-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K2oRXnBAIIo43Cepe9XcMga1cUP9sTlUiUiYt0JFdFPsi4jpA7VnIA/BeKxJWDxc NMf9eSqb//DDkKZQaC3RxA== 0000950168-97-003168.txt : 19971106 0000950168-97-003168.hdr.sgml : 19971106 ACCESSION NUMBER: 0000950168-97-003168 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970831 FILED AS OF DATE: 19971105 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN MUNICIPAL TRUST CENTRAL INDEX KEY: 0000836375 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05579 FILM NUMBER: 97708431 BUSINESS ADDRESS: STREET 1: 200 BERKELEY ST CITY: BOSTON STATE: MA ZIP: 02116-5034 BUSINESS PHONE: 6172103533 MAIL ADDRESS: STREET 1: 2500 WESTCHESTER AVENUE CITY: PURCHASE STATE: NY ZIP: 10577 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN INVESTMENT TRUST CENTRAL INDEX KEY: 0000757440 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046599663 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-04154 FILM NUMBER: 97708432 BUSINESS ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9146412305 MAIL ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION FUNDS/ DATE OF NAME CHANGE: 19940628 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION HIGH GRADE TAX FREE PORT DATE OF NAME CHANGE: 19940519 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION FUNDS DATE OF NAME CHANGE: 19921230 N-30D 1 EVERGREEN STATE TAX FREE AR 62544 N-30D Evergreen State Tax Free Funds (Photo of mountains and trees) 1997 Annual Report (Evergreen tree logo) Evergreen Funds(SM) SINCE 1932 (Evergreen graphic) EVERGREEN - -------------------------------------------------------------------------------- TABLE OF CONTENTS Letter to Shareholders............................... 1 FUND AT A GLANCE Evergreen Florida High Income Municipal Bond Fund............................................ 2 Evergreen Florida Municipal Bond Fund.............. 3 Evergreen Georgia Municipal Bond Fund.............. 4 Evergreen North Carolina Municipal Bond Fund....... 5 Evergreen South Carolina Municipal Bond Fund....... 6 Evergreen Virginia Municipal Bond Fund............................................ 7 FINANCIAL HIGHLIGHTS Evergreen Florida High Income Municipal Bond Fund............................................ 8 Evergreen Florida Municipal Bond Fund.............. 10 Evergreen Georgia Municipal Bond Fund.............. 12 Evergreen North Carolina Municipal Bond Fund....... 14 Evergreen South Carolina Municipal Bond Fund....... 16 Evergreen Virginia Municipal Bond Fund............. 18 SCHEDULES OF INVESTMENTS Evergreen Florida High Income Municipal Bond Fund............................................ 20 Evergreen Florida Municipal Bond Fund.............. 24 Evergreen Georgia Municipal Bond Fund.............. 27 Evergreen North Carolina Municipal Bond Fund....... 28 Evergreen South Carolina Municipal Bond Fund....... 30 Evergreen Virginia Municipal Bond Fund............................................ 31 Statements of Assets and Liabilities................. 33 Statements of Operations............................. 34 Statements of Changes in Net Assets.................. 35 Combined Notes to Financial Statements............... 37 Independent Auditors' Report-- KPMG Peat Marwick LLP.............................. 43 Report of Independent Accountants-- Price Waterhouse LLP............................... 44 Federal Income Tax Status of Distributions........... 45
ABOUT EVERGREEN KEYSTONE Since 1971, the Evergreen Funds have been providing investors with a proven, value-driven approach to equity investment management. For over 60 years of changing economic conditions, Keystone has taken pride in helping investors meet their financial goals through a broad range of financial products and services. Combined, Evergreen Keystone offers over 70 funds designed to meet a broad range of objectives, including fixed-income, balanced, growth and income, and aggressive growth. Assets under management total more than $30 billion. EVERGREEN - -------------------------------------------------------------------------------- LETTER TO SHAREHOLDERS October 1997 (Photo of William M. Ennis) WILLIAM M. ENNIS Dear Shareholders: Investors in state tax-free mutual funds enjoyed strong performance during the past year despite some short-term price fluctuations. The fiscal year that ended on August 31, 1997 ultimately proved rewarding for investors in municipal bond funds, despite some uncertainty and volatility. The municipal bond market finished the year with a strong six months, despite some weakness in March and April which could be attributed largely to comments from Alan Greenspan, Chairman of the Federal Reserve Board, who warned of "irrational exuberance" in the soaring stock market in early March. His comments were followed up by the Federal Reserve Board's March 25 decision to raise short-term rates by one-quarter of one percent. In the short run, this action caused interest rates to rise rather dramatically. However, by early June the markets were again back on track, as inflationary fears declined, despite continued economic strength and high employment. This sustained growth and low inflation enabled the municipal bond market to recoup the losses sustained during the first quarter of 1997 and to climb to new highs. In fact, rates fell through July, allowing 30-year municipal yields to reach approximately 5.15% in July. Then, an unexpectedly sharp increase in non-farm payrolls, accompanied by a drop in the unemployment rate, caused municipal bond yields to rise and prices to fall. However, even in this period, municipal bonds outperformed U.S. Treasuries, as demand for tax-free bonds outstripped new supply. Throughout the year, your Evergreen state tax free funds delivered healthy returns, with income exempt both from federal income taxes and many state taxes.(1) I am delighted to inform you that Evergreen Keystone has successfully integrated all service functions of Evergreen and Keystone Funds. This means that you now have full exchange privileges among all Evergreen and Keystone America funds. In addition, you will be receiving the top-flight service that earned Evergreen Keystone the 1996 Dalbar Quality Tested Service Seal, the highest award for mutual fund service presented by Dalbar, an independent mutual fund survey and rating firm. In the following pages, we provide specific information about each Evergreen state tax-free fund. We present this information in a new format that makes information easily accessible. We are very interested in hearing your thoughts on this new format, and we welcome your suggestions. Sincerely, /s/ William M. Ennis WILLIAM M. ENNIS MANAGING DIRECTOR (1) SOME PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX. 1 (logo) EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FUND AT A GLANCE As of August 31, 1997
PERFORMANCE - ------------------------------------------------------------------------------------------------------------------------------- 1 YEAR AVERAGE ANNUALIZED TOTAL RETURN(1) ---------------------------- ----------------------------------------------- CUMULATIVE TOTAL SHARE INCEPTION WITHOUT SALES WITH SALES SINCE RETURN(1) SINCE CLASS DATE CHARGE CHARGE 3 YEARS 5 YEARS INCEPTION INCEPTION - ------------------------------------------------------------------------------------------------------------------------------- A 6/17/92 10.77% 5.51% 6.96% 7.33% 7.34% 44.65% B 7/10/95 9.95% 4.95% -- -- 6.24% 13.88% Y 9/20/95 11.04% -- -- -- 8.47% 17.19% - ------------------------------------------------------------------------------------------------------------------------------- SHARE 12-MONTH CLASS DISTRIBUTION - ------ A $0.62 B $0.54 Y $0.65 - ------
(1) Adjusted for maximum sales charges. CURRENT STRATEGY - -------------------------------------------------------------------------------- For the twelve-month period ended September 30, 1997, the Fund's class Y and class A shares ranked number 1 and 3, respectively, out of 63 Florida municipal debt funds tracked by Lipper Analytical Services, an independent mutual fund rating company.(2) One constant through the recent environment of fluctuating interest rates has been the narrowing of spreads between higher and lower quality bonds, as investors searched for more yield. Since most of the Fund is comprised of lower rated and non-rated bonds, performance was aided dramatically by this tightening of spreads. The increased supply of higher-yielding bonds within the market should enable us to maintain our current yield-- with the possibility of increasing it-- even as heavy cash inflows enter the Fund. (Photo of Richard K. Marrone) RICHARD K. MARRONE VICE PRESIDENT, SENIOR FIXED INCOME PORTFOLIO MANAGER - -------------------------------------------------------------------------------- GROWTH OF INVESTMENT Evergreen Florida High Income Municipal Bond Fund Comparison of a $10,000 investment in Evergreen Florida High Income Municipal Bond Fund, Class A shares, versus a similar investment in the Lehman Brothers Municipal Bond Index (LBMBI) and the Consumer Price Index (CPI). (A chart appears here with the following plot points.) In Thousands 6/92 8/92 8/93 8/94 8/95 8/96 8/97 Class A Shares 9,525 9,672 11,039 11,261 12,271 13,059 $14,465 CPI 10,000 10,085 10,364 10,664 10,943 11,258 $11,508 LMBI 10,000 10,371 11,636 11,653 12,686 13,350 $14,586 Past performance is no guarantee of future results. The performance of each class may vary based on differences in loads and fees paid by the shareholders investing in different classes. The Lehman Brothers Municipal Bond Index is an unmanaged market index. The index does not include transactions costs associated with buying and selling securities nor any management fees. The Consumer Price Index, a measure of inflation, is through August 31, 1997.
PORTFOLIO CHARACTERISTICS - ---------------------------------------------------------------- Total Net Assets: $189,743,181 Average Credit Quality: BB+ Average Maturity: 23.04 years Average Duration: 8.31 years
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF PORTFOLIO ASSETS) (A pie chart appears here with the following plot points.) Health 2.7% Housing 24.1% Community Development 15.2% Residential Care 12.5% Industrial Development 12.5% Hospital 9.4% Other 8.8% Education 5.3% Utility 5.2% Special Care 4.3% PORTFOLIO QUALITY (AS A PERCENTAGE OF PORTFOLIO ASSETS) (A pie chart appears here with the following plot points.) A 2.5% AA 2.0% AAA 11.1% B 0.4% BB 1.2% BBB 16.7% NR 66.1% (2) THE RANKINGS ARE BASED ON TOTAL RETURN AND DO NOT INCLUDE THE EFFECT OF A SALES CHARGE. FOR THE 5-YEAR PERIOD ENDING SEPTEMBER 30, 1997, THE FUND'S CLASS A SHARES RANKED 1 OUT OF 19 FLORIDA MUNICIPAL DEBT FUNDS TRACKED BY LIPPER ANALYTICAL SERVICES. 2 (logo) EVERGREEN FLORIDA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FUND AT A GLANCE As of August 31, 1997
PERFORMANCE - ------------------------------------------------------------------------------------------------------------------------------- 1 YEAR AVERAGE ANNUALIZED TOTAL RETURN(1) ---------------------------- ----------------------------------------------- CUMULATIVE TOTAL SHARE INCEPTION WITHOUT SALES WITH SALES SINCE RETURN (1) SINCE CLASS DATE CHARGE CHARGE 3 YEARS 5 YEARS INCEPTION INCEPTION - ------------------------------------------------------------------------------------------------------------------------------- A 5/11/88 9.06% 3.88% 5.81% 5.92% 7.47% 95.60% B 6/30/95 8.06% 3.06% -- -- 5.03% 11.26% Y 6/30/95 9.14% -- -- -- 7.38% 16.75% - ------------------------------------------------------------------------------------------------------------------------------- - ------ SHARE 12-MONTH CLASS DISTRIBUTION - ------ A $0.58 B $0.49 Y $0.59 - ------
(1) Adjusted for maximum sales charges. CURRENT STRATEGY - -------------------------------------------------------------------------------- We continue to emphasize an income-oriented approach for the Fund. We replaced older, lower-yielding bonds with higher-yielding securities as opportunities became available. During the Fund's fiscal year, the BOND BUYER 20 BOND INDEX declined from 5.86% to 5.45%. Despite this decline, as the year progressed we sold approximately $68.8 million worth of bonds yielding 5.07%, while buying $65.1 million in bonds yielding 5.77%. Illustrating our emphasis on higher-yielding securities, this action has added substantial earning power to the portfolio. For the twelve- months ended September 30, 1997, the Fund ranked in the top 25%; class Y shares ranked 12 out of 63 and class A shares 14 out of 63 Florida municipal debt funds tracked by Lipper Analytical Services, an independent mutual fund rating company.(2) (Photo of Robert S. Drye) ROBERT S. DRYE VICE PRESIDENT, FIXED INCOME PORTFOLIO MANAGER - --------------------------------------------------------------------------------
GROWTH OF INVESTMENT Evergreen Florida Municipal Bond Fund Comparison of a $10,000 investment in Evergreen Florida Municipal Bond Fund, Class A shares, versus a similar investment in the Lehman Brothers Municipal Bond Index (LBMBI) and the Consumer Price Index (CPI). (A chart appears here with the following plot points.) In Thousands 5/88 8/88 8/89 8/90 8/91 8/92 8/93 8/94 8/95 8/96 8/97 Class A Shares 9,525 9,726 10,609 11,051 12,504 13,977 15,719 15,725 17,057 17,935 19,560 CPI 10,000 10,162 10,639 11,237 11,664 12,030 12,363 12,721 13,054 13,429 13,727 LBMBI 10,000 10,191 11,310 12,035 13,455 14,959 16,783 16,808 18,298 19,255 21,038
Past performance is no guarantee of future results. The performance of each class may vary based on differences in loads and fees paid by the shareholders investing in different classes. The Lehman Brothers Municipal Bond Index is an unmanaged market index. The index does not include transaction costs associated with buying and selling securities nor any management fees. The Consumer Price Index, a measure of inflation, is through August 31, 1997.
PORTFOLIO CHARACTERISTICS - ---------------------------------------------------------------- Total Net Assets: $161,803,570 Average Credit Quality: AA Average Maturity: 20.68 years Average Duration: 9.25 years
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF PORTFOLIO ASSETS) Health Care 30.9% Housing 24.1% Public Facilities 13.7% Industrial Revenue Bonds 9.7% Utilities 6.4% Education 5.9% Transportation 3.9% State General Obligation 2.9% Other 2.5% PORTFOLIO QUALITY (AS A PERCENTAGE OF PORTFOLIO ASSETS) (A pie chart appears here with the following plot points.) A 11.6% AA 16.7% AAA 45.7% BBB 19.8% NR 6.2% (2)THE RANKINGS ARE BASED ON TOTAL RETURN AND DO NOT INCLUDE THE EFFECT OF A SALES CHARGE. 3 (logo) EVERGREEN GEORGIA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FUND AT A GLANCE As of August 31, 1997
PERFORMANCE - ------------------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUALIZED 1 YEAR TOTAL RETURN(1) ---------------------------- ------------------------------ CUMULATIVE TOTAL SHARE INCEPTION WITHOUT SALES WITH SALES SINCE RETURN (1) SINCE 12-MONTH CLASS DATE CHARGE CHARGE 3 YEARS INCEPTION INCEPTION DISTRIBUTION - ------------------------------------------------------------------------------------------------------------------------------- A 7/2/93 8.73% 3.57% 5.78% 3.63% 16.04% $0.49 B 7/2/93 7.93% 2.93% 5.83% 3.73% 16.52% $0.41 Y 2/28/94 9.00% -- 7.78% 5.73% 21.59% $0.51 - -------------------------------------------------------------------------------------------------------------------------------
(1)Adjusted for maximum sales charge. CURRENT STRATEGY - -------------------------------------------------------------------------------- In the past several months, it has become increasingly difficult to maneuver within the fixed income markets. We have maintained our focus on providing strong income, a strategy which has paid off during the volatile interest rate swings throughout the fiscal year. The month of August was a particularly good month for the Fund, enabling it to climb higher in its peer group rankings. For the twelve months ended September 30, 1997, the Fund's class Y shares ranked 10 out of 32 Georgia municipal debt funds tracked by Lipper Analytical Services, an independent mutual fund rating company.(2) Class A shares ranked 13 out of the 32 Georgia municipal debt funds tracked by Lipper. (photo of Richard K. Marrone) RICHARD K. MARRONE VICE PRESIDENT, SENIOR FIXED INCOME PORTFOLIO MANAGER - -------------------------------------------------------------------------------- GROWTH OF INVESTMENT Evergreen Georgia Municipal Bond Fund Comparison of a $10,000 investment in Evergreen Georgia Municipal Bond Fund, Class A shares, versus a similar investment in the Lehman Brothers Georgia Municipal Bond Index (LBGMBI) and the Consumer Price Index (CPI). (A chart appears here with the following plot points.) In Thousands 7/93 8/93 8/94 8/95 8/96 8/97 Class A Shares 9,525 9,703 9,338 10,047 10,672 11,604 CPI 10,000 10,028 10,318 10,589 10,293 11,113 LBGMBI 10,000 10,232 10,878 11,095 11,643 12,685 Past performance is no guarantee of future results. The performance of each class may vary based on differences in loads and fees paid by the shareholders investing in different classes. The Lehman Brothers Georgia Municipal Bond Index is an unmanaged market index. The index does not include transaction costs associated with buying and selling securities nor any management fees. The Consumer Price Index, a measure of inflation, is through August 31, 1997.
PORTFOLIO CHARACTERISTICS - ---------------------------------------------------------------- Total Net Assets: $14,252,077 Average Credit Quality: AA Average Maturity: 22 years Average Duration: 9.47 years
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF PORTFOLIO ASSETS) (A pie chart appears here with the following plot points.) Other 4.4% Hospital 24.1% General Obligation Local 23.7% Housing 14.7% Industrial Development 13.3% Escrow 6.9% Utilities 6.7% Public Facilities 6.2% PORTFOLIO QUALITY (AS A PERCENTAGE OF PORTFOLIO ASSETS) (A pie chart appears here with the following plot points.) A 25.2% AA 20.2% AAA 43.3% BBB 3.9% NR 7.4% (2) THE RANKINGS ARE BASED ON TOTAL RETURN AND DO NOT INCLUDE THE EFFECT OF A SALES CHARGE. 4 (logo) EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FUND AT A GLANCE As of August 31, 1997
PERFORMANCE - ------------------------------------------------------------------------------------------------------------------------ AVERAGE ANNUALIZED 1 YEAR TOTAL RETURNS(1) ---------------------------- ----------------------- CUMULATIVE SHARE INCEPTION WITHOUT SALES WITH SALES SINCE TOTAL RETURN (1) 12-MONTH CLASS DATE CHARGE CHARGE 3 YEARS INCEPTION SINCE INCEPTION DISTRIBUTION - ------------------------------------------------------------------------------------------------------------------------ A 1/11/93 9.11% 3.93% 6.03% 4.79% 24.23% $0.50 B 1/11/93 8.30% 3.30% 6.08% 4.85% 24.56% $0.42 Y 2/28/94 9.39% -- 8.03% 5.51% 20.72% $0.53 - ------------------------------------------------------------------------------------------------------------------------
(1) Adjusted for maximum sales charge. CURRENT STRATEGY - -------------------------------------------------------------------------------- In the past several months, it has become increasingly difficult to maneuver within the fixed income markets. The Fund began the calendar year with great strength, outperforming most of its competitors, only to relinquish some of that lead as the first quarter came to a close. As the second quarter began, the Fund was managed more defensively-- due to our concerns of rising interest rates-- and moved back near the top of the performance rankings. We purchased a block of high-yielding bonds in August, which we anticipate will contribute to both income and total return. For the twelve-month period ended September 30, 1997, the Fund's class Y shares ranked in the top 5%, number 2 out of 37 North Carolina municipal debt funds tracked by Lipper Analytical Services, an independent mutual fund rating company. (2) Class A shares ranked in the top 11%, number 4 out of 37 North Carolina municipal debt funds tracked by Lipper. (Photo of Richard K. Marrone) RICHARD K. MARRONE VICE PRESIDENT, SENIOR FIXED INCOME PORTFOLIO MANAGER - -------------------------------------------------------------------------------- GROWTH OF INVESTMENT Evergreen North Carolina Municipal Bond Fund Comparison of a $10,000 investment in Evergreen North Carolina Municipal Bond Fund, Class A shares, versus a similar investment in the Lehman Brothers State General Oglibation Bond Index (LBSGOBI) and the Consumer Price Index (CPI). (A chart appears here with the following plot points.) In Thousands 1/93 8/93 8/94 8/95 8/96 8/97 Class A Shares 9,525 10,300 9,926 10,822 11,386 $12,423 CPI 10,000 10,205 10,500 10,775 11,085 $11,331 LBSGOBI 10,000 10,893 10,921 11,897 12,475 $13,529 Past performance is no guarantee of future results. The performance of each class may vary based on differences in loads and fees paid by the shareholders investing in different classes. The Lehman Brothers State General Obligation Bond Index is an unmanaged market index. The index does not include transaction costs associated with buying and selling securities nor any management fees. The Consumer Price Index, a measure of inflation, is through August 31, 1997.
PORTFOLIO CHARACTERISTICS - -------------------------------------------------------------- Total Net Assets: $60,355,046 Average Credit Quality: A+ Average Maturity: 21.26 years Average Duration: 9.5 years
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF PORTFOLIO ASSETS) (A pie chart appears here with the following plot points.) Housing 20.1% Escrow 13.7% Lease 10.5% Industrial Development 10.5% Education 9.3% Utility 8.6% Hospital 8.2% Other 6.9% Health 6.6% Residential Care 5.6% PORTFOLIO QUALITY (AS A PERCENTAGE OF PORTFOLIO ASSETS) (A pie chart appears here with the following plot points.) A 27.7% AA 19.0% AAA 27.0% BBB 19.5% NR 6.8% (2) THE RANKINGS ARE BASED ON TOTAL RETURN AND DO NOT INCLUDE THE EFFECT OF A SALES CHARGE. 5 (logo) EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FUND AT A GLANCE As of August 31, 1997
PERFORMANCE - ---------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUALIZED 1 YEAR TOTAL RETURN(1) ---------------------------- ----------------------- CUMULATIVE SHARE INCEPTION WITHOUT SALES WITH SALES SINCE TOTAL RETURN (1) 12-MONTH CLASS DATE CHARGE CHARGE 3 YEARS INCEPTION SINCE INCEPTION DISTRIBUTION - ---------------------------------------------------------------------------------------------------------------------- A 1/3/94 9.33% 4.14% 7.05% 4.06% 15.70% $0.49 B 1/3/94 8.52% 3.52% 7.12% 3.99% 15.41% $0.42 Y 2/28/94 9.60% -- 9.07% 6.62% 25.25% $0.52 - ----------------------------------------------------------------------------------------------------------------------
(1) Adjusted for maximum sales charge. CURRENT STRATEGY - -------------------------------------------------------------------------------- We continue to emphasize an income-oriented approach for the Fund. We replaced older, lower-yielding bonds with higher-yielding securities as opportunities became available. During the Fund's fiscal year, the BOND BUYER 20 BOND INDEX declined from 5.86% to 5.45%. Despite this decline, as the year progressed we sold approximately $7 million worth of bonds yielding 5.83%, while buying $9.5 million in bonds yielding 6.08%. By continuing to structure our portfolio with higher yielding issues, a substantial portion of the total return in the portfolio is produced by higher income. In an ongoing effort to ensure credit quality and increase total return, our municipal credit analysts continue to monitor existing holdings and screen potential new acquisitions. For the twelve-month period ended September 30, 1997, the Fund's class Y and class A shares ranked number 2 and 3, respectively, out of 16 South Carolina municipal debt funds tracked by Lipper Analytical Services, an independent mutual fund rating company.(2) (Photo of Robert S. Drye) ROBERT S. DRYE VICE PRESIDENT, FIXED INCOME PORTFOLIO MANAGER - -------------------------------------------------------------------------------- GROWTH OF INVESTMENT Evergreen South Carolina Municipal Bond Fund Comparison of a $10,000 investment in Evergreen South Carolina Municipal Bond Fund, Class A shares, versus a similar investment in the Lehman Brothers South Carolina Municipal Bond Index (LBSCMBI) and the Consumer Price Index (CPI). (A chart appears here with the following plot points.) In Thousands 1/94 8/94 8/95 8/96 8/97 Class A Shares 9,525 8,984 9,962 10,583 $11,570 CPI 10,000 10,219 10,487 10,788 $11,028 LBSCMBI 10,000 9,654 10,568 11,081 $12,076 Past performance is no guarantee of future results. The performance of each class may vary based on differences in loads and fees paid by the shareholders investing in different classes. The Lehman Brothers South Carolina Municipal Bond Index is an unmanaged market index. The index does not include transaction costs associated with buying and selling securities nor any management fees. The Consumer Price Index, a measure of inflation, is through August 31, 1997.
PORTFOLIO CHARACTERISTICS - ---------------------------------------------------------------- Total Net Assets: $12,770,530 Average Credit Quality: AA Average Maturity: 22.20 years Average Duration: 10.31 years
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF PORTFOLIO ASSETS) (A pie chart appears here with the following plot points.) Health Care 30.9% Housing 24.1% Public Facilities 13.7% Industrial Revenue Bonds 9.7% Utilities 6.4% Education 5.9% Transportation 3.9% General Obligation 2.9% Other 2.5% PORTFOLIO QUALITY (AS A PERCENTAGE OF PORTFOLIO ASSETS) (A pie chart appears here with the following plot points.) A 13.1% AA 28.5% AAA 32.8% BBB 12.8% NR 12.8% (2) THE RANKINGS ARE BASED ON TOTAL RETURN AND DO NOT INCLUDE THE EFFECT OF A SALES CHARGE. 6 (logo) EVERGREEN VIRGINIA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FUND AT A GLANCE As of August 31, 1997
PERFORMANCE - ---------------------------------------------------------------------------------------------------------------------- AVERAGE ANNUALIZED 1 YEAR TOTAL RETURN(1) ---------------------------- ----------------------- CUMULATIVE TOTAL SHARE INCEPTION WITHOUT SALES WITH SALES SINCE RETURN(1) SINCE 12-MONTH CLASS DATE CHARGE CHARGE 3 YEARS INCEPTION INCEPTION DISTRIBUTION - ---------------------------------------------------------------------------------------------------------------------- A 7/2/93 9.05% 3.87% 6.08% 3.90% 17.25% $0.50 B 7/2/93 8.24% 3.24% 6.14% 3.98% 17.71% $0.41 Y 2/28/94 9.32% -- 8.08% 6.06% 22.93% $0.51 - ----------------------------------------------------------------------------------------------------------------------
(1) Adjusted for maximum sales charge. CURRENT STRATEGY - -------------------------------------------------------------------------------- For the twelve months ended September 30, 1997, the Fund's class Y and class A shares ranked number 6 and 8, respectively, out of 32 Virginia municipal debt funds tracked by Lipper Analytical Services, an independent mutual fund rating company. (2) During the course of the fiscal year, we continued to emphasize an income-oriented approach. In doing so, we maintained a higher-coupon structure which allows our funds to provide tax-free income and in the long term, produce a strong total return with reduced volatility. A substantial portion of the total return of the Fund is produced by the portfolio's higher coupon structure. To ensure credit quality and increase total return, our municipal credit analysts work in conjunction with portfolio managers to carefully monitor existing holdings and seek out new investment opportunities. (Photo of Charles E. Jeanne) CHARLES E. JEANNE ASSISTANT VICE PRESIDENT, PORTFOLIO MANAGER - -------------------------------------------------------------------------------- GROWTH OF INVESTMENT Evergreen Virginia Municipal Bond Fund Comparison of a $10,000 investment in Evergreen South Carolina Municipal Bond Fund, Class A shares, versus a similar investment in the Lehman Brothers Virginia Municipal Bond Index (LBVMBI) and the Consumer Price Index (CPI). (A chart appears here with the following plot points.) In Thousands 7/93 8/93 8/94 8/95 8/96 8/97 Class A Shares 9,525 9,675 9,355 10,228 10,752 $11,725 CPI 10,000 10,028 10,318 10,589 10,893 $11,113 LBVMBI 10,000 10,189 10,241 11,151 11,665 $12,695 Past performance is no guarantee of future results. The performance of each class may vary based on differences in loads and fees paid by the shareholders investing in different classes. The Lehman Brothers Virginia Municipal Bond Index is an unmanaged market index. The index does not include transaction costs associated with buying and selling securities nor any management fees. The Consumer Price Index, a measure of inflation, is through August 31, 1997.
PORTFOLIO CHARACTERISTICS - ---------------------------------------------------------------- Total Net Assets: $15,824,821 Average Credit Quality: AA Average Maturity: 20.56 years Average Duration: 10.96 years
PORTFOLIO COMPOSITION (AS A PERCENTAGE OF PORTFOLIO ASSETS) (A pie chart appears here with the following plot points.) Housing 24.9% Lease 14.8% Other 12.9% Industrial Development 9.5% Hospital 7.6% Transportation 7.5% Residential Care 7.2% Public Facilities 6.4% General Obligation Local 4.6% Education 4.6% PORTFOLIO QUALITY (AS A PERCENTAGE OF PORTFOLIO ASSETS) (A pie chart appears here with the following plot points.) A 27.7% AA 32.7% AAA 19.5% BBB 3.7% NR 16.4% (2) THE RANKINGS ARE BASED ON TOTAL RETURN AND DO NOT INCLUDE THE EFFECT OF A SALES CHARGE. 7 (logo) EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
YEAR ENDED AUGUST 31, FOUR MONTHS YEAR ENDED APRIL 30, ----------------------- ENDED ----------------------- 1997 1996 AUGUST 31, 1995* 1995 1994 - ----------------------------------------------------------------------------------------------------------------- CLASS A SHARES NET ASSET VALUE BEGINNING OF YEAR....... $ 10.42 $ 10.40 $ 10.16 $ 10.08 $ 10.36 -------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income................... 0.62 0.63 0.21 0.65 0.68 Net realized and unrealized gain (loss) on investments........................ 0.47 0.02 0.24 0.08 (0.26) -------- ------- ------- ------- ------- Total from investment operations........ 1.09 0.65 0.45 0.73 0.42 -------- ------- ------- ------- ------- LESS DISTRIBUTIONS FROM: Net investment income................... (0.62) (0.63) (0.21) (0.65) (0.68) Net realized gains on investments....... 0 0 0 0 (0.02) -------- ------- ------- ------- ------- Total distributions..................... (0.62) (0.63) (0.21) (0.65) (0.70) -------- ------- ------- ------- ------- NET ASSET VALUE END OF YEAR............. $ 10.89 $ 10.42 $ 10.40 $ 10.16 $ 10.08 -------- ------- ------- ------- ------- TOTAL RETURN (B)........................ 10.77% 6.42% 4.43% 7.56% 3.94% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses........................ 0.88% 0.85% 1.07%(a) 0.60% 0.14% Total expenses excluding indirectly paid expenses....................... 0.87% -- -- -- -- Total expenses excluding waivers and reimbursements...................... 1.12% 1.15% 1.42%(a) 1.26% 1.12% Net investment income................. 5.86% 6.02% 5.92%(a) 6.52% 6.16% Portfolio turnover rate................. 32% 42% 14% 28% 31% NET ASSETS END OF YEAR (THOUSANDS)...... $119,942 $76,267 $ 59,551 $65,043 $72,683 JUNE 17, 1992 THROUGH APRIL 30, 1993 - ---------------------------------------- CLASS A SHARES NET ASSET VALUE BEGINNING OF YEAR....... $ 10.00 ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income................... 0.61 Net realized and unrealized gain (loss) on investments........................ 0.39 ------- Total from investment operations........ 1.00 ------- LESS DISTRIBUTIONS FROM: Net investment income................... (0.61) Net realized gains on investments....... (0.03) ------- Total distributions..................... (0.64) ------- NET ASSET VALUE END OF YEAR............. $ 10.36 ------- TOTAL RETURN (B)........................ 10.33% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses........................ 0.00%(a) Total expenses excluding indirectly paid expenses....................... -- Total expenses excluding waivers and reimbursements...................... 1.12%(a) Net investment income................. 5.92%(a) Portfolio turnover rate................. 50% NET ASSETS END OF YEAR (THOUSANDS)...... $ 33,541
* The Fund changed its fiscal year end from April 30 to August 31. (a) Annualized. (b) Excluding applicable sales charges.
JULY 10, 1995 (COMMENCEMENT OF CLASS YEAR ENDED AUGUST 31, OPERATIONS) ----------------------- THROUGH 1997 1996 AUGUST 31, 1995 - -------------------------------------------------------------------------------------------------------------------------------- CLASS B SHARES NET ASSET VALUE BEGINNING OF YEAR.............................................. $ 10.42 $ 10.40 $10.41 ------- ------- ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income.......................................................... 0.54 0.55 0.08 Net realized and unrealized gain (loss) on investments......................... 0.47 0.02 (0.01) ------- ------- ------ Total from investment operations............................................... 1.01 0.57 0.07 Less distributions from net investment income.................................. (0.54) (0.55) (0.08) ------- ------- ------ NET ASSET VALUE END OF YEAR.................................................... $ 10.89 $ 10.42 $10.40 ------- ------- ------ TOTAL RETURN (B)............................................................... 9.95% 5.63% 0.64% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses............................................................... 1.63% 1.59% 1.09%(a) Total expenses excluding indirectly paid expenses............................ 1.63% -- -- Total expenses excluding waivers and reimbursements.......................... 1.87% 1.89% -- Net investment income........................................................ 5.09% 5.27% 3.40%(a) Portfolio turnover rate........................................................ 32% 42% 14% NET ASSETS END OF YEAR (THOUSANDS)............................................. $63,475 $19,219 $3,137
(a) Annualized. (b) Excluding applicable sales charges. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 8 (logo) EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
SEPTEMBER 20, 1995 (COMMENCEMENT OF CLASS OPERATIONS) YEAR ENDED THROUGH AUGUST 31, 1997 AUGUST 31, 1996 - -------------------------------------------------------------------------------------------------------------------------------- CLASS Y SHARES NET ASSET VALUE BEGINNING OF YEAR.................................................... $ 10.42 $10.48 --------------- ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income................................................................ 0.65 0.63 Net realized and unrealized gain (loss) on investments............................... 0.47 (0.06) --------------- ------ Total from investment operations..................................................... 1.12 0.57 Less distributions from net investment income........................................ (0.65) (0.63) --------------- ------ NET ASSET VALUE END OF YEAR.......................................................... $ 10.89 $10.42 --------------- ------ TOTAL RETURN......................................................................... 11.04% 5.54% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses..................................................................... 0.63% 0.59%(a) Total expenses excluding indirectly paid expenses.................................. 0.63% -- Total expenses excluding waivers and reimbursements................................ 0.87% 0.89%(a) Net investment income.............................................................. 6.08% 6.27%(a) Portfolio turnover rate.............................................................. 32% 42% NET ASSETS END OF YEAR (THOUSANDS)................................................... $ 6,326 $1,970
(a) Annualized. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 9 (logo) EVERGREEN FLORIDA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
YEAR ENDED AUGUST 31, FOUR MONTHS YEAR ENDED APRIL 30, -------------------- ENDED ------------------------- 1997 1996 AUGUST 31, 1995 (C)* 1995(C) 1994(C) - ----------------------------------------------------------------------------------------------------------------------------------- CLASS A SHARES NET ASSET VALUE BEGINNING OF YEAR...................... $ 9.70 $ 9.74 $ 9.61 $ 9.52 $ 9.95 -------- -------- -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income.................................. 0.51 0.54 0.19 0.54 0.56 Net realized and unrealized gain (loss) on investments.......................................... 0.35 (0.04) 0.22 0.11 (0.36) -------- -------- -------- -------- -------- Total from investment operations....................... 0.86 0.50 0.41 0.65 0.20 -------- -------- -------- -------- -------- LESS DISTRIBUTIONS FROM: Net investment income.................................. (0.52) (0.54) (0.19) (0.54) (0.56) Distributions in excess of net investment income....... 0 0 (0.03) 0 0 Net realized gains on investments...................... (0.06) 0 (0.06) (0.02) (0.07) Paid-in capital........................................ 0 0 0 0 0 -------- -------- -------- -------- -------- Total distributions.................................... (0.58) (0.54) (0.28) (0.56) (0.63) -------- -------- -------- -------- -------- NET ASSET VALUE END OF YEAR............................ $ 9.98 $ 9.70 $ 9.74 $ 9.61 $ 9.52 -------- -------- -------- -------- -------- TOTAL RETURN (B)....................................... 9.06% 5.15% 4.20% 7.05% 1.87% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses....................................... 0.74% 0.63% 0.82%(a) 0.61% 0.56% Total expenses excluding indirectly paid expenses.... 0.74% -- -- -- -- Total expenses excluding waivers and reimbursements.. 0.91% 0.95% 1.05%(a) -- -- Net investment income................................ 5.22% 5.46% 4.89%(a) 5.73% 5.37% Portfolio turnover rate................................ 41% 30% 29% 53% 32% NET ASSETS END OF YEAR (THOUSANDS)..................... $105,673 $115,723 $136,449 $168,542 $199,612
MAY 11, 1988 (COMMENCEMENT OF CLASS OPERATIONS) YEAR ENDED APRIL 30, THROUGH ------------------------------------------ APRIL 30, 1993(C) 1992(C) 1991(C) 1990(C) 1989(C) - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A SHARES (continued) NET ASSET VALUE BEGINNING OF YEAR................................ $ 9.35 $ 9.21 $ 8.80 $ 9.09 $ 8.82 -------- -------- ------- ------- ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income............................................ 0.56 0.61 0.66 0.58 0.47 Net realized and unrealized gain (loss) on investments........... 0.67 0.22 0.43 (0.24) 0.22 -------- -------- ------- ------- ------ Total from investment operations................................. 1.23 0.83 1.09 0.34 0.69 -------- -------- ------- ------- ------ LESS DISTRIBUTIONS FROM: Net investment income............................................ (0.56) (0.61) (0.68) (0.59) (0.42) Distributions in excess of net investment income................. 0 0 0 0 0 Net realized gains on investments................................ (0.07) (0.04) 0 (0.04) 0 Paid-in capital.................................................. 0 (0.04) 0 0 0 -------- -------- ------- ------- ------ Total distributions.............................................. (0.63) (0.69) (0.68) (0.63) (0.42) -------- -------- ------- ------- ------ NET ASSET VALUE END OF YEAR...................................... $ 9.95 $ 9.35 $ 9.21 $ 8.80 $ 9.09 -------- -------- ------- ------- ------ TOTAL RETURN (B)................................................. 13.63% 9.30% 12.87% 3.74% 9.16% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses................................................. 0.58% 0.41% 0.10% 0.10% 0.30%(a) Total expenses excluding indirectly paid expenses.............. -- -- -- -- -- Total expenses excluding waivers and reimbursements............ -- 0.68% 0.88% 5.14% 20.40%(a) Net investment income.......................................... 5.66% 6.12% 6.55% 6.15% 5.30%(a) Portfolio turnover rate.......................................... 24% 24% 66% 82% 30% NET ASSETS END OF YEAR (THOUSANDS)............................... $198,286 $147,996 $75,791 $7,286 $ 717
* The Fund changed its fiscal year end from April 30 to August 31. (a) Annualized. (b) Excluding applicable sales charges. (c) On June 30, 1995, ABT Florida Tax-Free Fund sold substantially all of its net assets to Evergreen Florida Municipal Bond Fund. As ABT Florida Tax-Free Fund is the accounting survivor, its basis of accounting for assets and liabilities and its operating results for periods prior to June 30, 1995 have been carried forward in these financial highlights. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 10 (logo) EVERGREEN FLORIDA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
JUNE 30, 1995 (COMMENCEMENT OF CLASS YEAR ENDED AUGUST 31, OPERATIONS) ----------------------- THROUGH 1997 1996 AUGUST 31, 1995 - -------------------------------------------------------------------------------------------------------------------------------- CLASS B SHARES NET ASSET VALUE BEGINNING OF YEAR................................................. $ 9.70 $ 9.74 $ 9.67 ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income............................................................. 0.42 0.44 0.07 Net realized and unrealized gain (loss) on investments............................ 0.35 (0.04) 0.10 ------- ------- ------- Total from investment operations.................................................. 0.77 0.40 0.17 ------- ------- ------- LESS DISTRIBUTIONS FROM: Net investment income............................................................. (0.43) (0.44) (0.07) Net realized gains on investments................................................. (0.06) 0 (0.03) ------- ------- ------- Total distributions............................................................... (0.49) (0.44) (0.10) ------- ------- ------- NET ASSET VALUE END OF YEAR....................................................... $ 9.98 $ 9.70 $ 9.74 ------- ------- ------- TOTAL RETURN (B).................................................................. 8.06% 4.17% 1.49% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses.................................................................. 1.66% 1.56% 1.44%(a) Total expenses excluding indirectly paid expenses............................... 1.66% -- -- Total expenses excluding waivers and reimbursements............................. 1.84% 1.76% 1.64%(a) Net investment income........................................................... 4.29% 4.52% 3.22%(a) Portfolio turnover rate........................................................... 41% 30% 29% NET ASSETS END OF YEAR (THOUSANDS)................................................ $31,281 $28,849 $ 27,351
(a) Annualized. (b) Excluding applicable sales charges.
JUNE 30, 1995 (COMMENCEMENT OF CLASS YEAR ENDED AUGUST 31, OPERATIONS) ----------------------- THROUGH 1997 1996 AUGUST 31, 1995 - -------------------------------------------------------------------------------------------------------------------------------- CLASS Y SHARES NET ASSET VALUE BEGINNING OF YEAR................................................. $ 9.70 $ 9.74 $ 9.67 ------- ------- ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income............................................................. 0.52 0.53 0.09 Net realized and unrealized gain (loss) on investments............................ 0.35 (0.03) 0.10 ------- ------- ------ Total from investment operations.................................................. 0.87 0.50 0.19 ------- ------- ------ LESS DISTRIBUTIONS FROM: Net investment income............................................................. (0.53) (0.54) (0.09) Net realized gains on investments................................................. (0.06) 0 (0.03) ------- ------- ------ Total distributions............................................................... (0.59) (0.54) (0.12) ------- ------- ------ NET ASSET VALUE END OF YEAR....................................................... $ 9.98 $ 9.70 $ 9.74 ------- ------- ------ TOTAL RETURN...................................................................... 9.14% 5.22% 1.67% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses.................................................................. 0.67% 0.57% 0.59%(a) Total expenses excluding indirectly paid expenses............................... 0.67% -- -- Total expenses excluding waivers and reimbursements............................. 0.84% 0.77% 0.79%(a) Net investment income........................................................... 5.27% 5.55% 4.93%(a) Portfolio turnover rate........................................................... 41% 30% 29% NET ASSETS END OF YEAR (THOUSANDS)................................................ $24,850 $12,259 $3,602
(a) Annualized. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 11 (logo) EVERGREEN GEORGIA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
JULY 2, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 - --------------------------------------------------------------------------------------------------------------------------------- CLASS A SHARES NET ASSET VALUE BEGINNING OF YEAR................ $ 9.57 $ 9.47 $ 8.74 $ 10.19 $10.00 ------ ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income............................ 0.49 0.48 0.33 0.48 0.20 Net realized and unrealized gain (loss) on investments.................................... 0.33 0.10 0.73 (1.45) 0.19 ------ ------ ------ ------ ------ Total from investment operations................. 0.82 0.58 1.06 (0.97) 0.39 ------ ------ ------ ------ ------ Less distributions from net investment income.... (0.49) (0.48) (0.33) (0.48) (0.20) ------ ------ ------ ------ ------ NET ASSET VALUE END OF YEAR...................... $ 9.90 $ 9.57 $ 9.47 $ 8.74 $10.19 ------ ------ ------ ------ ------ TOTAL RETURN (B)................................. 8.73% 6.22% 12.28% (9.64%) 3.96% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses................................. 0.94% 0.88% 0.71%(a) 0.53% 0.25%(a) Total expenses excluding indirectly paid expenses..................................... 0.94% -- -- -- -- Total expenses excluding waivers and reimbursements............................... 1.83% 2.82% 2.83%(a) 3.61% 6.82%(a) Net investment income.......................... 5.00% 4.96% 5.39%(a) 5.26% 4.71%(a) Portfolio turnover rate.......................... 32% 21% 91% 147% 15% NET ASSETS END OF YEAR (THOUSANDS)............... $2,201 $1,954 $2,098 $ 1,387 $ 817
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges.
JULY 2, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ----------------- ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 - --------------------------------------------------------------------------------------------------------------------------------- CLASS B SHARES NET ASSET VALUE BEGINNING OF YEAR............... $ 9.57 $ 9.47 $ 8.74 $ 10.19 $10.00 ------- ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income........................... 0.41 0.41 0.28 0.43 0.18 Net realized and unrealized gain (loss) on investments................................... 0.33 0.10 0.73 (1.45) 0.19 ------- ------ ------ ------ ------ Total from investment operations................ 0.74 0.51 1.01 (1.02) 0.37 ------- ------ ------ ------ ------ Less distributions from net investment income... (0.41) (0.41) (0.28) (0.43) (0.18) ------- ------ ------ ------ ------ NET ASSET VALUE END OF YEAR..................... $ 9.90 $ 9.57 $ 9.47 $ 8.74 $10.19 ------- ------ ------ ------ ------ TOTAL RETURN (B)................................ 7.93% 5.44% 11.72% (10.15%) 3.74% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses................................ 1.69% 1.63% 1.46%(a) 1.13% 0.75%(a) Total expenses excluding indirectly paid expenses.................................... 1.69% -- -- -- -- Total expenses excluding waivers and reimbursements.............................. 2.58% 3.54% 3.58%(a) 4.21% 7.32%(a) Net investment income......................... 4.25% 4.21% 4.64%(a) 4.66% 4.15%(a) Portfolio turnover rate......................... 32% 21% 91% 147% 15% NET ASSETS END OF YEAR (THOUSANDS).............. $10,870 $9,271 $7,538 $ 6,912 $3,692
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 12 (logo) EVERGREEN GEORGIA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
FEBRUARY 28, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 - -------------------------------------------------------------------------------------------------------------------------------- CLASS Y SHARES NET ASSET VALUE BEGINNING OF YEAR.................................... $ 9.57 $ 9.47 $ 8.74 $ 9.83 ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income................................................ 0.51 0.50 0.35 0.42 Net realized and unrealized gain (loss) on investments............... 0.33 0.10 0.73 (1.09) ------ ------ ------ ------ Total from investment operations..................................... 0.84 0.60 1.08 (0.67) ------ ------ ------ ------ Less distributions from net investment income........................ (0.51) (0.50) (0.35) (0.42) ------ ------ ------ ------ NET ASSET VALUE END OF YEAR.......................................... $ 9.90 $ 9.57 $ 9.47 $ 8.74 ------ ------ ------ ------ TOTAL RETURN......................................................... 9.00% 6.48% 12.47% (6.86%) RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses..................................................... 0.69% 0.63% 0.46%(a) 0.31%(a) Total expenses excluding indirectly paid expenses.................. 0.69% -- -- -- Total expenses excluding waivers and reimbursements................ 1.58% 2.51% 2.58%(a) 3.39%(a) Net investment income.............................................. 5.25% 5.21% 5.64%(a) 5.68%(a) Portfolio turnover rate.............................................. 32% 21% 91% 147% NET ASSETS END OF YEAR (THOUSANDS)................................... $1,180 $1,620 $1,339 $ 284
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 13 (logo) EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
JANUARY 11, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------------- ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 - --------------------------------------------------------------------------------------------------------------------------------- CLASS A SHARES NET ASSET VALUE BEGINNING OF YEAR.......... $ 9.98 $ 9.95 $ 9.16 $ 10.61 $ 10.00 ------ ------ ------ ------ ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income...................... 0.49 0.49 0.33 0.49 0.46 Net realized and unrealized gain (loss) on investments.............................. 0.40 0.02 0.79 (1.45) 0.64 ------ ------ ------ ------ ------- Total from investment operations........... 0.89 0.51 1.12 (0.96) 1.10 ------ ------ ------ ------ ------- LESS DISTRIBUTIONS FROM: Net investment income...................... (0.50) (0.48) (0.33) (0.49) (0.46) Net realized gains on investments.......... 0 0 0 0 (0.03) ------ ------ ------ ------ ------- Total distributions........................ (0.50) (0.48) (0.33) (0.49) (0.49) ------ ------ ------ ------ ------- NET ASSET VALUE END OF YEAR................ $10.37 $ 9.98 $ 9.95 $ 9.16 $ 10.61 ------ ------ ------ ------ ------- TOTAL RETURN (B)........................... 9.11% 5.21% 12.34% (9.12%) 11.28% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses........................... 1.11% 1.08% 0.92%(a) 0.79% 0.32%(a) Total expenses excluding indirectly paid expenses............................... 1.11% -- -- -- -- Total expenses excluding waivers and reimbursements......................... 1.11% 1.35% 1.27%(a) 1.18% 1.25%(a) Net investment income.................... 4.77% 4.81% 5.09%(a) 5.11% 4.91%(a) Portfolio turnover rate.................... 50% 86% 117% 126% 57% NET ASSETS END OF YEAR (THOUSANDS)......... $8,115 $7,989 $8,279 $ 7,979 $ 12,739
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges.
JANUARY 11, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ------------------------ ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 - --------------------------------------------------------------------------------------------------------------------------------- CLASS B SHARES NET ASSET VALUE BEGINNING OF YEAR........ $ 9.98 $ 9.95 $ 9.16 $ 10.61 $ 10.00 ------- ------- ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS: Net investment income.................... 0.41 0.42 0.28 0.44 0.42 Net realized and unrealized gain (loss) on investments......................... 0.40 0.02 0.79 (1.45) 0.64 ------- ------- ------- ------- ------- Total from investment operations......... 0.81 0.44 1.07 (1.01) 1.06 ------- ------- ------- ------- ------- LESS DISTRIBUTIONS FROM: Net investment income.................... (0.42) (0.41) (0.28) (0.44) (0.42) Net realized gains on investments........ 0 0 0 0 (0.03) ------- ------- ------- ------- ------- Total distributions...................... (0.42) (0.41) (0.28) (0.44) (0.45) ------- ------- ------- ------- ------- NET ASSET VALUE END OF YEAR.............. $ 10.37 $ 9.98 $ 9.95 $ 9.16 $ 10.61 ------- ------- ------- ------- ------- TOTAL RETURN (B)......................... 8.30% 4.42% 11.78% (9.64%) 10.80% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses......................... 1.86% 1.83% 1.67%(a) 1.37% 0.79%(a) Total expenses excluding indirectly paid expenses........................ 1.86% -- -- -- -- Total expenses excluding waivers and reimbursements....................... 1.86% 2.10% 2.02%(a) 1.76% 1.74%(a) Net investment income.................. 4.02% 4.06% 4.34%(a) 4.53% 4.47%(a) Portfolio turnover rate.................. 50% 86% 117% 126% 57% NET ASSETS END OF YEAR (THOUSANDS)....... $48,198 $49,382 $ 49,040 $44,616 $ 45,168
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 14 (logo) EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
FEBRUARY 28, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 - -------------------------------------------------------------------------------------------------------------------------------- CLASS Y SHARES NET ASSET VALUE BEGINNING OF YEAR.................................... $ 9.98 $ 9.95 $ 9.16 $10.31 ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income................................................ 0.51 0.51 0.35 0.43 Net realized and unrealized gain (loss) on investments............... 0.41 0.03 0.79 (1.15) ------ ------ ------ ------ Total from investment operations..................................... 0.92 0.54 1.14 (0.72) ------ ------ ------ ------ Less distributions from net investment income........................ (0.53) (0.51) (0.35) (0.43) ------ ------ ------ ------ NET ASSET VALUE END OF YEAR.......................................... $10.37 $ 9.98 $ 9.95 $ 9.16 ------ ------ ------ ------ TOTAL RETURN......................................................... 9.39% 5.47% 12.52% (7.01%) RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses..................................................... 0.86% 0.84% 0.67%(a) 0.59%(a) Total expenses excluding indirectly paid expenses.................. 0.86% -- -- -- Total expenses excluding waivers and reimbursements................ 0.86% 1.07% 1.02%(a) 0.98%(a) Net investment income.............................................. 5.02% 5.05% 5.34%(a) 5.58%(a) Portfolio turnover rate.............................................. 50% 86% 117% 126% NET ASSETS END OF YEAR (THOUSANDS)................................... $4,042 $3,771 $1,006 $ 642
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 15 (logo) EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
JANUARY 3, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH --------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 - -------------------------------------------------------------------------------------------------------------------------------- CLASS A SHARES NET ASSET VALUE BEGINNING OF YEAR..................................... $ 9.69 $9.59 $ 8.62 $10.00 ------ ----- ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income................................................. 0.48 0.49 0.34 0.46 Net realized and unrealized gain (loss) on investments................ 0.40 0.10 0.97 (1.38) ------ ----- ------ ------ Total from investment operations...................................... 0.88 0.59 1.31 (0.92) ------ ----- ------ ------ LESS DISTRIBUTIONS FROM: Net investment income................................................. (0.48) (0.49) (0.34) (0.46) Net realized gains on investments..................................... (0.01) 0 0 0 ------ ----- ------ ------ Total distributions................................................... (0.49) (0.49) (0.34) (0.46) ------ ----- ------ ------ NET ASSET VALUE END OF YEAR........................................... $10.08 $9.69 $ 9.59 $ 8.62 ------ ----- ------ ------ TOTAL RETURN (B)...................................................... 9.33% 6.23% 15.35% (9.32%) RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses...................................................... 0.98% 0.86% 0.53%(a) 0.25%(a) Total expenses excluding indirectly paid expenses................... 0.98% -- -- -- Total expenses excluding waivers and reimbursements................. 2.16% 4.00% 6.50%(a) 10.71%(a) Net investment income............................................... 4.87% 4.98% 5.41%(a) 5.57%(a) Portfolio turnover rate............................................... 62% 37% 66% 23% NET ASSETS END OF YEAR (THOUSANDS).................................... $1,025 $ 841 $ 610 $ 312
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges.
JANUARY 3, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 - -------------------------------------------------------------------------------------------------------------------------------- CLASS B SHARES NET ASSET VALUE BEGINNING OF YEAR.................................... $ 9.69 $ 9.59 $ 8.62 $10.00 ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income................................................ 0.41 0.41 0.29 0.41 Net realized and unrealized gain (loss) on investments............... 0.40 0.10 0.97 (1.38) ------ ------ ------ ------ Total from investment operations..................................... 0.81 0.51 1.26 (0.97) ------ ------ ------ ------ LESS DISTRIBUTIONS FROM: Net investment income................................................ (0.41) (0.41) (0.29) (0.41) Net realized gains on investments.................................... (0.01) 0 0 0 ------ ------ ------ ------ Total distributions.................................................. (0.42) (0.41) (0.29) (0.41) ------ ------ ------ ------ NET ASSET VALUE END OF YEAR.......................................... $10.08 $ 9.69 $ 9.59 $ 8.62 ------ ------ ------ ------ TOTAL RETURN (B)..................................................... 8.52% 5.43% 14.77% (9.83%) RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses..................................................... 1.73% 1.61% 1.28%(a) 0.87%(a) Total expenses excluding indirectly paid expenses.................. 1.73% -- -- -- Total expenses excluding waivers and reimbursements................ 2.91% 4.76% 7.25%(a) 11.33%(a) Net investment income.............................................. 4.13% 4.23% 4.66%(a) 4.88%(a) Portfolio turnover rate.............................................. 62% 37% 66% 23% NET ASSETS END OF YEAR (THOUSANDS)................................... $4,734 $4,282 $3,542 $2,456
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 16 (logo) EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
FEBRUARY 28, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 - -------------------------------------------------------------------------------------------------------------------------------- CLASS Y SHARES NET ASSET VALUE BEGINNING OF YEAR.................................... $ 9.69 $ 9.59 $ 8.62 $ 9.74 ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income................................................ 0.51 0.51 0.35 0.43 Net realized and unrealized gain (loss) on investments............... 0.40 0.10 0.97 (1.12) ------ ------ ------ ------ Total from investment operations..................................... 0.91 0.61 1.32 (0.69) ------ ------ ------ ------ LESS DISTRIBUTIONS FROM: Net investment income................................................ (0.51) (0.51) (0.35) (0.43) Net realized gains on investments.................................... (0.01) 0 0 0 ------ ------ ------ ------ Total distributions.................................................. (0.52) (0.51) (0.35) (0.43) ------ ------ ------ ------ NET ASSET VALUE END OF YEAR.......................................... $10.08 $ 9.69 $ 9.59 $ 8.62 ------ ------ ------ ------ TOTAL RETURN......................................................... 9.60% 6.49% 15.54% (7.12%) RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses..................................................... 0.73% 0.62% 0.28%(a) 0.00%(a) Total expenses excluding indirectly paid expenses.................. 0.73% -- -- -- Total expenses excluding waivers and reimbursements................ 1.91% 3.70% 6.25%(a) 10.46%(a) Net investment income.............................................. 5.12% 5.22% 5.66%(a) 5.92%(a) Portfolio turnover rate.............................................. 62% 37% 66% 23% NET ASSETS END OF YEAR (THOUSANDS)................................... $7,012 $4,555 $1,673 $ 92
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 17 (logo) EVERGREEN VIRGINIA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
JULY 2, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 - --------------------------------------------------------------------------------------------------------------------------------- CLASS A SHARES NET ASSET VALUE BEGINNING OF YEAR................ $ 9.68 $ 9.67 $ 8.85 $ 10.19 $10.00 ------ ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income............................ 0.50 0.48 0.33 0.47 0.20 Net realized and unrealized gain (loss) on investments.................................... 0.37 0.01 0.82 (1.34) 0.19 ------ ------ ------ ------ ------ Total from investment operations................. 0.87 0.49 1.15 (0.87) 0.39 ------ ------ ------ ------ ------ Less distributions from net investment income.... (0.50) (0.48) (0.33) (0.47) (0.20) ------ ------ ------ ------ ------ NET ASSET VALUE END OF YEAR...................... $10.05 $ 9.68 $ 9.67 $ 8.85 $10.19 ------ ------ ------ ------ ------ TOTAL RETURN (B)................................. 9.05% 5.12% 13.09% (8.60%) 3.89% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses................................. 1.03% 0.93% 0.72%(a) 0.53% 0.25%(a) Total expenses excluding indirectly paid expenses..................................... 1.02% -- -- -- -- Total expenses excluding waivers and reimbursements............................... 1.84% 3.47% 3.83%(a) 5.14% 7.75%(a) Net investment income.......................... 4.95% 4.83% 5.17%(a) 5.11% 4.64%(a) Portfolio turnover rate.......................... 72% 68% 87% 59% 0% NET ASSETS END OF YEAR (THOUSANDS)............... $2,934 $2,892 $1,983 $ 1,606 $1,306
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges.
JULY 2, 1993 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED YEAR ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* DECEMBER 31, 1994 1993 - --------------------------------------------------------------------------------------------------------------------------------- CLASS B SHARES NET ASSET VALUE BEGINNING OF YEAR................ $ 9.68 $ 9.67 $ 8.85 $ 10.19 $10.00 ------ ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income............................ 0.41 0.41 0.28 0.42 0.17 Net realized and unrealized gain (loss) on investments.................................... 0.37 0.01 0.82 (1.34) 0.19 ------ ------ ------ ------ ------ Total from investment operations................. 0.78 0.42 1.10 (0.92) 0.36 ------ ------ ------ ------ ------ Less distributions from net investment income.... (0.41) (0.41) (0.28) (0.42) (0.17) ------ ------ ------ ------ ------ NET ASSET VALUE END OF YEAR...................... $10.05 $ 9.68 $ 9.67 $ 8.85 $10.19 ------ ------ ------ ------ ------ TOTAL RETURN (B)................................. 8.24% 4.34% 12.53% (9.13%) 3.66% RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses................................. 1.79% 1.68% 1.47%(a) 1.12% 0.75%(a) Total expenses excluding indirectly paid expenses..................................... 1.78% -- -- -- -- Total expenses excluding waivers and reimbursements............................... 2.59% 4.23% 4.58%(a) 5.73% 8.25%(a) Net investment income.......................... 4.21% 4.09% 4.42%(a) 4.54% 4.25%(a) Portfolio turnover rate.......................... 72% 68% 87% 59% 0% NET ASSETS END OF YEAR (THOUSANDS)............... $6,695 $5,963 $5,083 $ 3,817 $2,235
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. (b) Excluding applicable sales charges. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 18 (logo) EVERGREEN VIRGINIA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (CONTINUED) (FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
FEBRUARY 28, 1994 (COMMENCEMENT OF CLASS YEAR ENDED OPERATIONS) AUGUST 31, EIGHT MONTHS THROUGH ---------------- ENDED DECEMBER 31, 1997 1996 AUGUST 31, 1995* 1994 - -------------------------------------------------------------------------------------------------------------------------------- CLASS Y SHARES NET ASSET VALUE BEGINNING OF YEAR.................................... $ 9.68 $ 9.67 $ 8.85 $ 9.83 ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income................................................ 0.51 0.50 0.34 0.41 Net realized and unrealized gain (loss) on investments............... 0.37 0.01 0.82 (0.98) ------ ------ ------ ------ Total from investment operations..................................... 0.88 0.51 1.16 (0.57) ------ ------ ------ ------ Less distributions from net investment income........................ (0.51) (0.50) (0.34) (0.41) ------ ------ ------ ------ NET ASSET VALUE END OF YEAR.......................................... $10.05 $ 9.68 $ 9.67 $ 8.85 ------ ------ ------ ------ TOTAL RETURN......................................................... 9.32% 5.38% 13.28% (5.80%) RATIOS/SUPPLEMENTAL DATA RATIOS TO AVERAGE NET ASSETS: Total expenses..................................................... 0.79% 0.70% 0.47%(a) 0.28%(a) Total expenses excluding indirectly paid expenses.................. 0.78% -- -- -- Total expenses excluding waivers and reimbursements................ 1.60% 3.24% 3.58%(a) 4.89%(a) Net investment income.............................................. 5.27% 5.05% 5.42%(a) 5.54%(a) Portfolio turnover rate.............................................. 72% 68% 87% 59% NET ASSETS END OF YEAR (THOUSANDS)................................... $6,195 $4,266 $ 965 $ 344
* The Fund changed its fiscal year end from December 31 to August 31. (a) Annualized. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 19 (logo) EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS August 31, 1997
PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- 97.5% CALIFORNIA-- 1.9% $3,500,000 Valley Hlth. Sys. Hosp. RB, Ser. A 6.50%, 5/15/25.................... $ 3,703,070 ------------ FLORIDA-- 88.3% 745,000 Alachua Cnty. Hlth. Facs. RB, Beverly Enterprises Proj. 10.13%, 4/1/10.................... 804,354 1,000,000 Bay Cnty. Hosp. Sys. RB, Bay Med. Ctr. Proj. 8.00%, 10/1/12.................... 1,178,930 100,000 Baytree Cmnty. Dev. Dist. Special Assmt. RB 8.75%, 5/1/12..................... 108,061 750,000 Boynton Beach Hsg. Mtg. Clipper Cove Apts. 6.35%, 7/1/16..................... 773,430 Brevard Cnty. Hlth. Facs. Auth. RB, Courtenay Springs Vlg.: 910,000 7.38%, 11/15/04..................... 977,367 1,875,000 7.50%, 11/15/12..................... 2,007,188 1,000,000 Brevard Cnty. Tourist Dev. Tax RB, Marlins Spring 6.88%, 3/1/13..................... 1,073,860 1,000,000 Broward Cnty. Hsg. Fin. Auth. RB, Ser. A 7.35%, 3/1/23, (GNMA)............. 1,059,020 2,000,000 Clay County Hsg. Fin. Auth. RB, Single Family Mortgage Multi-Cnty. Prog. 5.95%, 10/1/19.................... 2,043,560 2,850,000 Cory Lakes Florida Cmnty. Dev. Dist. RB 8.38%, 5/1/17..................... 2,929,344 1,080,000 Crossings At Fleming Island Cmnty. Dev. Dist. Util. RB 7.38%, 10/1/19.................... 1,116,666 4,000,000 Dade Cnty. Single Family Mtg. RB, Ser. B 1 5.60%, 4/1/27..................... 4,200,000 2,310,000 Duval Cnty. Hsg. Fin. Auth. RB, St. Augustine Apts. Proj. 6.00%, 3/1/21..................... 2,318,917 1,500,000 Eastlake Oaks Cmnty. Dev. Dist. 7.75%, 5/1/17..................... 1,559,550 Escambia Cnty. Hlth. Facs. Auth. RB, Azalea Trace Inc.: 2,905,000 6.00%, 1/1/15....................... 2,930,419 2,250,000 6.10%, 1/1/19....................... 2,279,362 515,000 8.50%, 1/1/19....................... 544,139 535,000 9.25%, 1/1/06....................... 580,416 235,000 9.25%, 1/1/12....................... 254,949 PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED FLORIDA-- CONTINUED $1,500,000 Escambia Cnty. Hlth. Facs. Auth. RB, Baptist Hosp. Inc., Ser. B 6.00%, 10/1/14.................... $ 1,531,470 Escambia Cnty. PCR Champion Intl. Corp. Proj.: 3,000,000 6.40%, 9/1/30....................... 3,205,350 2,000,000 6.90%, 8/1/22....................... 2,202,580 Florida Hsg. Fin. Agy. RB: Glen Oaks Apts. Proj. 1,600,000 5.80%, 8/1/17....................... 1,613,616 Mar Lago Village Apts. Proj., Ser. F 2,945,000 6.00%, 6/1/39....................... 2,982,931 St. Cloud Village Proj., Ser. D 4,905,000 5.95%, 2/1/30....................... 4,965,577 The Vineyards Proj., Ser. H 1,000,000 6.50%, 11/1/25...................... 1,030,640 Grand Haven Cmnty. Dev. Special Assmt., Ser. A: 2,000,000 6.30%, 5/1/02....................... 2,023,940 3,000,000 6.90%, 5/1/19....................... 2,963,430 3,610,000 Hernando Cnty. IDR, Florida Crushed Stone Co. 8.50%, 12/1/14.................... 4,084,859 1,545,000 Hialeah Gardens, IDR, Waterford Convalescent, Ser. A 7.88%, 12/1/07.................... 1,645,301 600,000 Hillsborough Cnty. Aviation Auth. RB, US Air Proj., Ser. 2 8.60%, 1/15/22.................... 666,516 1,000,000 Hillsborough Cnty. Hsg. Fin. 5.88%, 10/1/30.................... 998,490 3,245,000 Homestead IDR, Cmnty. Rehab. Providers Prog., Ser. A 7.95%, 11/1/18.................... 3,450,506 2,500,000 Indian Trace Cmnty. GO Wtr. Mgmt. Special Benefit, Subser. B 8.25%, 5/1/11..................... 2,789,125 Jacksonville Hlth. Facs. Auth. RB, Natl. Benevolent Assoc., Cypress Vlg. Proj.: 750,000 7.00%, 12/1/14...................... 809,438 1,020,000 7.00%, 12/1/22...................... 1,096,000 500,000 8.00%, 12/1/15...................... 574,950 2,500,000 Lake Bernadette Cmnty. Dev. Dist. Florida Special, Ser. A 8.00%, 5/1/17..................... 2,595,975 3,200,000 Lake County Resources Recreation IDR., Ser. A 5.85%, 10/1/09.................... 3,243,392 2,295,000 Largo Sun Coast Hlth. Sys. RB, Refunding Hospital 6.20%, 3/1/13..................... 2,269,571
(CONTINUED) 20 (logo) EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (CONTINUED) August 31, 1997
PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED FLORIDA-- CONTINUED Lee Cnty. Hsg. Fin. Auth. RB, Single Family Mtg., Multi-Cnty. Prog., Ser. A: $1,000,000 7.20%, 3/1/27....................... $ 1,103,980 Subser. 2: 2,780,000 5.60%, 3/19/29...................... 3,047,519 1,685,000 7.50%, 9/1/27....................... 1,875,843 Subser. 3 1,000,000 7.45%, 9/1/27....................... 1,114,430 850,000 Lee Cnty. IDA, Encore Nursing Center Partner 8.13%, 12/1/07.................... 937,899 2,790,000 Leon Cnty. Ed. Facs. Auth. RB, Ser. A 8.25%, 5/1/14..................... 2,867,953 950,000 Manatee Cnty. Hsg. Fin. Auth. RB, Single Family Mtg., Subser. 1 7.45%, 5/1/27..................... 1,055,763 1,125,000 Manatee Cnty. Hsg. Fin. Auth. RB, Multi-Family Hsg., Conquistador, Ser. A 6.25%, 10/1/22.................... 1,183,185 Martin Cnty. IDR, Indiantown Cogeneration Proj.: Ser. A 2,175,000 7.88%, 12/15/25..................... 2,507,710 Ser. B 650,000 8.05%, 12/15/25..................... 755,885 1,245,000 Meadow Point II Cmnty. Dev. Dist. Cap. Impt. RB 7.75%, 5/1/18..................... 1,300,353 Miami Beach City Center Historic Convention: 1,000,000 6.25%, 12/1/16...................... 1,033,370 500,000 6.35%, 12/1/22...................... 517,010 1,285,000 North Springs Impt. Dist. Wtr. Mgmt. Special Assmt., Ser. A 8.20%, 5/1/24..................... 1,391,359 2,500,000 Northern Palm Beach Cnty. Impt. RB, Wtr. Ctl. & Impt., Unit Dev., Ser. A 7.20%, 8/1/16..................... 2,627,175 Northern Palm Beach Cnty. Wtr. Ctl. Dist. Special Assmt.: 500,000 6.88%, 11/1/13...................... 544,045 500,000 7.00%, 8/1/15....................... 546,290 1,500,000 Northwood Cmnty. Dev. Dist. 7.60%, 5/1/17..................... 1,553,415 2,605,000 Ocean Highway & Port Auth. PCR, Solid Waste, Jefferson Smurfit Corp. 6.50%, 11/1/06.................... 2,653,297 PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED FLORIDA-- CONTINUED Orange Cnty. Hlth. Facs. Auth. RB: Lakeside Apts. Inc. $1,040,000 6.50%, 7/1/13....................... $ 1,112,426 Orlando Lutheran Tower 395,000 8.40%, 7/1/14....................... 434,069 2,250,000 Orange Cnty. Hsg. Fin. Auth. Mtg. RB, Ser. B 8.10%, 11/1/21.................... 2,380,523 Orange Cnty. Hsg. Fin. Auth. Mtg. RB, Single Family Mtg.: 1,000,000 6.85%, 10/1/27...................... 1,035,100 Ser. B: 1,000,000 5.80%, 9/1/17....................... 1,013,810 2,500,000 5.88%, 3/1/28....................... 2,528,975 1,050,000 Osceola Cnty. Hsg. Fin. Auth., Tierra Vista Apts. Proj., Ser. A 5.75%, 12/1/22.................... 1,053,780 2,000,000 Osceola Cnty. IDA, Cmnty. Provider Pooled Ln. Proj., Ser. A 7.75%, 7/1/17..................... 2,098,980 565,000 Overoaks Cmnty. Dev. Dist. Cap. Impt. RB 8.25%, 5/1/17..................... 578,165 1,500,000 Palm Beach Cnty. IDR, Geriatric Care Inc. Proj. 6.55%, 12/1/16.................... 1,599,540 3,695,000 Pasco Cnty. Hsg. Fin. Auth., Oak Trail Apts. Proj., Ser. A 5.35%, 6/1/27..................... 3,728,580 3,100,000 Pinellas Cnty. Edl. Facs. Auth. RB, Clearwater Christian College 8.00%, 2/1/11..................... 3,215,630 685,000 Pinellas Cnty. Edl. Facs. Auth. RB, Eckerd College 7.75%, 7/1/14..................... 743,828 Pinellas Cnty. Hlth. Facs. Auth. RB: 150,000 6.75%, 10/1/00...................... 151,777 100,000 7.00%, 10/1/01...................... 101,515 200,000 7.25%, 10/1/02...................... 203,636 1,100,000 8.00%, 10/1/08...................... 1,125,520 5,000,000 Polk Cnty. IDA, IMC Fertilizer, Ser. A 7.53%, 1/1/15..................... 5,407,500 1,000,000 Port Everglades RB, Ser. A 7.50%, 9/1/12..................... 1,066,050
(CONTINUED) 21 (logo) EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (CONTINUED) August 31, 1997
PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED FLORIDA-- CONTINUED $1,705,000 Quantum Cmnty. Dev. Dist. Special Assmt. 7.75%, 3/1/14..................... $ 1,811,256 2,045,000 Riverwood Cmnty. Sys. RB 7.75%, 10/1/14.................... 2,148,068 1,000,000 Sarasota Cnty. Hlth. Fac. Auth. RB, Jewish Hsg. Council 7.38%, 7/1/16..................... 1,060,320 1,500,000 Sarasota Cnty. Hlth. Fac. Auth. RB, Manatee Jewish Hsg. 6.70%, 7/1/25..................... 1,542,885 1,000,000 Sarasota Cnty. Hlth. Fac. Auth. RB, Sunnyside Properties 6.00%, 5/15/10.................... 1,013,380 1,830,000 Seminole Wtr. Ctl Unit of Dev. No. 2 7.25%, 8/1/22..................... 1,872,236 1,500,000 South Indian River, Wtr. Ctl. Dist. RB, Egret Landing, Phase I 7.50%, 11/1/18.................... 1,586,550 2,500,000 St. John's Cnty. IDA, Bayview Proj., Ser. A 7.10%, 10/1/26.................... 2,551,875 2,500,000 St. John's Ctny. IDA, Vicars Landing Proj., Ser. A 6.75%, 2/15/12.................... 2,548,875 3,000,000 Tampa, RB Aquarium Inc. Proj. 7.75%, 5/1/27..................... 3,446,940 1,000,000 Tarpon Springs, Hlth. Facs. Auth. RB, Helen Ellis Mem. Hosp. Proj. 7.50%, 5/1/11..................... 1,065,100 Volusia Cnty. Edl. Facs. Auth. RB, Embry-Riddle, Ser. A: 1,025,000 6.13%, 10/15/16..................... 1,063,878 5,000,000 6.13%, 10/15/26..................... 5,168,750 2,000,000 Volusia Cnty. IDA, RB, Bishops Glen Proj. 7.63%, 11/1/26.................... 2,085,240 Westchase East Cmnty. Dev. Dist. Cap. Impt. RB: 1,350,000 7.30%, 5/1/18....................... 1,378,877 1,775,000 7.50%, 5/1/17....................... 1,827,806 1,000,000 Winter Garden, IDR, Beverly Enterprises 8.75%, 7/1/12..................... 1,124,160 Winter Haven Hsg. Auth. RB, Multi-Family Mtg., Abbey Lane Apts., Ser. C: 250,000 7.00%, 7/1/12, (FNMA)............... 265,285 250,000 7.00%, 7/1/24, (FNMA)............... 263,828 ------------ 167,504,383 ------------ PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED GEORGIA-- 1.4% Coffee Cnty. Hosp. Auth. RB: $1,100,000 6.75%, 12/1/16...................... $ 1,107,689 1,500,000 6.75%, 12/1/26...................... 1,504,245 ------------ 2,611,934 ------------ NEW YORK-- 1.7% 3,000,000 Port Auth. NY & NJ 6.75%, 10/1/11.................... 3,248,400 ------------ TEXAS-- 1.6% 2,860,000 Lufkin Hlth. Facs. Dev. Corp. RB, Memorial Hlth. Sys. of East Texas 6.88%, 2/15/26.................... 3,069,495 ------------ U. S. VIRGIN ISLANDS-- 1.2% 2,000,000 Virgin Islands, Wtr. & Pwr. Auth. RB, Ser. B 7.60%, 1/1/12..................... 2,229,480 ------------ PUERTO RICO-- 1.4% 1,000,000 Puerto Rico Indl. Tourist Edl. Med. Envir. Ctl. Facs. RB, Mennonite Gen. Hosp. Proj., Ser. A 6.50%, 7/1/12..................... 1,056,550 1,475,000 Puerto Rico Ports Auth. RB, American Airlines Proj., Ser. A 6.25%, 6/1/26..................... 1,563,766 ------------ 2,620,316 ------------ TOTAL LONG-TERM INVESTMENTS (COST $178,015,116)............... 184,987,078 ------------ SHORT-TERM INVESTMENTS-- 0.4% (COST $700,000) FLORIDA 700,000 Remington Cmnty. Dev. Dist., Bond Anticipation Notes 7.50%, 10/31/97................... 700,000 ------------ SHARES - ---------- MUTUAL FUND SHARES-- 3.3% (COST $6,310,000) 6,310,000 Federated Municipal Obligations Fund.................. 6,310,000 ------------ TOTAL INVESTMENTS-- (COST $185,025,116)....... 101.2% 191,997,078 OTHER ASSETS AND LIABILITIES-- NET......... (1.2) (2,253,897) ------- ------------ NET ASSETS--................ 100.0% $189,743,181 ------- ------------
(CONTINUED) 22 (logo) EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (CONTINUED) August 31, 1997 SUMMARY OF ABBREVIATIONS: FNMA Insured by Federal National Mortgage Association GNMA Insured by Government National Mortgage Association GO General Obligation IDA Industrial Development Authority IDR Industrial Development Revenue Bond PCR Pollution Control Revenue Bond RB Revenue Bond SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 23 (logo) EVERGREEN FLORIDA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS August 31, 1997
PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- 94.7% FLORIDA-- 94.7% $2,000,000 Altamonte Springs Hlth. Fac. Auth. RB, Adventist Hlth./Sunbelt, Ser. B 5.13%, 11/15/18, (AMBAC)........... $ 1,897,020 3,750,000 Brevard Cnty. Hsg. Fin. Auth. RB, Multi-Family Hsg. Windover Oaks, Ser. A 6.90%, 2/1/27, (FNMA).............. 4,155,750 600,000 Brevard Cnty. Hsg. Fin., Auth. RB, Single Family Mtg., Refunding, Ser. B 7.00%, 3/1/13, (FSA)............... 635,394 Broward Cnty. Hsg. Fin. Auth. RB, Ser. B: 180,000 7.55%, 3/1/15, (GNMA)................ 189,936 1,375,000 7.13%, 3/1/17, (GNMA)................ 1,450,955 105,000 Charlotte Cnty. Spec. Assmt., Peachland Muni. Svc. Tax & Ben. Unit 7.25%, 10/1/10, (MBIA)............. 115,257 500,000 Collier Cnty. Hlth. Facs. Auth. RB, The Moorings, Inc. Proj. 7.00%, 12/1/19..................... 544,340 Dade Cnty. Edl. Facs. Auth. RB, St. Thomas Univ.: 2,000,000 6.00%, 1/1/14, (LOC: Sun Bank Miami)........................... 2,059,260 1,000,000 6.13%, 1/1/19, (LOC: Sun Bank Miami)........................... 1,046,710 230,000 Dade Cnty. Hlth. Fac. Auth. RB, South Shore Hosp. & Med. Center, Ser. A 7.60%, 8/1/24...................... 247,059 3,815,000 Dade Cnty. Pub. Fac. RB, Jackson Mem. Hosp. Proj., Ser. A 4.88%, 6/1/15, (MBIA).............. 3,526,243 Dade Cnty. Single Family Mtg. RB, Ser. A: 230,000 7.50%, 9/1/13........................ 243,016 135,000 7.10%, 3/1/17........................ 142,176 340,000 Dade Cnty. Single Family Mtg. RB, Ser. D 6.95%, 12/15/12.................... 360,621 1,000,000 Dade Cnty. Spec. Oblig. RB, Courthouse Ctr. Proj. 6.25%, 4/1/09...................... 1,077,390 PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED FLORIDA-- CONTINUED Duval Cnty. Hsg. Fin. Auth. RB, Single Family Mtg.: $ 200,000 7.50%, 6/1/15, (FGIC)................ $ 211,044 840,000 7.35%, 7/1/24, (GNMA)................ 896,288 Escambia Cnty. Hlth. Facs. Auth. RB: 2,560,000 6.00%, 1/1/15........................ 2,582,400 1,250,000 6.10%, 1/1/19........................ 1,266,313 2,750,000 Escambia Cnty. Hlth. Facs. Auth. RB, Baptist Hosp. Inc., Ser. B 6.00%, 10/1/14..................... 2,807,695 Escambia Cnty. PCR, Champion Int'l. Corp. Proj.: 5,230,000 5.88%, 6/1/22........................ 5,285,647 1,650,000 6.40%, 9/1/30........................ 1,762,942 Florida Hsg. Fin. Agcy. RB: 2,810,000 8.00%, 12/1/20, (GNMA)............... 2,950,641 1,860,000 6.35%, 5/1/26, (GNMA) Ser. A......... 1,925,398 1,895,000 6.88%, 10/1/12....................... 1,969,170 Florida Hsg. Fin. Agcy. RB, Landings At Sea Forest: 560,000 5.85%, 12/1/18, (AMBAC).............. 569,178 805,000 6.05%, 12/1/36, (AMBAC).............. 821,382 Florida Ports. Fin. Commission RB, St. Trans. Trust Fund: 2,000,000 5.38%, 6/1/16, (MBIA)................ 1,950,240 6,500,000 5.38%, 6/1/27, (MBIA)................ 6,270,485 4,000,000 Florida St. Div. of Bond Fin., Dept. Genl. Svcs. RB, Dept. Envir.-Preserv. 2000, Ser. A 5.75%, 7/1/13, (AMBAC)............. 4,145,400 1,000,000 Hialeah Cap. Impt. RB 5.50%, 10/1/13..................... 986,300 3,250,000 Hillsborough Cnty. Indl. Dev. Auth. IDR, Univ. Cmnty. Hosp., Ser. 1994 6.50%, 8/15/19, (MBIA)............. 3,738,605 Jacksonville Hlth. Indl. Dev., Nat'l. Benevolent-Cypress Vlg., Ser. A: 345,000 6.13%, 12/1/16....................... 354,022 1,245,000 6.25%, 12/1/26....................... 1,304,349 1,250,000 Lee Cnty. Hsg. Fin. Auth. 7.20%, 3/1/27...................... 1,379,975
(CONTINUED) 24 (logo) EVERGREEN FLORIDA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (CONTINUED) August 31, 1997
PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED FLORIDA-- CONTINUED Lee Cnty. Hsg. Fin. Auth. RB, Single Family Mtg., Multi-Cnty. Prog., Ser. A: $1,700,000 7.45%, 9/1/27........................ $ 1,894,531 3,685,000 7.50%, 9/1/27........................ 4,102,363 4,890,000 Leesburg Hosp. RB, Leesburg Regl. Med. Ctr. Proj., Ser. B 5.70%, 7/1/18...................... 4,937,531 770,000 Leon Cnty. Hsg. Fin. Auth. RB, Single Family Mtg., Multi-Cnty. Prog., Ser. B 6.25%, 7/1/19, (GNMA).............. 797,458 1,425,000 Manatee Cnty. Hsg. Fin. Auth. Mtg. RB 7.45%, 5/1/27...................... 1,583,645 1,750,000 Manatee Cnty. Hsg. Fin. Auth. Mtg. RB, Single Family Subser. 1 7.20%, 5/1/28...................... 1,933,593 5,000,000 Miami Hlth. Fac. Auth. RB 5.25%, 8/15/15, (AMBAC)............ 4,819,750 Miami Beach Redev. Agency Tax Increment RB, City Center-Historic Convention Vlg.: 2,000,000 5.63%, 12/1/09....................... 1,998,920 3,000,000 5.80%, 12/1/13....................... 2,980,980 2,000,000 5.88%, 12/1/22....................... 1,982,880 1,500,000 North Miami Hlth. Fac. Auth. RB, Catholic Hlth. Svc. Oblig. Group 6.00%, 8/15/16..................... 1,539,960 1,000,000 North Tampa Hsg. Dev. Corp. RB, Cntry. Oaks Apts., Ser. A 6.90%, 1/1/24, (FNMA).............. 1,052,620 1,300,000 Northern Palm Beach Cnty. Impt. RB, Wtr. Ctl. & Impt., Unit Dev. 9A, Ser. A 7.20%, 8/1/16...................... 1,366,131 1,000,000 Okaloosa Cnty. Wtr. & Swr. RB 6.00%, 7/1/11, (AMBAC)............. 1,095,790 3,000,000 Orange Cnty. Hlth. Facs. Auth. RB, Lakeside Apts. Inc. 6.50%, 7/1/13...................... 3,208,920 4,000,000 Orlando Utils. Commission Wtr. & Elec. RB, Linked SAVRs/RIBs (a) 5.60%, 10/6/17..................... 3,990,200 3,000,000 Palm Beach Cnty. Criminal Justice Facs. RB 7.20%, 6/1/15, (FGIC).............. 3,681,810 PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED FLORIDA-- CONTINUED Palm Beach Cnty. Hlth. Facs. Auth. RB, Good Samaritan Hlth. Sys.: $3,695,000 6.20%, 10/1/11....................... $ 3,874,133 6,000,000 6.30%, 10/1/22....................... 6,301,680 4,440,000 Palm Beach Cnty. Hsg. Fin. Auth. RB, Daughters of Charity, Ser. B 7.60%, 3/1/23, (GNMA).............. 4,718,921 1,000,000 Palm Beach Cnty. Hsg. Fin. Auth. RB, Single Family Mtg., Ser. A 6.50%, 10/1/21, (GNMA)............. 1,052,830 2,000,000 Palm Beach Cnty. IDR, Geriatric Care Inc. Proj. 6.55%, 12/1/16..................... 2,132,720 5,000,000 Pensacola Hlth. Facs. Auth. RB, Daughters of Charity Natl. Hlth. 5.25%, 1/1/11...................... 4,943,000 860,000 Polk Cnty Hsg. Fin. Auth. RB, Single Family Mtg., Ser. A 7.00%, 9/1/15...................... 893,703 8,350,000 Polk Cnty. Indl. Dev. Auth., Tampa Elec. Co. Proj. 5.85%, 12/1/30..................... 8,459,803 1,500,000 Reedy Creek Impt. Dist. Util. RB, Ser. 1 5.00%, 10/1/19, (MBIA)............. 1,415,670 1,800,000 Sarasota Cnty. Hlth. Fac. Auth. RB, Sunnyside Properties 6.00%, 5/15/10..................... 1,824,084 3,590,000 Seacoast Util. Auth. RB, Wtr. & Swr. Sys., Ser. A 5.50%, 3/1/18, (FGIC).............. 3,683,663 1,000,000 St. John's Cnty. Indl. Dev. Auth., Bayview Proj., Ser. A 7.00%, 10/1/12..................... 1,025,880 Volusia Cnty. Ed. Facs. Auth. RB, Embry-Riddle Aero, Ser. A: 3,500,000 6.13%, 10/15/16...................... 3,632,755 2,600,000 6.13%, 10/15/26...................... 2,687,750 Winter Haven Hsg. Auth. RB, Multi-Family Mtg., Abbey Lane Apts., Ser. C: 850,000 7.00%, 7/1/12, (FNMA)................ 901,969 1,750,000 7.00%, 7/1/24, (FNMA)................ 1,846,793 ----------- TOTAL LONG-TERM INVESTMENTS (COST $145,060,611)................ 153,231,037 -----------
(CONTINUED) 25 (logo) EVERGREEN FLORIDA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (CONTINUED) August 31, 1997
SHARES VALUE - --------------------------------------------------------------- MUTUAL FUND SHARES-- 3.6% (COST $5,881,000) 5,881,000 Federated Municipal Obligations Fund.................... $ 5,881,000 -----------
TOTAL INVESTMENTS-- (COST $150,941,611)...... 98.3% 159,112,037 OTHER ASSETS AND LIABILITIES-- NET........ 1.7 2,691,533 --------- ------------ NET ASSETS--............... 100.0% $161,803,570 --------- ------------ --------- ------------
SUMMARY OF ABBREVIATIONS: AMBAC Insured by American Municipal Bond Assurance Corporation FGIC Insured by Federal Guaranty Insurance Company FNMA Insured by Federal National Mortgage Association FSA Insured by Financial Security Assurance Company GNMA Insured by Government National Mortgage Association IDR Industrial Development Revenue Bond LOC Line of Credit MBIA Insured by Municipal Bond Investors Assurance Corporation PCR Pollution Control Revenue Bond RIBs Residual Interest Bonds RB Revenue Bond SAVRs Select Auction Variable Rate Securities (a) At the discretion of the portfolio manager, these securities may be separated into securities with interest or principal payments that are linked to another rate or index and therefore would be considered derivative securities. SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 26 (logo) EVERGREEN GEORGIA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS August 31, 1997
PRINCIPAL AMOUNT VALUE LONG-TERM INVESTMENTS-- 95.5% GEORGIA-- 91.8% $ 500,000 Appling Cnty. Dev. Auth. PCR 7.15%, 1/1/21, (MBIA).............. $ 562,730 300,000 Butts Cnty. COP 6.75%, 12/1/14, (MBIA)............. 335,394 1,100,000 Cartersville, Dev. Auth. RB, Wtr. & Waste Facs. 7.40%, 11/1/10..................... 1,328,954 120,000 Cartersville, GO 6.70%, 1/1/12...................... 138,420 500,000 Clayton Cnty. Hsg. Auth. Mtg. RB 7.13%, 12/1/25, (FHA/VA)........... 533,950 1,000,000 Coffee Cnty. Hosp. Auth. RB 6.75%, 12/1/16..................... 1,006,990 500,000 DeKalb Cnty. Hsg. Auth. RB, The Lakes at Indian Creek Proj. 7.15%, 1/1/25, (FSA)............... 537,270 500,000 DeKalb Cnty. Sch. Dist., Ser. A 6.25%, 7/1/11...................... 558,655 600,000 Fayette Cnty. Sch. Dist. 6.13%, 3/1/15...................... 636,912 500,000 Forsyth Cnty. Sch. Dist. GO 6.75%, 7/1/16...................... 586,345 600,000 Fulton Cnty. Hsg. Auth. RB, Ser. C 6.90%, 1/1/28...................... 606,768 400,000 Fulton Cnty. Wtr. & Swr. RB 6.38%, 1/1/14, (FGIC).............. 452,228 500,000 George L. Smith II, World Congress Ctr. Auth. RB, Domed Stadium Proj. 7.88%, 7/1/20...................... 547,085 395,000 Georgia State, Hsg. & Fin. Auth. RB, Ser. A 6.55%, 12/1/27..................... 414,063 400,000 Georgia State, Muni. Elec. Auth. Pwr. RB, Ser. EE 7.25%, 1/1/24, (AMBAC)............. 505,984 500,000 Glynn-Brunswick Mem. Hosp. Auth. RB 6.00%, 8/1/16, (MBIA).............. 526,595 500,000 Hall Cnty. Sch. Dist. GO 6.70%, 12/1/14..................... 563,025 330,000 Metro Atlanta Rapid Tran. Auth., Sales Tax RB 7.00%, 7/1/11, (FGIC).............. 392,033 500,000 Putnam Cnty. Sch. Dist. GO 6.90%, 2/1/14, (AMBAC)............. 568,555 1,500,000 Richmond Cnty. Dev. Auth. RB, Southern Care, Ser. C, (effective yield 5.72%) (a) 0.00%, 12/1/21..................... 381,945 LONG-TERM INVESTMENTS-- CONTINUED GEORGIA-- CONTINUED $ 775,000 Savannah Eco. Dev. Auth. RB, Southern Care, Ser. C, (effective yield 5.72%) (a) 0.00%, 12/1/21..................... $ 197,338 Savannah Hosp. Auth. RB, St. Joseph's Hosp. Proj.: 800,000 6.13%, 7/1/12........................ 846,024 500,000 6.20%, 7/1/23........................ 514,625 300,000 Washington Cnty. Sch. Dist. GO 6.88%, 1/1/14, (AMBAC).................... 340,335 ----------- 13,082,223 ----------- TEXAS-- 3.7% 500,000 Lufkin Hlth. Facs. Dev. Corp. RB 6.88%, 2/15/26..................... 536,625 ----------- TOTAL LONG-TERM INVESTMENTS (COST $12,787,033)................. 13,618,848 -----------
SHARES - ---------- MUTUAL FUND SHARES-- 3.5% (COST $494,000) 494,000 Federated Municipal Obligations Fund................... 494,000 -----------
TOTAL INVESTMENTS-- (COST $13,281,033)........ 99.0% 14,112,848 OTHER ASSETS AND LIABILITIES-- NET......... 1.0 139,229 --------- ----------- NET ASSETS--................ 100.0% $14,252,077 --------- ----------- --------- -----------
(a) Effective yield (calculated at the date of purchase) is the yield at which the bond accretes on an annual basis until maturity date. SUMMARY OF ABBREVIATIONS: AMBAC Insured by American Municipal Bond Assurance Corporation COP Certificate of Participation FGIC Insured by Federal Guaranty Insurance Company FHA/VA Insured by Federal Housing Authority/Veterans Administration FSA Insured by Financial Security Assurance Company GO General Obligation Bond MBIA Insured by Municipal Bond Investors Assurance Corporation PCR Pollution Control Revenue Bond RB Revenue Bond SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 27 (logo) EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS August 31, 1997
PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- 94.5% NEW JERSEY-- 2.5% $1,430,000 Western Monmouth Util. Auth. RB, Sewer Revenue 6.80%, 2/1/14...................... $ 1,494,636 ----------- NORTH CAROLINA-- 76.6% 1,315,000 Burlington Hsg. Auth. Mtg. RB, Burlington Homes, Sec. 8-A 6.00%, 8/1/09...................... 1,354,226 1,000,000 Chapel Hill Parking Fac., COP 6.35%, 12/1/18..................... 1,053,660 1,455,000 Charlotte Hsg. Dev. Corp. Mtg. RB, Vantage 78 Apts. 6.60%, 7/15/21, (FHA).............. 1,493,514 1,475,000 Charlotte Stadium Parking Facs. Proj., COP, Ser. C 6.00%, 6/1/14...................... 1,521,418 2,390,000 Cumberland Cnty. Civic Center Proj., COP, Ser. A 6.40%, 12/1/24, (AMBAC)............ 2,612,437 920,000 Fremont Hsg. Dev. Corp. First Lien RB, Torhunta Apts. 6.75%, 7/15/22, (FHA).............. 953,212 1,000,000 Gastonia Combined Util. Sys. RB 6.00%, 5/1/14, (MBIA).............. 1,053,050 1,000,000 Harnett Cnty., COP 6.40%, 12/1/14, (AMBAC)............ 1,093,070 1,000,000 Haywood Cnty. Indl. Facs. & Poll. Ctrl. Fin. Auth. RB, Champion Int'l. Corp. Proj. 6.25%, 9/1/25...................... 1,043,820 4,750,000 Martin Cnty. Indl. Facs. & Poll. Ctrl. Fin. Auth. RB, Solid Waste Disp., Weyerhauser Co. 6.80%, 5/1/24...................... 5,218,825 North Carolina Hsg. Fin. & Dev. Auth. RB, Single Family: 3,890,000 Ser. JJ 6.15%, 3/1/11, (FHA)................. 4,061,316 1,390,000 Ser. T 7.05%, 9/1/20, (FHA)................. 1,470,425 500,000 North Carolina Med. Care Cmnty. Hlth. Care Fac. RB, First Mtg. Southminster 6.88%, 10/1/09..................... 529,180 PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED NORTH CAROLINA-- CONTINUED North Carolina Med. Care Cmnty. Hosp. RB: $1,100,000 6.13%, 6/1/10........................ $ 1,164,152 1,000,000 Duke University Hosp. Project, Ser. C 5.25%, 6/1/17........................ 984,220 1,350,000 Rex Hosp. Proj. 6.25%, 6/1/17........................ 1,430,555 3,000,000 North Carolina Muni. Pwr. Agcy. RB, No. 1 Catawba Elec., Ser. B 5.00%, 1/1/20...................... 2,883,900 North Carolina Stud. Ed. Assist. Auth. RB: 2,000,000 Ser. A 6.30%, 7/1/15........................ 2,078,540 2,375,000 Ser. C 6.35%, 7/1/16........................ 2,476,840 1,000,000 North Carolina Stud. Ed. Assist. Auth. RB, First Mtg. Southminister, Ser. A 6.05%, 7/1/10...................... 1,031,310 North Carolina Muni. Pwr. Sys. Agcy. RB, Ser. A: 3,750,000 6.50%, 1/1/18, (ETM)................. 4,098,600 4,000,000 5.00%, 1/1/21........................ 3,825,640 3,000,000 Univ. North Carolina Chapel Hill Hosp. RB 5.00%, 2/15/29..................... 2,772,480 ----------- 46,204,390 ----------- TEXAS-- 7.4% 1,500,000 Dallas Fort Worth Int'l. Arpt. Facs. Impt. Corp. RB, American Airlines Inc. 6.00%, 11/1/14..................... 1,542,390 2,750,000 Lufkin Hlth. Facs. Dev. Corp. RB, Mem. Hlth. Sys. of East Texas 6.88%, 2/15/26..................... 2,951,437 ----------- 4,493,827 ----------- VIRGINIA-- 5.5% James City Cnty. Indl. Dev. Auth. RB, Residential Care Facs., First Mtg. Williamsburg Landing: 1,750,000 6.63%, 3/1/19........................ 1,794,573 1,500,000 6.63%, 3/1/23........................ 1,534,980 ----------- 3,329,553 -----------
(CONTINUED) 28 (logo) EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (CONTINUED) August 31, 1997
PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED PUERTO RICO-- 2.5% $1,400,000 Puerto Rico Ports Auth. RB, American Airlines Proj., Ser. A 6.25%, 6/1/26...................... $ 1,484,252 ----------- TOTAL LONG-TERM INVESTMENTS (COST $53,335,912)................. 57,006,658 -----------
SHARES - ---------- MUTUAL FUND SHARES-- 4.5% (COST-- $2,739,000) 2,739,000 Federated Municipal Obligations Fund................... 2,739,000 ----------- TOTAL INVESTMENTS-- (COST $56,074,912)......... 99.0% 59,745,658 OTHER ASSETS AND LIABILITIES-- NET.......... 1.0 609,388 ------- ----------- NET ASSETS--................. 100.0% $60,355,046 ------- ----------- ------- -----------
SUMMARY OF ABBREVIATIONS: AMBAC Insured by American Municipal Bond Assurance Corporation COP Certificates of Participation ETM Escrowed to Maturity FHA Insured by Federal Housing Authority MBIA Insured by Municipal Bond Investors Assurance Corporation RB Revenue Bond
SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 29 (logo) EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS August 31, 1997
PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- 97.3% SOUTH CAROLINA-- 97.3% $ 400,000 Calhoun Cnty. Solid Waste Disp. Facs. RB, Eastman Kodak Co. Proj. 6.75%, 5/1/17...................... $ 463,836 400,000 Camden Pub. Util. RB, Refunding & Imp. 5.50%, 3/1/17...................... 403,052 Charleston Cnty. Hlth. Facs. RB, First Mtg. Episcopal Church: 300,000 7.13%, 4/1/20........................ 313,836 500,000 Ser. A 6.25%, 4/1/19........................ 502,510 Darlington Cnty. IDR: 500,000 Nucor Corp. Proj., Ser. A 5.75%, 8/1/23...................... 502,180 750,000 Sonoco Products. Co. Proj. 6.00%, 4/1/26...................... 774,885 200,000 Georgetown Cnty. Wtr. & Swr. Dist. RB 6.50%, 6/1/17...................... 203,148 600,000 Greenville Hosp. Sys. RB, Hosp. Facs., Ser. B 5.70%, 5/1/12...................... 614,604 400,000 Greenville Mem. Auditorium Dist. GO, Bi Lo Center Proj. 5.75%, 4/1/18, (AMBAC)............. 411,156 300,000 Horry County Arpt. RB, Ser. A 5.60%, 7/1/17...................... 299,262 400,000 Marion Cnty. RB, Hosp. Rev. 5.38%, 11/1/25..................... 383,464 Piedmont Muni. Pwr. Agcy. Elec. RB: 800,000 6.55%, 1/1/16........................ 802,616 Refunding, Ser. A 500,000 5.75%, 1/1/24........................ 495,935 South Carolina Jobs Eco. Dev. Auth. RB: 200,000 Oconee Mem. Hosp. 6.15%, 3/1/16...................... 208,322 400,000 Plasti Line Inc. Proj. 6.25%, 7/1/17...................... 400,620 250,000 South Carolina State Ed. Assist. Auth. RB, Gtd. Stud. Ln., Sub. Lien 5.88%, 9/1/07...................... 262,013 250,000 South Carolina State Ed. Facs. Auth. RB, Furman Univ. Proj., Ser. A 5.50%, 10/1/16..................... 250,810 PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED SOUTH CAROLINA-- CONTINUED South Carolina St. Hsg. Fin. & Dev. Auth. Mtg. RB: $ 100,000 6.55%, 7/1/15........................ $ 105,601 595,000 Heritage Crt. Apts. 6.15%, 7/1/25........................ 608,167 675,000 Ser. A 6.35%, 7/1/25........................ 700,360 South Carolina St. Hsg. Fin. & Dev. Auth. RB: 500,000 5.95%, 7/1/29........................ 506,250 200,000 Homeownership Mtg., Ser. A 7.55%, 7/1/11........................ 211,698 265,000 Hunting Ridge Apts. RB 6.75%, 6/1/25........................ 275,931 300,000 Runaway Bay Apts. Proj. 6.13%, 12/1/15....................... 304,644 100,000 Ser. A 6.80%, 11/15/11...................... 106,098 500,000 South Carolina St. Refunding, Ser. A 5.75%, 1/1/22, (MBIA).............. 510,110 500,000 Spartanburg County Hlth. Facs. RB, Ser. B 5.50%, 4/15/27..................... 494,200 Three Rivers Solid Waste Auth. RB, Capital Appreciation: (effective yield 5.61%) (a) 1,015,000 0.00%, 1/1/16........................ 367,968 (effective yield 5.66%) (a) 1,015,000 0.00%, 1/1/17........................ 344,907 585,000 York Cnty. IDR, Hoechst Celanese Corp. 5.70%, 1/1/24...................... 591,248 ----------- TOTAL LONG-TERM INVESTMENTS (COST $11,892,323)................. 12,419,431 -----------
SHARES - ---------- MUTUAL FUND SHARES-- 5.1% (COST $652,000) 652,000 Federated Municipal Obligations Fund................... 652,000 ----------- TOTAL INVESTMENTS-- (COST $12,544,323)......... 102.4% 13,071,431 OTHER ASSETS AND LIABILITIES-- NET.......... (2.4) (300,901) ------- ----------- NET ASSETS--................. 100.0% $12,770,530 ------- ----------- ------- -----------
(a) Effective yield (calculated at the date of purchase) is the yield at which the bond accretes on an annual basis until maturity date. SUMMARY OF ABBREVIATIONS: AMBAC Insured by American Municipal Bond Assurance Corporation GO General Obligation Bond IDR Industrial Development Revenue Bond MBIA Insured by Municipal Bond Investors Assurance Corporation RB Revenue Bond SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 30 (logo) EVERGREEN VIRGINIA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS August 31, 1997
PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- 96.9% DISTRICT OF COLUMBIA-- 1.5% $ 250,000 Metro. Washington DC Arpt. Auth. RB, Ser. B 5.50%, 10/1/23..................... $ 244,900 ----------- VIRGINIA-- 95.4% Albemarle Cnty. Indl. Dev. Auth. RB, Residential Care Fac. Our Lady of Peace Inc.: 100,000 6.45%, 7/1/15........................ 102,953 145,000 6.63%, 7/1/21........................ 149,301 350,000 Arlington Cnty. Indl. Dev. Auth. RB, The Nature Conservancy, Ser. A 5.40%, 7/1/17...................... 346,612 390,000 Buena Vista Indl. Dev. Auth. RB, Wtr. & Swr. Fac. Route 60 Proj. 6.25%, 7/15/11..................... 391,283 250,000 Charlottesville-Albemarle Arpt. Auth. RB 6.13%, 12/1/13....................... 255,588 500,000 Chesapeake Redev. & Hsg. Auth. RB, Multi-Family Hsg., Cedar Assoc., Ser. A 7.75%, 6/1/20...................... 515,730 500,000 Chesterfield Cnty. Hlth. Ctr. Cmnty. Mtg. RB, Lucy Corr. Nursing Home Proj. 5.88%, 12/1/21..................... 511,315 370,000 Fairfax Cnty. Indl. Dev. Auth. RB, Hlth. Care, Inova Hlth. Sys. Proj. 5.88%, 8/15/16..................... 381,300 500,000 Fairfax Cnty. Redev. & Hsg. Auth. RB, Hsg. for the Elderly 6.00%, 9/1/16, (FHA)............... 514,195 Giles Cnty. Indl. Dev. Auth. RB, Hoechst Celanese Proj.: 250,000 5.95%, 12/1/25....................... 256,632 500,000 6.45%, 5/1/26........................ 537,745 500,000 Harrisonburg Redev. & Hsg. Auth. RB, Greens of Salem Run Proj. 6.20%, 4/1/17...................... 517,530 350,000 Isle Wright Cnty. Indl. Dev. Auth. RB, Solid Waste Disp. Fac. Union Camp Corp. Proj. 6.55%, 4/1/24...................... 376,873 600,000 James City Cnty. Indl. Dev. Auth. RB, Williamsburg Landing 6.63%, 3/1/23...................... 613,992 PRINCIPAL AMOUNT VALUE - -------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED VIRGINIA-- CONTINUED $1,000,000 King & Queen Cnty. Indl. Dev. Auth. RB, King & Queen Cnty. Courts Complex, Ser. A 5.63%, 7/15/17..................... $ 994,600 700,000 King George Cnty. Indl. Dev. Auth. RB, King George Cnty. School Proj. 6.40%, 8/1/16...................... 722,722 640,000 Portsmouth Redev. & Hsg. Auth. RB, Multi-Family Hsg., Ser. A 6.30%, 9/1/26, (FNMA).............. 667,878 Prince William Cnty. Indl. Dev. Auth. RB: 500,000 ATCC Proj. 6.00%, 2/1/14...................... 518,400 500,000 Potomac Hosp. Corp. 6.75%, 10/1/15....................... 542,675 1,250,000 Prince William Cnty. Park Auth. RB 6.88%, 10/15/16.................... 1,366,325 400,000 Riverside Regl. Jail Auth. RB 6.00%, 7/1/25, (MBIA).............. 420,908 750,000 Virginia Port Auth. RB, Comwlth. Port Fund 5.90%, 7/1/16...................... 769,260 400,000 Virginia Port Auth. RB, Port Fac. 5.60%, 7/1/27, (MBIA).............. 396,528 700,000 Virginia College Bldg. Auth. RB, Hampton Univ. Proj. 5.75%, 4/1/14...................... 715,925 Virginia St. Hsg. Dev. Auth. RB, Comwlth. Mtg.: Ser. A 100,000 7.10%, 1/1/17........................ 105,503 Ser. A, Subser. A-6 100,000 6.95%, 1/1/10........................ 103,957 Ser. B, Subser. B-2 500,000 6.65%, 1/1/13........................ 536,675 Ser. D, Subser. D-1 300,000 6.10%, 1/1/19........................ 311,202 Ser. F, Subser. F-1 300,000 6.25%, 7/1/12........................ 314,148 Virginia St. Hsg. Dev. Auth. RB, Multi-Family Hsg.: Ser. H 300,000 6.35%, 11/1/11....................... 313,749 Ser. O 500,000 6.05%, 11/1/17....................... 507,330
(CONTINUED) 31 (logo) EVERGREEN VIRGINIA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (CONTINUED) August 31, 1997
PRINCIPAL AMOUNT VALUE - ------------------------------------------------------------------- LONG-TERM INVESTMENTS-- CONTINUED VIRGINIA-- CONTINUED $ 300,000 West Point Indl. Dev. Auth. RB, Solid Waste Disp. Fac., Chesapeake Corp. Proj., Ser. B 6.25%, 3/1/19...................... $ 314,955 ----------- 15,093,789 ----------- TOTAL LONG-TERM INVESTMENTS (COST $14,771,682)................. 15,338,689 -----------
SHARES VALUE - --------------------------------------------------------------- MUTUAL FUND SHARES-- 1.5% (COST $232,000) 232,000 Federated Municipal Obligations Fund................... $ 232,000 ----------- TOTAL INVESTMENTS-- (COST $15,003,682)......... 98.4% 15,570,689 OTHER ASSETS AND LIABILITIES-- NET.......... 1.6 254,132 ------- ----------- NET ASSETS--................. 100.0% $15,824,821 ------- ----------- ------- -----------
SUMMARY OF ABBREVIATIONS: FHA Insured by Federal Housing Authority FNMA Insured by Federal National Mortgage Association MBIA Insured by Municipal Bond Investors Assurance Corporation RB Revenue Bond
SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 32 (logo) EVERGREEN - -------------------------------------------------------------------------------- STATEMENTS OF ASSETS AND LIABILITIES August 31, 1997
(logo) (logo) (logo) (logo) (logo) FLORIDA NORTH SOUTH HIGH INCOME FLORIDA GEORGIA CAROLINA CAROLINA FUND FUND FUND FUND FUND - -------------------------------------------------------------------------------------------------------------------------- ASSETS Investments at market value (identified cost-- $185,025,116, $150,941,611, $13,281,033, $56,074,912, $12,544,323 and $15,003,682, respectively).................................. $191,997,078 $159,112,037 $14,112,848 $59,745,658 $13,071,431 Cash............................................. 0 464 465 0 146 Interest receivable.............................. 3,392,928 2,577,016 166,405 854,839 187,334 Receivable for Fund shares sold.................. 1,875,061 784,613 0 7,000 38,500 Unamortized organization expenses................ 14,443 0 0 0 0 Prepaid expenses and other assets................ 25,818 7,850 11,190 2,228 7,165 - -------------------------------------------------------------------------------------------------------------------------- Total assets................................... 197,305,328 162,481,980 14,290,908 60,609,725 13,304,576 - -------------------------------------------------------------------------------------------------------------------------- LIABILITIES Payable for investments purchased................ 6,805,891 0 0 0 502,865 Dividends payable................................ 427,507 432,405 12,954 56,887 17,691 Distribution fee payable......................... 109,586 45,272 8,737 53,518 5,495 Payable for Fund shares redeemed................. 96,254 78,460 10,000 86,192 0 Due to related parties........................... 43,008 83,649 463 27,909 66 Accrued custodian fees........................... 9,000 13,200 1,300 9,715 960 Due to custodian................................. 3,970 0 0 0 0 Accrued expenses and other liabilities........... 66,931 25,424 5,377 20,458 6,969 - -------------------------------------------------------------------------------------------------------------------------- Total liabilities.............................. 7,562,147 678,410 38,831 254,679 534,046 - -------------------------------------------------------------------------------------------------------------------------- NET ASSETS......................................... $189,743,181 $161,803,570 $14,252,077 $60,355,046 $12,770,530 - -------------------------------------------------------------------------------------------------------------------------- NET ASSETS REPRESENTED BY Paid-in capital.................................. $183,979,565 $150,128,843 $14,019,261 $60,199,042 $12,209,433 Undistributed net investment income.............. 71,079 102,244 3,588 0 2,439 Accumulated net realized gain (loss) on investments.................................... (1,279,425 ) 3,402,057 (602,587) (3,514,742) 31,550 Net unrealized appreciation on investments....... 6,971,962 8,170,426 831,815 3,670,746 527,108 - -------------------------------------------------------------------------------------------------------------------------- TOTAL NET ASSETS............................... $189,743,181 $161,803,570 $14,252,077 $60,355,046 $12,770,530 - -------------------------------------------------------------------------------------------------------------------------- NET ASSETS CONSIST OF Class A.......................................... $119,942,452 $105,672,609 $ 2,201,213 $ 8,114,829 $ 1,024,797 Class B.......................................... 63,474,546 31,281,385 10,870,454 48,197,720 4,734,195 Class Y.......................................... 6,326,183 24,849,576 1,180,410 4,042,497 7,011,538 - -------------------------------------------------------------------------------------------------------------------------- $189,743,181 $161,803,570 $14,252,077 $60,355,046 $12,770,530 - -------------------------------------------------------------------------------------------------------------------------- SHARES OUTSTANDING Class A.......................................... 11,013,506 10,589,864 222,411 782,431 101,700 Class B.......................................... 5,828,551 3,134,781 1,098,398 4,647,049 469,801 Class Y.......................................... 580,894 2,490,213 119,266 389,762 695,799 - -------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE Class A.......................................... $ 10.89 $ 9.98 $ 9.90 $ 10.37 $ 10.08 - -------------------------------------------------------------------------------------------------------------------------- Class A-- Offering price (based on sales charge of 4.75%)...................................... $ 11.43 $ 10.48 $ 10.39 $ 10.89 $ 10.58 - -------------------------------------------------------------------------------------------------------------------------- Class B.......................................... $ 10.89 $ 9.98 $ 9.90 $ 10.37 $ 10.08 - -------------------------------------------------------------------------------------------------------------------------- Class Y.......................................... $ 10.89 $ 9.98 $ 9.90 $ 10.37 $ 10.08 - -------------------------------------------------------------------------------------------------------------------------- (logo) VIRGINIA FUND - --------------------------------------------------- ASSETS Investments at market value (identified cost-- $185,025,116, $150,941,611, $13,281,033, $56,074,912, $12,544,323 and $15,003,682, respectively).................................. $15,570,689 Cash............................................. 617 Interest receivable.............................. 262,744 Receivable for Fund shares sold.................. 36,370 Unamortized organization expenses................ 0 Prepaid expenses and other assets................ 6,723 - --------------------------------------------------- Total assets................................... 15,877,143 - --------------------------------------------------- LIABILITIES Payable for investments purchased................ 0 Dividends payable................................ 25,082 Distribution fee payable......................... 9,602 Payable for Fund shares redeemed................. 0 Due to related parties........................... 10,951 Accrued custodian fees........................... 1,500 Due to custodian................................. 0 Accrued expenses and other liabilities........... 5,187 - --------------------------------------------------- Total liabilities.............................. 52,322 - --------------------------------------------------- NET ASSETS......................................... $15,824,821 - --------------------------------------------------- NET ASSETS REPRESENTED BY Paid-in capital.................................. $15,456,526 Undistributed net investment income.............. 6,150 Accumulated net realized gain (loss) on investments.................................... (204,862) Net unrealized appreciation on investments....... 567,007 - --------------------------------------------------- TOTAL NET ASSETS............................... $15,824,821 - --------------------------------------------------- NET ASSETS CONSIST OF Class A.......................................... $ 2,933,967 Class B.......................................... 6,695,383 Class Y.......................................... 6,195,471 - --------------------------------------------------- $15,824,821 - --------------------------------------------------- SHARES OUTSTANDING Class A.......................................... 291,836 Class B.......................................... 665,945 Class Y.......................................... 616,230 - --------------------------------------------------- NET ASSET VALUE PER SHARE Class A.......................................... $ 10.05 - --------------------------------------------------- Class A-- Offering price (based on sales charge of 4.75%)...................................... $ 10.55 - --------------------------------------------------- Class B.......................................... $ 10.05 - --------------------------------------------------- Class Y.......................................... $ 10.05 - ---------------------------------------------------
SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 33 (logo) EVERGREEN - -------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS Year Ended August 31, 1997
(logo) (logo) (logo) (logo) (logo) (logo) FLORIDA NORTH SOUTH HIGH INCOME FLORIDA GEORGIA CAROLINA CAROLINA VIRGINIA FUND FUND FUND FUND FUND FUND - ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest......................................... $9,126,685 $ 9,416,396 $ 786,503 $3,595,558 $ 682,195 $ 848,887 - ----------------------------------------------------------------------------------------------------------------------------------- EXPENSES Management fee................................... 813,790 791,322 66,245 305,634 58,299 70,972 Distribution Plan expenses....................... 618,859 574,097 101,554 510,687 47,664 68,701 Transfer agent fees.............................. 108,023 105,456 29,963 58,241 29,051 38,992 Custodian fees................................... 64,433 68,109 39,566 52,247 40,242 39,704 Administrative services fees..................... 52,864 65,916 5,267 24,354 4,596 9,900 Professional fees................................ 26,226 17,894 16,979 16,902 16,082 15,516 Registration and filing fees..................... 73,818 24,152 23,623 23,925 21,552 21,315 Trustees' fees and expenses...................... 3,268 4,827 1,308 1,833 700 888 Organization expenses............................ 3,544 10,301 9,791 26,702 26,658 8,886 Other............................................ 35,761 42,017 16,209 16,423 25,879 18,370 Fee waivers and/or expense reimbursements........ (330,629) (272,815) (117,219) 0 (137,607) (114,180) - ----------------------------------------------------------------------------------------------------------------------------------- Total expenses................................. 1,469,957 1,431,276 193,286 1,036,948 133,116 179,064 Less: Indirectly paid expenses................... (3,474) (81) (281) (298) (37) (596) - ----------------------------------------------------------------------------------------------------------------------------------- Net expenses................................... 1,466,483 1,431,195 193,005 1,036,650 133,079 178,468 - ----------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME............................ 7,660,202 7,985,201 593,498 2,558,908 549,116 670,419 - ----------------------------------------------------------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on investments................. 145,751 4,253,020 84,767 297,379 42,822 177,142 Net change in unrealized appreciation (depreciation) on investments.................. 6,008,472 1,314,673 354,644 2,148,174 396,963 361,929 - ----------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain on investments.................................... 6,154,223 5,567,693 439,411 2,445,553 439,785 539,071 - ----------------------------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................................... $13,814,425 $13,552,894 $1,032,909 $5,004,461 $ 988,901 $1,209,490 - -----------------------------------------------------------------------------------------------------------------------------------
SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 34 (logo) EVERGREEN - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS Year Ended August 31, 1997
(logo) (logo) (logo) (logo) (logo) FLORIDA NORTH SOUTH HIGH INCOME FLORIDA GEORGIA CAROLINA CAROLINA FUND FUND FUND FUND FUND - -------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income............................ $ 7,660,202 $ 7,985,201 $ 593,498 $ 2,558,908 $ 549,116 Net realized gain on investments................. 145,751 4,253,020 84,767 297,379 42,822 Net change in unrealized appreciation (depreciation) on investments.................. 6,008,472 1,314,673 354,644 2,148,174 396,963 - -------------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations................................... 13,814,425 13,552,894 1,032,909 5,004,461 988,901 - -------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income: Class A........................................ (5,491,178) (5,824,608) (110,152) (403,703) (44,289) Class B........................................ (1,956,616) (1,295,519) (408,815) (2,042,140) (187,294) Class Y........................................ (212,408) (960,612) (75,880) (201,277) (318,010) Net realized gains on investments: Class A........................................ 0 (665,344) 0 0 (1,178) Class B........................................ 0 (171,649) 0 0 (5,778) Class Y........................................ 0 (81,865) 0 0 (7,006) - -------------------------------------------------------------------------------------------------------------------------- Total distributions to shareholders............ (7,660,202) (8,999,597) (594,847) (2,647,120) (563,555) - -------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from shares sold........................ 102,384,802 27,824,216 3,285,353 5,860,717 4,936,067 Proceeds from reinvestment of distributions...... 3,354,164 2,877,333 422,287 1,817,312 346,366 Payment for shares redeemed...................... (19,605,169) (30,281,998) (2,738,013) (10,822,725) (2,614,880) - -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from capital share transactions.............. 86,133,797 419,551 969,627 (3,144,696) 2,667,553 - -------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets...... 92,288,020 4,972,848 1,407,689 (787,355) 3,092,899 NET ASSETS - -------------------------------------------------------------------------------------------------------------------------- Beginning of year................................ 97,455,161 156,830,722 12,844,388 61,142,401 9,677,631 - -------------------------------------------------------------------------------------------------------------------------- END OF YEAR...................................... $189,743,181 $161,803,570 $14,252,077 $60,355,046 $12,770,530 - -------------------------------------------------------------------------------------------------------------------------- Undistributed net investment income................ $ 71,079 $ 102,244 $ 3,588 $ 0 $ 2,439 - -------------------------------------------------------------------------------------------------------------------------- (logo) VIRGINIA FUND - --------------------------------------------------- OPERATIONS Net investment income............................ $ 670,419 Net realized gain on investments................. 177,142 Net change in unrealized appreciation (depreciation) on investments.................. 361,929 - --------------------------------------------------- Net increase in net assets resulting from operations................................... 1,209,490 - --------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income: Class A........................................ (142,824) Class B........................................ (257,414) Class Y........................................ (271,563) Net realized gains on investments: Class A........................................ 0 Class B........................................ 0 Class Y........................................ 0 - --------------------------------------------------- Total distributions to shareholders............ (671,801) - --------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from shares sold........................ 4,600,357 Proceeds from reinvestment of distributions...... 369,743 Payment for shares redeemed...................... (2,804,295) - --------------------------------------------------- Net increase (decrease) in net assets resulting from capital share transactions.............. 2,165,805 - --------------------------------------------------- Total increase (decrease) in net assets...... 2,703,494 NET ASSETS - --------------------------------------------------- Beginning of year................................ 13,121,327 - --------------------------------------------------- END OF YEAR...................................... $15,824,821 - --------------------------------------------------- Undistributed net investment income................ $ 6,150 - ---------------------------------------------------
SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 35 (logo) EVERGREEN - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS Year Ended August 31, 1996
(logo) (logo) (logo) (logo) (logo) FLORIDA NORTH SOUTH HIGH INCOME FLORIDA GEORGIA CAROLINA CAROLINA FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income............................ $4,708,138 $ 8,509,981 $ 565,522 $ 2,585,742 $ 384,455 Net realized gain (loss) on investments.......... (67,136) 1,550,230 28,904 483,051 10,377 Net change in unrealized appreciation (depreciation) on investments.................. (42,880) (2,163,335) 57,035 (416,432) 19,665 - ------------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations................................... 4,598,122 7,896,876 651,461 2,652,361 414,497 - ------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income Class A........................................ (4,083,337) (6,726,492) (100,626) (396,192) (38,206) Class B........................................ (562,849) (1,290,196) (357,853) (2,003,550) (168,950) Class Y........................................ (61,952) (417,123) (109,101) (147,923) (177,721) - ------------------------------------------------------------------------------------------------------------------------- Total distributions to shareholders............ (4,708,138) (8,433,811) (567,580) (2,547,665) (384,877) - ------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from shares sold........................ 51,887,683 23,857,675 5,651,629 10,964,230 4,780,175 Proceeds from reinvestment of distributions...... 1,815,929 2,678,816 366,974 1,752,076 251,384 Payment for shares redeemed...................... (18,826,666) (36,571,005) (4,232,687) (10,003,099) (1,208,640) - ------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from capital share transactions.............. 34,876,946 (10,034,514) 1,785,916 2,713,207 3,822,919 - ------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets...... 34,766,930 (10,571,449) 1,869,797 2,817,903 3,852,539 NET ASSETS Beginning of year................................ 62,688,231 167,402,171 10,974,591 58,324,498 5,825,092 - ------------------------------------------------------------------------------------------------------------------------- END OF YEAR...................................... $97,455,161 $156,830,722 $12,844,388 $61,142,401 $9,677,631 - ------------------------------------------------------------------------------------------------------------------------- Undistributed net investment income (distributions in excess of net investment income).............. $ (7,223) $ 98,832 $ 1,349 $ 88,212 $ 477 - ------------------------------------------------------------------------------------------------------------------------- (logo) VIRGINIA FUND - --------------------------------------------------- OPERATIONS Net investment income............................ $ 458,280 Net realized gain (loss) on investments.......... (98,854) Net change in unrealized appreciation (depreciation) on investments.................. 47,564 - --------------------------------------------------- Net increase in net assets resulting from operations................................... 406,990 - --------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income Class A........................................ (117,625) Class B........................................ (238,415) Class Y........................................ (105,354) - --------------------------------------------------- Total distributions to shareholders............ (461,394) - --------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from shares sold........................ 6,625,000 Proceeds from reinvestment of distributions...... 309,870 Payment for shares redeemed...................... (1,791,146) - --------------------------------------------------- Net increase (decrease) in net assets resulting from capital share transactions.............. 5,143,724 - --------------------------------------------------- Total increase (decrease) in net assets...... 5,089,320 NET ASSETS Beginning of year................................ 8,032,007 - --------------------------------------------------- END OF YEAR...................................... $13,121,327 - --------------------------------------------------- Undistributed net investment income (distributions in excess of net investment income).............. $ 1,382 - ---------------------------------------------------
SEE COMBINED NOTES TO FINANCIAL STATEMENTS. 36 (logo) EVERGREEN - -------------------------------------------------------------------------------- COMBINED NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES The Evergreen State Tax Free Funds consist of Evergreen Florida High Income Municipal Bond Fund ("Florida High Income Fund"), Evergreen Florida Municipal Bond Fund ("Florida Fund"), Evergreen Georgia Municipal Bond Fund ("Georgia Fund"), Evergreen North Carolina Municipal Bond Fund ("North Carolina Fund"), Evergreen South Carolina Municipal Bond Fund ("South Carolina Fund") and Evergreen Virginia Municipal Bond Fund ("Virginia Fund"), (collectively, the "Funds"). The Funds are registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as non-diversified, open-end management investment companies. Each Fund, except Florida High Income Fund, is a separate series of Evergreen Investment Trust. Florida High Income Fund is a series of Evergreen Municipal Trust. The Funds offer Class A, Class B and Class Y shares. Class A shares are sold with a maximum front-end sales charge of 4.75%. Class B shares are sold without a front-end sales charge, but pay a higher ongoing distribution fee than Class A. Class B shares are sold subject to a contingent deferred sales charge that is payable upon redemption and decreases depending on how long the shares have been held. Class Y shares are sold at net asset value and are not subject to contingent deferred sales charges or distribution fees. Class Y shares are sold only to investment advisory clients of First Union Corporation ("First Union") and its affiliates, certain institutional investors or Class Y shareholders of record of certain other funds managed by First Union and its affiliates as of December 30, 1994. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with generally accepted accounting principles, which require management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. A. VALUATION OF SECURITIES An independent pricing service values each Fund's municipal bonds at fair value using a variety of factors which may include yield, liquidity, interest rate risk, credit quality, coupon, maturity and type of issue. Securities for which valuations are not available from an independent pricing service, including restricted securities, are valued at fair value as determined in good faith according to procedures established by the Board of Trustees. Short-term investments with remaining maturities of 60 days or less are carried at amortized cost, which approximates market value. B. SECURITY TRANSACTIONS AND INVESTMENT INCOME Securities transactions are accounted for no later than one business day after the trade date. Realized gains and losses are computed on the identified cost basis. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. C. FEDERAL INCOME TAXES The Funds have qualified and intend to continue to qualify as regulated investment companies under the Internal Revenue Code of 1986, as amended (the "Code"). Thus, the Funds will not incur any federal income tax liability since they are expected to distribute all of their net investment company taxable income, net tax-exempt income and net capital gains, if any, to their shareholders. The Funds also intend to avoid any excise tax liability by making the required distributions under the Code. Accordingly, no provision for federal income taxes is required. To the extent that realized capital gains can be offset by capital loss carryforwards, it is each Fund's policy not to distribute such gains. D. DISTRIBUTIONS Distributions from net investment income for each Fund are declared daily and paid monthly. Distributions from net realized capital gains, if any, are paid at least annually. Distributions to shareholders are recorded at the close of business on the ex-dividend date. Income and capital gains distributions to shareholders are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. The significant differences between financial statement amounts available for distributions and distributions made in accordance with income tax regulations are primarily due to differing treatment of market discount on securities. E. CLASS ALLOCATIONS Income, expenses (other than class specific expenses) and realized and unrealized gains and losses are prorated among the classes based on the relative net assets of each class. Currently, class specific expenses are limited to expenses incurred under the Distribution Plans for each class. F. ORGANIZATION EXPENSES Organization expenses for the Florida High Income Fund are amortized to operations over a five-year period beginning June 30, 1995 on a straight-line basis. In the event any of the initial shares of the Fund are redeemed by any holder during the five-year amortization period, redemption proceeds will be reduced by any unamortized organization expenses in the same proportion as the number of initial shares being redeemed bears to the number of initial shares outstanding at the time of the redemption. 37 (logo) EVERGREEN - -------------------------------------------------------------------------------- COMBINED NOTES TO FINANCIAL STATEMENTS (CONTINUED) Organization expenses of the Florida, Georgia, North Carolina, South Carolina and Virginia Funds were initially borne by the Funds' prior administrator. As a result of a change in the administration agreement, First Union purchased the remaining unreimbursed organizational expenses from the prior administrator. As of, and for the year ended August 31, 1997, the Funds paid and have a remaining liability to First Union as follows:
REMAINING PAYMENTS LIABILITY - ----------------------------------------------------------------------- Florida Fund................................... $10,301 $11,093 Georgia Fund................................... 9,791 9,520 North Carolina Fund............................ 26,702 0 South Carolina Fund............................ 26,658 30,466 Virginia Fund.................................. 8,886 9,569
2. CAPITAL SHARE TRANSACTIONS Each of the Funds has an unlimited number of shares of beneficial interest with a par value of $0.0001 authorized. Shares of beneficial interest of the Funds are currently divided into Class A, Class B and Class Y. Transactions in shares of the Funds were as follows:
YEAR ENDED AUGUST 31, 1997 1996 -------------------------- -------------------------- FLORIDA HIGH INCOME FUND SHARES AMOUNT SHARES AMOUNT - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A Shares sold............................................................ 4,908,227 $ 52,353,817 3,124,792 $ 32,820,683 Shares issued in reinvestment of distributions......................... 218,163 2,333,137 141,897 1,492,720 Shares redeemed........................................................ (1,431,303) (15,236,336) (1,673,161) (17,673,622) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 3,695,087 $ 39,450,618 1,593,528 $ 16,639,781 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS B Shares sold............................................................ 4,247,193 $ 45,291,821 1,606,756 $ 16,929,901 Shares issued in reinvestment of distributions......................... 89,841 961,874 29,466 309,488 Shares redeemed........................................................ (352,500) (3,764,886) (93,856) (985,765) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 3,984,534 $ 42,488,809 1,542,366 $ 16,253,624 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS Y Shares sold............................................................ 443,071 $ 4,739,164 203,571 $ 2,137,099 Shares issued in reinvestment of distributions......................... 5,518 59,153 1,303 13,721 Shares redeemed........................................................ (56,700) (603,947) (15,879) (167,279) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 391,889 $ 4,194,370 188,995 $ 1,983,541 - ----------------------------------------------------------------------------------------------------------------------------------
FLORIDA FUND - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A Shares sold............................................................ 680,065 $ 6,676,415 647,176 $ 6,349,216 Shares issued in reinvestment of distributions......................... 200,942 1,980,889 198,575 1,954,093 Shares redeemed........................................................ (2,225,426) (21,851,674) (2,919,201) (28,758,982) - ---------------------------------------------------------------------------------------------------------------------------------- Net decrease........................................................... (1,344,419) $(13,194,370) (2,073,450) $(20,455,673) - ---------------------------------------------------------------------------------------------------------------------------------- CLASS B Shares sold............................................................ 586,099 $ 5,756,602 720,789 $ 7,109,005 Shares issued in reinvestment of distributions......................... 77,038 759,420 67,958 668,617 Shares redeemed........................................................ (503,356) (4,943,204) (621,849) (6,110,433) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 159,781 $ 1,572,818 166,898 $ 1,667,189 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS Y Shares sold............................................................ 1,566,132 $ 15,391,199 1,061,203 $ 10,399,454 Shares issued in reinvestment of distributions......................... 13,894 137,024 5,711 56,106 Shares redeemed........................................................ (353,969) (3,487,120) (172,594) (1,701,590) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 1,226,057 $ 12,041,103 894,320 $ 8,753,970 - ----------------------------------------------------------------------------------------------------------------------------------
38 (logo) EVERGREEN - -------------------------------------------------------------------------------- COMBINED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED AUGUST 31, 1997 1996 -------------------------- -------------------------- GEORGIA FUND SHARES AMOUNT SHARES AMOUNT - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A Shares sold............................................................ 58,988 $ 571,356 37,924 $ 365,163 Shares issued in reinvestment of distributions......................... 7,041 68,727 7,779 75,126 Shares redeemed........................................................ (47,699) (464,268) (63,160) (605,087) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease)................................................ 18,330 $ 175,815 (17,457) $ (164,798) - ---------------------------------------------------------------------------------------------------------------------------------- CLASS B Shares sold............................................................ 234,534 $ 2,292,070 268,620 $ 2,600,226 Shares issued in reinvestment of distributions......................... 30,017 293,086 26,313 253,826 Shares redeemed........................................................ (134,483) (1,307,027) (122,257) (1,183,493) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 130,068 $ 1,278,129 172,676 $ 1,670,559 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS Y Shares sold............................................................ 43,212 $ 421,927 280,783 $ 2,686,240 Shares issued in reinvestment of distributions......................... 6,202 60,474 3,963 38,022 Shares redeemed........................................................ (99,306) (966,718) (256,913) (2,444,107) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease)................................................ (49,892) $ (484,317) 27,833 $ 280,155 - ----------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA FUND - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A Shares sold............................................................ 104,597 $ 1,069,375 118,007 $ 1,198,058 Shares issued in reinvestment of distributions......................... 27,845 283,991 27,147 275,346 Shares redeemed........................................................ (150,887) (1,540,570) (176,511) (1,780,168) - ---------------------------------------------------------------------------------------------------------------------------------- Net decrease........................................................... (18,445) $ (187,204) (31,357) $ (306,764) - ---------------------------------------------------------------------------------------------------------------------------------- CLASS B Shares sold............................................................ 387,839 $ 3,937,543 635,229 $ 6,447,862 Shares issued in reinvestment of distributions......................... 148,184 1,511,443 144,603 1,466,473 Shares redeemed........................................................ (839,134) (8,524,353) (759,219) (7,700,019) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease)................................................ (303,111) $ (3,075,367) 20,613 $ 214,316 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS Y Shares sold............................................................ 84,295 $ 853,799 327,111 $ 3,318,310 Shares issued in reinvestment of distributions......................... 2,138 21,878 1,016 10,257 Shares redeemed........................................................ (74,420) (757,802) (51,457) (522,912) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 12,013 $ 117,875 276,670 $ 2,805,655 - ----------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA FUND - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A Shares sold............................................................ 41,892 $ 414,564 31,170 $ 305,932 Shares issued in reinvestment of distributions......................... 2,239 22,308 1,829 17,842 Shares redeemed........................................................ (29,248) (286,768) (9,800) (95,582) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 14,883 $ 150,104 23,199 $ 228,192 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS B Shares sold............................................................ 55,162 $ 544,288 109,335 $ 1,062,828 Shares issued in reinvestment of distributions......................... 14,381 142,689 12,969 126,461 Shares redeemed........................................................ (41,753) (410,305) (49,850) (485,446) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 27,790 $ 276,672 72,454 $ 703,843 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS Y Shares sold............................................................ 400,553 $ 3,977,215 349,743 $ 3,411,415 Shares issued in reinvestment of distributions......................... 18,276 181,369 10,998 107,081 Shares redeemed........................................................ (193,151) (1,917,807) (65,167) (627,612) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 225,678 $ 2,240,777 295,574 $ 2,890,884 - ----------------------------------------------------------------------------------------------------------------------------------
39 (logo) EVERGREEN - -------------------------------------------------------------------------------- COMBINED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED AUGUST 31, 1997 1996 -------------------------- -------------------------- VIRGINIA FUND SHARES AMOUNT SHARES AMOUNT - ---------------------------------------------------------------------------------------------------------------------------------- CLASS A Shares sold............................................................ 52,270 $ 516,653 105,025 $ 1,032,730 Shares issued in reinvestment of distributions......................... 12,391 122,884 10,186 99,877 Shares redeemed........................................................ (71,543) (705,708) (21,674) (211,176) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease)................................................ (6,882) $ (66,171) 93,537 $ 921,431 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS B Shares sold............................................................ 127,982 $ 1,276,030 145,062 $ 1,427,003 Shares issued in reinvestment of distributions......................... 18,384 182,440 19,108 187,592 Shares redeemed........................................................ (96,368) (959,225) (74,064) (721,093) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 49,998 $ 499,245 90,106 $ 893,502 - ---------------------------------------------------------------------------------------------------------------------------------- CLASS Y Shares sold............................................................ 284,030 $ 2,807,674 425,577 $ 4,165,267 Shares issued in reinvestment of distributions......................... 6,490 64,419 2,286 22,401 Shares redeemed........................................................ (114,905) (1,139,362) (87,094) (858,877) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase........................................................... 175,615 $ 1,732,731 340,769 $ 3,328,791 - ----------------------------------------------------------------------------------------------------------------------------------
3. SECURITIES TRANSACTIONS Cost of purchases and proceeds from sales of investment securities (excluding short-term securities) were as follows for the year ended August 31, 1997:
COST OF PROCEEDS PURCHASES FROM SALES - ------------------------------------------------------------------------- Florida High Income Fund................... $127,507,828 $43,933,866 Florida Fund............................... 62,562,977 67,138,568 Georgia Fund............................... 4,761,178 4,200,233 North Carolina Fund........................ 29,901,470 34,034,440 South Carolina Fund........................ 9,501,226 6,901,828 Virginia Fund.............................. 12,133,746 10,145,848
On August 31, 1997, the tax cost and composition of gross unrealized appreciation and depreciation of investment securities based on the aggregate cost of investments for federal income tax purposes was as follows:
GROSS GROSS TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION APPRECIATION - --------------------------------------------------------------------------------------------------------- Florida High Income Fund................... $185,025,116 $7,034,248 $(62,286) $6,971,962 Florida Fund............................... 150,941,611 8,172,823 (2,397) 8,170,426 Georgia Fund............................... 13,281,033 831,815 0 831,815 North Carolina Fund........................ 56,074,912 3,670,746 0 3,670,746 South Carolina Fund........................ 12,544,323 527,108 0 527,108 Virginia Fund.............................. 15,003,682 568,192 (1,185) 567,007
As of August 31, 1997, the Funds had capital loss carryovers for federal income tax purposes as follows:
EXPIRATION --------------------------------- 2002 2003 2004 ---------- -------- ------- Florida High Income Fund............................................ $ 577,000 $635,000 $64,000 Georgia Fund........................................................ -- 603,000 -- North Carolina Fund................................................. 3,515,000 -- -- Virginia Fund....................................................... 175,000 30,000 --
40 (logo) EVERGREEN - -------------------------------------------------------------------------------- COMBINED NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. DISTRIBUTION PLANS Evergreen Keystone Distributor, Inc. ("EKD"), a wholly-owned subsidiary of The BISYS Group Inc. ("BISYS") serves as the principal underwriter for each of the Funds. Each Fund has adopted a distribution plan for each class of shares as allowed by Rule 12b-1 of the 1940 Act. Distribution plans permit each Fund to reimburse its principal underwriter for costs related to selling shares of the Fund and for various other services. These costs, which consist primarily of commissions and services fees to broker-dealers who sell shares of the Fund, are paid by shareholders through expenses called "Distribution Plan expenses." Each class, except Class Y, currently pays an annual service fee equal to 0.25% of the average daily net assets of the class. Class B also presently pays an annual distribution fee equal to 0.75% of the average daily net assets of the class. Distribution Plan expenses are calculated daily and paid monthly. The Funds have entered into a Shareholder Services Agreement with First Union Brokerage Services ("FUBS"), an affiliate of First Union, whereby they will compensate FUBS up to an annual fee of 0.25% of Class B average daily net assets, as referred to above, for certain services provided to shareholders and/or maintenance of shareholder accounts relating to each of the Fund's Class B shares. During the year ended August 31, 1997, amounts paid or accrued to EKD and fees waived, if any, pursuant to each Fund's Class A and Class B Distribution Plans were as follows:
FEES WAIVED CLASS A CLASS B CLASS A - ------------------------------------------------------------------------------------------------------- Florida High Income Fund............................................ $235,662 $383,197 $ 0 Florida Fund........................................................ 275,983 298,114 191,541 Georgia Fund........................................................ 5,499 96,055 0 North Carolina Fund................................................. 20,523 490,164 0 South Carolina Fund................................................. 2,271 45,393 0 Virginia Fund....................................................... 7,230 61,471 0
EKD intends, but is not obligated, to continue to pay distribution costs that exceed the current annual payments from the Fund. EKD intends to seek full payment of such distribution costs from the Fund at such time in the future as, and to the extent that, payment thereof by the Class B shares would be within permitted limits. EKD has advised the Funds that it has retained front-end sales charges resulting from the sales of Class A shares during the year ended August 31, 1997 as follows: Florida High Income Fund................................ $34,454 Florida Fund............................................ 22,335 Georgia Fund............................................ 2,488 North Carolina Fund..................................... 2,377 South Carolina Fund..................................... 710 Virginia Fund........................................... 1,596
Contingent deferred sales charges paid by redeeming shareholders are paid to EKD. 5. INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND OTHER AFFILIATED TRANSACTIONS The Capital Management Group of First Union National Bank of North Carolina ("CMG"), a subsidiary of First Union, serves as the investment adviser to each Fund and is paid a management fee that is computed daily and paid monthly. CMG is paid at an annual rate of 0.50% of the average daily net assets of the Florida Fund, Georgia Fund, North Carolina Fund, South Carolina Fund and Virginia Fund. CMG is paid at an annual rate of 0.60% of the average daily net assets of the Florida High Income Fund. For each Fund, Evergreen Keystone Investment Services, Inc. ("EKIS"), a subsidiary of First Union, is the administrator. Prior to March 11, 1997, Evergreen Asset Management Corp. ("Evergreen Asset"), a wholly-owned subsidiary of First Union, was the administrator. Furman Selz LLC ("Furman Selz") was the sub-administrator through December 31, 1996. Effective January 1, 1997, BISYS acquired Furman Selz' mutual fund unit and accordingly BISYS Fund Services became sub-administrator to each of the Funds. The administrator and sub-administrator for each Fund are entitled to an annual fee based on the average daily net assets of the funds administered by EKIS for which First Union or its investment advisory subsidiaries are also the investment advisers. The administration fee is calculated by applying percentage rates, which start at 0.05% and decline to 0.01% per annum as net assets increase, to the average daily net asset value of each Fund. The sub-administration fee is calculated by applying percentage rates, which start at 0.01% and decline to 0.004% per annum as net assets increase, to the average daily net asset value of each Fund. BISYS, as sub-administrator, compensates the officers of each Fund. 41 (logo) EVERGREEN - -------------------------------------------------------------------------------- COMBINED NOTES TO FINANCIAL STATEMENTS (CONTINUED) For the year ended August 31, 1997, investment management fees and administration fees were waived and/or expenses reimbursed as follows:
MANAGEMENT FEES ADMINISTRATION EXPENSES WAIVED FEES WAIVED REIMBURSED - ---------------------------------------------------------------------------------------------------- Florida High Income Fund............................... $330,629 $ 0 $ 0 Florida Fund........................................... 81,274 0 0 Georgia Fund........................................... 66,245 4,027 46,947 South Carolina Fund.................................... 58,299 3,810 75,498 Virginia Fund.......................................... 70,972 4,281 38,927
During the year ended August 31, 1997, the Funds paid or accrued to EKIS the following amounts for certain administrative services:
Florida High Income Fund................................ $43,778 Florida Fund............................................ 52,171 Georgia Fund............................................ 4,368 North Carolina Fund..................................... 20,199 South Carolina Fund..................................... 3,810 Virginia Fund........................................... 8,940
Effective May 5, 1997, Evergreen Keystone Service Company ("EKSC"), a wholly-owned subsidiary of Keystone Investment Management Company ("Keystone"), a subsidiary of First Union, began providing transfer and dividend disbursing agent services for the Funds that were formerly provided by State Street Bank and Trust Company ("State Street"). Officers of the Funds and affiliated Trustees receive no compensation directly from the Funds. 6. EXPENSE OFFSET ARRANGEMENT The Funds have entered into an expense offset arrangement with their custodian. The assets deposited with the custodian under this expense offset arrangement could have been invested in income-producing assets. 7. DEFERRED TRUSTEES' FEES Each Independent Trustee of each Fund may defer any or all compensation related to performance of their duties as Trustees. The Trustees' deferred balances are allocated to deferral accounts which are included in the accrued expenses for the Fund. The investment performance of the deferral accounts is based on the investment performance of certain Evergreen Funds. Any gains earned or losses incurred in the deferral accounts are reported in the Funds' Trustees' fees and expenses. Trustees will be paid either in one lump sum or in quarterly installments for up to ten years at their election, not earlier than either the year in which the Trustee ceases to be a member of the Board of Trustees or January 1, 2000. As of August 31, 1997, the value of the Trustees deferral account for each Fund was as follows: Florida High Income Fund................................. $6,242 Florida Fund............................................. 6,265 Georgia Fund............................................. 512 North Carolina Fund...................................... 2,436 South Carolina Fund...................................... 388 Virginia Fund............................................ 480
8. FINANCING AGREEMENT On October 31, 1996, a financing agreement between all of the Evergreen Funds and State Street, Societe Generale and ABN Amro Bank N.V. (collectively, the "Banks") became effective. Under this agreement, the Banks provide an unsecured credit facility in the aggregate amount of $225 million ($112.5 million committed and $112.5 million uncommitted) allocated evenly among the Banks. Borrowings under this facility bear interest at 0.75% per annum above the Federal Funds rate. A commitment fee of 0.10% per annum will be incurred on the unused portion of the committed facility which will be allocated to all participating funds. State Street acts as agent for the Banks, and as agent is entitled to a fee of $15,000 which is allocated to all of the Evergreen Funds. During the year ended August 31, 1997, the Funds had no borrowings under this agreement. 9. CONCENTRATION OF CREDIT RISK Each Fund invests a substantial portion of its assets in issuers located in a single state, therefore, it may be more affected by economic and political developments in that state or region than would be a comparable general tax-exempt mutual fund. 42 (logo) EVERGREEN - -------------------------------------------------------------------------------- INDEPENDENT AUDITORS' REPORT The Trustees and Shareholders Evergreen Investment Trust We have audited the accompanying statements of assets and liabilities, including the schedules of investments of the Evergreen State Tax Free Funds listed below as of August 31, 1997, and the related statements of operations, statements of changes in net assets, and financial highlights for each of the years or periods listed below: EVERGREEN FLORIDA MUNICIPAL BOND FUND-- statement of operations for the year ended August 31, 1997, statements of changes in net assets for each of the years in the two-year period ended August 31, 1997 and the financial highlights for the periods presented on pages 10 and 11. EVERGREEN GEORGIA MUNICIPAL BOND FUND-- statement of operations for the year ended August 31, 1997, statements of changes in net assets for each of the years in the two-year period ended August 31, 1997 and the financial highlights for the periods presented on pages 12 and 13. EVERGREEN NORTH CAROLINA MUNICIPAL BOND FUND-- statement of operations for the year ended August 31, 1997, statements of changes in net assets for each of the years in the two-year period ended August 31, 1997 and the financial highlights for the periods presented on pages 14 and 15. EVERGREEN SOUTH CAROLINA MUNICIPAL BOND FUND-- statement of operations for the year ended August 31, 1997, statements of changes in net assets for each of the years in the two-year period ended August 31, 1997 and the financial highlights for the periods presented on pages 16 and 17. EVERGREEN VIRGINIA MUNICIPAL BOND FUND-- statement of operations for the year ended August 31, 1997, statements of changes in net assets for each of the years in the two-year period ended August 31, 1997 and the financial highlights for the periods presented on pages 18 and 19. These financial statements and 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. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 1997 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Evergreen Florida Municipal Bond Fund, Evergreen Georgia Municipal Bond Fund, Evergreen North Carolina Municipal Bond Fund, Evergreen South Carolina Municipal Bond Fund and Evergreen Virginia Municipal Bond Fund as of August 31, 1997, the results of their operations, the changes in their net assets and financial highlights for each of the years or periods specified in the first paragraph above in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Boston, Massachusetts October 10, 1997 43 (logo) EVERGREEN - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT ACCOUNTANTS TO THE TRUSTEES AND SHAREHOLDERS OF EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Evergreen Florida High Income Municipal Bond Fund (the "Fund"), one of the Evergreen Municipal Trust Portfolios, at August 31, 1997, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for the two years in the period ended August 31, 1997 and for the four month period ended August 31, 1995, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 1997 by correspondence with the custodian and the application of alternative auditing procedures where securities purchased had not been received, provide a reasonable basis for the opinion expressed above. The financial statements of the Fund for the year ended and indicated periods prior to, April 30, 1995 were audited by other independent accountants whose report dated June 2, 1995 expressed an unqualified opinion. Price Waterhouse LLP 1177 Avenue of the Americas New York, New York October 14, 1997 44 (logo) EVERGREEN - -------------------------------------------------------------------------------- FEDERAL INCOME TAX STATUS OF DIVIDENDS (UNAUDITED) 100% of the dividends distributed by Florida High Income Fund, Georgia Fund and the North Carolina Fund and 99% of the dividends distributed by Florida Fund, South Carolina Fund and the Virginia Fund for the year ended August 31, 1997 are exempt from federal income tax, other than alternative minimum tax. 45 (This Page Left Blank Intentionally) (This Page Left Blank Intentionally) (This Page Left Blank Intentionally) This brochure must be preceded or accompanied by a prospectus of an Evergreen fund contained herein. The prospectus contains more complete information, including fees and expenses, and should be read carefully before investing or sending money. ________________________________________ | NOT May lose value | | FDIC No bank guarantee | | INSURED | |________________________________________| Evergreen Funds Distributor, Inc. 62544 540712 Rev. 01 10/97 -----END PRIVACY-ENHANCED MESSAGE-----