopted a Master 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 Distributor has
undertaken to limit 12b-1 fees for Class A Shares to 0.40% for Money Market
Fund, 0.25% for each other Fund.
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. During the current fiscal year, the Distributor has undertaken to
limit 12b-1 fees for class B shares to 0.75% for Government Income Fund and
North Carolina Tax-Free Bond Fund.
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 0.025% of average daily net assets plus certain
transactions and out-of-pocket expenses. For the year ended April 30, 1999,
fees waived or reimbursed by the Advisor, Administrator and Distributor are
listed below:
<TABLE>
<CAPTION>
INVESTMENT ADVISORY FEES
----------------------------------- 12b-1 FEES VOLUNTARILY
ANNUAL FEES AS
A PERCENTAGE OF ADMINISTRATION REDUCED OTHER EXPENSES
AVERAGE DAILY FEES VOLUNTARILY FEES VOLUNTARILY ----------------------- VOLUNTARILY
NET ASSETS REDUCED REDUCED CLASS A CLASS B REIMBURSED
--------------- ----------------- ----------------- ------------ -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Equity Fund.... 0.70% $ 75,833 $12,697 $ 4,317 $ -- $ --
Mid Cap Equity Fund...... 0.70% -- -- 33,610 -- --
Small Cap Equity Fund.... 0.70% -- -- 7,882 -- --
Federal Securities Income
Fund................... 0.30% -- -- 1,334 409 --
North Carolina Tax-Free
Bond Fund.............. 0.35% 62,334 25,980 12,376 1,394 --
Money Market Fund(a)..... 0.30% 145,325 70,228 15 -- 53,345
</TABLE>
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>
Large Cap Equity Fund................... $2,598 $ 4,956
Mid Cap Equity Fund..................... 425 15,161
Small Cap Equity Fund................... 1,265 9,393
Government Income Fund.................. 10 148
North Carolina Tax-Free Bond Fund....... -- 176
</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>
Large Cap Equity Fund................... $184 $11,753
Mid Cap Equity Fund..................... 240 28,009
Small Cap Equity Fund................... 600 11,579
Government Income Fund.................. -- 208
North Carolina Tax-Free Bond Fund....... -- 1
</TABLE>
- ---------
(a) For the period from June 1, 1998 (commencement of operations) to April 30,
1999.
CONTINUED
48
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 1999
4. CONCENTRATION OF CREDIT RISK
The North Carolina Tax-Free Bond Fund invests substantially all of its
assets in a non-diversified portfolio of tax-exempt 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.
The North Carolina Tax-Free Bond Fund had the following concentrations by
sector at April 30, 1999 (as a percentage of total investments):
<TABLE>
<S> <C>
General Obligation................................ 42.0%
Medical........................................... 15.7%
Education......................................... 11.5%
Facilities........................................ 9.1%
Housing........................................... 8.8%
Others............................................ 4.9%
Utilities......................................... 4.6%
Airport........................................... 2.2%
Cash and Cash Equivalents......................... 1.2%
------
100.0%
------
------
</TABLE>
5. SECURITIES TRANSACTIONS
The cost of securities purchased and proceeds from securities sold
(excluding short-term securities) for the year ended April 30, 1999, were as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
Large Cap Equity Fund................... $147,485,009 $101,548,916
Mid Cap Equity Fund..................... 255,372,341 305,448,486
Small Cap Equity Fund................... 46,565,349 45,828,307
Government Income Fund.................. 129,524,134 143,407,651
North Carolina Tax-Free Bond Fund....... 6,308,023 4,798,521
</TABLE>
CONTINUED
49
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 1999
6. CAPITAL SHARE TRANSACTIONS
The Company is authorized to issue 1.05 billion shares of capital stock with
a par value of $.001. Transactions in shares of the Funds are summarized
below:
<TABLE>
<CAPTION>
LARGE CAP EQUITY MID CAP EQUITY SMALL CAP EQUITY
FUND FUND FUND
-------------------------- ------------------------- --------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1999 1998 1999 1998 1999 1998 (a)
------------ ------------ ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
CLASS A
Proceeds from shares
issued.................... $ 816,895 $ 1,056,102 $ 1,806,499 $ 3,163,397 $ 1,244,625 $ 2,565,282
Dividends reinvested........ 142,313 101,011 1,660,521 2,526,452 264,282 106,607
Cost of shares redeemed..... (309,940) (91,029) (2,762,882) (1,043,262) (932,624) (88,016)
------------ ------------ ------------ ----------- ----------- -------------
Class A capital
transactions.............. $ 649,268 $ 1,066,084 $ 704,138 $ 4,646,587 $ 576,283 $ 2,583,873
------------ ------------ ------------ ----------- ----------- -------------
CLASS B
Proceeds from shares
issued.................... $ 1,605,066 $ 1,553,426 $ 2,780,308 $ 5,645,351 $ 1,435,855 $ 4,157,063
Dividends reinvested........ 229,546 142,262 2,276,470 3,082,774 427,617 161,960
Cost of shares redeemed..... (201,825) (53,441) (3,103,277) (1,107,231) (842,111) (59,035)
------------ ------------ ------------ ----------- ----------- -------------
Class B capital
transactions.............. $ 1,632,787 $ 1,642,247 $ 1,953,501 $ 7,620,894 $ 1,021,361 $ 4,259,988
------------ ------------ ------------ ----------- ----------- -------------
CLASS C
Proceeds from shares
issued.................... $ 72,619,940 $ 12,594,171 $ 28,727,345 $27,803,088 $10,883,038 $ 25,455,780
Dividends reinvested........ 7,460,161 6,397,356 18,969,157 37,998,422 2,388,916 1,604,687
Cost of shares redeemed..... (18,400,519) (15,185,729) (78,648,661) (46,852,385) (9,950,538) (4,417,805)
------------ ------------ ------------ ----------- ----------- -------------
Class C capital
transactions.............. $ 61,679,582 $ 3,805,798 $(30,952,159) $18,949,125 $ 3,321,416 $ 22,642,662
------------ ------------ ------------ ----------- ----------- -------------
Total net increase (decrease)
from capital transactions... $ 63,961,637 $ 6,514,129 $(28,294,520) $31,216,606 $ 4,919,060 $ 29,486,523
------------ ------------ ------------ ----------- ----------- -------------
------------ ------------ ------------ ----------- ----------- -------------
SHARE TRANSACTIONS:
CLASS A
Issued...................... 64,084 86,108 119,307 192,395 93,816 198,109
Reinvested.................. 11,887 8,728 119,209 179,802 21,841 8,398
Redeemed.................... (25,140) (7,551) (186,812) (63,367) (75,628) (6,405)
------------ ------------ ------------ ----------- ----------- -------------
Change in Class A Shares.... 50,831 87,285 51,704 308,830 40,029 200,102
------------ ------------ ------------ ----------- ----------- -------------
CLASS B
Issued...................... 125,170 126,611 187,852 351,351 111,125 323,090
Reinvested.................. 19,271 12,376 167,222 222,891 35,754 12,804
Redeemed.................... (16,271) (4,320) (215,399) (68,477) (69,687) (4,413)
------------ ------------ ------------ ----------- ----------- -------------
Change in Class B Shares.... 128,170 134,667 139,675 505,765 77,192 331,481
------------ ------------ ------------ ----------- ----------- -------------
CLASS C
Issued...................... 5,804,044 1,029,572 1,924,313 1,694,904 872,066 2,318,413
Reinvested.................. 622,999 555,815 1,358,439 2,700,946 197,105 126,558
Redeemed.................... (1,463,451) (1,233,017) (5,380,575) (2,863,739) (812,897) (337,933)
------------ ------------ ------------ ----------- ----------- -------------
Change in Class C Shares.... 4,963,592 352,370 (2,097,823) 1,532,111 256,274 2,107,038
------------ ------------ ------------ ----------- ----------- -------------
Total net increase (decrease)
from share transactions..... 5,142,593 574,322 (1,906,444) 2,346,706 373,495 2,638,621
------------ ------------ ------------ ----------- ----------- -------------
------------ ------------ ------------ ----------- ----------- -------------
</TABLE>
CONTINUED
50
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 1999
<TABLE>
<CAPTION>
NORTH CAROLINA
GOVERNMENT INCOME TAX-FREE MONEY MARKET
FUND BOND FUND FUND
------------------------- ---------------------- ------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
APRIL 30, APRIL 30, APRIL 30, APRIL 30, APRIL 30,
1999 1998 1999 1998 1999 (b)
------------ ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
CLASS A
Proceeds from shares
issued.................... $ 285,888 $ 235,089 $ 332,162 $ 988,212 $ 47,429
Dividends reinvested........ 34,263 27,234 204,388 178,156 564
Cost of shares redeemed..... (164,373) (224,712) (400,229) (442,204) (20,855)
------------ ----------- ---------- ---------- ------------
Class A capital
transactions.............. $ 155,778 $ 37,611 $ 136,321 $ 724,164 $ 27,138
------------ ----------- ---------- ---------- ------------
CLASS B
Proceeds from shares
issued.................... $ 127,022 $ 44,620 $ 58,679 $ 138,381 $ --
Dividends reinvested........ 9,923 6,601 18,903 13,731 --
Cost of shares redeemed..... (68,139) (118,485) (25,919) (81,485) --
------------ ----------- ---------- ---------- ------------
Class B capital
transactions.............. $ 68,806 $ (67,264) $ 51,663 $ 70,627 $ --
------------ ----------- ---------- ---------- ------------
CLASS C
Proceeds from shares
issued.................... $ 34,025,484 $30,411,839 $7,898,545 $8,617,011 $204,406,231
Dividends reinvested........ 6,333,808 4,288,523 195,600 24,738 --
Cost of shares redeemed..... (50,904,535) (26,095,657) (6,616,483) (4,356,092) (140,221,787)
------------ ----------- ---------- ---------- ------------
Class C capital
transactions.............. $(10,545,243) $ 8,604,705 $1,477,662 $4,285,657 $ 64,184,444
------------ ----------- ---------- ---------- ------------
Total net increase (decrease)
from capital transactions... $(10,320,659) $ 8,575,052 $1,665,646 $5,080,448 $ 64,211,582
------------ ----------- ---------- ---------- ------------
------------ ----------- ---------- ---------- ------------
SHARE TRANSACTIONS:
CLASS A
Issued...................... 28,191 23,306 31,533 95,975 47,429
Reinvested.................. 3,348 2,693 19,455 17,311 564
Redeemed.................... (16,108) (22,272) (38,041) (43,267) (20,855)
------------ ----------- ---------- ---------- ------------
Change in Class A Shares.... 15,431 3,727 12,947 70,019 27,138
------------ ----------- ---------- ---------- ------------
CLASS B
Issued...................... 12,342 4,431 5,555 13,248 --
Reinvested.................. 971 654 1,798 1,335 --
Redeemed.................... (6,665) (11,768) (2,454) (7,984) --
------------ ----------- ---------- ---------- ------------
Change in Class B Shares.... 6,648 (6,683) 4,899 6,599 --
------------ ----------- ---------- ---------- ------------
CLASS C
Issued...................... 3,323,824 2,999,680 754,342 836,663 204,406,231
Reinvested.................. 618,807 424,095 18,519 2,411 --
Redeemed.................... (4,982,025) (2,571,444) (630,036) (422,570) (140,221,787)
------------ ----------- ---------- ---------- ------------
Change in Class C Shares.... (1,039,394) 852,331 142,825 416,504 64,184,444
------------ ----------- ---------- ---------- ------------
Total net increase (decrease)
from share transactions..... (1,017,315) 849,375 160,671 493,122 64,211,582
------------ ----------- ---------- ---------- ------------
------------ ----------- ---------- ---------- ------------
</TABLE>
- ---------
(a) For the period from May 2, 1997 (commencement of operations).
(b) For the period from June 1, 1998 (commencement of operations).
7. SUBSEQUENT EVENT
The Centura Quality Income Fund commenced operations on June 10, 1999. The
Fund seeks current income and capital appreciation by investing in a
diversified portfolio consisting primarily of investment grade debt
securities.
8. FEDERAL INCOME TAX INFORMATION (UNAUDITED)
During the year ended April 30, 1999, the North Carolina Tax-Free Bond Fund
declared tax-exempt income distributions in the amount of $1,809,032.
CONTINUED
51
<PAGE>
CENTURA FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 1999
During the year ended April 30, 1999, long-term capital gain distributions
declared and dividends received deduction available to corporations are as
follows:
<TABLE>
<CAPTION>
DIVIDENDS
LONG-TERM RECEIVED
20% DEDUCTION
-------------- --------------
<S> <C> <C>
Large Cap Equity Fund................... 7,1$09,222 61.14%
Mid Cap Equity Fund..................... 22,416,520 16.65%
Small Cap Equity Fund................... 1,335,875 7.97%
Government Income Fund.................. 2,440,842 --
North Carolina Tax-Free Bond Fund....... 202,451 --
</TABLE>
END OF NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
RESULTS OF SHAREHOLDER MEETING (UNAUDITED)
On July 23, 1998, a Special Meeting of the Shareholders of the Equity Income
Fund (currently, the Large Cap Equity Fund) was called to approve a change
in the investment objective of the Fund. The Fund's investment objective was
to provide long-term capital appreciation and income. The proposed new
investment objective is to provide long-term capital appreciation.
<TABLE>
<CAPTION>
% OF % OF
OUTSTANDING SHARES
NO. OF SHARES SHARES VOTED
-------------- -------------- --------------
<S> <C> <C> <C>
FOR:............................... 3,781,469 69.29% 98.37%
AGAINST:........................... 24,070 0.44% 0.63%
ABSTAINING:........................ 38,400 0.70% 1.00%
TOTAL:............................. 3,843,939 70.43% 100.00%
</TABLE>
52
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors of
Centura Funds, Inc.
We have audited the accompanying statements of assets and liabilities of the
Centura Funds, Inc.--Large Cap Equity Fund (formerly Equity Income Fund), Mid
Cap Equity Fund (formerly Equity Growth Fund), Small Cap Equity Fund (formerly
Southeast Equity Fund), Government Income Fund (formerly Federal Securities
Income Fund), North Carolina Tax-Free Bond Fund, and Money Market Fund (the
Funds), including the schedules of portfolio investments, as of April 30, 1999,
and the related statements of operations, statements of changes in net assets
and the financial highlights related to the year ended April 30, 1999 (eleven
month period ended April 30, 1999 for the Money Market Fund). These financial
statements and the financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The accompanying
statements of changes in net assets for the periods ended April 30, 1998 and the
financial highlights for the periods ended April 30, 1998 and prior, were
audited by other auditors whose report thereon dated May 22, 1998 expressed an
unqualified opinion on the statement of changes in net assets and financial
highlights.
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 verification of securities owned as of April
30, 1999, by examination, correspondence with brokers and other appropriate
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds comprising the Centura Funds, Inc. as of April 30,
1999, the results of their operations, the changes in their net assets and the
financial highlights related to the year ended April 30, 1999 (eleven month
period ended April 30, 1999 for the Money Market Fund), in conformity with
generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
June 11, 1999
53
<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 N.W.
WASHINGTON, D.C. 20006
INDEPENDENT AUDITORS
KPMG LLP
TWO NATIONWIDE PLAZA
COLUMBUS, OHIO 43215
THIS REPORT IS FOR THE INFORMATION OF THE SHAREHOLDERS OF CENTURA FUNDS. ITS USE
IN CONNECTION WITH ANY OFFERING OF THE FUNDS' SHARES IS AUTHORIZED ONLY IN CASE
OF A CONCURRENT OR PRIOR DELIVERY OF THE FUNDS' CURRENT PROSPECTUS.
INVESTMENTS IN MUTUAL FUNDS INVOLVE RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
CENTURA FUNDS ARE NOT DEPOSITS, GUARANTEED BY OR OBLIGATIONS OF CENTURA BANK OR
ITS AFFILIATES AND ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY
OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO MAINTAIN VALUE OF YOUR
INVESTMENT IN THE MONEY MARKET FUND AT $1 PER SHARE, IT IS POSSIBLE TO LOSE
MONEY BY INVESTING IN THE MONEY MARKET FUND.
6/99
