-----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, I7lFfmYQ4OM0qqRkVagrjjAa+i0tT1pMzHdARiTDoNpAHR0jTbZLNCWFmxBraITr 51esR7WCDgQ+hVtWN5BshQ== 0000806176-96-000033.txt : 19960708 0000806176-96-000033.hdr.sgml : 19960708 ACCESSION NUMBER: 0000806176-96-000033 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960705 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREMIER STATE MUNICIPAL BOND FUND CENTRAL INDEX KEY: 0000806176 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MA FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04906 FILM NUMBER: 96591491 BUSINESS ADDRESS: STREET 1: 144 GENN CURTISS BLVD CITY: NUIONDALE STATE: NY ZIP: 11556 BUSINESS PHONE: 2129226805 FORMER COMPANY: FORMER CONFORMED NAME: PREMIER SERIES TAX EXEMPT BOND FUND DATE OF NAME CHANGE: 19870224 N-30D 1 ANNUAL REPORT PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES LETTER TO SHAREHOLDERS Dear Shareholder: We are pleased to provide you with this report on the Premier State Municipal Bond Fund - Virginia Series. For its annual reporting period ended April 30, 1996, your Series produced a total return of 7.32% for Class A shares, 6.77% for Class B shares and, since their inception on August 15, 1995, 4.02% for Class C shares.* Income dividends exempt from Federal and Virginia State personal income taxes of approximately $.929 for Class A shares, $.843 for Class B shares and $.567 for Class C shares were paid.** This amounts to an annualized tax-free distribution rate per share of 5.44%, 5.17% and 4.90% for Class A, Class B and Class C shares respectively.*** THE ECONOMY Concerns that the economy was heading toward recession were eased by the recent release of brighter-than-expected reports on employment and consumer spending. Consequently, the Federal Reserve Board refrained from making any further reductions in the Federal Funds rate; the last easing of this benchmark interest rate occurred on January 31. In reaction to the more optimistic economic news (and the related fears of a potential rekindling of inflation), long-term interest rates as measured by 30-year Treasury bonds have risen nearly one percentage point since February. The rosier outlook for the economy was spearheaded by reports of large gains in employment for two consecutive months (February and March). Furthermore, personal income and expenditures data indicated that consumers continued to spend, despite their present high level of installment credit. Retail sales reports have correspondingly edged higher, confirming a modest recovery in consumer spending from its year-end slump. Supporting the growing consensus that the economy has picked up steam were reports of slow but steady growth in the manufacturing sector. After adjusting data for the 17-day General Motors strike, industrial output rose modestly. New orders for durable goods, a closely watched indicator of future hiring and production, also posted gains. Despite the economy's apparent recovery from its year-end pause, inflation has remained under control. Through March of this year, the Consumer Price Index rose at an annual rate of 2.8%. There appear to be few signs of inflationary pressure in the economy. Factories are running at a relatively comfortable rate of capacity (82.5%), markedly below this expansion's peak of 85.1% reached over a year ago. With major industries trying to reduce inventories, there is little to suggest that product pricing will surge upwards. Reflecting this absence of so-called pipeline inflationary pressure, price increases at both the wholesale and production levels of the economy remained similarly under control. We believe the cautionary stance of the Federal Reserve regarding additional reductions in interest rates combined with the fiscal restraint from reduced government spending should serve as additional moderating forces against any resurgence in inflation. We are mindful, however, of a potential change in what has been a benign inflation picture. The recent rise in oil prices, along with strength in other commodity prices such as grain, is not to be dismissed lightly. While they may be only aberrations of a temporary nature, they also could represent early warning signs of a fundamental change in inflation which will be seen later in the year. MARKET ENVIRONMENT The bond market has recently risen from its lows and is showing stable to improving signs. This is in reaction to a favorable Producer Price Index report and, to some extent, a better-than-expected "beige book" survey from the Fed which showed "moderate" growth coupled with "generally subdued" price increases. These reports, in conjunction with recently released declining retail sales figures, are changing the mood of the market. This change in market sentiment reflects a shift in the stance of the Federal Reserve. The Fed, recently viewed as moving from easing to tightening, could be on hold for a while. It is possible that the Fed might be slow to tighten after being severely criticized in 1994 when they tightened preemptively, without overt evidence of an inflation problem. The municipal market has outperformed Treasuries lately, shaking off the residual effects of the flat tax proposal. Although not at the level it saw before the flat tax proposal, which was 81% of Treasuries for long insured paper in early 1995, the 87% current level is an improvement from recent readings which had been in the low 90s. The municipal market is also benefiting from a forward supply calendar that needs a 40-50 basis point drop in rates for 30% of it to be brought to market. These rate-sensitive issues are usually refinancings of earlier bonds. THE PORTFOLIO The portfolio has stayed fully invested during this choppy time in the market. We have been trying to improve call features on many holdings through swap opportunities or new purchases in the primary market. Many of these issues are insured and carry superior market liquidity should we need to change our strategy later. At present, however, we remain comfortable with our security selections. We are encouraged by the positive supply pattern developing (mentioned above) and the upcoming June and July interest payment and maturity dates. These are critical dates when investors potentially seek to reinvest large sums of money into the municipal market. Included in this report is a series of detailed statements about your Series' holdings and its financial condition. We hope they are informative. Please know that we greatly appreciate your continued confidence in the Series and in The Dreyfus Corporation. Sincerely, (RICHARD J. MOYNIHAN - SIGNATURE) Richard J. Moynihan Director, Municipal Portfolio Management The Dreyfus Corporation May 15, 1996 New York, N.Y. * Total return includes reinvestment of dividends and any capital gains paid, without taking into account the maximum initial sales charge in the case of Class A shares or the applicable contingent deferred sales charge imposed on redemptions in the case of Class B shares and Class C shares. **Some income may be subject to the Federal Alternative Minimum Tax (AMT) for certain shareholders. Income may be subject to some state and local taxes for non-Virginia residents. ***Annualized distribution rate per share is based upon dividends per share paid from net investment income during the period, divided by the maximum offering price, in the case of Class A shares, or the net asset value per share, in the case of Class B and Class C shares, at the end of the period. PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES APRIL 30, 1996 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX Dollars $14,222 Lehman Brothers Municipal Bond Index* $13,810 Premier State Municipal Bond Fund, Virginia Series (Class A Shares) *Source: Lehman Brothers
AVERAGE ANNUAL TOTAL RETURNS CLASS A SHARES CLASS B SHARES % Return Reflecting % Return Applicable Contingent Reflecting % Return Deferred Sales % Return Without Maximum Initial Assuming No Charge Upon PERIOD ENDED 4/30/96 Sales Charge Sales Charge (4.5%) PERIOD ENDED 4/30/96 Redemption Redemption* 1 Year 7.32% 2.46% 1 Year 6.77% 3.76% From Inception (8/1/91) 8.08 7.03 From Inception (1/15/93) 5.50 4.96
ACTUAL AGGREGATE TOTAL RETURNS CLASS C SHARES % Return Reflecting Applicable Contingent % Return Deferred Sales Assuming No Charge Upon PERIOD ENDED 4/30/96 Redemption Redemption** From Inception (8/15/95) 4.02% 3.02% Past performance is not predictive of future performance. The above graph compares a $10,000 investment made in Class A shares of Premier State Municipal Bond Fund, Virginia Series on 8/1/91 (Inception Date) to a $10,000 investment made in the Lehman Brothers Municipal Bond Index on that date. For comparative purposes, the value of the Index on 7/31/91 is used as the beginning value on 8/1/91. All dividends and capital gain distributions are reinvested. Performance for Class B and Class C shares will vary from the performance of Class A shares shown above due to differences in charges and expenses. The Series invests primarily in Virginia municipal securities and its performance shown in the line graph takes into account the maximum initial sales charge on Class A shares and all other applicable fees and expenses. Unlike the Series, the Lehman Brothers Municipal Bond Index is an unmanaged total return performance benchmark for the long-term, investment-grade, geographically unrestricted tax exempt bond market, calculated by using municipal bonds selected to be representative of the municipal market overall. The Index does not take into account charges, fees and other expenses. Also, unlike the Fund which principally limits investments to Virginia municipal obligations, the Index is not State specific. These factors can contribute to the Index potentially outperforming the Series. Further information relating to Series performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the Prospectus and elsewhere in this report. * Maximum contingent deferred sales charge for Class B shares is 3% and is reduced to 0% after five years. **Maximum contingent deferred sales charge for Class C shares is 1% within one year of the date of purchase.
PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES STATEMENT OF INVESTMENTS APRIL 30, 1996 PRINCIPAL LONG-TERM MUNICIPAL INVESTMENTS-100.0% AMOUNT VALUE ________________ ______________ VIRGINIA-84.5% Alexandria Redevelopment and Housing Authority, Multi-Family Housing Mortgage Revenue (Buckingham Village Apartments) 6.125%, 7/1/2021........................................................ $ 3,000,000 $ 2,941,260 Augusta County Industrial Development Authority, HR (Augusta Hospital Corp. Project) 7%, 9/1/2021 (Prerefunded 9/1/2001) (a) 2,750,000 3,081,898 Capital Region Airport Commission, Airport Revenue (Richmond International Airport Projects) 5.625%, 7/1/2025 (Insured; AMBAC) 3,000,000 2,843,670 Charlottesville-Albemarle Airport Authority, Airport Revenue Refunding: 6.125%, 12/1/2009....................................................... 450,000 432,738 6.125%, 12/1/2013....................................................... 350,000 335,807 Chesapeake, Water and Sewer System Revenue, Refunding 6.50%, 7/1/2012....... 1,000,000 1,049,240 Chesapeake Bay Bridge and Tunnel District, General Resolution Revenue, Refunding 5%, 7/1/2022 (Insured; MBIA).................................. 5,410,000 4,767,779 Chesapeake Hospital Authority, Hospital Facility Revenue, Refunding (Chesapeake General Hospital) 5.25%, 7/1/2018 (Insured; MBIA)........... 1,000,000 906,920 Community Housing Finance Corp. Arlington County, Collateralized Mortgage Revenue, Refunding (Colonial Village Project) 6.25%, 6/1/2022 (Insured; FHA).......................................... 1,000,000 1,001,360 Covington-Alleghany County Industrial Development Authority, Hospital Facility Revenue (Alleghany Regional Hospital) 6.875%, 4/1/2022 (Prerefunded 4/1/2002) (a)............................. 1,000,000 1,106,940 Fairfax County Park Authority, Park Facilities Revenue 6.625%, 7/15/2020....................................................... 2,665,000 2,710,545 Fairfax County Water Authority, Water Revenue: 5%, 4/1/2016............................................................ 2,000,000 1,806,900 7.561%, 4/1/2029 (b,c).................................................. 2,000,000 1,710,000 Hanover County Industrial Development Authority, HR (Memorial Regional Medical Center Project) 5.50%, 8/15/2025 (Insured; MBIA) 1,000,000 930,670 Harrisonburg Redevelopment and Housing Authority, MFHR, Refunding (Hanover Crossing Apartments Project) 6.35%, 3/1/2023................... 2,000,000 2,003,800 Industrial Development Authority of Albermarle County, HR, Refunding (Martha Jefferson Hospital): 5.875%, 10/1/2013..................................................... 2,360,000 2,263,098 5.50%, 10/1/2020...................................................... 1,500,000 1,333,425 Industrial Development Authority of the City of Williamsburg, Hospital Facility Revenue (Williamsburg Community Hospital) 5.75%, 10/1/2022 2,000,000 1,794,360 Industrial Development Authority of Giles County, Exempt Facility Revenue (Hoechst Celanese Corp. Project) 5.95%, 12/1/2025........................................................ 3,000,000 2,919,690 PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996 PRINCIPAL LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE ________________ _____________ VIRGINIA (CONTINUED) Industrial Development Authority of the County of Henrico, SWDR (Browning-Ferris Industries of South Atlantic, Inc. Project) 5.45%, 1/1/2014......................................................... $ 3,500,000 $ 3,312,855 Industrial Development Authority of the County of Prince William: Hospital Facility Revenue (Potomac Hospital Corp. of Prince William) 6.85%, 10/1/2025...................................................... 1,000,000 1,043,820 HR, Refunding (Prince William Hospital) 5.625%, 4/1/2012...................................................... 1,000,000 944,700 Industrial Development Authority of the Town of West Point, SWDR (Chesapeake Corp. Project) 6.375%, 3/1/2019........................ 2,500,000 2,431,825 Nelson County Service Authority, Water and Sewer Revenue, Refunding 5.50%, 7/1/2018 (Insured; FGIC)......................................... 1,750,000 1,648,430 Norfolk Redevelopment and Housing Authority, Educational Facility Revenue (Tidewater Community College Campus) 5.875%, 11/1/2015.................. 1,000,000 976,210 Prince William County Park Authority, Revenue 6.875%, 10/15/2016...................................................... 3,000,000 3,195,630 Rector and Visitors of the University of Virginia, General Revenue Pledge 5.375%, 6/1/2020........................................................ 4,370,000 4,068,776 Richmond Industrial Development Authority, HR (Retreat Hospital) 7.35%, 7/1/2021 (Prerefunded 7/1/2001) (a).............................. 1,900,000 2,144,283 Richmond Metropolitan Authority, Expressway Revenue, Refunding 6.375%, 7/15/2016 (Insured; FGIC)....................................... 1,500,000 1,564,980 Southeastern Public Service Authority, Revenue 5.125%, 7/1/2013 (Insured; MBIA)........................................ 7,850,000 7,339,593 Upper Occoquan Sewer Authority, Regional Sewer Revenue: 6.50%, 7/1/2017 (Insured; MBIA) (Prerefunded 7/1/2001) (a).............. 1,000,000 1,098,140 5%, 7/1/2025 (Insured; MBIA)............................................ 4,000,000 3,508,920 Virginia Beach Development Authority Nursing Home Revenue (Sentara Life Care Corp.) 7.75%, 11/1/2021......... 1,000,000 1,096,670 Virginia Housing Development Authority: Commonwealth Mortgage: 6.20%, 7/1/2021....................................................... 3,255,000 3,221,929 6.85%, 1/1/2027....................................................... 2,000,000 2,040,300 Multi-Family Refunding 5.90%, 11/1/2017................................. 2,000,000 1,957,120 U. S. RELATED-15.5% Guam Airport Authority, Revenue 6.70%, 10/1/2023............................ 2,000,000 2,006,080 Commonwealth of Puerto Rico: 5.40%, 7/1/2025......................................................... 3,000,000 2,717,010 (Public Improvement) 6.80%, 7/1/2021 (Prerefunded 7/1/2002) (a)......... 1,000,000 1,122,000 PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996 PRINCIPAL LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE ________________ ______________ U. S. RELATED (CONTINUED) Puerto Rico Highway and Transportation Authority, Highway Revenue: 6.625%, 7/1/2018 (Prerefunded 7/1/2002) (a)............................. $ 2,000,000 $ 2,224,780 5.50%, 7/1/2026......................................................... 5,000,000 4,597,650 Virgin Islands Public Finance Authority, Revenue, Refunding, Matching Fund Loan Notes 7.25%, 10/1/2018........................................................ 1,500,000 1,578,405 ______________ TOTAL INVESTMENTS (cost $92,283,183)........................................ $91,780,206 ==============
SUMMARY OF ABBREVIATIONS AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance FGIC Financial Guaranty Insurance Company Insurance Corporation FHA Federal Housing Administration MFHR Multi-Family Housing Revenue HR Hospital Revenue SWDR Solid Waste Disposal Revenue
SUMMARY OF COMBINED RATINGS (UNAUDITED) FITCH (D) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE _____________ _____________ ___________________ _____________________ AAA Aaa AAA 31.5% AA Aa AA 20.6 A A A 35.2 BBB Baa BBB 11.0 Not Rated (e) Not Rated (e) Not Rated (e) 1.7 ___________ 100.0% ===========
NOTES TO STATEMENT OF INVESTMENTS: (a) Bonds which are prerefunded are collateralized by U.S. Government securities which are held in escrow and are used to pay principal and interest on the municipal issue and to retire the bonds in full at the earliest refunding date. (b) Inverse Floater Security f the interest rate is subject to change periodically. (c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At April 30, 1996, this security amounted to $1,710,000 or 1.8% of net assets. (d) Fitch currently provides creditworthiness information for a limited number of investments. (e) Securities which, while not rated by Fitch, Moody's or Standard & Poor's have been determined by the Manager to be of comparable quality to those rated securities in which the Series may invest. See notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1996 ASSETS: Investments in securities, at value (cost $92,283,183)-see statement...................................... $91,780,206 Cash.................................................................... 1,031,926 Interest receivable..................................................... 1,530,159 Receivable for shares of Beneficial Interest subscribed................. 208,537 Prepaid expenses........................................................ 3,900 _______________ 94,554,728 LIABILITIES: Due to Distributor...................................................... $32,981 Payable for shares of Beneficial Interest redeemed...................... 14,191 Accrued expenses........................................................ 72,788 119,960 ____________ _______________ NET ASSETS.................................................................. $94,434,768 =============== REPRESENTED BY: Paid-in capital......................................................... $95,195,136 Accumulated net realized (loss) on investments.......................... (257,391) Accumulated net unrealized (depreciation) on investments-Note 3......... (502,977) _______________ NET ASSETS at value......................................................... $94,434,768 =============== Shares of Beneficial Interest outstanding: Class A Shares (unlimited number of $.001 par value shares authorized)............... 3,759,009 =============== Class B Shares (unlimited number of $.001 par value shares authorized)............... 2,036,179 =============== Class C Shares (unlimited number of $.001 par value shares authorized)............... 10,194 =============== NET ASSET VALUE per share: Class A Shares ($61,149,373 / 3,759,009 shares)...................................... $16.27 =============== Class B Shares ($33,119,613 / 2,036,179 shares)...................................... $16.27 =============== Class C Shares ($165,782 / 10,194 shares)............................................ $16.26 =============== See notes to financial statements. PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1996 INVESTMENT INCOME: INTEREST INCOME......................................................... $5,783,574 EXPENSES: Management fee-Note 2(a).............................................. $ 522,229 Shareholder servicing costs-Note 2(c)................................. 315,653 Distribution fees-Note 2(b)........................................... 157,882 Professional fees..................................................... 18,106 Prospectus and shareholders' reports.................................. 15,763 Custodian fees........................................................ 10,760 Registration fees..................................................... 1,648 Trustees' fees and expenses-Note 2(d)................................. 1,264 Miscellaneous......................................................... 116,338 ______________ TOTAL EXPENSES.................................................. 1,159,643 Less-management fee waived due to undertaking-Note 2(a)............................................. 522,229 ______________ NET EXPENSES.................................................... 637,414 _____________ INVESTMENT INCOME-NET........................................... 5,146,160 REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments-Note 3................................. $1,771,595 Net unrealized (depreciation) on investments............................ (539,154) _____________ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 1,232,441 _____________ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $6,378,601 ============= See notes to financial statements. PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED APRIL 30, _____________________________________ 1995 1996 _____________ _____________ OPERATIONS: Investment income-net................................................... $ 5,219,359 $ 5,146,160 Net realized gain (loss) on investments................................. (1,651,777) 1,771,595 Net unrealized appreciation (depreciation) on investments for the year.. 1,713,847 (539,154) _____________ _____________ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 5,281,429 6,378,601 _____________ _____________ DIVIDENDS TO SHAREHOLDERS: From investment income-net: Class A shares........................................................ (3,761,772) (3,546,219) Class B shares........................................................ (1,457,587) (1,598,256) Class C shares........................................................ - (1,685) In excess of net realized gain on investments: Class A shares........................................................ (120,788) - Class B shares........................................................ (53,700) - _____________ _____________ TOTAL DIVIDENDS................................................... (5,393,847) (5,146,160) _____________ _____________ BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold: Class A shares........................................................ 7,081,776 4,126,648 Class B shares........................................................ 5,599,985 5,468,182 Class C shares........................................................ - 171,138 Dividends reinvested: Class A shares........................................................ 2,086,577 1,849,325 Class B shares........................................................ 818,920 812,093 Class C shares........................................................ - 1,041 Cost of shares redeemed: Class A shares........................................................ (11,840,016) (8,185,998) Class B shares........................................................ (2,926,642) (2,280,799) _____________ _____________ INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS........................................... 820,600 1,961,630 _____________ _____________ TOTAL INCREASE IN NET ASSETS.................................... 708,182 3,194,071 NET ASSETS: Beginning of year....................................................... 90,532,515 91,240,697 _____________ _____________ End of year............................................................. $91,240,697 $94,434,768 ============= =============
PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES STATEMENT OF CHANGES IN NET ASSETS (CONTINUED) SHARES ____________________________________________________________________________________________ CLASS A CLASS B CLASS C __________________________ ____________________________________ ________________________ YEAR ENDED YEAR ENDED APRIL 30, YEAR ENDED APRIL 30, APRIL 30, __________________________ ____________________________________ 1995 1996 1995 1996 1996* ____________ ___________ _______________ _______________ ________________________ CAPITAL SHARE TRANSACTIONS: Shares sold.......... 447,976 249,234 356,143 328,113 10,131 Shares issued for dividends reinvested 132,774 111,225 52,168 48,831 63 Shares redeemed...... (761,303) (494,748) (187,333) (137,908) - ____________ ___________ _______________ _______________ ________________________ NET INCREASE (DECREASE) IN SHARES OUTSTANDING.... (180,553) (134,289) 220,978 239,036 10,194 ============ =========== =============== =============== ======================== * From August 15, 1995 (commencement of initial offering) to April 30, 1996. See notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Series' financial statements. CLASS A SHARES _______________________________________________________________________ YEAR ENDED APRIL 30, _______________________________________________________________________ PER SHARE DATA: 1992(1) 1993 1994 1995 1996 _____________ ___________ ___________ ____________ ___________ Net asset value, beginning of year........... $15.00 $15.50 $16.80 $16.02 $16.03 _____________ ___________ ___________ ____________ ___________ INVESTMENT OPERATIONS: Investment income-net........................ .78 1.00 .97 .94 .93 Net realized and unrealized gain (loss) on investments............................. .50 1.31 (.75) .04 .24 _____________ ___________ ___________ ____________ ___________ TOTAL FROM INVESTMENT OPERATIONS........... 1.28 2.31 .22 .98 1.17 _____________ ___________ ___________ ____________ ___________ DISTRIBUTIONS: Dividends from investment income-net......... (.78) (1.00) (.97) (.94) (.93) Dividends from net realized gain on investments - (.01) (.01) - - Dividends in excess of net realized gain on investments............................. - - (.02) (.03) - _____________ ___________ ___________ ____________ ___________ TOTAL DISTRIBUTIONS........................ (.78) (1.01) (1.00) (.97) (.93) _____________ ___________ ___________ ____________ ___________ Net asset value, end of year................. $15.50 $16.80 $16.02 $16.03 $16.27 ============= =========== =========== ============ =========== TOTAL INVESTMENT RETURN(2)....................... 11.54%(3) 15.32% 1.10% 6.39% 7.32% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets...... - .27% .46% .39% .50% Ratio of net investment income to average net assets 6.42%(3) 6.02% 5.64% 5.93% 5.58% Decrease reflected in above expense ratios due to undertakings by the Manager............. 1.22%(3) .76% .55% .55% .55% Portfolio Turnover Rate...................... 5.96%(4) 9.32% 30.69% 21.60% 50.06% Net Assets, end of year (000's Omitted)...... $23,096 $55,627 $65,279 $62,428 $61,149 (1) From August 1, 1991 (commencement of operations) to April 30, 1992. (2) Exclusive of sales load. (3) Annualized. (4) Not annualized. See notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES FINANCIAL HIGHLIGHTS (CONTINUED) Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Series' financial statements. CLASS B SHARES CLASS C SHARES ______________________________________ _________________________ YEAR ENDED YEAR ENDED APRIL 30, APRIL 30, ______________________________________ PER SHARE DATA: 1993(1) 1994 1995 1996 1996(2) _________ ________ ________ ________ _________________________ Net asset value, beginning of year.... $16.25 $16.80 $16.02 $16.03 $16.17 _________ ________ ________ ________ _________________________ INVESTMENT OPERATIONS: Investment income-net................. .26 .88 .85 .84 .57 Net realized and unrealized gain (loss) on investments............... .55 (.75) .04 .24 .09 _________ ________ ________ ________ _________________________ TOTAL FROM INVESTMENT OPERATIONS.... .81 .13 .89 1.08 .66 _________ ________ ________ ________ _________________________ DISTRIBUTIONS: Dividends from investment income-net.. (.26) (.88) (.85) (.84) (.57) Dividends from net realized gain on investments...................... - (.01) - - - Dividends in excess of net realized gain on investments...................... - (.02) (.03) - - _________ ________ ________ ________ _________________________ TOTAL DISTRIBUTIONS................. (.26) (.91) (.88) (.84) (.57) _________ ________ ________ ________ _________________________ Net asset value, end of year.......... $16.80 $16.02 $16.03 $16.27 $16.26 ========= ======== ======== ======== ========================= TOTAL INVESTMENT RETURN(3)................ 17.22%(4) .54% 5.83% 6.77% 5.64%(4) RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets.......................... .83%(4) 1.01% .90% 1.01% 1.21%(4) Ratio of net investment income to average net assets.................. 4.62%(4) 5.02% 5.40% 5.06% 4.55%(4) Decrease reflected in above expense ratios due to undertakings by the Manager.. .54%(4) .54% .55% .55% .52%(4) Portfolio Turnover Rate............... 9.32% 30.69% 21.60% 50.06% 50.06% Net Assets, end of year (000's Omitted) $8,402 $25,254 $28,813 $33,120 $166 (1) From January 15, 1993 (commencement of initial offering) to April 30, 1993. (2) From August 15, 1995 (commencement of initial offering) to April 30, 1996. (3) Exclusive of sales load. (4) Annualized. See notes to financial statements
PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES NOTES TO FINANCIAL STATEMENTS NOTE 1-SIGNIFICANT ACCOUNTING POLICIES: Premier State Municipal Bond Fund (the "Fund") is registered under the Investment Company Act of 1940 ("Act") as a non-diversified open-end management investment company and operates as a series company currently offering twelve series including the Virginia Series (the "Series"). The Fund's investment objective is to maximize current income exempt from Federal and, where applicable, from State income taxes, without undue risk. The Dreyfus Corporation ("Manager") serves as the Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc., (the "Distributor") acts as the distributor of the Fund's shares. The Series offers Class A, Class B and Class C shares. Class A shares are subject to a sales charge imposed at the time of purchase, Class B shares are subject to a contingent deferred sales charge imposed at the time of redemption on redemptions made within five years of purchase and Class C shares are subject to a contingent deferred sales charge imposed at the time of redemption on redemptions made within one year of purchase. Other differences between the three Classes include the services offered to and the expenses borne by each Class and certain voting rights. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. (A) PORTFOLIO VALUATION: The Series' investments (excluding options and financial futures on municipal and U.S. treasury securities) are valued each business day by an independent pricing service ("Service") approved by the Board of Trustees. Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are carried at fair value as determined by the Service, based on methods which include consideration of: yields or prices of municipal securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Options and financial futures on municipal and U.S. treasury securities are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market on each business day. Investments not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Interest income, adjusted for amortization of premiums and original issue discounts on investments, is earned from settlement date and recognized on the accrual basis. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after the trade date. The Series follows an investment policy of investing primarily in municipal obligations of one state. Economic changes affecting the state and certain of its public bodies and municipalities may affect the ability of issuers within the state to pay interest on, or repay principal of, municipal obligations held by the Series. PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES NOTES TO FINANCIAL STATEMENTS (CONTINUED) (C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gain are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. To the extent that net realized capital gain can be offset by capital loss carryovers, it is the policy of the Series not to distribute such gain. (D) FEDERAL INCOME TAXES: It is the policy of the Series to continue to qualify as a regulated investment company, which can distribute tax exempt dividends, by complying with the applicable provisions of the Internal Revenue Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all Federal income and excise taxes. The Fund has an unused capital loss carryover of approximately $148,000 available for Federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to April 30, 1996. If not applied, the carryover expires in fiscal 2003. NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to a management agreement ("Agreement") with the Manager, the management fee is computed at the annual rate of .55 of 1% of the value of the Series' average daily net assets and is payable monthly. The Agreement provides for an expense reimbursement from the Manager should the Series' aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Series for any full fiscal year. However, the Manager has undertaken from May 1, 1995 to waive receipt of the management fee payable to it by the Series until such time as the net assets of the Series exceed $100 million, regardless of whether they remain at that level. The management fee waived, pursuant to the undertaking, amounted to $522,229 for the year ended April 30, 1996. The undertaking may be extended, modified or terminated by the Manager, provided that the resulting expense reimbursement would not be less than the amount required pursuant to the Agreement. Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained $39 during the year ended April 30, 1996 from commissions earned on sales of the Series' shares. (B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, the Series pays the Distributor for distributing the Series' Class B and Class C shares at an annual rate of .50 of 1% of the value of the average daily net assets of Class B shares and .75 of 1% of the value of the average daily net assets of Class C shares. During the year ended April 30, 1996, $157,606 was charged to the Series for the Class B shares and $276 was charged to the Series for the Class C shares. (C) Under the Shareholder Services Plan, the Series pays the Distributor at an annual rate of .25 of 1% of the value of the average daily net assets of Class A, Class B and Class C shares for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the Series and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (a securities dealer, financial institution or other industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES NOTES TO FINANCIAL STATEMENTS (CONTINUED) Agents. During the year ended April 30, 1996, $158,482, $78,803 and $92 were charged to Class A, Class B and Class C shares, respectively, by the Distributor pursuant to the Shareholder Service Plan. Effective December 1, 1995, the Series compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the Series. Such compensation amounted to $19,409 for the period from December 1, 1995 through April 30, 1996. (D) Each trustee who is not an "affiliated person" as defined in the Act receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. NOTE 3-SECURITIES TRANSACTIONS: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the year ended April 30, 1996 amounted to $49,693,408 and $47,684,106, respectively. At April 30, 1996, accumulated net unrealized depreciation on investments was $502,977, consisting of $2,070,929 gross unrealized appreciation and $2,573,906 gross unrealized depreciation. At April 30, 1996, the cost of investments for Federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments). PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Premier State Municipal Bond Fund, Virginia Series (one of the Series constituting the Premier State Municipal Bond Fund) as of April 30, 1996, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of April 30, 1996 by correspondence with the custodian. 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 Premier State Municipal Bond Fund, Virginia Series at April 30, 1996, 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 each of the indicated years, in conformity with generally accepted accounting principles. (ERNST & YOUNG LLP..... SIGNATURE LOGO) New York, New York June 5, 1996 PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES IMPORTANT TAX INFORMATION (UNAUDITED) In accordance with Federal tax law, the Series hereby designates all the dividends paid from investment income-net during the fiscal year ended April 30, 1996 as "exempt-interest dividends" (not subject to regular Federal and, for individuals who are Virginia residents, Virginia personal income taxes). As required by Federal tax law rules, shareholders will receive notification of their portion of the Series' taxable ordinary dividends (if any) and capital gain distributions (if any) paid for the 1996 calendar year on Form 1099-DIV which will be mailed by January 31, 1997. PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES 200 Park Avenue New York, NY 10166 MANAGER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 CUSTODIAN The Bank of New York 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT Dreyfus Transfer, Inc. One American Express Plaza Providence, RI 02903 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 066/625AR964 (Dreyfus Logo) Annual Report Premier State Municipal Bond Fund Virginia Series April 30, 1996 EX-99.A 2 GRAPH IN PRESIDENT'S LTR OF ANNUAL REPORT COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER STATE MUNICIPAL BOND FUND, VIRGINIA SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX EXHIBIT A: ____________________________________________________ | | | PREMIER STATE | | | LEHMAN BROTHERS |MUNICIPAL BOND FUND, | | PERIOD | MUNICIPAL | VIRGINIA SERIES | | | BOND INDEX * | (CLASS A SHARES) | |-----------|-----------------|---------------------| | 8/1/91 | 10,000 | 9,548 | | 4/30/92 | 10,734 | 10,375 | | 4/30/93 | 12,092 | 11,965 | | 4/30/94 | 12,353 | 12,097 | | 4/30/95 | 13,175 | 12,869 | | 4/30/96 | 14,222 | 13,810 | |---------------------------------------------------| *Source: Lehman Brothers -----END PRIVACY-ENHANCED MESSAGE-----