-----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, GrZGcsD3sYvZ3mfmmluJ7tMRKpa8YrH/b6OziEnp8AdDB+5WtyZ34tugzkehmNis esoWLaZHSa2rPLpEs0XjNg== 0000935069-97-000122.txt : 19970731 0000935069-97-000122.hdr.sgml : 19970731 ACCESSION NUMBER: 0000935069-97-000122 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970531 FILED AS OF DATE: 19970730 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STI CLASSIC FUNDS CENTRAL INDEX KEY: 0000883939 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-06557 FILM NUMBER: 97647949 BUSINESS ADDRESS: STREET 1: 2 OLIVER STREET CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6109896602 MAIL ADDRESS: STREET 1: 530 E SWEDESFORD ROAD CITY: WAYNE STATE: PA ZIP: 19087-1693 N-30D 1 STI CLASSIC ANNUAL REPORT ANNUAL ................................................................................ FINANCIAL REPORT ................................................................................ STI CLASSIC FUNDS ................................................................................ A Family of Mutual Funds ................................................................................ May 31, 1997 STI CLASS FUNDS (LOGO) [GRAPHIC OMITTED] Dear STI Classic Trust Shareholder: As of May 31, 1997, your STI Classic Funds' assets totaled $8.6 billion or 26.5% more than the $6.8 billion reported to you as of May 31, 1996. Since the last semi-annual report of November 30, 1996, four new STI Classic Funds have been added, including a new small cap equity "value style" fund and an international emerging markets fund. The STI Classic family now includes 23 funds covering a broad range of investment objectives and management styles. The U.S. economic expansion is now more than six years old and it has been characterized by modest inflation and strong investment returns. Economic growth has been somewhat erratic in nature, including a strong rebound in late 1996 and early 1997 followed by a slowdown recently. In response to accelerated growth and fears of renewed inflation, the Federal Reserve raised interest rates by a quarter of one percent. As the economy grew, interest rates initially rose and the stock market declined by approximately 10%. Recently, economic data has confirmed that slower, more sustainable growth has occurred; thereby, causing long interest rates to decline by approximately one half of one percent and stocks have rebounded to record levels. Given the STI Classic Funds' quality oriented, disciplined investment approach, we believe our shareholders are well positioned for future investment opportunities. Sincerely, /s/ ANTHONY R. GRAY Anthony R. Gray President, Chief Investment Officer STI Capital Management, N.A. /s/ DOUGLAS S. PHILLIPS Douglas S. Phillips, CFA President, Chief Investment Officer Trusco Capital Management, Inc. STI CLASSIC VALUE INCOME STOCK FUND - -------------------------------------------------------------------------------- The STI Classic Value Income Stock Fund (the "Fund") seeks to provide current income with the secondary goal of achieving capital appreciation by investing primarily in equity securities. The Fund's investment philosophy is a very structured, methodical approach to purchasing stocks. The bottom-up approach has three key factors to consider in all investment decisions -- minimum dividend yield criteria, low historical relative valuation, and a fundamental catalyst which could upwardly value the individual security. Our process seeks high-dividend paying stocks that are trading at the lower end of their historical valuation ranges. These companies are in the midst of fundamental change that we expect will reignite investor interest in the near term. They tend to exhibit value characteristics such as low price-to-earnings ratios and have lower volatility. As a result, the Fund benefits when the market becomes less exuberant and more value oriented. A good example of a company whose stock was depressed and was in the midst of fundamental change is Dow Jones & Co., publisher of The Wall Street Journal and Telerate, a business data service. A group of disenchanted stockholders recently insisted that the company consider selling Telerate, a perennially poor performer, and the stock rose sharply as a result. We believe the Fund performed well relative to the standard value equity benchmarks, the S&P/Barra Value Index and the Lipper Equity Income Funds Average. The performance was due in part to the high yield of the portfolio. Stock selection also played a key factor. Other stocks that proved to be top performers this year include, Reynolds Metals, which is in the midst of a major restructuring in which several divisions are being considered for sale. A strong performing group was energy. Amoco has a massive share repurchase plan underway. Marathon has aggressively paid down debt, and is a major force in refining in the Midwest. /s/ MILLS A. RIDDICK Mills A. Riddick, CFA Managing Director 2 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 compared with the growth of hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - -------------------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - -------------------------------------------------------------------------------- 22.18% 23.00% 18.87% 110.15% Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Invested in the STI Growth of $10,000 Growth of $10,000 Classic Value Income Invested in the Invested in the Lipper Stock Fund, S&P/BARRA Value Equity Income Funds Trust Shares Index Average Period Ended 2/28/93 $10,000 $10,000 $10,000 5/31/93 10,395 10,426 10,345 5/31/94 11,432 11,202 10,836 5/31/95 13,611 13,114 12,234 5/31/96 17,410 16,568 15,123 5/31/97 21,271 20,787 18,515 Investor Shares - -------------------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - -------------------------------------------------------------------------------- 21.69% 22.54% 19.20% 112.16% Without load - -------------------------------------------------------------------------------- 17.14% 20.99% 18.14% 104.19% With load - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Invested in the STI Growth of $10,000 Growth of $10,000 Classic Value Income Invested in the Invested in the Lipper Stock Fund, S&P/BARRA Value Equity Income Funds Investor Shares Index Average Period Ended 2/28/93 $ 9,625 $10,000 $10,000 5/31/93 10,010 10,426 10,345 5/31/94 10,940 11,202 10,836 5/31/95 12,986 13,114 12,234 5/31/96 16,543 16,568 15,123 5/31/97 20,132 20,787 18,515 Flex Shares - -------------------------------------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - -------------------------------------------------------------------------------- 20.91% 23.68% 52.97% Without load - -------------------------------------------------------------------------------- 18.91% 23.68% 52.97% With load - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Invested in the STI Growth of $10,000 Growth of $10,000 Classic Value Income Invested in the Invested in the Lipper Stock Fund, S&P/BARRA Value Equity Income Funds Flex Shares Index Average Period Ended 6/30/95 $10,000 $10,000 $10,000 5/31/96 12,566 12,539 12,211 5/31/97 15,193 15,731 14,950 Past performance is no indication of future performance. The Funds'comparative benchmarks do not include the annual operating expenses incurred by the Fund. 3 STI CLASSIC MID-CAP EQUITY FUND - -------------------------------------------------------------------------------- The STI Classic Mid-Cap Equity Fund (the "Fund") seeks capital appreciation by investing in the stocks of companies with a market capitalization between $50 million and $5 billion. Mid-cap securities with a strong growth history are the primary consideration for this investment philosophy. These companies are evaluated relative to their industry sector and the market in general. Each industry sector is considered in relation to the business cycle, and the Fund maintains large positions in the sectors which appear to perform best in the given cycle. Stocks that fall within favored sectors are analyzed based on fundamentals -- the quality of earnings, dependability of growth rates, and relative attractiveness of price/earnings ratios. The mid-cap stock universe continued to underperform the large capitalization averages such as the Standard & Poor's 500 and the Dow Jones Industrial Average. This broad underperformance of mid-cap as well as small cap stocks began last summer, as investors sought the liquidity and brand name appeal of big companies. Our Fund included technology stocks of all sizes, which fared poorly. Our worst holding was Atmel, a midsized chipmaker. Regional bank stocks were adversely impacted by the rise in interest rates, even though these banks all raised their prime lending rate along with their higher cost of funds. On the plus side, building sector stocks such as Stanley Works, Foster Wheeler and American Standard were among the strongest performers. /s/ ELLIOT PERNY Elliot Perny Managing Director 4 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - -------------------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - -------------------------------------------------------------------------------- 14.23% 17.30% 15.01% 59.17% Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Invested in the STI Growth of $10,000 Classic Mid-Cap Equity Invested in the S&P Fund, Trust Shares Mid-Cap 400 Index Period Ended 2/28/94 $10,000 $10,000 5/31/94 9,735 9,516 5/31/95 10,958 10,803 5/31/96 13,756 13,877 5/31/97 15,714 16,397 Investor Shares - --------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - --------------------------------------------------------------- 13.76% 16.75% 14.42% 56.58% Without load - --------------------------------------------------------------- 9.46% 15.28% 13.11% 50.70% With load - --------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Invested in the STI Growth of $10,000 Classic Mid-Cap Equity Invested in the S&P Fund, Investor Shares Mid-Cap 400 Index Period Ended 1/31/94 $ 9,625 $10,000 5/31/94 9,471 9,381 5/31/95 10,603 10,650 5/31/96 13,247 13,676 5/31/97 15,070 16,164 Flex Shares - --------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - --------------------------------------------------- 13.06% 17.91% 38.78% Without load - --------------------------------------------------- 11.06% 17.91% 38.78% With load - --------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Invested in the STI Growth of $10,000 Classic Mid-Cap Equity Invested in the S&P Fund, Flex Shares Mid-Cap 400 Index Period Ended 6/30/95 $10,000 $10,000 5/31/96 11,639 12,339 5/31/97 13,385 14,584 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 5 STI SMALL CAP EQUITY FUND - -------------------------------------------------------------------------------- The STI Classic Small Cap Equity Fund seeks capital appreciation with a secondary goal of achieving current income by investing in the stocks of companies with a market capitalization of less than $1 billion. In a period that was very difficult for small capitalization stocks in general, our small cap value equity style produced strong returns. There are several reasons for this outperformance. First, the value style outperformed the growth style of investment by a wide margin. Second, our insistence that every stock we select pay a dividend provided a cushion in a negative margin. Third, we were very underweighted in technology, an area that was very bearish. Finally, we were also underweighted in financial services, an industry that became very richly valued in the fourth quarter. The top performing stock during the period was Security Connecticut, a life insurance company that focuses on high net worth individuals. The company was bought out by a company with a much larger salesforce that is properly equipped to market Security Connecticut's products. Another winner was Applied Industrial Technology. The company is a large distributor of ball bearings and other manufacturing products. On the downside, Alamo Group, which makes industrial lawn mowing equipment was down. Bad weather negatively impacted the company, and inventories built up dramatically. /s/ BRETT L. BARNER Brett L. Barner, CFA Principal 6 Shown immediately following the Advisor's Discussion of Fund Performance is a line graph depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmark. Trust Shares* - --------------------------------------------------------- Three Cumulative Month Inception Return to Date - --------------------------------------------------------- 6.60% 10.97% - --------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Invested in STI Clasic Growth of $10,000 Small Cap Equity Fund, Invested in the Frank Trust Shares Russell 2000 Index Period Ended 1/31/97 $10,000 $10,000 5/31/97 11,097 10,360 *Commenced operations on January 31, 1997. Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 7 STI CLASSIC CAPITAL GROWTH FUND - -------------------------------------------------------------------------------- The STI Classic Capital Growth Fund (the "Fund") seeks capital appreciation by investing primarily in stocks which, in the advisor's opinion are undervalued in the marketplace at the time of purchase. Large capitalization stocks with a strong growth history are the primary consideration for this investment philosophy. Out of this universe of companies, a security is selected for the portfolio when it appears undervalued based on the relative earnings ratios. In order to make this relative value comparison, each stock is compared to its own historical price earnings ratio range, to other stocks in the sector, and to the stock market as measured by indices such as the Standard & Poor's 500 Index. Our strong performance -- particularly in comparison with other growth managers - -- was partly due to heavy concentration in the aerospace conglomerate area, with such holdings as Allied Signal, Textron, United Technology and Tyco. In addition, the Fund benefited from a large position in Microsoft, which was one of the few technology stocks to perform reasonably well during the quarter. The style also benefited from its low weighting in commodity chemicals, financial services, papers and utilities, all of which tend to be negatively impacted by rising interest rates and efforts by the Federal Reserve Board to slow down the economy. Sincerely, /s/ ANTHONY R. GRAY Anthony R. Gray President, Chief Investment Officer 8 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - ------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - ------------------------------------------------------------------- 24.66% 19.68% 15.98% 107.19% - ------------------------------------------------------------------- GRAPH CHART (GRAPHIC OMITTED) Comparison of Change in the Value of a $10,000 Investment Growth of $10,000 Invested in the STI Growth of $10,000 Growth of $10,000 Classic Capital Growth Invested in the S&P Invested in the Lipper Fund, Trust Shares 500 Composite Index Growth Funds Average Period Ended 7/31/92 $10,000 $10,000 $10,000 5/31/93 11,203 10,885 11,206 5/31/94 11,638 11,345 11,780 5/31/95 12,409 13,631 13,390 5/31/96 16,004 17,505 17,350 5/31/97 19,951 22,652 20,424 Investor Shares - ----------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - ----------------------------------------------------------------- 23.74% 18.88% 15.86% 108.05% Without load - ----------------------------------------------------------------- 19.10% 17.37% 14.98% 100.24% With load - ----------------------------------------------------------------- GRAPH CHART (GRAPHIC OMITTED) Comparison of Change in the Value of a $10,000 Investment Growth of $10,000 Invested in the STI Growth of $10,000 Growth of $10,000 Classic Capital Growth Invested in the S&P Invested in the Lipper Fund, Investor Shares 500 Composite Index Growth Funds Average Period Ended 6/30/92 $ 9,625 $10,000 $10,000 5/31/93 11,206 11,329 11,607 5/31/94 11,572 11,808 12,202 5/31/95 12,258 14,187 13,870 5/31/96 15,712 18,219 17,971 5/31/97 19,442 23,576 21,155 Flex Shares - --------------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - --------------------------------------------------------- 23.24% 25.34% 57.10% Without load - --------------------------------------------------------- 21.24% 25.34% 57.10% With load - --------------------------------------------------------- GRAPH CHART (GRAPHIC OMITTED) Comparison of Change in the Value of a $10,000 Investment Growth of $10,000 Invested in the STI Growth of $10,000 Growth of $10,000 Classic Capital Growth Invested in the S&P Invested in the Lipper Fund, Flex Shares 500 Composite Index Growth Funds Average Period Ended 6/30/95 $10,000 $10,000 $10,000 5/31/96 12,387 12,549 12,432 5/31/97 15,266 16,239 14,635 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 9 STI CLASSIC BALANCED FUND - -------------------------------------------------------------------------------- The STI Classic Balanced Fund (the "Fund") seeks capital appreciation and current income through investments in a diversified portfolio of common stocks, bonds and money market securities. The Fund uses a bottom-up selection process to find stocks of high quality companies with a history of earnings growth. Bonds are selected by attempting to exploit undervalued bond sectors and areas along the yield curve. No more than 70% of the total assets of the Fund are invested in stocks, and no more than 60% are invested in bonds. At least 20% of the Fund 's total assets will be in senior fixed income securities. Strong performance for the equity allocation of the Fund was due to its concentration in the aerospace conglomerate area, with such holdings as Allied Signal, Textron and Tyco. The Fund's performance also benefited from its low weighting in commodity chemicals, financial services, papers and utilities, all of which tend to be negatively impacted by rising interest rates. During a period of rising interest rates, it is advantageous to have a shorter than average maturity structure in a bond portfolio. We maintained such a posture during the quarter, which helped limit the impact of the interest rate hike. The Federal Reserve Board's Chairman, Alan Greenspan, indicated that the rate increase might just be the "first step" and not the final move. We have positioned the Fund accordingly. /s/ ANTHONY R. GRAY Anthony R. Gray President and Chief Investment Officer /s/ L. EARL DENNEY L. Earl Denney, CFA Managing Director 10 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - ------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - ------------------------------------------------------------------- 16.66% 14.14% 11.77% 46.06% - ------------------------------------------------------------------- GRAPH CHART (GRAPHIC OMITTED) Comparison of Change in the Value of a $10,000 Investment
Growth of $10,000 Invested Growth of $10,000 Growth of $10,000 Growth of in the STI Classic Invested in Invested in the Lehman $10,000 Lipper Balanced Fund, the S&P 500 Government/Corporate Balanced Funds Trust Shares Composite Index Bond Index Average Period Ended 1/31/94 $10,000 $10,000 $10,000 $10,000 5/31/94 9,554 9,579 9,446 9,505 5/31/95 10,387 11,510 10,543 10,632 5/31/96 12,180 14,781 10,975 12,505 5/31/97 14,210 19,126 11,842 14,525
Investor Shares - -------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - -------------------------------------------------------------------- 16.27% 13.74% 11.32% 44.07% Without load - -------------------------------------------------------------------- 11.92% 12.31% 10.07% 38.66% With load - -------------------------------------------------------------------- GRAPH CHART (GRAPHIC OMITTED) Comparison of Change in the Value of a $10,000 Investment Period Ended
Growth of $10,000 Invested Growth of $10,000 Growth of $10,000 Growth of in the STI Classic Invested in Invested in the Lehman $10,000 Lipper Balanced Fund, the S&P 500 Government/Corporate Balanced Funds Investor Shares Composite Index Bond Index Average Period Ended 1/31/94 $ 9,625 $10,000 $10,000 $10,000 5/31/94 9,238 9,579 9,446 9,505 5/31/95 10,004 11,510 10,543 10,632 5/31/96 11,693 14,781 10,975 12,505 5/31/97 13,595 19,126 11,842 14,525
Flex Shares - -------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - -------------------------------------------------- 15.40% 15.51% 32.75% Without load - -------------------------------------------------- 13.40% 15.51% 32.75% With load - -------------------------------------------------- GRAPH CHART (GRAPHIC OMITTED) Comparison of Change in the Value of a $10,000 Investment
Growth of $10,000 Invested Growth of $10,000 Growth of $10,000 Growth of in the STI Classic Invested in Invested in the Lehman $10,000 Lipper Balanced Fund, the S&P 500 Government/Corporate Balanced Funds Flex Shares Composite Index Bond Index Average Period Ended 6/30/95 $10,000 $10,000 $10,000 $10,000 5/31/96 11,401 12,549 10,327 11,536 5/31/97 13,157 16,239 11,143 13,399 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund.
11 STI CLASSIC EMERGING MARKETS EQUITY FUND - -------------------------------------------------------------------------------- The STI Classic Emerging Markets Equity Fund (the "Fund") seeks long-term capital appreciation by investing primarily in equity securities of companies located in emerging markets that appear undervalued relative to their global peers. Emerging markets performances for the year were led by Eastern Europe and Latin America. The Fund's overweighted positions in these two regions aided our performance for the year compared to the Fund's benchmark, Morgan Stanley Capital International ("MSCI") Emerging Markets Free Index. The Fund's Asian exposure is underweight relative to the Index. This is based on our belief that the region and the stocks within the region were overvalued. Our reasoning is that as economies become more global, prices for goods and services will become more competitive. The company which can produce higher quality products at the lowest cost will be more profitable and attract more investors. We feel that each and every company should be viewed on its own valuation regardless of where its stock trades, and therefore focus on industries and companies with better valuations. A few of the Fund's brightest stars were Telebras, Brazil's telecommunication system which was aided by favorable regulatory issues and a low relative valuation, and Gedeon Richter, Hungary's main manufacturer of pharmaceutical products for the heart and central nervous system. In India, Hindalco, a major aluminum producer, has also contributed to the performance of the Fund. It is one of the lowest cost producers in the world and is benefiting from the expectation that metal prices will strengthen. /s/ NED DAU Ned Dau Managing Director 12 Shown immediately following the Advisor's Discussion of Fund Performance is a line graph depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmark. Trust Shares* - --------------------------------------------------------- Three Cumulative Month Inception Return to Date - --------------------------------------------------------- 3.45% 7.90% - --------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Invested in the STI Growth of $10,000 Classic Emerging Invested in the MSCI Markets Equity Fund Emerging Markets Trust Shares Free Index Period Ended 1/31/97 $10,000 $10,000 5/31/97 10,790 10,365 *Commenced operations on January 31, 1997. Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 13 STI CLASSIC INTERNATIONAL EQUITY INDEX FUND - -------------------------------------------------------------------------------- The STI Classic International Equity Index Fund (the "Fund") seeks to provide investment results that correspond to the aggregate price and dividend performance of the securities included in the Morgan Stanley Capital International Europe, Australasia, Far East Gross Domestic Product Index (the "MSCI EAFE-GDP Index"). The Fund has been constructed to have the aggregate investment characteristics similar to those of the MSCI EAFE-GDP Index. The Fund limits investments to a representative sample of securities contained within the Index. Not all securities or countries in the Index will be held in the Fund. Securities are selected using a statistically-based optimization process. No attempt is made to manage the Fund using traditional economic, financial and market analysis. All securities are purchased and held in their local currencies. For the year ending May 31, 1997, the Fund met its objective. The Fund's correlation to the MSCI EAFE-GDP Index was .99. This exceeded the expected annual correlation of over .951. The Fund's overall performance for the fiscal year was similar to the MSCI EAFE-GDP Index on a post fee adjusted basis. /s/ ROBERT J. RHODES, CFA Robert J. Rhodes, CFA Group Vice President /s/ STANLEY J. CHERNY Stanley J. Cherny Vice President - ------------ 1Prospectus, Trust Shares, STI Classic Funds, dated October 1, 1996, page 12. 14 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmark. Trust Shares - -------------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - --------------------------------------------------------- 7.48% 6.48% 20.62% - --------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the MSCI Classic International EAFE-GDP Weighted, Equity Index Fund, Index in U.S. Trust Shares $(Price Return) Period Ended 6/30/94 $10,000 $10,000 5/31/95 10,331 10,343 5/31/96 11,291 11,255 5/31/97 12,135 12,066 Investor Shares - ------------------------------------------------------ One Year Annualized Cumulative Return Inception Inception to Date to Date - ------------------------------------------------------ 7.12% 6.06% 19.20% Without load - ------------------------------------------------------ 3.14% 4.71% 14.72% With load - ------------------------------------------------------ Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the MSCI Classic International EAFE-GDP Weighted, Equity Index Fund, Index in U.S. Investor Shares $(Price Return) Period Ended 6/30/94 $ 9,625 $10,000 5/31/95 9,904 10,343 5/31/96 10,786 11,255 5/31/97 11,554 12,066 Flex Shares - --------------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - --------------------------------------------------------- 6.41% 7.34% 15.07% Without load - --------------------------------------------------------- 4.41% 7.34% 15.07% With load - --------------------------------------------------------- GRAPH CHART (GRAPHIC OMITTED) Comparison of Change in the Value of a $10,000 Investment Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the MSCI Classic International EAFE-GDP Weighted, Equity Index Fund, Index in U.S. Flex Shares $(Price Return) Period Ended 6/30/95 $10,000 $10,000 5/31/96 10,911 11,019 5/31/97 11,610 11,813 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 15 STI CLASSIC INTERNATIONAL EQUITY FUND - -------------------------------------------------------------------------------- The STI Classic International Equity Fund (the "Fund") invests in equity securities of foreign issuers and seeks to provide long term capital appreciation. We strive to obtain investment results that outperform the international markets and the average international mutual fund. The Fund focuses on sector and company fundamentals specifically looking for companies which exhibit top managements, quality products and sound financial positions. Our goal is to find companies which fit the above criteria but are selling at a discount to their global peers. During the past year, the Fund's under weighting in the Japanese market and its relative over weighting in the European markets contributed to the strong return. On a sector basis, the Fund's overweight position in capital equipment and consumer goods sector was a positive factor in its relative out performance. Our current stock selection process continues to lead us to overweight the capital equipment and the consumer goods sector based on bottom up company valuations. Our other weightings which deviate from the index averages include services and energy where we are underweighted. Geographically our largest exposure remains Europe. As we view the world on an industry and regional basis we continue to find financially solid companies with appealing valuations in Europe. Emerging markets continue to show good relative valuations, particularly in the Latin and South American markets where fundamentals are improving and we maintain an overweight position. The Fund's largest market weighting deviation continues to be underweight in the Japanese market. While the Japanese economy appears to be showing signs of life and some companies have improved their competitive position by moving manufacturing offshore, we continue to believe that on valuation measures, the Japanese market remains expensive to its global industry peers, and thus we remain underweight. /s/ NED DAU Ned Dau Managing Director 16 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmark. Trust Shares - -------------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - --------------------------------------------------------- 23.29% 25.50% 40.56% - --------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Invested in the STI Growth of $10,000 Classic International Invested in the MSCI Equity Fund, EAFE Index, Trust Shares in U.S.$ Period Ended 12/31/95 $10,000 $10,000 5/31/96 10,973 10,393 5/31/97 13,528 11,178 Investor Shares - ------------------------------------------------------ One Year Annualized Cumulative Return Inception Inception to Date to Date - ------------------------------------------------------ 22.85% 22.99% 33.91% Without load - ------------------------------------------------------ 18.28% 19.68% 28.85% With load - ------------------------------------------------------ Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Invested in the STI Growth of $10,000 Classic International Invested in the MSCI Equity Fund, EAFE Index, Investor Shares in U.S.$ Period Ended 1/31/96 $ 9,625 $10,000 5/31/96 10,421 10,351 5/31/97 12,802 11,132 Flex Shares - ------------------------------------------------------ One Year Annualized Cumulative Return Inception Inception to Date to Date - ------------------------------------------------------ 21.98% 22.30% 32.85% Without load - ------------------------------------------------------ 19.98% 22.30% 32.85% With load - ------------------------------------------------------ GRAPH CHART (GRAPHIC OMITTED) Comparison of Change in the Value of a $10,000 Investment Growth of $10,000 Invested in the STI Growth of $10,000 Classic International Invested in the MSCI Equity Index Fund, EAFE Index, Flex Shares in U.S.$ Period Ended 1/31/96 $10,000 $10,000 5/31/96 10,818 10,351 5/31/97 13,196 11,132 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 17 STI CLASSIC SUNBELT EQUITY FUND - -------------------------------------------------------------------------------- The objective of the STI Classic Sunbelt Equity Fund (the "Fund") is to provide capital appreciation by investing in U.S. companies located in the Sunbelt region. The Fund's philosophy is centered on the belief that a portfolio of companies with positive earnings trends will generate above average returns over time. This focus on favorable earnings characteristics has been and remains the Fund's cornerstone. The Fund invests in companies which are headquartered or conduct the majority of their business in the twelve state Sunbelt region which runs from Virginia down to Florida and over to Texas. The favorable economic and demographic trends in the Sunbelt have resulted in a vibrant and growing business climate. Such an environment leads to above average investment opportunities. Key trends in the Sunbelt are low cost levels, an excellent transportation system, expansion in personal income and growth in population. The Fund's investment universe consists of approximately 1,400 public companies, of which roughly 270 are covered extensively by our nine dedicated research analysts. Before a company can be considered for investment, it must satisfy initial screening criteria which include: five year operating history, market capitalization of a least $50 million, monthly trading volume of $20 million, management continuity and strong fundamental history. Once the initial screening is complete, the stocks chosen for purchase generally have strong or improving growth rates, a demonstrated ability to meet expectations and rising estimates. Over time, the companies owned in the Fund have shown above average earnings growth rates. The above average growth rates have continued through the Fund's 1997 fiscal year and are a direct result of the Fund's bottom up orientation. Yet the Fund's performance did not reflect these favorable earnings trends and fundamentals. The reason is that the Sunbelt region is biased towards small and mid-sized companies. The smaller stocks were overlooked during the past twelve months as the stock market was dominated by investors seeking larger more liquid stocks. Recently, smaller more growth-oriented stocks, including those owned in the Fund, have rebounded as the large companies' earnings growth has become more suspect. The Fund is expected to continue to benefit from this shift. /s/ JAMES P. FOSTER James P. Foster Vice President 18 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. TRUST SHARES - ------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - ------------------------------------------------------------------- 1.48% 14.69% 11.83% 46.34% - ------------------------------------------------------------------- GRAPH CHART (GRAPHIC OMITTED) Comparison of Change in the Value of a $10,000 Investment Growth of Growth of Growth of $10,000 Invested $10,000 Invested $10,000 Invested in the STI Classic in the S&P 600 in the Frank Sunbelt Equity Small Cap Index Russell 2000 Fund, Trust Growth Index (1) Shares Period Ended 1/31/94 $10,000 $10,000 $10,000 5/31/94 9,530 9,209 9,149 5/31/95 9,893 10,110 10,309 5/31/96 14,165 13,995 14,907 5/31/97 14,375 15,671 14,102 Investor Shares - --------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - --------------------------------------------------------------- 1.05% 14.14% 11.32% 44.08% Without load - --------------------------------------------------------------- -2.71% 12.68% 10.08% 38.68% With load - --------------------------------------------------------------- GRAPH CHART (GRAPHIC OMITTED) Comparison of Change in the Value of a $10,000 Investment Growth of Growth of Growth of $10,000 Invested $10,000 Invested $10,000 Invested in the STI Classic in the S&P 600 in the Frank Sunbelt Equity Small Cap Index Russell 2000 Fund, Investor Growth Index (1) Shares Period Ended 1/31/94 $ 9,625 $10,000 $10,000 5/31/94 9,162 9,209 9,149 5/31/95 9,455 10,110 10,309 5/31/96 13,481 13,995 14,907 5/31/97 13,622 15,671 14,102 Flex Shares - ------------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - ------------------------------------------------------- 0.46% 18.46% 40.07% Without load - ------------------------------------------------------- -1.40% 18.46% 40.07% With load - ------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of Growth of Growth of $10,000 Invested $10,000 Invested $10,000 Invested in the STI Classic in the S&P 600 in the Frank Sunbelt Equity Small Cap Index Russell 2000 Fund, Flex Growth Index (1) Shares Period Ended 6/30/95 $10,000 $10,000 $10,000 5/31/96 13,571 13,122 13,528 5/31/97 13,633 14,695 12,797 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. (1) In the current year, the Fund changed its benchmark index from the S&P 600 Small Cap Index to the Frank Russell 2000 Growth Index. The new index more accurately reflects the investment strategies and objectives of the Fund. Future comparisons will be based solely on the new index. 19 STI CLASSIC INVESTMENT GRADE TAX-EXEMPT BOND FUND - -------------------------------------------------------------------------------- The STI Classic Investment Grade Tax-Exempt Bond Fund (the "Fund") seeks to provide as high a level of total return through current income and capital appreciation as is consistent with the preservation of capital by investing in investment grade fixed income securities. In the municipal bond market we try to limit risk as much as possible. We do not make major maturity shifts. We will bias the Fund based upon our near term fundamental and technical analysis, however, these will be moderate maturity shifts. Our style of investing enables us to enhance performance by utilizing various techniques. One such technique is emphasizing cheap sectors of the yield curve. Another is to be a relative value investor, we try to overweight undervalued sectors and underweight overvalued sectors. Also, we take advantage of changes in yield spreads. We buy specific bonds when spreads are trading historically wide and sell when the spreads are trading historically narrow. Credit analysis is an important technique especially in today's market. We try to identify and invest in improving credits and avoid those credits which are deteriorating. The underlying concept to all these techniques is to enhance total return without adding risk. Due to rising interest rates, fixed-income funds of all types had a difficult six months. However, tax-exempt bonds performed relatively well compared to U.S. Treasuries. As is typical for the municipal market, the supply of bonds was light during January and February, keeping prices firm. For instance, a five-year AAA municipal bond was priced to yield about 70% of similar maturity U.S. Treasuries, which is slightly lower than average. Since bond prices move in the opposite direction to bond yields, that means that municipal bond prices were higher than normal in relation to U.S. Treasuries. /s/ Ronald H. Schwartz Ronald H. Schwartz, CFA, CFP Managing Director 20 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - -------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - -------------------------------------------------------------------- 7.13% 7.70% 6.04% 23.58% - -------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Immediate Classic Investment Brothers 5 Year G.O. Municipal Debt Grade Tax-Exempt Index Average Bond Fund, Trust Shares Period Ended 10/31/93 $10,000 $10,000 $10,000 5/31/94 9,976 9,943 9,828 5/31/95 10,995 10,627 10,518 5/31/96 11,635 11,131 10,934 5/31/97 12,464 11,807 11,615 Investor Shares - --------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - --------------------------------------------------------------- 6.69% 7.32% 7.80% 45.33% Without load - --------------------------------------------------------------- 2.72 5.95% 6.98% 39.88% With load - --------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Immediate Classic Investment Brothers 5 Year G.O. Municipal Debt Grade Tax-Exempt Index Average Bond Fund, Investor Shares Period Ended 6/30/92 $ 9,625 $10,000 $10,000 5/31/93 10,731 10,778 10,891 5/31/94 11,309 11,112 11,213 5/31/95 12,429 11,877 12,001 5/31/96 13,101 12,440 12,475 5/31/97 13,977 13,196 13,252 Flex Shares - ------------------------------------------------------ One Year Annualized Cumulative Return Inception Inception to Date to Date - ------------------------------------------------------ 6.19% 5.55% 11.41% Without load - ------------------------------------------------------ 4.19% 5.55% 11.41% With load - ------------------------------------------------------ Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Immediate Classic Investment Brothers 5 Year G.O. Municipal Debt Grade Tax-Exempt Index Average Bond Fund, Flex Shares Period Ended 6/30/95 $10,000 $10,000 $10,000 5/31/96 10,541 10,465 10,439 5/31/97 11,193 11,102 11,089 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 21 STI CLASSIC FLORIDA TAX-EXEMPT BOND FUND - -------------------------------------------------------------------------------- The STI Classic Florida Tax-Exempt Bond Fund (the "Fund") seeks to provide current income exempt from regular federal income tax by investing in municipal bonds issued by the state of Florida and its municipalities. In the municipal bond market we try to limit risk as much as possible. We do not make major maturity shifts. We will bias the Fund based upon our near term fundamental and technical analysis, however, these will be moderate maturity shifts. Our style of investing enables us to enhance performance by utilizing various techniques. One such technique is emphasizing cheap sectors of the yield curve. Another is to be a relative value investor, we try to overweight undervalued sectors and underweight overvalued sectors. Also, we take advantage of changes in yield spreads. We buy specific bonds when spreads are trading historically wide and sell when the spreads are trading historically narrow. Credit analysis is an important technique especially in today's market. We try to identify and invest in improving credits and avoid those credits which are deteriorating. The underlying concept to all these techniques is to enhance total return without adding risk. Due to rising interest rates, fixed-income funds of all types had a difficult six months. However, tax-exempt bonds performed relatively well compared to U.S. Treasuries. As is typical for the municipal market, the supply of bonds was light during January and February, keeping prices firm. For instance, a five-year AAA municipal bond was priced to yield about 70% of similar maturity U.S. Treasuries, which is slightly lower than average. Since bond prices move in the opposite direction to bond yields, that means that municipal bond prices were higher than normal in relation to U.S. Treasuries. /s/ RONALD H. SCHWARTZ Ronald H. Schwartz,CFA, CFP Managing Director 22 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - ------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - ------------------------------------------------------------------- 7.22% 6.76% 5.66% 20.24% - ------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Florida Classic Florida Tax- 10-Year Municipal Municipal Debt Exempt Bond Fund, Bond Index Average Trust Shares Period Ended 1/31/94 $10,000 $10,000 $10,000 5/31/94 9,786 9,533 9,354 5/31/95 10,692 10,389 10,203 5/31/96 11,106 10,880 10,548 5/31/97 11,908 11,769 11,335 Investor Shares - --------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - --------------------------------------------------------------- 7.00% 6.58% 5.46% 19.59% Without load - --------------------------------------------------------------- 3.01% 5.23% 4.27% 15.10% With load - --------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Florida Classic Florida Tax- 10-Year Municipal Municipal Debt Exempt Bond Fund, Bond Index Average Investor Shares Period Ended 1/31/94 $ 9,625 $10,000 $10,000 5/31/94 9,418 9,533 9,354 5/31/95 10,270 10,389 10,203 5/31/96 10,656 10,880 10,548 5/31/97 11,402 11,769 11,335 Flex Shares - ------------------------------------------------------ One Year Annualized Cumulative Return Inception Inception to Date to Date - ------------------------------------------------------ 6.48% 4.86% 9.96% Without load - ------------------------------------------------------ 4.48% 4.86% 9.96% With load - ------------------------------------------------------ Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Florida Classic Florida Tax- 10-Year Municipal Municipal Debt Exempt Bond Fund, Bond Index Average Flex Shares Period Ended 6/30/95 $10,000 $10,000 $10,000 5/31/96 10,424 10,539 10,484 5/31/97 11,099 11,400 11,266 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 23 STI CLASSIC TENNESSEE TAX-EXEMPT BOND FUND - -------------------------------------------------------------------------------- The STI Classic Tennessee Tax-Exempt Bond Fund (the "Fund") seeks to provide current income exempt from regular federal and state income tax by investing in municipal bonds issued by the state of Tennessee and its municipalities. In the municipal bond market we try to limit risk as much as possible. We do not make major maturity shifts. We will bias the Fund based upon our near term fundamental and technical analysis, however, these will be moderate maturity shifts. Our style of investing enables us to enhance performance by emphasizing cheap sectors of the yield curve, overweighting undervalued sectors and underweighting overvalued sectors. Another technique is credit analysis, where we try to identify and invest in improving credits and avoid those credits which are deteriorating. Due to rising interest rates, fixed-income funds of all types had a difficult six months. However, tax-exempt bonds performed relatively well compared to U.S. Treasuries. As is typical for the municipal market, the supply of bonds was light during January and February, keeping prices firm. For instance, a five-year AAA municipal bond was priced to yield about 70% of similar maturity U.S. Treasuries, which is slightly lower than average. Since bond prices move in the opposite direction to bond yields, that means that municipal bond prices were higher than normal in relation to U.S. Treasuries. /s/ RONALD H. SCHWARTZ Ronald H. Schwartz, CFA, CFP Managing Director 24 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - ------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - ------------------------------------------------------------------- 7.16% 6.23% 3.47% 12.08% - ------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Tennessee Classic Tennessee Tax- 10-Year Municipal Municipal Debt Exempt Bond Fund, Bond Index Average Trust Shares Period Ended 1/31/94 $10,000 $10,000 $10,000 5/31/94 9,282 9,533 9,430 5/31/95 10,040 10,389 10,189 5/31/96 10,385 10,880 10,564 5/31/97 11,128 11,769 11,350 Investor Shares - ------------------------------------------------------------ One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - ------------------------------------------------------------ 6.93% 6.13% 3.40% 11.89% Without load - ------------------------------------------------------------ 2.89% 4.78% 2.23% 7.69% With load - ------------------------------------------------------------ Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Tennessee Classic Tennessee Tax- 10-Year Municipal Municipal Debt Exempt Bond Fund, Bond Index Average Investor Shares Period Ended 1/31/94 $ 9,625 $10,000 $10,000 5/31/94 8,942 9,533 9,430 5/31/95 9,679 10,389 10,189 5/31/96 9,996 10,880 10,564 5/31/97 10,689 11,769 11,350 Flex Shares - ------------------------------------------------------ One Year Annualized Cumulative Return Inception Inception to Date to Date - ------------------------------------------------------ 6.42% 4.19% 8.50% Without load - ------------------------------------------------------ 4.42% 4.19% 8.50% With load - ------------------------------------------------------ Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Tennessee Classic Tennessee Tax- 10-Year Municipal Municipal Debt Exempt Bond Fund, Bond Index Average Flex Shares Period Ended 6/30/95 $10,000 $10,000 $10,000 5/31/96 10,401 10,539 10,477 5/31/97 11,068 11,400 11,257 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 25 STI CLASSIC GEORGIA TAX-EXEMPT BOND FUND - -------------------------------------------------------------------------------- The STI Classic Georgia Tax-Exempt Bond Fund (the Fund") seeks to provide current income exempt from federal and state income taxes for Georgia residents without undue investment risk. Total return for the Fund includes current income as well as changes in the value of the Fund's assets. As of May 31, 1997, the Fund had an average maturity of 9.4 years and a one year annualized total return of 6.79% which compared with the Lipper Georgia Municipal Debt at 7.68%. The Lehman Ten Year Municipal Bond Index, which does not include Fund expenses, had an annual return of 8.17%. The lower return for the Fund reflects our conservative strategy which tends to better protect our participants from undue principal risk if interest rates rise. As a consequence, returns on the Fund may lag the indices if interest rates fall which was the case for this fiscal year. Our investment philosophy in the municipal market is to provide our shareholders, as conservative investors, with high quality investments, income stability, and a favorable risk/return ratio. In keeping with our philosophy we look for value within the state of Georgia utilizing internal as well as outside credit analysis to identify areas in the state that are possible quality upgrade candidates, monitoring shifts within the Georgia market which may create investment opportunities and subsequently allow the Fund to achieve gains, while at the same time maintaining a geographical diversity to minimize credit risk. Given our philosophy, and in light of the market's volatile nature in recent years, we are maintaining a relatively defensive position. The average maturity and duration may vary slightly in the future however, depending on our outlook for the market. The municipal market was volatile in the second half of 1996 as well as during the first half of 1997 as investors nervously watched economic data trying to determine if a possible rise in inflation was indicated. The economy showed strength while inflation remained low. However, in a much anticipated move the Federal Reserve Board (the "Fed") raised short term interest rates in March 1997. Investors continued to monitor the economic data and many expected the Fed to tighten again in May 1997, but there was no move at that time, which has led to speculation that additional Fed action may be taken to raise interest rates later this year. Municipal yields fell in the second half of 1996 with prices peaking in December. Despite rallies in December 1996 and February 1997 interest rates gradually rose until early May 1997 when they began to fall again. With all the volatility experienced during the fiscal year, there was very little net change in the short rates. Long term rates saw the biggest move with a price increase of almost thirty-five basis points. The current data being released is mixed as to the direction of the economy so many investors are reluctant to commit resources. Sporadic supply and investors' wavering enthusiasm for bonds has resulted in the market trading in a fairly narrow range. That trend will likely continue near term. The Georgia municipal market, in the first half of 1997, experienced heavy volume in new school district deals, all with short maturities. Issuance of other Georgia bonds was lighter, but fairly active. As a result of the current appetite for Georgia municipal bonds, all were well received by investors. We should continue to see greater volume in new Georgia deals throughout the rest of 1997. /s/ GAY B. CASH Gay B. Cash Vice President 26 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment as $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - ------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - ------------------------------------------------------------------- 6.79% 5.87% 3.81% 13.40% - ------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Georgia Classic Georgia Tax- 10-Year Municipal Municipal Debt Exempt Bond Fund, Bond Index Average Trust Shares Period Ended 1/31/94 $10,000 $10,000 $10,000 5/31/94 9,529 9,533 9,338 5/31/95 10,190 10,389 10,124 5/31/96 10,587 10,880 10,496 5/31/97 11,305 11,769 11,302 Investor Shares - ------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - ------------------------------------------------------------------- 6.47% 5.61% 3.63% 12.75% Without load - ------------------------------------------------------------------- 2.51% 4.27% 2.46% 8.52% With load - ------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Georgia Classic Georgia Tax- 10-Year Municipal Municipal Debt Exempt Bond Fund, Bond Index Average Investor Shares Period Ended 1/31/94 $ 9,625 $10,000 $10,000 5/31/94 9,171 9,533 9,338 5/31/95 9,785 10,389 10,124 5/31/96 10,147 10,880 10,496 5/31/97 10,803 11,769 11,302 Flex Shares - ------------------------------------------------------ One Year Annualized Cumulative Return Inception Inception to Date to Date - ------------------------------------------------------ 6.06% 4.15% 8.41% Without load - ------------------------------------------------------ 4.06% 4.15% 8.41% With load - ------------------------------------------------------ Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Georgia Classic Georgia Tax- 10-Year Municipal Municipal Debt Exempt Bond Fund, Bond Index Average Flex Shares Period Ended 6/30/95 $10,000 $10,000 $10,000 5/31/96 10,370 10,539 10,482 5/31/97 10,998 11,400 11,287 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 27 STI CLASSIC INVESTMENT GRADE BOND FUND - -------------------------------------------------------------------------------- The STI Classic Investment Grade Bond Fund (the "Fund") seeks to provide as high a level of total return through current income and capital appreciation as is consistent with the preservation of capital by investing in corporate investment grade bonds and U.S. government securities. The Fund utilizes an investment philosophy which minimizes risk, while attempting to outperform selected market indices. The core portfolio is structured around the composition of the Lehman Brothers Government/ Corporate Bond Index. The composition of the index is reviewed and quantitative historical data is analyzed to determine the optimal spread ranges of the different market sectors. Once the optimum market sectors are selected, an over- or under-weighting is developed in different sectors by investing in well-valued issues. All securities purchased are carefully reviewed for value. Yield curve analysis and credit ratings are an important part of this process. Over the last year, mortgage-backed securities and corporate bonds have tended to outperform U.S. Treasury bonds. Because mortgage outperformed strongly in the beginning of the calendar year, we reduced the Fund's allocation by about 15%. Meanwhile we increased our allocation of corporate bonds by about 10%. /s/ L. EARL DENNEY L. Earl Denney, CFA Managing Director 28 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment as $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - -------------------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - -------------------------------------------------------------------------------- 6.99% 7.10% 6.26% 34.44% - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Intermediate Classic Investment Government/Corporate Investment Grade Debt Grade Bond Fund, Trust Bond Index Average Shares Period Ended 7/31/92 $10,000 $10,000 $10,000 5/31/93 10,736 10,788 10,698 5/31/94 10,861 10,897 10,737 5/31/95 11,990 12,162 11,813 5/31/96 12,472 12,660 12,255 5/31/97 13,344 13,661 13,182 Investor Shares - -------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - -------------------------------------------------------------- 6.66% 6.70% 5.99% 33.54% Without load - -------------------------------------------------------------- 2.68% 5.34% 5.18% 28.52% With load - -------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Intermediate Classic Investment Government/Corporate Investment Grade Debt Grade Bond Fund, Trust Bond Index Average Shares Period Ended 6/30/92 $ 9,625 $10,000 $10,000 5/31/93 10,486 11,064 10,941 5/31/94 10,577 11,176 10,981 5/31/95 11,639 12,473 12,082 5/31/96 12,046 12,984 12,533 5/31/97 12,849 14,010 13,481 Flex Shares - --------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - --------------------------------------------------- 6.16% 4.33% 8.77% Without load - --------------------------------------------------- 4.16% 4.33% 8.77% With load - --------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lehman Lipper Intermediate Classic Investment Government/Corporate Investment Grade Debt Grade Bond Fund, Flex Bond Index Average Shares Period Ended 6/30/95 $10,000 $10,000 $10,000 5/31/96 10,232 10,327 10,313 5/31/97 10,862 11,143 11,093 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 29 STI CLASSIC SHORT-TERM BOND FUND - -------------------------------------------------------------------------------- The investment objective of the STI Classic Short-Term Bond Fund (the "Fund") is to provide as high a level of current income, relative to funds with like investment objectives, as is consistent with the preservation of capital primarily through investment in short to intermediate-term investment grade fixed income securities. The Fund attempts to capture the yield advantage which normally exists between money market instruments and short to intermediate-term bonds. The price volatility of short to intermediate-term bonds is fairly modest and over time it consistently has been offset by the incremental yield these instruments offer relative to money market securities. The Fund is managed from a total return perspective; that is, day to day decisions are made with a view towards maximizing income and price appreciation. The investment discipline applied in managing the Fund emphasizes adding value through yield curve, sector and credit analysis. Investments are made in those sectors, credits, and segments of the yield curve within the applicable universe which offer the most attractive risk/reward trade-offs. For example, we study historical yield spread data of the corporate and mortgage sectors and compare it with the current environment to identify buying and selling opportunities between various sectors. We also use internal credit analysis and screening to identify opportunities in corporate bonds. We look for those instruments that offer incremental yield for a given level of credit risk. The total return earned by the Fund (Trust Shares) over the last twelve months was 6.30%, as compared to 6.23% for the Salomon One-Year Treasury Benchmark On-the-Run and 6.63% for the Salomon 1-3 year Treasury/Government Sponsored/Corporate Index, neither of which include fees or expenses. The Fund's return was approximately 1.35% above the average taxable money market fund. We believe the Fund continues to meet or exceed its objective. /s/ DAVID S. YEALY David S. Yealy Vice President 30 Shown immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment as $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - -------------------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - -------------------------------------------------------------------------------- 6.30% 6.11% 5.04% 23.02% - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the Invested in the STI Invested in the Salomon Salomon One Year Classic Short-Term 1-3 Year Treasury Benchmark Bond Fund, Trust Treasury/Government On-the-Run Shares Sponsored/Corporate Index Period Ended 3/31/93 $10,000 $10,000 $10,000 5/31/93 10,035 10,039 10,035 5/31/94 10,238 10,260 10,303 5/31/95 11,016 11,021 10,965 5/31/96 11,506 11,614 11,593 5/31/97 12,231 12,384 12,315 Investor Shares - -------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - -------------------------------------------------------------- 5.97% 5.87% 4.69% 21.20% Without load - -------------------------------------------------------------- 3.87% 5.16% 4.18% 18.72% With load - -------------------------------------------------------------- Comparison of Change in the Value of a $10,000 Investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the Invested in the STI Invested in the Salomon Salomon One Year Classic Short-Term 1-3 Year Treasury Benchmark Bond Fund, Investor Treasury/Government On-the-Run Shares Sponsored/Corporate Index Period Ended 3/31/93 $ 9,800 $10,000 $10,000 5/31/93 9,838 10,039 10,035 5/31/94 10,017 10,260 10,303 5/31/95 10,762 11,021 10,965 5/31/96 11,218 11,614 11,593 5/31/97 11,887 12,384 12,315 Flex Shares - --------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - --------------------------------------------------- 5.62% 4.70% 9.36% Without load - --------------------------------------------------- 3.62% 4.70% 9.36% With load - --------------------------------------------------- GRAPH CHART (GRAPHIC OMITTED) Comparison of Change in the Value of a $10,000 Investment Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the Invested in the STI Invested in the Salomon Salomon One Year Classic Short-Term 1-3 Year Treasury Benchmark Bond Fund, Flex Treasury/Government On-the-Run Shares Sponsored/Corporate Index Period Ended 6/30/95 $10,000 $10,000 $10,000 5/31/96 10,359 10,481 10,511 5/31/97 10,941 11,176 11,166 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 31 STI CLASSIC SHORT-TERM U.S. TREASURY SECURITIES FUND - -------------------------------------------------------------------------------- The investment objective of STI Classic Short-Term U.S. Treasury Securities Fund (the "Fund") is to provide as high a level of current income, relative to funds with like investment objectives, as is consistent with the preservation of capital through investment exclusively in short-term U.S. Treasury securities. The goal of the Fund is to capture the yield advantage which normally exists between money market instruments and short-term bonds. The price volatility of short-term bonds is very modest and over time has consistently been offset by the incremental yield of these instruments relative to money market securities. The Fund is managed from a total return perspective, that is, day to day decisions are made with a view toward maximizing income and price appreciation. The investment discipline applied in managing the Fund emphasizes adding value through yield curve analysis. Investments are made in those segments of the yield curve within the applicable universe which offer the most attractive risk/reward trade-off. The total return earned by the Fund (Trust Shares) over the last twelve months was 5.76%, as compared to 5.38% for the Salomon 6-month Treasury Bill Index. The Fund's return was also approximately one percent above the average treasury money market fund. We believe the Fund continues to meet or exceed its objective. /s/ DAVID S. YEALY David S. Yealy Vice President 32 Shown Immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - -------------------------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - -------------------------------------------------------------------------------- 5.76% 5.53% 4.56% 20.66% - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Salomon Invested in the Classic Short-Term U.S. 1-3 Year Salomon 6 Month Treasury Securities Treasury/Government Treasury Bill Index Fund, Trust Shares Sponsored/Corporate Period Ended Index 3/31/93 $10,000 $10,000 $10,000 5/31/93 10,024 10,039 10,053 5/31/94 10,242 10,260 10,391 5/31/95 10,868 11,021 10,953 5/31/96 11,382 11,614 11,554 5/31/97 12,038 12,384 12,176 Investor Shares - ------------------------------------------------------------- One Year Annualized Annualized Cumulative Return 3 Year Inception Inception Return to Date to Date - ------------------------------------------------------------- 5.59% 5.38% 4.40% 19.83% Without load - ------------------------------------------------------------- 4.53% 5.03% 4.15% 18.65% With load - ------------------------------------------------------------- Comparison of Change in the Value of a $10,000 investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Invested in the Salomon Invested in the STI 1-3 Year Growth of $10,000 Classic Short-Term U.S. Treasury/Government Invested in the Treasury Securities Sponsored/Corporate Salomon 6 Month Fund, Investor Shares Index Treasury Bill Index Period Ended 3/31/93 $9,900 $10,000 $10,000 5/31/93 9,920 10,039 10,053 5/31/94 10,121 10,260 10,391 5/31/95 10,731 11,021 10,953 5/31/96 11,216 11,614 11,554 5/31/97 11,843 12,384 12,176 Flex Shares - --------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - --------------------------------------------------- 5.19% 4.48% 8.88% Without load - --------------------------------------------------- 3.19% 4.48% 8.88% With load - --------------------------------------------------- Comparison of Change in the Value of a $10,000 investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Salomon Classic Short-Term U.S. 1-3 Year Growth of $10,000 Treasury Securities Treasury/Government Invested in the Fund, Flex Shares Sponsored/Corporate Salomon 6 Month Index Treasury Bill Index Period Ended 6/30/95 $10,000 $10,000 $10,000 5/31/96 10,357 10,481 10,500 5/31/97 10,894 11,176 11,065 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 33 STI CLASSIC LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND - -------------------------------------------------------------------------------- The STI Classic Limited-Term Federal Mortgage Securities Fund seeks to provide as high a level of current income as is consistent with the preservation of capital by investing in mortgage related securities issued or guaranteed by the U.S. government. There are three reasons that our style performed well during the past year: 1) its short maturity, which is less sensitive to adverse interest rate movements; 2) its emphasis on income as the biggest component of total return; and 3) the virtual elimination of credit risk by the absence of corporate securities. We hold a mixture of Federal National Mortgage Association ("FNMA") balloon mortgages, very seasoned Government National Mortgage Association ("GNMA") and FNMA conventional mortgages, as well as high quality Collateralized Mortgage Obligations ("CMOs") -- all combined to have an effective average maturity of 3.3 years. These government securities currently offer half a percentage point to more than one percentage point more yield than U.S. Treasuries. In the mortgage market, prepayment is a big concern. We minimize this risk by holding securities that are less prone to this occurrence. Seasoned GNMA or FNMA mortgages that have been outstanding for several years provide an advantage because the mortgagees have had many opportunities to prepay them and have chosen not to for whatever reason. If rates drop again, these mortgagees are unlikely to prepay the loans. Similarly, the high quality CMOs that the portfolio acquires are structured in such a way to minimize this prepayment volatility risk. /s/ L. EARL DENNEY L. Earl Denney, CFA Managing Director /s/ DAVID WEST David West, CFA Principal 34 Shown Immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmarks. Trust Shares - -------------------------------------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - -------------------------------------------------------------------------------- 6.43% 6.29% 19.95% Comparison of Change in the Value of a $10,000 investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Merrill Invested in the Classic Limited-Term Lynch 1-5 Year Lipper. Federal Mortgage Short/Intermediate U.S. Short/Intermediate Securities Fund, Trust Treasury Index U.S. Government Average Shares Period Ended 6/30/94 $10,000 $10,000 $10,000 5/31/95 10,756 10,809 10,737 5/31/96 11,276 11,341 11,175 5/31/97 12,002 12,110 11,887 Investor Shares - --------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - --------------------------------------------------- 6.17% 6.35% 19.32% Without load - --------------------------------------------------- 3.47% 5.40% 16.29% With load - --------------------------------------------------- Comparison of Change in the Value of a $10,000 investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Merrill Invested in the Classic Limited-Term Lynch 1-5 Year Lipper Short/ Federal Mortgage Short/Intermediate U.S. Intermediate U.S. Securities Fund, Investor Treasury Index Government Average Shares Period Ended 7/31/94 $ 9,750 $10,000 $10,000 5/31/95 10,440 10,697 10,634 5/31/96 11,919 11,223 11,068 5/31/97 11,593 11,984 11,773 Flex Shares - --------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - --------------------------------------------------- 5.80% 4.95% 10.06% Without load - --------------------------------------------------- 3.80% 4.95% 10.06% With load - --------------------------------------------------- Comparison of Change in the Value of a $10,000 investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Merrill Invested in the Classic Limited-Term Lynch 1-5 Year Lipper Short/ Federal Mortgage Short/Intermediate Intermediate U.S. Securities Fund, Flex Treasury Index Government Average Shares Period Ended 6/30/95 $10,000 $10,000 $10,000 5/31/96 10,393 10,431 10,356 5/31/97 10,996 11,139 11,016 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 35 STI CLASSIC U.S. GOVERNMENT SECURITIES FUND - -------------------------------------------------------------------------------- The objective for the STI Classic U.S. Government Securities Fund (the "Fund") is to provide as high a level of current income as is consistent with the preservation of capital by investing in obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities. We believe the Fund met its objectives for the fiscal year of operations ending May 31, 1997. The Fund (Trust Class) had an annualized one year total return of 7.54%. In addition, the Fund was comprised of 28% U.S. Treasuries and 66% Government Agency Mortgage-Backed Securities. The fact that the yield on the benchmark 30 year U.S. Treasury bond ended May 31, 1997 was only 3 basis points lower than on May 31, 1996 (6.96% vs. 6.99%) belies the volatility in interest rates that occurred within the one year period. Indeed, the yield dropped as low as 6.42% in November 1996, only to rise as high as 7.26% in April 1997. Amidst this volatility we continued to take opportunities to increase income for shareholders when rates were higher. In addition, we increased our allocation to the Government Agency MBS Sector which performed very well during the period. Despite recent growth spurts in the fourth quarter '96 and first quarter '97 we feel overall that growth will continue on a moderate sustainable path and that inflation will remain well controlled. We feel this will be a good environment for bonds and have currently positioned the fund to take advantage of these trends. /s/ CHARLES B. LEONARD Charles B. Leonard, CFA First Vice President /s/ MICHAEL L. FORD Michael L. Ford Associate 36 Shown Immediately following the Advisor's Discussion of Fund Performance are three line graphs depicting the growth (including reinvestment of dividends and capital gains) of a hypothetical investment of $10,000 as compared with the growth of a hypothetical investment of $10,000 in the Fund's benchmark. Trust Shares - -------------------------------------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - -------------------------------------------------------------------------------- 7.54% 6.67% 20.06% - -------------------------------------------------------------------------------- Comparison of Change in the Value of a $10,000 investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lipper Classic U.S. Intermediate Government Securities Government Funds Fund, Trust Shares Average Period Ended 8/31/94 $10,000 $10,000 5/31/95 10,832 10,751 5/31/96 11,132 11,103 5/31/97 11,972 11,874 Investor Shares - -------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - -------------------------------------------------- 7.21% 6.09% 19.31% Without load - -------------------------------------------------- 3.14% 4.74% 14.83% With load - -------------------------------------------------- Comparison of Change in the Value of a $10,000 investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lipper Classic U.S. Intermediate Government Securities Government Funds Fund, Investor Shares Average Period Ended 6/30/94 $ 9,625 $10,000 5/31/95 10,571 10,912 5/31/96 10,833 11,270 5/31/97 11,614 12,052 Flex Shares - -------------------------------------------------- One Year Annualized Cumulative Return Inception Inception to Date to Date - -------------------------------------------------- 6.57% 3.98% 8.06% Without load - -------------------------------------------------- 4.57% 3.98% 8.06% With load - -------------------------------------------------- Comparison of Change in the Value of a $10,000 investment GRAPH CHART (GRAPHIC OMITTED) Growth of $10,000 Growth of $10,000 Invested in the STI Invested in the Lipper Classic U.S. Intermediate Government Securities Government Funds Fund, Flex Shares Average Period Ended 6/30/95 $10,000 $10,000 5/31/96 10,144 10,264 5/31/97 10,810 10,977 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. 37 STI CLASSIC PRIME QUALITY MONEY MARKET FUND - -------------------------------------------------------------------------------- The investment objective of the STI Classic Prime Quality Money Market Fund (the "Fund") is to provide as high a level of current income as is consistent with the preservation of capital and liquidity by investing exclusively in high quality money market instruments. The investment discipline which we use in managing the Fund emphasizes adding incremental value through yield curve, sector and credit analysis. Investments are made in those sectors, credits, and segments of the yield curve within the universe of money market eligible securities which offer the most attractive risk/reward trade-off and current yield. The maturity structure and average maturity of the Fund are actively managed to maximize the yield of the Fund over time based on the current market rates and conditions and on our market outlook. The Federal Reserve raised the Federal Funds Rate one time during the fiscal year ending May 31, 1997. Interest rates on short-term money market securities and money market funds have followed the modest rise in the Federal Funds Rate. During most of this period, the Fund maintained an extended average maturity in order to maximize the yield of the Fund. STI CLASSIC U.S. GOVERNMENT SECURITIES MONEY MARKET FUND - -------------------------------------------------------------------------------- The investment objective of the STI Classic U.S. Government Securities Money Market Fund (the "Fund") is to provide as high a level of current income as is consistent with the preservation of capital and liquidity by investing exclusively in money market eligible securities. Eligible securities include U.S. Treasury securities, U.S. Government Subsidiary Corporation securities that are backed by the full faith and credit of the U.S. Government, and repurchase agreements ("repos") collateralized by U.S. Treasury obligations and U.S. Government Subsidiary Corporation securities. The investment discipline which is used in managing the Fund emphasizes adding incremental value through yield curve analysis. The maturity structure and average maturity of the Fund are actively managed to maximize the yield of the Fund over time based on the current market rates and conditions and our market outlook. The Federal Reserve raised the Federal Funds Rate one time during the fiscal year ending May 31, 1997. Interest rates on short-term money market securities and money market funds have followed the modest rise in the Federal Funds Rate. During most of this period, the Fund maintained an extended average maturity in order to maximize the yield of the Fund. /s/ DAVID S. YEALY David S. Yealy Vice President 38 STI CLASSIC TAX-EXEMPT MONEY MARKET FUND - -------------------------------------------------------------------------------- The STI Classic Tax-Exempt Money Market Fund (the "Fund") seeks to provide as high a level of current interest income exempt from regular federal income tax as is consistent with preserving capital and liquidity. The Fund invests in high quality, U.S. dollar-denominated municipal securities of issuers located in all fifty states, the District of Columbia, and Puerto Rico. The Federal Reserve raised the Federal Funds Rate one time during the fiscal year ending May 31, 1997. Interest rates on short-term money market securities and money market funds have followed the modest rise in the Federal Funds Rate. During most of this period, the Fund maintained an extended average maturity in order to maximize the yield of the Fund. /s/ MARY F. CERNILLI Mary F. Cernilli Associate 39 [This Page Left Intentionally Blank] REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and Board of Trustees of STI Classic Funds: We have audited the accompanying statements of net assets of the Value Income Stock, Mid-Cap Equity, Small Cap Equity, Capital Growth, Balanced, Emerging Markets Equity, International Equity Index, International Equity, Sunbelt Equity, Investment Grade Tax-Exempt Bond, Florida Tax-Exempt Bond, Tennessee Tax-Exempt Bond, Georgia Tax-Exempt Bond, Investment Grade Bond, Short-Term Bond, Short-Term U.S. Treasury Securities, Limited-Term Federal Mortgage Securities, U.S. Government Securities, Prime Quality Money Market, U.S. Government Securities Money Market, and Tax-Exempt Money Market Funds of STI Classic Funds (the "Trust") as of May 31, 1997, and the related statements of operations, changes in net assets, and financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Trust'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 May 31, 1997, by correspondence with the custodian and the application of alternative auditing procedures with respect to unsettled securities transactions. 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 the Value Income Stock, Mid-Cap Equity, Small Cap Equity, Capital Growth, Balanced, Emerging Markets Equity, International Equity Index, International Equity, Sunbelt Equity, Investment Grade Tax-Exempt Bond, Florida Tax-Exempt Bond, Tennessee Tax-Exempt Bond, Georgia Tax-Exempt Bond, Investment Grade Bond, Short-Term Bond, Short-Term U.S. Treasury Securities, Limited-Term Federal Mortgage Securities, U.S. Government Securities, Prime Quality Money Market, U.S. Government Securities Money Market, and Tax-Exempt Money Market Funds of STI Classic Funds as of May 31, 1997, the results of their operations, changes in their net assets, and financial highlights for the periods presented, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Philadelphia, PA July 11, 1997 41 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 VALUE INCOME STOCK FUND - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ COMMON STOCKS (92.6%) BASIC MATERIALS (14.8%) Consolidated Papers 233,700 $ 12,737 Cyprus AMAX Minerals 707,200 17,238 Eastman Chemical 119,700 7,122 Ethyl 1,428,100 13,388 Georgia Pacific 246,700 21,771 Hercules 617,800 28,959 Imperial Chemical Industries 315,900 17,217 International Flavors & Fragrances 592,100 26,274 International Paper 531,300 25,502 Nalco Chemical 394,600 14,650 Olin 464,700 19,053 Reynolds Metals 247,100 16,772 Union Camp 338,100 17,750 Witco Chemical 467,200 17,286 ---------- Total Basic Materials 255,719 ---------- CAPITAL GOODS (12.8%) AMP 1,034,400 42,540 Cooper Industries 329,100 16,784 Federal Signal 198,300 5,057 Foster Wheeler 544,000 21,080 General Signal 563,300 23,729 National Service Industries 278,100 12,202 Pall 556,500 13,147 Tenneco 770,100 34,462 Thomas & Betts 362,200 18,427 Trinity Industries 319,800 9,594 Waste Management 769,100 24,419 ---------- Total Capital Goods 221,441 ---------- COMMUNICATIONS SERVICES (7.7%) Alltel 538,700 17,710 BellSouth 460,200 20,882 Frontier 984,100 18,083 GTE 899,600 39,695 Southern New England Telecommunications 577,200 22,511 Sprint 269,400 13,167 ---------- Total Communication Services 132,048 ---------- - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ CONSUMER CYCLICALS (15.9%) American Greetings, Cl A 514,900 $ 17,635 Dana 617,300 22,300 Echlin 597,300 19,935 Ford Motor 455,500 17,081 H & R Block 497,800 16,427 ITT Industries 1,291,700 31,970 J.C. Penney 767,200 39,511 Masco 428,800 16,670 May Department Stores 532,100 25,075 Maytag 683,900 18,294 McGraw-Hill 307,300 16,786 Mercantile Stores 287,700 15,464 Reader's Digest, Cl A 200,800 4,970 Shaw Industries 1,033,200 12,915 ---------- Total Consumer Cyclicals 275,033 ---------- CONSUMER STAPLES (9.3%) Cadbury Schweppes ADR 461,800 16,740 CPC International 271,900 23,383 Deluxe 261,600 8,502 Food Lion, Cl A 1,101,900 7,369 Kelly Services, Cl A 334,900 9,838 McCormick 617,100 16,122 R.R. Donnelley & Sons 660,200 24,510 Rubbermaid 896,400 24,987 UST 620,200 17,676 Whitman 495,500 11,954 ---------- Total Consumer Staples 161,081 ---------- ENERGY (9.2%) Amoco 291,400 26,044 Chevron 358,900 25,123 Dresser Industries 753,100 25,794 Kerr-McGee 352,700 22,837 Mobil 179,400 25,094 Phillips Petroleum 612,900 26,048 Sun 278,200 8,311 ---------- Total Energy 159,251 ---------- 42 - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ FINANCIALS (8.2%) American Financial Group 435,700 $ 16,557 American General 397,500 17,589 AmSouth Bancorp 233,850 9,149 Central Fidelity Banks 292,000 8,541 Crestar Financial 259,600 9,865 First American Bank 127,400 8,775 First American of Tennessee 281,600 10,278 Hibernia, Cl A 651,800 8,636 Magna Group 273,000 8,804 Merchantile Bancorp 150,700 8,891 Signet Banking 260,900 8,577 Summit Bancorp 183,854 9,078 TIG Holdings 624,000 16,848 ---------- Total Financials 141,588 ---------- HEALTH CARE (6.2%) American Home Products 345,600 26,352 Baxter International 490,800 25,890 C.R. Bard 525,400 16,813 Pharmacia Upjohn ADR 1,118,900 38,742 ---------- Total Health Care 107,797 ---------- TECHNOLOGY (1.5%) Eastman Kodak 307,900 25,517 ---------- TRANSPORTATION (2.2%) KLM Royal Dutch Air* 664,000 19,505 Illinois Central 493,400 17,824 ---------- Total Transportation 37,329 ---------- UTILITIES (4.8%) Central & South West 697,200 14,815 Duke Power 201,300 9,058 Pacificorp 873,000 17,351 Questar 445,900 17,502 Southern 1,124,800 23,902 ---------- Total Utilities 82,628 ---------- Total Common Stocks (Cost $1,445,015) 1,599,432 ---------- - ------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------- REPURCHASE AGREEMENTS (6.8%) Deutsche Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $70,160,347 (collateralized by FHLMC obligation, par value $69,192,840, 6.63%, 05/15/08:FNMA obligation, par value $54,184,000, 8.50%, 04/01/17: total market value $71,530,412) $70,128 $70,128 Salomon Brothers 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $46,073,839 (collateralized by various FHLMC obligations, total par value $68,587,421, 6.00%-9.50%, 11/01/01-05/01/27: various FNMA obligations total par value $71,651,398, 5.50%-9.00%, 06/01/01-05/01/27: total market value $44,159,361) 43,054 43,054 Swiss Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $4,954,044 (collateralized by FNMA obligation, par value $6,319,000, 6.071%, matures 04/01/34: market value $5,075,690) 4,952 4,952 ---------- Total Repurchase Agreements (Cost $118,134) 118,134 ---------- Total Investments (99.4%) (Cost $1,563,149) 1,717,566 ---------- OTHER ASSETS AND LIABILITIES, NET (0.6%) 9,961 ---------- 43 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 VALUE INCOME STOCK FUND--CONCLUDED - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 108,557,380 outstanding shares of beneficial interest $1,171,719 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 12,133,042 outstanding shares of beneficial interest 134,021 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 5,399,733 outstanding shares of beneficial interest 68,125 Undistributed net investment income 6,428 Accumulated net realized gain on investments 192,817 Unrealized appreciation on investments 154,417 ---------- Total Net Assets (100.0%) $1,727,527 ========== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 13.71 ========== Net Asset Value and Redemption Price Per Share -- Investor Shares $ 13.68 ========== Maximum Offering Price Per Share -- Investor Class ($13.68 (Divide) 96.25%) $ 14.21 ========== Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 13.61 ========== (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 44 MID-CAP EQUITY FUND - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ COMMON STOCKS (92.6%) BASIC MATERIALS (5.0%) IMC Fertilizer Group 168,800 $ 6,604 James River 94,300 3,312 Potash of Saskatchewan 71,800 5,897 ---------- Total Basic Materials 15,813 ---------- CAPITAL GOODS (15.1%) Agco 111,400 3,551 Fisher Scientific International 86,500 3,136 Foster Wheeler 79,400 3,077 Hubbell, Cl B 84,540 3,847 Molten Metal Technology* 203,300 1,449 Philip Services* 405,600 5,932 Solectron* 119,100 7,444 Sundstrand 90,200 4,487 United Waste Systems* 136,200 5,227 U.S. Filter* 156,900 4,942 York International 100,850 4,891 ---------- Total Capital Goods 47,983 ---------- COMMUNICATIONS SERVICES (1.1%) Nextel Communications, Cl A* 243,500 3,592 ---------- CONSUMER CYCLICALS (15.5%) Bed Bath and Beyond* 116,000 3,292 Dollar General 183,200 6,160 Harley-Davidson 158,900 7,111 International Speedway* 123,500 2,439 Men's Wearhouse* 123,600 4,125 Nine West Group* 113,000 4,350 Saks Holdings* 224,300 5,579 Stanley Works 87,700 3,596 Staples* 336,700 7,407 West Marine* 203,800 5,350 ---------- Total Consumer Cyclicals 49,409 ---------- CONSUMER STAPLES (12.0%) Boston Chicken* 313,700 5,647 Cracker Barrel Old Country Stores 182,700 5,298 Dial 186,500 3,124 - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ CONSUMER STAPLES--CONTINUED Hannaford Brothers 137,600 $ 4,799 JP Foodservice* 152,000 4,408 McKesson 75,300 5,657 Nabisco Holdings, Cl A 130,200 5,159 Papa John's International* 122,400 3,902 ---------- Total Consumer Staples 37,994 ---------- ENERGY (6.3%) Anadarko Petroleum 105,400 6,640 Kerr-McGee 47,400 3,069 Tosco 91,600 2,988 Western Atlas* 106,300 7,215 ---------- Total Energy 19,912 ---------- FINANCIALS (9.9%) Crestar Financial 139,000 5,282 First Security 162,075 3,971 Hartford Life, Cl A* 62,400 2,090 North Fork Bancorporation 88,000 1,848 Regions Financial 57,500 3,436 SouthTrust 77,100 2,997 Summit Bancorp 111,000 5,481 Union Planters 66,700 3,152 PMI Group 56,600 3,106 ---------- Total Financials 31,363 ---------- HEALTH CARE (9.9%) Allergan 112,200 3,324 Biogen* 187,300 6,216 DePuy* 136,500 3,310 Medpartners* 179,700 3,414 Pacificare Health Systems, Cl B* 91,400 7,243 Teva Pharmaceuticals ADR 65,600 3,936 Watson Pharmaceuticals* 105,100 4,112 ---------- Total Health Care 31,555 ---------- TECHNOLOGY (15.0%) ADC Telecommunications* 177,500 6,079 Adobe Systems 110,300 4,922 Analog Devices* 240,133 6,424 45 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 MID-CAP EQUITY FUND--CONCLUDED - --------------------------------------------------------------- SHARES/FACE AMOUNT (000) VALUE (000) - --------------------------------------------------------------- TECHNOLOGY--CONTINUED Atmel* 151,900 $ 4,367 Ceridian* 141,000 5,182 Flextronics International* 207,000 4,890 Micron Electronics* 193,600 2,940 Network General* 226,600 4,164 Teradyne* 214,400 8,790 ---------- Total Technology 47,758 ---------- TRANSPORTATION (1.4%) ASA Holdings 172,300 4,501 ---------- UTILITIES (1.4%) Wisconsin Energy 185,200 4,468 ---------- Total Common Stocks (Cost $268,513) 294,348 ---------- REPURCHASE AGREEMENTS (6.8%) Deutsche Bank 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $12,270,617 (collateralized by FNMA obligation, par value $13,389,534, 0.000%, 01/01/26: market value $12,510,245) $12,265 12,265 Merrill Lynch 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $9,389,853 (collateralized by FNMA obligation, par value $465,000, 0.000%, 11/25/22; and various GNMA obligations, total par value $10,608,368, 6.000%-8.500%, 05/20/06-05/15/26: total market value $9,577,430) 9,386 9,386 ---------- Total Repurchase Agreements (Cost $21,651) 21,651 ---------- - ------------------------------------------------------------- VALUE (000) - ------------------------------------------------------------- Total Investments (99.4%) (Cost $290,164) $ 315,999 ---------- OTHER ASSETS AND LIABILITIES, NET (0.6%) 1,736 ---------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 21,752,271 outstanding shares of beneficial interest 239,440 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 1,537,279 outstanding shares of beneficial interest 17,180 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 776,273 outstanding shares of beneficial interest 9,538 Accumulated net investment loss (10) Accumulated net realized gain on investments 25,752 Net unrealized appreciation on investments 25,835 ---------- Total Net Assets (100.0%) $ 317,735 ========== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 13.21 ========== Net Asset Value and Redemption Price Per Share -- Investor Shares $ 13.17 ========== Maximum Offering Price Per Share -- Investor Shares ($13.17 (Divide) 96.25%) $ 13.68 ========== Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 13.04 ========== (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 46 SMALL CAP EQUITY FUND - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- COMMON STOCKS (95.2%) BASIC MATERIALS (3.1%) Columbus Mckinnon 63,700 $ 1,147 Commonwealth Industries 94,700 1,788 Lilly Industries Incorporated, Cl A 9,000 189 Schnitzer Steel Industries, Cl A 38,800 970 ---------- Total Basic Materials 4,094 ---------- CAPITAL GOODS (11.7%) A.M. Castle 87,600 1,905 Applied Industrial Technology 45,500 1,598 Barnes Group 13,300 357 Fisher Scientific International 69,000 2,501 Regal Beloit 115,700 3,081 Valmont Industries 24,100 1,012 Thomas Industries 34,000 956 Zurn Industries 145,900 3,866 ---------- Total Capital Goods 15,276 ---------- CONSUMER CYCLICALS (27.4%) Ameron 6,600 366 Angelica 104,900 1,888 Brown Group 107,000 1,926 Bush Industries 116,300 2,617 Cross A.T., Cl A 54,800 610 Guilford Mills 132,250 2,595 Hardinge 38,000 988 Harman International 84,800 3,540 K2 55,500 1,603 Libbey 74,800 2,497 LSI Industries 72,300 1,103 Movado Group 86,625 1,917 Optical Coating Laboratories 43,900 466 Rock Tenn, Cl A 63,000 953 Sotheby's Holdings, Cl A 124,000 1,922 Springs Industries, Cl A 75,200 3,807 Talbots 143,700 3,772 WD-40 32,700 1,856 Wellman 73,100 1,307 Winnebago Industries 20,400 140 ---------- Total Consumer Cyclicals 35,873 ---------- - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- CONSUMER STAPLES (15.4%) ABM Industries 99,700 $ 1,932 Banta 87,000 2,414 Bowne & Company 106,000 3,167 Earthgrains 34,200 1,949 Ingles Markets, Cl A 136,000 1,964 John H. Harland 163,300 3,736 Kelly Services, Cl A 61,000 1,792 Rykoff-Sexton 52,100 996 Smucker (J.M.), Cl B 115,100 2,144 TCA Cable Television 3,000 101 ---------- Total Consumer Staples 20,195 ---------- ENERGY (5.6%) Giant Industries 44,700 648 Monterey Resources 118,500 1,866 Pittston Minerals Group 73,400 1,009 Quaker State 255,400 3,863 ---------- Total Energy 7,386 ---------- FINANCIALS (10.1%) Banco Latinamericano de Exportaciones 46,600 2,196 Bank United, Cl A 28,700 997 GCR Holdings 7,800 209 Interwest Bancorp 26,700 935 IPC Holdings 79,300 2,022 Klamath First Bancorp 61,500 1,138 Lawyers Title 43,800 788 National Bancorp of Alaska 14,400 1,130 Seacoast Banking of Florida 49,000 1,286 West Coast Bancorp 40,625 1,016 Willis Corroon Public Limited 132,900 1,495 ---------- Total Financials 13,212 ---------- HEALTH CARE (8.9%) Bindley Western Industries 75,600 1,663 Chemed 26,300 960 Invacare 117,000 2,516 Morrison Health Care 103,100 1,675 Vital Signs 101,000 2,007 47 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 SMALL CAP EQUITY FUND--CONCLUDED - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ HEALTH CARE--CONTINUED West Company 96,100 $ 2,835 ---------- Total Health Care 11,656 ---------- TECHNOLOGY (3.0%) Methode Electronics, Cl A 231,200 3,902 ---------- TRANSPORTATION (4.3%) Arnold Industries 107,300 1,797 Knightsbridge Tankers Limited* 50,000 1,231 Sea Containers 127,200 2,544 ---------- Total Transportation 5,572 ---------- UTILITIES (5.7%) Eastern Enterprises 12,800 442 Enron Global Power & Pipelines 12,800 422 Minnesota Power & Light 65,300 1,894 Northwest Natural Gas 39,050 952 TNP Enterprises 56,000 1,232 United Water Resources 74,100 1,334 Wicor 33,900 1,246 ---------- Total Utilities 7,522 ---------- Total Common Stocks (Cost $117,054) 124,688 ---------- PREFERRED STOCKS (1.9%) PRECIOUS METALS (1.9%) Coeur D'Alene Mines 151,100 2,512 ---------- Total Preferred Stocks (Cost $2,502) 2,512 ---------- - ------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------- REPURCHASE AGREEMENT (3.7%) Deutsche Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $4,900,504 (collateralized by FHLMC obligation, total par value $5,062,244, 6.092%, 10/01/32, market value: $4,996,199) $4,898 $ 4,898 ---------- Total Repurchase Agreements (Cost $4,898) 4,898 ---------- Total Investments (100.8%) (Cost $124,454) 132,098 ---------- OTHER ASSETS AND LIABILITIES, NET (-0.8%) (1,049) ---------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 11,836,719 outstanding shares of beneficial interest 121,332 Undistributed net investment income 316 Accumulated net realized gain on investments 1,757 Net unrealized appreciation on investments 7,644 ---------- Total Net Assets (100.0%) $ 131,049 ========== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 11.07 ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 48 ================================================================================ CAPITAL GROWTH FUND - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ COMMON STOCKS (86.6%) BASIC MATERIALS (4.7%) Aluminum Company of America 117,500 $ 8,651 Air Products & Chemicals 27,100 2,107 Fort Howard* 179,000 8,223 Hercules 228,800 10,725 Monsanto 265,100 11,664 Morton International 198,000 6,386 Potash of Saskatchewan 54,100 4,443 Praxair 123,900 6,520 W.R. Grace 67,500 3,527 ---------- Total Basic Materials 62,246 ---------- CAPITAL GOODS (13.9%) Allied Signal 361,100 27,714 Avery Dennison 62,300 2,344 Deere 163,000 8,333 Emerson Electric 285,000 15,390 Fluor 57,500 3,040 General Electric 688,700 41,580 General Signal 311,700 13,130 Keystone International 54,400 1,775 Lockheed Martin 96,000 8,988 McDonnell Douglas 58,200 3,747 Molten Metal Technology* 243,500 1,735 Pall 140,000 3,308 Rockwell International 171,400 11,055 Thomas & Betts 34,064 1,733 Tyco International 359,100 22,803 United Technologies 164,400 13,214 United Waste Systems* 8,700 334 USA Waste Services* 112,900 4,093 Waste Management 21,000 667 Wheelabrator Technologies 135,900 1,750 ---------- Total Capital Goods 186,733 ---------- COMMUNICATION SERVICES (1.6%) Airtouch Communications* 12,700 354 BellSouth 71,700 3,253 Ericsson Telephone ADR* 263,800 9,398 GTE 196,000 8,649 ---------- Total Communication Services 21,654 ---------- - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ CONSUMER CYCLICALS (8.4%) American Stores 157,900 $ 7,184 Borders Group* 6,700 146 Carnival 282,300 10,727 Costco* 211,100 7,125 CUC International* 291,700 6,709 Federated Department Stores* 309,400 11,448 Ford Motor 82,100 3,079 Fruit of the Loom* 90,400 3,153 Gannett 44,500 4,116 Hollinger International 64,200 714 Home Depot 244,432 15,399 Intimate Brands 190,900 4,081 ITT* 33,400 1,991 Lear* 332,100 12,703 Marriott 27,100 1,565 Mattel 348,500 10,411 McGraw-Hill 35,900 1,961 Office Depot* 407,400 7,028 TJX 9,800 470 Tribune 46,900 2,028 ---------- Total Consumer Cyclicals 112,038 ---------- CONSUMER STAPLES (11.7%) American Standard* 27,700 1,388 Avon Products 276,600 17,633 Colgate-Palmolive 24,400 1,513 CPC International 37,800 3,251 CVS 360,600 17,264 Dial 28,300 474 Gillette 171,817 15,270 Kimberly Clark 101,400 5,083 JP Foodservice* 132,900 3,854 Nabisco Holdings, Cl A 30,700 1,216 PepsiCo 12,400 456 Philip Morris 574,650 25,285 Ralston Purina Group 61,500 5,243 RJR Nabisco 105,600 3,419 Safeway* 259,300 11,669 Sara Lee 138,700 5,669 Sysco 335,700 11,708 Tele-Communications, Cl A* 375,800 5,684 49 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 CAPITAL GROWTH FUND--CONTINUED - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ CONSUMER STAPLES--CONTINUED Time Warner 57,500 $ 2,674 Unilever ADR 12,400 2,403 Viacom, Cl B* 321,021 9,530 Walt Disney 55,366 4,533 Wendy's International 53,200 1,244 William Wrigley Jr. 11,300 670 ---------- Total Consumer Staples 157,133 ---------- ENERGY (5.7%) Amoco 66,500 5,943 British Petroleum ADR 53,500 7,751 Dresser Industries 186,200 6,377 Halliburton 142,100 10,995 Kerr-McGee 49,200 3,186 Mobil 138,200 19,331 Royal Dutch Petroleum, ADR 26,800 5,233 Schlumberger 40,700 4,848 Tosco 88,100 2,874 Union Pacific Resources Group 330,358 9,539 ---------- Total Energy 76,077 ---------- FINANCIALS (12.9%) American International Group 76,350 10,336 BankAmerica 126,300 14,761 Bank of New York 82,600 3,521 Capital One Financial 36,400 1,169 Chase Manhattan Bank 314,200 29,692 Citicorp 10,100 1,155 Conseco 19,100 764 Cullen/Frost Bankers 23,900 941 Dean Witter Discover 50,800 2,096 FHLMC 221,100 7,296 FNMA 206,100 8,991 First Union 59,300 5,092 First USA 267,800 13,256 GCR Holdings 60,000 1,605 General Re 53,500 9,376 Great Western Financial 191,900 9,307 Hartford Financial Services Group 266,800 20,810 Nationsbank 45,040 2,643 Norwest 24,400 1,305 - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ FINANCIALS--CONTINUED PMI Group 104,100 $ 5,713 Sphere Drake Holdings 214,900 1,907 Summit Bancorp 43,900 2,168 Travelers 160,296 8,796 Washington National 354,600 9,929 Wells Fargo 2,500 659 ---------- Total Financials 173,288 ---------- HEALTH CARE (13.6%) Alza, Cl A* 7,900 233 American Home Products 427,000 32,559 Amgen* 71,200 4,762 Baxter International 173,100 9,131 Becton Dickinson 19,300 951 Boston Scientific* 83,111 4,436 Bristol-Myers Squibb 276,800 20,310 Columbia/HCA Healthcare 493,196 18,063 Eli Lilly 107,400 9,988 Healthsouth* 467,000 10,683 Horizon/CMS Healthcare* 50,000 913 Johnson & Johnson 386,888 23,165 Medpartners* 413,600 7,858 Medtronic 22,400 1,658 Merck 196,082 17,623 Pacificare Health Systems, Cl B* 39,200 3,107 Schering Plough 89,400 8,113 Tenet Healthcare* 222,800 6,127 Warner Lambert 30,900 3,113 ---------- Total Health Care 182,793 ---------- TECHNOLOGY (12.7%) Atmel* 50,900 1,463 Automatic Data Processing 44,500 2,186 Cadence Design Systems* 28,000 931 Ceridian* 119,000 4,373 Cisco Systems* 243,600 16,504 Compaq Computer* 13,800 1,494 Eastman Kodak 137,200 11,370 First Data 390,100 15,604 Hewlett Packard 112,600 5,799 IBM 115,600 9,999 50 - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ TECHNOLOGY--CONTINUED Intel 154,900 $ 23,467 Lucent Technologies 136,131 8,661 Microsoft* 185,100 22,952 Motorola 163,300 10,839 Oracle* 165,450 7,714 Scientific-Atlanta 644,900 11,689 Xerox 231,600 15,691 ---------- Total Technology 170,736 ---------- TRANSPORTATION (1.0%) Burlington Northern Santa Fe 102,800 8,532 Delta Air Lines 21,000 1,969 Union Pacific 39,500 2,676 ---------- Total Transportation 13,177 ---------- UTILITIES (0.4%) Consolidated Natural Gas 23,700 1,259 Enron 64,000 2,608 Sonat 27,100 1,558 ---------- Total Utilities 5,425 ---------- Total Common Stocks (Cost $982,524) 1,161,300 ---------- PREFERRED STOCKS (1.7%) BASIC MATERIALS (0.2%) International Paper, CV to .9259 Shares 45,000 2,278 ---------- FINANCIALS (0.1%) National Bank of Australia, CV to .3273 Shares* 74,600 2,014 ---------- TECHNOLOGY (1.2%) Microsoft, CV to 1 share 186,700 16,080 ---------- TRANSPORTATION (0.2%) Continental Air Finance Trust, CV to 2.0678 Shares* 28,500 2,230 ---------- Total Preferred Stocks (Cost $20,294) 22,602 ---------- - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ CONVERTIBLE BONDS (5.0%) Alza, CV to 12.987 Shares (A) 0.000%, 07/14/14 $11,500 $ 5,103 Automatic Commercial Exchange Security, CV to 0.8333 Shares 6.500%, 05/15/00 123 2,958 Continental Airlines, CV to 16.559 Shares 6.750%, 04/15/06 3,600 4,707 Cuc International, CV to 32.6531 3.000%, 02/15/02 7,000 6,913 Home Depot, CV to 14.4665 Shares 3.250%, 10/01/01 9,000 9,630 Mariott LYON, (A) (B) 0.000%, 03/25/11 5,000 2,906 Molten Metal Technology, CV to 25.8065 Shares (B) 5.750%, 05/01/06 5,500 2,365 Roche, CV to 3.5626 Shares (A) 0.000%, 05/06/12 19,000 7,648 Times Mirror, CV to 5.8280 Shares (A) (B) 0.000%, 04/15/17 10,000 3,925 U.S. Filter, CV to 25.3164 Shares, Callable 12/15/99 @ 101.8 4.500%, 12/15/01 5,200 5,298 USA Waste Services, CV to 35.3243 Shares 5.000%, 03/01/06 2,350 3,243 USA Waste Services, CV to 22.9594 Shares, Callable 02/01/2000 @101.6 4.000%, 02/01/02 3,000 3,116 WMX Technologies, CV to 26.078 Shares 2.000%, 01/24/05 9,500 8,752 ---------- Total Convertible Bonds (Cost $66,837) 66,564 ---------- 51 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 CAPITAL GROWTH FUND--CONCLUDED - -------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------- REPURCHASE AGREEMENTS (8.2%) Deutsche Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $76,351,152 (collateralized by various FHLMC obligations, total par value $41,261,658, 6.092%-6.230%, 12/15/23-10/01/32; and various FNMA obligations, total par value $40,818,728, 0.000%, 01/01/26-04/25/27: total market value $77,842,108) $76,316 $ 76,316 Salomon Brothers 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $33,282,808 (collateralized by various FHLMC obligations, total par value $25,236,419, 5.500%-9.000%, 01/01/00-06/01/26; and various FNMA obligations, total par value $37,520,630, 5.500%-9.500%, 04/01/01-04/01/27: total market value $34,062,576) 33,267 33,267 ---------- Total Repurchase Agreements (Cost $109,583) 109,583 ---------- Total Investments (101.5%) (Cost $1,179,238) 1,360,049 ---------- OTHER ASSETS AND LIABILITIES, NET (-1.5%) (19,508) ---------- - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 71,924,416 outstanding shares of beneficial interest $ 807,086 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 14,515,982 outstanding shares of beneficial interest 167,543 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 2,456,856 outstanding shares of beneficial interest 34,522 Undistributed net investment income 3,569 Accumulated net realized gain on investments 147,010 Net unrealized appreciation on investments 180,811 ---------- Total Net Assets (100.0%) $1,340,541 ========== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $15.09 ========== Net Asset Value and Redemption Price Per Share -- Investor Shares $15.06 ========== Maximum Offering Price Per Share -- Investor Class ($15.06 (Divide) 96.25%) $15.65 ========== Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $14.96 ========== (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 52 BALANCED FUND - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ COMMON STOCKS (51.7%) BASIC MATERIALS (2.7%) Air Products & Chemicals 1,900 $ 148 Aluminum Company of America 7,800 574 Fort Howard* 12,000 551 Hercules 15,500 727 Monsanto 19,400 854 Morton International 13,900 448 Potash of Saskatchewan 3,600 296 Praxair 8,300 437 W.R. Grace 7,300 381 ---------- Total Basic Materials 4,416 ---------- CAPITAL GOODS (8.6%) Allied Signal 27,800 2,134 Avery Dennison 8,200 309 Deere 11,600 593 Emerson Electric 20,500 1,107 Fisher Scientific International 5,000 181 Fluor 4,000 211 General Electric 50,100 3,025 General Signal 20,600 868 Keystone International 11,800 385 Lockheed Martin 7,000 655 McDonnell Douglas 6,600 425 Molten Metal Technology* 19,100 136 Pall 9,500 224 Rockwell International 12,500 806 Thomas & Betts 2,300 117 Tyco International 26,100 1,657 United Technologies 11,900 956 United Waste Systems* 400 15 USA Waste Services* 7,100 257 Waste Management 1,500 48 ---------- Total Capital Goods 14,109 ---------- COMMUNICATION SERVICES (1.2%) Airtouch Communications* 8,600 240 BellSouth 8,100 368 Ericsson Telephone ADR* 19,200 684 GTE 15,900 702 ---------- Total Communication Services 1,994 ---------- - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ CONSUMER CYCLICALS (4.7%) American Standard* 2,000 $ 100 Carnival 20,600 783 Costco* 14,200 479 CUC International* 21,200 488 Federated Department Stores* 21,000 777 Ford Motor 5,600 210 Fruit of the Loom* 8,600 300 Gannett 3,000 277 Home Depot 19,200 1,210 Intimate Brands 12,900 276 ITT* 2,400 143 Lear* 22,700 868 Marriott 1,700 98 Mattel 21,950 656 McGraw-Hill 2,900 158 Office Depot* 25,800 445 Tribune 10,000 432 ---------- Total Consumer Cyclicals 7,700 ---------- CONSUMER STAPLES (7.2%) American Stores 10,700 487 Avon Products 19,800 1,262 Colgate-Palmolive 1,600 99 CPC International 2,600 224 CVS 25,700 1,230 Dial 1,900 32 Gillette 12,548 1,115 JP Foodservice* 11,900 345 Kimberly Clark 9,000 451 Nabisco Holdings, Cl A 1,200 48 PepsiCo 900 33 Philip Morris 41,800 1,839 Ralston Purina Group 4,500 384 RJR Nabisco 7,800 253 Safeway* 21,200 954 Sara Lee 9,400 384 Sysco 24,500 854 Tele-Communications, Cl A* 27,100 410 Time Warner 4,200 195 Unilever ADR 900 174 Viacom, Cl B* 20,944 622 53 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 BALANCED FUND--CONTINUED - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ CONSUMER STAPLES--CONTINUED Walt Disney 3,395 $ 278 Wendy's International 6,900 161 ---------- Total Consumer Staples 11,834 ---------- ENERGY (3.4%) Amoco 4,800 429 British Petroleum ADR 3,900 565 Dresser Industries 13,300 456 Halliburton 11,300 874 Kerr-McGee 7,100 460 Mobil 8,900 1,245 Royal Dutch Petroleum ADR 1,900 371 Schlumberger 2,800 334 Tosco 5,900 192 Union Pacific Resources Group 21,922 633 ---------- Total Energy 5,559 ---------- FINANCIALS (7.8%) American International Group 5,200 704 Bank of New York 5,600 239 BankAmerica 9,100 1,064 BB&T 8,600 344 Capital One Financial 2,600 84 Chase Manhattan Bank 23,400 2,211 Citicorp 700 80 Conseco 1,400 56 Cullen/Frost Bankers 1,900 75 Dean Witter Discover 3,700 153 FHLMC 16,200 535 FNMA 13,400 585 First Union 4,300 369 First USA 18,700 926 GCR Holdings 7,000 187 General Re 3,600 631 Great Western Financial 13,900 674 Hartford Financial Services Group 19,500 1,521 Norwest 5,500 294 PMI Group 7,600 417 Sphere Drake Holdings 21,000 186 Summit Bancorp 3,000 148 Travelers 11,133 611 - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ FINANCIALS--CONTINUED U.S. Bancorp 700 $ 43 Washington National 19,500 546 ---------- Total Financials 12,683 ---------- HEALTH CARE (7.9%) American Home Products 28,400 2,165 Amgen* 6,500 435 Baxter International 12,600 665 Becton Dickinson 1,300 64 Boston Scientific* 5,910 315 Bristol-Myers Squibb 20,300 1,490 Columbia/HCA Healthcare 33,310 1,220 Healthsouth* 32,868 752 Johnson & Johnson 28,100 1,682 Eli Lilly 7,800 725 Medpartners* 27,600 524 Medtronic 1,600 118 Merck 14,200 1,276 Pacificare Health Systems, Cl B* 3,400 269 Schering Plough 6,600 599 Tenet Healthcare* 15,000 412 Warner Lambert 2,300 232 ---------- Total Health Care 12,943 ---------- TECHNOLOGY (7.4%) Atmel* 3,600 103 Automatic Data Processing 2,270 112 Cadence Design Systems* 9,000 299 Ceridian* 6,300 232 Cisco Systems* 16,400 1,111 Compaq Computer* 600 65 Eastman Kodak 10,000 829 First Data 28,000 1,120 Hewlett Packard 7,900 407 IBM 7,800 675 Intel 11,500 1,742 Lucent Technologies 9,214 586 Microsoft* 12,200 1,513 Motorola 11,000 730 Oracle* 10,900 508 Scientific-Atlanta 42,300 767 54 ================================================================================ - ------------------------------------------------------------ SHARES/FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ TECHNOLOGY--CONTINUED Xerox 18,200 $ 1,233 ---------- Total Technology 12,032 ---------- TRANSPORTATION (0.6%) Burlington Northern Santa Fe 7,400 614 Delta Air Lines 1,400 131 Union Pacific 2,800 190 ---------- Total Transportation 935 ---------- UTILITIES (0.2%) Consolidated Natural Gas 1,500 80 Enron 4,200 171 Sonat 1,800 103 ---------- Total Utilities 354 ---------- Total Common Stocks (Cost $72,954) 84,559 ---------- PREFERRED STOCKS (1.1%) AIR TRANSPORTATION (0.2%) Continental Airline Financial (B) 5,000 391 ---------- BANKS (0.2%) National Bank of Australia, CV to 0.3273 shares* 10,000 270 ---------- TECHNOLOGY (0.7%) Microsoft, CV to 1 share 12,500 1,077 ---------- Total Preferred Stocks (Cost $1,573) 1,738 ---------- CORPORATE OBLIGATIONS (23.1%) American General Finance 6.875%, 07/01/99 $ 1,000 1,007 Aristar 6.750%, 05/15/99 1,500 1,507 Associates of North America, MTN 6.650%, 08/30/99 750 752 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ CORPORATE OBLIGATIONS--CONTINUED AT&T Capital, MTN 6.920%, 04/29/99 $2,250 $ 2,261 Bear Stearns 7.000%, 03/01/07 1,900 1,853 Ford Capital 9.500%, 06/01/10 1,350 1,558 General Electric Capital 6.660%, 05/01/18 1,000 1,003 General Motors Acceptance 7.125%, 05/01/01 1,900 1,914 6.750%, 11/04/04 1,500 1,459 Homeside Lending, MTN 6.875%, 05/15/00 2,000 1,998 Household Finance, MTN 7.150%, 06/15/00 1,000 1,010 International Lease Finance 6.700%, 04/30/99 1,900 1,910 Lockheed Martin 6.550%, 05/15/99 1,000 1,001 Marriott International, (A) (B) 0.000%, 03/25/11 1,000 581 Mascotech, Callable 12/22/96 @ 103 4.500%, 12/15/03 500 445 Merrill Lynch, MTN 6.640%, 04/09/99 1,500 1,506 Morgan Stanley Group 6.875%, 03/01/07 1,000 974 Philip Morris 7.250%, 09/15/01 2,100 2,108 6.800%, 12/01/03 500 488 7.500%, 04/01/04 1,000 1,005 RHG Finance 8.875%, 10/01/05 1,500 1,622 Salomon 6.500%, 03/01/00 2,500 2,478 6.750%, 02/15/03 1,150 1,118 Service International 7.375%, 04/15/04 1,750 1,772 SunAmerica 6.200%, 10/31/99 2,000 1,985 US West Capital Funding 7.300%, 01/15/07 2,500 2,484 ---------- 55 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 BALANCED FUND--CONCLUDED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ Total Corporate Obligations (Cost $37,869) $ 37,799 ---------- CONVERTIBLE BONDS (2.5%) Alza, CV to 26.1840 Shares, Callable 05/01/00 @ 100 5.000%, 05/01/06 $ 500 501 Automatic Commercial Exchange Security, CV to 0.8333 shares 6.500%, 05/15/00 9 215 Roche, CV to 3.5626 Shares (A) 0.000%, 05/06/12 1,000 403 Staples, CV to 30.303 Shares (B) 4.500%, 10/01/00 500 585 Time Warner Finance, CV to 7.7589 Shares (A) 0.000%, 06/22/13 900 411 U.S. Filter, CV to 25.3164 shares, Callable 12/15/99 @ 101.8 4.500%, 12/15/01 500 509 USA Waste Services, CV to 35.3243 Shares 5.000%, 03/01/06 355 490 WMX Technologies, CV to 26.078 shares 2.000%, 01/24/05 1,000 921 ---------- Total Convertible Bonds (Cost $3,864) 4,035 ---------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (1.2%) FHLMC 8.000%, 06/01/02 574 589 7.500%, 09/01/03 1,308 1,326 ---------- Total U.S. Agency Mortgage- Backed Obligations (Cost $1,916) 1,915 ---------- - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ U.S. TREASURY OBLIGATIONS (10.6%) U.S. Treasury Bonds 7.500%, 11/15/16 $ 3,000 $ 3,163 8.125%, 08/15/19 7,800 8,775 6.625%, 02/15/27 3,450 3,324 U.S. Treasury Notes 6.750%, 04/30/00 2,000 2,020 ---------- Total U.S. Treasury Obligations (Cost $17,245) 17,282 ---------- REPURCHASE AGREEMENT (8.9%) Merrill Lynch 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $14,570,241 (collateralized by various GNMA obligations, total par value $26,629,425, 7.000%-13.250%, 04/20/00-11/20/22: total market value $14,856,427) 14,563 14,563 ---------- Total Repurchase Agreement (Cost $14,563) 14,563 ---------- Total Investments (99.1%) (Cost $149,984) 161,891 ---------- OTHER ASSETS AND LIABILITIES, NET (0.9%) 1,546 ---------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 12,674,232 outstanding shares of beneficial interest 131,876 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 501,289 outstanding shares of beneficial interest 5,143 56 - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS--CONTINUED Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 509,658 outstanding shares of beneficial interest $ 5,720 Undistributed net investment income 781 Accumulated net realized gain on investments 8,010 Net unrealized appreciation on investments 11,907 ---------- Total Net Assets (100.0%) $ 163,437 ========== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 11.94 ========== Net Asset Value and Redemption Price Per Share -- Investor Shares $ 11.99 ========== Maximum Offering Price Per Share -- Investor Class ($11.99 (Divide) 96.25%) $ 12.46 ========== Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1)(2) $ 11.90 ========== (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. (2) Represents NAV on last business day -- May 30, 1997. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 57 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 EMERGING MARKETS EQUITY FUND - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------- FOREIGN COMMON STOCKS (84.7%) ARGENTINA (6.9%) Banco Frances del Rio de la Plata ADR* 16,000 $ 526 Capex, Cl A 33,700 324 Massalin Particulares, Cl B 38,800 231 Metrogas ADR 32,204 314 Quilmes Industrial 37,000 430 Transportadora de Gas del Sur ADR 33,000 417 YPF ADR, Cl D 16,000 480 ---------- Total Argentina 2,722 ---------- BRAZIL (4.3%) Makro Atacadista GDR 27,500 344 Souza Cruz 50,000 467 Telebras ADR 3,230 444 Votorantim Celelose Papel Receibos* 1,476,876 40 Unibanco 12,000 414 ---------- Total Brazil 1,709 ---------- CHILE (1.1%) Administradora de Fondos de Pensiones Provida ADR 21,500 441 ---------- COLOMBIA (1.6%) Banco de Colombia GDS 24,700 152 Banco Ganadero ADR 15,600 476 ---------- Total Colombia 628 ---------- CZECH REPUBLIC (0.5%) Komercni Banka GDR 8,400 204 ---------- ECUADOR (0.4%) La Cemento Nacional GDR 800 158 ---------- GREECE (5.3%) Greek Telecom 7,800 194 Hellas Can Packaging 25,500 467 Papastratos Cigarettes 15,400 316 Teletypos 130,000 533 Titan Cement Company 5,700 568 ---------- Total Greece 2,078 ---------- - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ HONG KONG (9.2%) China Hong Kong Photo 1,086,000 $ 315 Esprit Asia Holdings 616,000 354 First Pacific 142,000 181 National Mutual Asia 358,000 390 Peregrine Investment Holdings 137,000 244 Peregrine Investment Warrants* 6,600 2 Road King Infrastructure* 400,000 390 Seoul Horizon Trust 17,000 212 Shenzhen Express* 700,000 235 Sinocan 920,000 365 South China Morning Post Holdings 460,000 442 Wing Hang Bank 108,000 514 ---------- Total Hong Kong 3,644 ---------- HUNGARY (1.4%) Egis* 6,000 353 Gedeon Richter GDR 2,500 207 ---------- Total Hungary 560 ---------- INDIA (4.5%) Hindalco GDR 6,700 221 India Cements GDR 54,000 124 Indian Aluminum GDR 15,800 58 Indian Aluminum GDS 15,300 57 Tata Electric GDR 210 71 Videsh Sanchar Nigam GDR 60,000 1,236 ---------- Total India 1,767 ---------- INDONESIA (8.8%) Budi Acid Jaya, F 185,000 228 Citra Marga Nusaphala 472,000 471 Dankos Laboratories, F 665,000 561 Indonesian Satellite ADR 13,500 403 Matahari Putra Prima 251,000 447 Modern Photo Film, F 150,000 546 Tambang Timah, F 281,000 451 Tempo Scan Pacific 164,000 351 ---------- Total Indonesia 3,458 ---------- 58 - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ ISRAEL (5.8%) Blue Square Stores* 57,300 $ 587 ECI Telecommunications 22,000 509 Koor Industries ADR 20,300 355 Nice Systems ADR* 18,000 549 Orbotech* 10,000 279 ---------- Total Israel 2,279 ---------- MALAYSIA (3.4%) Aluminium of Malaysia 231,000 325 Edaran Otomobil 28,000 244 Petronas Dagangan 170,000 403 Southern Bank Warrants* 15,000 10 UMW Holdings 72,000 370 ---------- Total Malaysia 1,352 ---------- MEXICO (8.3%) Femsa, Cl B 106,000 562 Grupo Carso 66,000 375 Grupo Continental 167,750 418 Grupo Elektra GDR 21,100 401 Herdez, Cl B 1,035,000 458 Kimberly Clark, Cl A 95,500 331 Nacional de Drogas, Cl L 139,000 459 Telefonos de Mexico ADR 6,500 288 ---------- Total Mexico 3,292 ---------- PANAMA (1.1%) Banco Latinamericano de Exportaciones 9,000 424 ---------- PERU (2.1%) Cerveceria Backus & Johnston 356,240 320 CPT Telefoncia del Peru 15,000 381 Telefonica del Peru, Cl B 50,500 125 ---------- Total Peru 826 ---------- - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ PHILIPPINES (3.6%) Bacnotan Consolidated 135,600 $ 250 Benpres GDR* 65,800 467 First Philippine Holdings 174,375 288 Philippine Long Distance 14,000 414 ---------- Total Philippines 1,419 ---------- PORTUGAL (2.5%) Banco Totta & Acores 21,700 309 Cimentos de Portugal 15,020 330 Portugal Telecom 600 23 Portugal Telecom ADR 8,200 316 ---------- Total Portugal 978 ---------- SINGAPORE (2.0%) Amtek Engineering 180,000 311 Elec & Eltek International 84,000 496 ---------- Total Singapore 807 ---------- SOUTH AFRICA (8.6%) Amalgated Banks of South Africa 39,642 245 Anglo American Coal 3,260 216 Barlow 37,700 399 De Beers Consolidated Mines ADR 5,500 194 Gencor 44,000 193 Kersaf Investments 48,600 381 Liberty Life Association of Africa 14,000 392 Rembrandt Group 30,400 306 Richemont 26,500 360 Sasol 26,200 321 Suncrush 181,000 387 ---------- Total South Africa 3,394 ---------- SOUTH KOREA (1.5%) Pohang Iron & Steel ADR 21,000 609 ---------- THAILAND (1.7%) K.R. Precision, F 46,500 324 Nation Publishing 120,000 344 ---------- Total Thailand 668 ---------- 59 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 EMERGING MARKETS EQUITY FUND--CONCLUDED - ------------------------------------------------------------ SHARES/FACE AMOUNT(G) (000) VALUE (000) - ------------------------------------------------------------ TURKEY (0.1%) Dogan Holding* 2,800,000 $ 60 ---------- Total Foreign Common Stocks (Cost $31,409) 33,477 ---------- FOREIGN PREFERRED STOCKS (6.2%) BRAZIL (6.2%) Banco Bradesco 42,150,000 336 Banco Itau SA 800,000 411 Brahma 440,000 319 Cemig 2,800,000 128 Centrais Eletricas de Santa Catarina, Cl B 103,000 124 Globex Utilidades 15,500 235 Lojas Renner 7,800,000 452 Multibras Eletrodomes* 228,400 233 Votorantim Celulose Papel* 7,500,000 203 ---------- Total Foreign Preferred Stocks (Cost $2,386) 2,441 ---------- FOREIGN CONVERTIBLE BOND (0.4%) TURKEY (0.4%) Medya Holdings Int'l 10.000%, 06/28/01 200 160 ---------- Total Foreign Convertible Bond (Cost $175) 160 ---------- - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ TIME DEPOSIT (7.6%) Cayman Island 5.250%, 06/02/97 $3,000 $ 3,000 ---------- Total Time Deposit (Cost $3,000) 3,000 ---------- Total Investments (98.9%) (Cost $36,970) 39,078 ---------- OTHER ASSETS AND LIABILITIES, NET (1.1%) 417 ---------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 3,660,064 outstanding shares of beneficial interest 37,181 Undistributed net investment income 144 Accumulated net realized gain on investments and foreign currency transactions 62 Net unrealized appreciation on investments 2,108 ---------- Total Net Assets (100.0%) $ 39,495 ========== Net Asset Value, Offering and Redemption Price Per Share-- Trust Shares $ 10.79 ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 60 ================================================================================ INTERNATIONAL EQUITY INDEX FUND - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ U.S. AND FOREIGN COMMON STOCKS (95.4%) AUSTRALIA (2.7%) Amcor 13,361 $ 88 Broken Hill Proprietary 20,656 297 Coles Myer 30,235 141 CRA 5,542 91 CSR 27,994 103 Lend Lease 4,481 89 Mount Isa Mines Holdings 42,910 64 National Australia Bank 13,886 199 Newscorp 33,881 150 Pacific Dunlop 28,455 79 Western Mining 20,202 131 Westpac Banking 36,880 200 ---------- Total Australia 1,632 ---------- AUSTRIA (1.6%) Bank of Austria 3,058 197 Creditanstalt Bankverein 3,535 209 Ea - Generali 343 85 Oest El Wirtsch, Cl A 2,245 161 OMV 1,715 218 Wienerberger Baustoff 401 82 ---------- Total Austria 952 ---------- BELGIUM (2.1%) Bekaert 30 18 Delhaize Freres 1,000 50 Electrabel 1,000 224 Fortis 1,000 194 Generale Banque 470 186 Groupe Bruxelles Lambert 700 112 Kredietbank 290 119 Petrofina 500 176 Royale Belge 175 50 Solvay, Cl A 125 75 Union Minere* 680 55 ---------- Total Belgium 1,259 ---------- DENMARK (1.6%) Carlsberg, Cl B 1,427 84 D/S 1912, Cl B 6 209 D/S Svendborg, Cl B 4 200 - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ DENMARK--CONTINUED Danisco 2,210 $ 131 Novo Nordisk, Cl B 1,670 179 Sophus Berendsen, Cl B 251 38 Tele Danmark, Cl B 2,208 109 ---------- Total Denmark 950 ---------- FINLAND (0.8%) Merita* 25,000 85 Nokia, Cl K 2,300 150 Outokumpu Oy Akt, Cl A 3,100 61 Rauma 303 7 UPM - Kymmene 8,500 195 ---------- Total Finland 498 ---------- FRANCE (11.4%) Accor 847 117 Air Liquide 1,886 289 Alcatel Alsthom 2,238 242 Axa 4,748 284 Banque National Paris, Cl A 3,350 137 Bouygues 950 82 Carrefour 603 396 Cie Bancaire 710 78 Cie de Saint Gobain 2,265 312 Cie Financiara Paribas 958 62 Cie Generale des Eaux 2,045 251 Cie Generale des Eaux Warrants* 2,045 1 Compagnie de Suez 2,963 151 Elf Aquitaine 4,282 428 Elf Sanofi 2,573 223 Eridania Beghin - Say 1,209 169 Groupe Danone 1,764 265 Havas 1,300 87 L'Oreal 1,084 393 Lafarge Coppee 2,218 142 Legrand 950 153 Louis Vuitton - Moet Hennessy 1,881 455 Lyonnaise des Eaux Dumez 1,650 162 Michelin, Cl B 2,844 155 Pernod - Ricard 2,179 104 Peugeot 1,790 177 Pinault - Printemps Redoute 400 168 61 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 INTERNATIONAL EQUITY INDEX FUND--CONTINUED - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ FRANCE--CONTINUED Promodes 478 $ 162 Rhone - Poulenc, Cl A 8,500 275 Schneider 3,877 186 Societe Generale 2,280 253 Total Compaigne, Cl B 4,470 408 Unibail 400 39 ---------- Total France 6,806 ---------- GERMANY (19.2%) Aachener & Munchener Bete 166 154 Allianz 5,080 1,085 BASF 15,100 561 Bayer 21,960 857 Bayerische Hypotheken und Wechselbank 9,900 316 Bayerische Vereinsbank 2,360 98 Biersdorf 3,340 179 Colonia Konzern 310 31 Daimler - Benz 13,630 1,053 Degussa 2,490 121 Deutsche Bank 14,620 811 Dresdner Bank Frankfurt 10,600 372 Heidelberger Zement 2,490 235 Hochtief 260 11 Karstadt 625 219 Linde 391 271 Lufthansa 14,580 232 Man Muenchen 31 9 Mannesmann 853 349 Metro AG 3,063 333 Munchener Ruckvers 256 656 Preussag 11 3 RWE 6,340 273 SAP 1,900 339 Schering 1,810 182 Siemens 14,340 811 Thyssen 1,301 294 Veba 12,660 720 Viag 683 310 Volkswagen 961 624 ---------- Total Germany 11,509 ---------- - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ HONG KONG (1.9%) Cathay Pacific Airways 9,000 $ 14 Cheung Kong Holdings 13,000 133 China Light & Power 15,000 75 Hang Seng Bank 10,200 122 Hong Kong Telecommunications 50,000 111 HSBC Holdings 13,068 396 Hutchison Whampoa 14,800 123 Sun Hung Kai Properties 6,600 81 Swire Pacific, Cl A 9,000 75 ---------- Total Hong Kong 1,130 ---------- ITALY (9.0%) Assicurazioni Generali 42,670 731 Banca Commerciale Italiana 33,500 66 Benetton Group 9,448 132 Credito Italiano 23,000 34 Edison 42,500 201 ENI 76,000 379 Fiat 139,000 456 Fiat Non-Convertible 42,000 74 Istituto Bancario san Paolo di Torino 42,091 265 Istituto Nazionale 323,919 447 Italgas 5,000 15 Mediobanca 30,950 176 Montedison* 134,680 82 Olivetti* 142,500 41 Parmalat Finanziaria 102,800 147 Pirelli 120,000 261 RAS 10,135 77 Sirti 19,500 112 Telecom Italia 265,000 730 Telecom Italia di Risp 63,000 138 Telecom Italia Mobile 195,802 575 Telecom Italia Mobile di Risp 154,164 269 ---------- Total Italy 5,408 ---------- JAPAN (23.5%) Ajinomoto 15,000 151 Asahi Bank 20,000 131 Asahi Chemical Industries 15,000 83 Asahi Glass 12,000 116 62 - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ JAPAN--CONTINUED Bank of Tokyo - Mitsubushi 24,000 $ 416 Bank of Yokohama 11,000 55 Bridgestone 9,000 203 Chiba Bank 12,000 62 Chiyoda 5,000 24 Citizen Watch 11,000 83 Cosmo Oil 12,000 55 Dai Nippon Printing 12,000 240 Daiei* 11,000 72 Daiwa Kosho Lease 5,000 38 Daiwa Securities 18,000 132 Ebara 8,000 116 Fanuc 900 32 Fuji Bank 24,000 309 Fuji Photo Film 5,000 194 Fujitsu 18,000 220 Furukawa Electric 15,000 89 Hankyu 2,000 10 Hitachi 32,000 341 Honda Motor 5,000 147 Industrial Bank of Japan 20,000 241 Ito Ham Foods 1,000 6 Ito Yokado 4,000 228 Itochu 31,000 158 Japan Air Lines* 16,000 68 Japan Energy 11,000 28 Joyo Bank 14,300 70 Jusco 3,000 101 Kansai Electric Power 9,800 184 Kao 7,000 95 Kawasaki Steel 19,000 56 Kinki Nippon Railway 26,000 156 Kirin Brewery 15,000 148 Komatsu 13,000 98 Kubota 23,000 106 Kyocera 3,000 216 Marui 4,000 75 Matsushita Electric 18,000 339 Mitsubishi 21,000 247 Mitsubishi Chemical 16,000 49 Mitsubishi Electric 23,000 130 Mitsubishi Estate 5,000 68 - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ JAPAN--CONTINUED Mitsubishi Heavy Industries 43,000 $ 310 Mitsubishi Materials 35,000 136 Mitsubishi Trust & Banking 13,000 186 Mitsui 17,000 150 Mitsui Trust & Banking 13,000 98 Mitsukoshi 7,000 49 Murata Manufacturing 1,000 40 NEC 15,000 209 New Oji Paper 9,000 52 Nichido Fire & Marine Insurance 15,000 91 Nippon Express 5,000 39 Nippon Oil 16,000 81 Nippon Paper Industries* 1,000 5 Nippon Sharyo 5,000 32 Nippon Steel 39,000 114 Nippon Yusen 27,000 111 Nippondenso 7,000 175 Nissan Motor 32,000 212 NKK 24,000 47 Nomura Securities 19,000 225 Obayashi 13,000 80 Odakyu Electric Railway 24,000 133 Olympus Optical 8,000 68 Osaka Gas 44,000 116 Sakura Bank 25,000 150 Sankyo 7,000 222 Sanyo Electric 4,000 17 Sega Enterprises 1,600 54 Sekisui Chemical 7,000 73 Sekisui House 7,000 69 Sharp 10,000 129 Shimizu 3,000 18 Shin - Etsu Chemical 7,000 176 Shizuoka Bank 9,000 87 Skylark 3,000 50 Sony 3,500 295 Sumitomo Bank 28,000 387 Sumitomo Chemical 20,000 83 Sumitomo Metal 26,000 66 Taisei 35,000 150 Takeda Chemical 15,000 380 Tobu Railway 15,000 67 63 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 INTERNATIONAL EQUITY INDEX FUND--CONTINUED - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ JAPAN--CONTINUED Tohoku Electric Power 5,300 $ 91 Tokai Bank 20,000 165 Tokio Marine & Fire Insurance 34,000 400 Tokyo Electric Power 15,900 303 Tokyo Gas 26,000 66 Tokyu 10,000 57 Toppan Printing 11,000 151 Toray 24,000 163 Tostem 3,000 80 Toto 7,700 87 Toyo Seikan Kaisha 3,300 63 Toyoda Automatic Loom 4,000 87 Toyota Motor 31,000 889 Yamaichi Securities 15,000 43 Yamanouchi Pharmaceutical 1,000 25 Yasuda Trust & Banking 5,000 15 ---------- Total Japan 14,103 ---------- NETHERLANDS (3.1%) ABN-Amro Holdings 10,668 197 Akzo Nobel 470 63 ING Groep 5,816 257 Koninklijke 3,789 132 Koninklijke Nederlanden Papierfabriek 960 20 Philips Electronics 2,550 139 Royal Dutch Petroleum 3,580 691 Unilever 1,065 205 Wolters Kluwer 1,479 178 ---------- Total Netherlands 1,882 ---------- NORWAY (1.2%) Bergesen, Cl A 4,150 96 Hafslund Nycomed, Cl B 5,900 33 Kvaerner 2,000 115 Norsk Hydro 7,825 391 Nycomed Asa- Cl B 2,300 31 Uni Storebrand* 9,987 66 ---------- Total Norway 732 ---------- - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ SPAIN (4.7%) Argentaria Bancaria de Espana 2,916 $ 145 Autopistas CESA 6,347 78 Banco Bilbao Vizcaya 4,571 324 Banco Central Hispano 4,255 137 Banco de Santander 3,510 299 Dragados Construccion 2,565 50 Empresa Nacional de Electricidad 5,473 418 Fomento de Construcciones Contratas 598 67 Gas Natural 828 158 Iberdola 16,206 199 Mapfre 1,018 55 Repsol 6,279 263 Telefonica de Espana 19,933 575 Union Electrica Fenosa 7,629 68 ---------- Total Spain 2,836 ---------- SWEDEN (2.0%) Asea, Cl A 12,000 162 Astra, Cl A 14,666 237 Diligentia* 1,350 15 Electrolux, Cl B 1,100 66 Ericsson, Cl B 8,100 284 Granges* 550 7 Skandinaviska Enskilda Banken 7,700 79 Skanska Rights* 1,800 -- Skanska, Cl B 1,800 72 Stora Kopparbergs Bergslags, Cl A 5,000 74 Svenska Cellulosa, Cl B 4,000 84 Swedish Match 4,500 15 Volvo, Cl B 3,950 109 ---------- Total Sweden 1,204 ---------- SWITZERLAND (2.3%) Nestle 222 276 Novartis 244 331 Roche Holdings, Bearer 7 92 Roche Holdings, Genusshein 34 302 Schweizerische Bankgesellschaft 170 186 Swiss Bank* 875 210 ---------- Total Switzerland 1,397 ---------- 64 ================================================================================ - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ UNITED KINGDOM (8.2%) Abbey National 8,291 $ 119 Barclays Bank 14,416 280 Bass 9,466 123 BAT Industries 22,460 201 BG 20,778 69 Blue Circle Industries 12,797 88 British Petroleum 41,753 495 British Telecommunications 20,475 148 BTR 43,929 143 Cable & Wireless 22,390 183 Centrica* 20,778 22 Energy Group* 9,677 87 General Electric 21,236 121 Glaxo Wellcome 19,999 399 Grand Metropolitan 23,365 217 Great Universal Stores 7,352 78 Guinness 18,085 168 Hanson 12,096 62 HSBC Holdings 7,895 245 Imperial Chemical 11,454 152 Marks & Spencer 40,514 337 National Power 9,177 83 Reuters 13,125 147 RMC Group 2,799 42 RTZ 13,785 236 Sainsbury, J. 11,344 65 Smithkline Beecham 20,334 350 Unilever 6,230 167 Vodafone Group 22,646 100 ---------- Total United Kingdom 4,927 ---------- UNITED STATES (0.1%) Millennium Chemicals* 1,382 27 ---------- Total U.S. and Foreign Common Stocks (Cost $48,937) 57,252 ---------- - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ FOREIGN PREFERRED STOCKS (1.3%) FINLAND (0.3%) Nokia, Cl A 2,400 $ 157 ---------- GERMANY (0.9%) RWE 3,730 131 SAP 1,380 251 Volkswagen 297 146 ---------- Total Germany 528 ---------- ITALY (0.1%) Fiat 42,800 72 ---------- Total Foreign Preferred Stocks (Cost $571) 757 ---------- Total Investments (96.7%) (Cost $49,508) 58,009 ---------- OTHER ASSETS AND LIABILITIES, NET (3.3%) 1,999 ---------- 65 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 INTERNATIONAL EQUITY INDEX FUND--CONCLUDED - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 4,717,839 outstanding shares of beneficial interest $ 43,186 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 496,770 outstanding shares of beneficial interest 4,962 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 80,102 outstanding shares of beneficial interest 829 Undistributed net investment income 220 Accumulated net realized gain on investments and foreign currency transactions 2,335 Net unrealized appreciation on investments 8,501 Net unrealized depreciation on foreign currency and translation of other assets and liabilities in foreign currency (25) ---------- Total Net Assets (100.0%) $ 60,008 ========== Net Asset Value, Offering and Redemption Price Per Share-- Trust Shares $ 11.34 ========== Net Asset Value and Redemption Price Per Share -- Investor Shares $ 11.26 ========== Maximum Offering Price Per Share -- Investor Shares ($11.26 (Divide) 96.25%) $ 11.70 ========== Net Asset Value, Offering and Redemption Price Per Share-- Flex Shares (1) $ 11.24 ========== (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 66 INTERNATIONAL EQUITY FUND - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ FOREIGN COMMON STOCKS (97.3%) ARGENTINA (0.9%) YPF ADR, Cl D 160,000 $ 4,800 ---------- AUSTRALIA (2.0%) Australia & New Zealand Bank Group 350,000 2,396 Faulding (F.H.) & Co. 405,124 2,412 QBE Insurance 922,000 5,486 ---------- Total Australia 10,294 ---------- BRAZIL (2.8%) Souza Cruz 838,000 7,827 Telecom Brasileiras ADR 47,800 6,567 ---------- Total Brazil 14,394 ---------- CANADA (3.3%) Bank of Montreal 71,991 2,744 Bombardier, Cl B 201,000 4,220 CAE 436,729 3,431 Royal Bank of Canada 57,000 2,468 Suncor 158,000 3,918 ---------- Total Canada 16,781 ---------- DENMARK (0.9%) Sophus Berendsen, Cl B 29,550 4,471 ---------- FINLAND (4.3%) Cultor, Ser 2 82,400 4,129 Finnlines 100,000 2,777 Metra, Cl B 195,000 5,529 Nokia ADR, Cl A 41,000 2,706 Rauma 72,200 1,683 UPM - Kymmene 208,000 4,774 ---------- Total Finland 21,598 ---------- FRANCE (9.7%) Accor 34,000 4,708 Christian Dior 30,850 4,832 Cie Generale d'Industrie et de Participations 23,000 6,524 Credit Local de France 55,000 5,131 Lafarge Coppee 38,000 2,427 - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ FRANCE--CONTINUED Lagardere Groupe 158,000 $ 4,643 SGS-Thomson Microelectronics ADR* 66,000 5,511 Technip 153,113 15,714 ---------- Total France 49,490 ---------- GERMANY (3.3%) Siemens 48,000 2,713 Veba 79,600 4,525 Volkswagen 14,300 9,288 ---------- Total Germany 16,526 ---------- GREECE (2.0%) Greek Telecom 411,840 10,253 ---------- HONG KONG (1.2%) HSBC Holdings 192,645 5,843 ---------- HUNGARY (0.6%) Gedeon Richter 32,000 2,656 Gedeon Richter GDR 3,000 249 ---------- Total Hungary 2,905 ---------- INDONESIA (0.5%) Modern Photo Film, F 736,500 2,681 ---------- ISRAEL (2.1%) ECI Telecommunications 319,000 7,377 Technomatrix Technologies 105,500 3,244 ---------- Total Israel 10,621 ---------- ITALY (3.1%) Banca Popolare di Milano 500,000 2,686 ENI 933,000 4,655 Istituto Bancario san Paolo di Torino 450,002 2,831 Saipem 1,057,000 5,376 ---------- Total Italy 15,548 ---------- JAPAN (8.8%) Canon 215,000 5,448 FCC 97,000 2,516 67 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 INTERNATIONAL EQUITY FUND--CONCLUDED - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ JAPAN--CONTINUED Fuji Photo Film 139,000 $ 5,385 Honda Motor 282,000 8,285 Sony 99,400 8,377 TDK 69,000 5,299 Terumo 546,000 9,615 ---------- Total Japan 44,925 ---------- MALAYSIA (0.9%) UMW Holdings 844,000 4,334 ---------- MEXICO (2.5%) Fomento Econo Mexicana, Cl B 1,676,000 8,906 Panamerican Beverage, Cl A 130,200 3,776 ---------- Total Mexico 12,682 ---------- NETHERLANDS (5.5%) Akzo Nobel 53,000 7,051 Hollandsche Beton Groep 28,658 6,590 ING Groep 327,938 14,486 ---------- Total Netherlands 28,127 ---------- NEW ZEALAND (1.0%) Fletcher Challenge Building Division 1,831,500 5,114 ---------- PANAMA (1.4%) Banco Latinamericano de Exportaciones 150,400 7,088 ---------- PERU (1.1%) CPT Telefoncia del Peru 109,000 2,766 Credicorp 124,449 2,816 ---------- Total Peru 5,582 ---------- PHILIPPINES (1.1%) Benpres GDR* 775,961 5,509 ---------- PORTUGAL (1.5%) Banco Espirito Santo 120,400 2,493 Portugal Telecom ADR 134,300 5,171 ---------- Total Portugal 7,664 ---------- - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ SINGAPORE (0.7%) Elec & Eltek International 599,000 $ 3,534 ---------- SOUTH AFRICA (5.0%) Barlow 442,000 4,676 De Beers Consolidated Mines ADR 70,200 2,475 First National Bank 373,000 2,911 Gencor 1,048,000 4,599 Liberty Life Association of Africa 50,000 1,399 Rembrandt Group 446,000 4,494 Sasol 385,000 4,720 ---------- Total South Africa 25,274 ---------- SOUTH KOREA (3.4%) Pohang Iron & Steel 107,531 9,209 Samsung Electronics 29,590 2,897 Samsung Electronics Rights* 490 11 Sindo Ricoh 91,400 5,282 ---------- Total South Korea 17,399 ---------- SPAIN (3.4%) Corporacion Financiera Alba 49,000 5,391 Telefonica de Espana 414,000 11,946 ---------- Total Spain 17,337 ---------- SWEDEN (3.1%) Castellum AB* 130,000 906 Ericsson, Cl B 168,100 5,899 Skandia Forsakrings 250,000 8,822 ---------- Total Sweden 15,627 ---------- SWITZERLAND (6.7%) Asea Brown Boveri 4,215 5,785 Nestle 9,000 11,194 Novartis, Registered 12,640 17,151 ---------- Total Switzerland 34,130 ---------- UNITED KINGDOM (14.5%) Avis Europe* 2,500,000 5,356 Bank of Ireland 769,715 8,327 Bass 400,000 5,187 68 ================================================================================ - ------------------------------------------------------------ SHARES/FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ UNITED KINGDOM--CONTINUED BOC Group 163,000 $ 2,735 Granada Group 315,000 4,464 Halma 1,196,000 3,442 London Forfaiting 1,763,200 11,577 Morgan Crucible 717,432 5,344 Powerscreen 513,100 5,232 Railtrack Group* 462,000 4,835 Reckit & Colman 554,000 7,791 Smithkline Beecham 306,484 5,270 Vodafone Group 980,000 4,343 ---------- Total United Kingdom 73,903 ---------- Total Foreign Common Stocks (Cost $429,604) 494,434 ---------- TIME DEPOSIT (2.8%) Cayman Island 5.250%, 06/02/97 $14,500 14,500 ---------- Total Time Deposit (Cost $14,500) 14,500 ---------- Total Investments (100.1%) (Cost $444,104) 508,934 ---------- OTHER ASSETS AND LIABILITIES, NET (-0.1%) (560) ---------- - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 35,898,515 outstanding shares of beneficial interest $ 399,733 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 786,012 outstanding shares of beneficial interest 9,162 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 621,903 outstanding shares of beneficial interest 7,607 Undistributed net investment income 834 Accumulated net realized gain on investments and foreign currency transactions 26,202 Net unrealized appreciation on investments 64,830 Net unrealized appreciation on foreign currency and translation of other assets and liabilities in foreign currency 6 ---------- Total Net Assets (100.0%) $ 508,374 ========== Net Asset Value, Offering and Redemption Price Per Share-- Trust Shares $ 13.63 ========== Net Asset Value and Redemption Price Per Share-- Investor Shares $ 13.58 ========== Maximum Offering Price Per Share -- Investor Shares ($13.58 / 96.25%) $ 14.11 ========== Net Asset Value, Offering and Redemption Price Per Share-- Flex Shares (1) $ 13.47 ========== (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 69 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 SUNBELT EQUITY FUND - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ COMMON STOCKS (94.3%) BASIC MATERIALS (1.2%) Blount International 100,649 $ 4,152 Citation* 65,268 971 ---------- Total Basic Materials 5,123 ---------- CAPITAL GOODS (9.2%) Agco 145,197 4,628 American Buildings* 156,275 4,415 American Homestar* 156,914 3,138 Browning Ferris Industries 60,659 1,987 Greenfield Industries 143,198 3,723 Intermet 301,822 4,226 Maverick Tube* 126,699 3,833 Palm Harbor Homes* 126,814 3,583 Roper Industries 41,105 2,019 Tracor* 79,461 2,016 Watsco 164,769 4,778 ---------- Total Capital Goods 38,346 ---------- COMMUNICATION SERVICES (2.3%) Premiere Technologies* 162,964 4,380 U.S. Long Distance* 335,286 5,197 ---------- Total Communication Services 9,577 ---------- CONSUMER CYCLICALS (19.1%) Barnett* 251,979 5,607 Books-A-Million* 364,468 1,868 Central Parking 86,890 2,715 Claire's Stores 190,753 3,672 Dollar General 236,344 7,947 Family Dollar Stores 159,553 4,108 Heilig-Meyers 413,167 6,817 Home Depot 64,703 4,076 Miller Industries* 524,807 8,594 O'Charleys* 109,669 1,563 Pier 1 Imports 79,777 1,785 Play By Play Toys & Novelties* 90,204 1,409 Promus Hotel* 199,826 7,219 Rare Hospitality International* 221,310 3,486 Richfood Holdings 275,860 6,379 Stein Mart* 198,738 6,012 - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ CONSUMER CYCLICALS--CONTINUED Tractor Supply* 169,673 $ 3,478 Suburban Lodges of America* 119,666 2,513 ---------- Total Consumer Cyclicals 79,248 ---------- CONSUMER STAPLES (1.9%) Flowers Industries 179,497 3,164 Tyson Foods 224,809 4,609 ---------- Total Consumer Staples 7,773 ---------- ENERGY (21.7%) Anadarko Petroleum 74,294 4,681 BJ Services* 86,013 4,752 Baker Hughes 110,638 4,149 Cairn Energy USA* 70,547 833 Diamond Offshore Drilling* 122,095 8,684 Ensco International* 109,330 5,453 Global Industries* 264,743 5,824 Global Marine* 289,298 6,509 Nuevo Energy* 218,321 9,524 Oceaneering International* 104,407 1,775 Offshore Logistics* 167,668 3,039 Pride Petroleum Service* 365,188 8,125 Production Operators 80,518 5,385 St Mary Land & Exploration 79,777 2,533 Stone Energy* 288,296 8,072 Tidewater 126,926 5,347 Transocean Offshore 45,716 3,154 World Fuel Services 104,839 2,110 ---------- Total Energy 89,949 ---------- FINANCIALS (6.9%) AmSouth Bancorp 60,660 2,373 BB&T 21,029 841 CCB Financial 52,650 3,699 Central Fidelity Banks 28,307 828 Cullen/Frost Bankers 22,646 892 Equity Inns REIT 222,416 2,919 Fairfield Communities* 131,638 4,393 First Enterprise Financial Group* 161,692 950 First Virginia Banks 16,176 906 Regions Financial 13,749 822 70 ================================================================================ - ------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------ FINANCIALS--CONTINUED Texas Regional Bancshares, Cl A 44,300 $ 1,384 Triad Guaranty* 122,286 4,249 Union Planters 62,171 2,938 Winston Hotels REIT 117,435 1,541 ---------- Total Financials 28,735 ---------- HEALTH CARE (9.7%) Beverly Enterprises* 487,197 6,882 Compdent* 186,165 3,374 Gulf South Medical Supply* 271,411 5,360 Healthsouth* 151,776 3,472 Owens & Minor Holding 197,426 2,493 Phycor* 255,733 7,320 Quorum Health Group* 241,231 8,534 Serologicals* 139,340 2,665 ---------- Total Health Care 40,100 ---------- ERVICE INDUSTRIES (5.5%) Billing Information Concepts* 40,440 1,173 Education Medical* 159,694 1,437 Norrell 240,634 7,760 Nova* 198,384 3,596 PMT Services* 343,137 5,490 Staffmark* 183,054 3,432 ---------- Total Service Industries 22,888 ---------- TECHNOLOGY (12.5%) Acxiom* 165,803 2,819 BDM International* 191,467 4,978 Benchmark Electronics* 136,047 4,779 Cybex Computer Products* 79,847 1,452 Harbinger* 155,395 4,817 Input/Output* 250,551 4,447 National Data 133,001 5,835 Nichols Research* 252,683 4,927 SCB Computer Technology* 342,063 7,867 SCI Systems* 5,905 384 Sterling Commerce* 240,417 7,994 Wandel & Goltermann Technologies* 135,258 1,691 ---------- Total Technology 51,990 ---------- - ------------------------------------------------------------ SHARES/FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ TRANSPORTATION (4.3%) American Freightways* 388,181 $ 5,338 Hunt J B Transportation Services 538,819 8,217 MTL* 85,327 1,963 USA Truck* 228,340 2,169 ---------- Total Transportation 17,687 ---------- Total Common Stocks (Cost $310,998) 391,416 ---------- CONVERTIBLE BONDS (3.4%) Career Horizons, CV to 88.1340 Shares 7.000%, 11/01/02 $2,507 5,534 Pride Petroleum Services, CV to 81.6327 Shares 6.250%, 02/15/06 792 1,465 SCI Finance LLC, CV to 1.6617 Shares 37 4,247 Sci Systems, CV to 20.5128 Shares 5.000%, 05/01/06 2,059 3,009 ---------- Total Convertible Bonds (Cost $13,110) 14,255 ---------- REPURCHASE AGREEMENT (0.8%) Deutsche Bank 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $3,328,353 (collateralized by U.S. Treasury Note, par value $3,373,000, 5.125%, 12/31/98: total market value $3,393,654) 3,327 3,327 ---------- Total Repurchase Agreement (Cost $3,327) 3,327 ---------- Total Investments (98.5%) (Cost $327,435) 408,998 ---------- 71 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 SUNBELT EQUITY FUND--CONCLUDED - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ OTHER ASSETS AND LIABILITIES, NET (1.5%) $ 6,157 ---------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 28,714,327 outstanding shares of beneficial interest 292,778 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 2,151,656 outstanding shares of beneficial interest 21,236 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 437,822 outstanding shares of beneficial interest 5,505 Undistributed net investment income 39 Accumulated net realized gain on investments 14,034 Net unrealized appreciation on investments 81,563 ---------- Total Net Assets (100.0%) $ 415,155 ========== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 13.28 ========== Net Asset Value and Redemption Price Per Share -- Investor Shares $ 13.06 ========== Maximum Offering Price Per Share -- Investor Class ($13.06 (Divide) 96.25%) $ 13.57 ========== Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1)(2) $ 13.00 ========== (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. (2) Represents NAV on last business day -- May 30, 1997. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 72 ================================================================================ INVESTMENT GRADE TAX-EXEMPT FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ MUNICIPAL BONDS (102.3%) ARIZONA (1.7%) Northern Arizona University Revenue, RB, Callable 06/01/02 @ 101 (FGIC) 6.300%, 06/01/05 $2,770 $ 2,948 ---------- CALIFORNIA (4.2%) Los Angeles, California Participation Note, COP, Pre-Refunded 06/01/99 @ 102 (F) 7.000%, 06/01/09 3,765 4,039 Northern California, Power Agency, RB (AMBAC) 5.850%, 07/01/10 1,295 1,384 State University, California Public Works, RB, Pre-Refunded 10/01/02 @ 102 (F) 6.700%, 10/01/17 1,800 2,012 ---------- Total California 7,435 ---------- FLORIDA (12.2%) Hillsborough County, Capital Improvement Program, Ser B, RB, Callable 07/01/06 @ 102 (MBIA) 5.125%, 07/01/22 3,300 3,073 Okeechobee Correctional Facility, COP (AMBAC) 5.800%, 03/01/03 1,000 1,044 Orange County, Health Facilities Authority, RB (MBIA) 6.250%, 10/01/13 1,000 1,093 Reedy Creek, Improvement District Utility, Ser 1991-1, RB, Pre-Refunded 10/01/01 @ 101 (MBIA) (F) 6.500%, 10/01/16 2,000 2,169 State Board of Education, Capital Outlay, Ser C, GO, Pre-Refunded 06/01/02 @ 101 (F) 6.625%, 06/01/22 1,950 2,139 - ----------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ FLORIDA--CONTINUED State Department of Natural Resources, Environmental Preservation 2000 Project, Ser A, RB, Callable 07/01/01 @ 102 (AMBAC) 6.750%, 07/01/13 $2,000 $ 2,164 Tampa, Allegany Health, RB, Pre-Refunded 12/01/99 @ 102 (FGIC) (F) 7.375%, 12/01/23 3,500 3,814 Tampa, Capital Improvement Program, Ser B, RB, Callable 10/01/98 @ 100 (E) 8.375%, 10/01/18 1,000 1,051 Volusia County, Health Facility Authority, Aces Pooled Hospital Program, RB, VRDN, (FGIC) (C) (D) 3.900%, 11/01/15 2,700 2,700 Volusia County, Master Lease Program, COP, Pre-Refunded 08/01/01 @ 102 (FSA) (F) 6.625%, 08/01/06 2,000 2,190 ---------- Total Florida 21,437 ---------- GEORGIA (5.7%) Cobb County, School District, GO 6.000%, 02/01/01 5,900 6,194 Murray County, School District, GO 4.800%, 04/01/00 1,150 1,160 4.875%, 10/01/00 1,200 1,214 State, GO 7.250%, 07/01/99 1,305 1,381 ---------- Total Georgia 9,949 ---------- HAWAII (3.1%) State, GO 5.750%, 01/01/07 5,150 5,421 ---------- 73 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 INVESTMENT GRADE TAX-EXEMPT BOND FUND--CONTINUED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ ILLINOIS (3.6%) Chicago, Board of Education, GO (AMBAC) 6.750%, 12/01/09 $1,000 $ 1,132 Chicago, State Board of Education, GO (MBIA) 6.250%, 12/01/09 2,745 3,021 State Health Facilities Authority, Trinity Medical Center Project, RB, Callable 07/01/02 @ 102 (FSA) 7.000%, 07/01/12 2,000 2,189 ---------- Total Illinois 6,342 ---------- INDIANA (3.6%) Beech Grove, School Building, RB (MBIA) 6.250%, 07/05/16 2,265 2,464 Health Facilities Financing Authority, Community Hospitals of Indiana, RB, Pre-Refunded 07/01/01 @ 102 (MBIA) (F) 7.000%, 07/01/21 3,500 3,869 ---------- Total Indiana 6,333 ---------- MARYLAND (5.1%) Baltimore, Metropolitan District, GO, Callable 07/01/02 @ 102 5.900%, 07/01/04 1,000 1,067 Montgomery County Public Improvement, Ser A, GO 5.200%, 10/01/00 5,725 5,866 Montgomery County, Ser A, GO 5.100%, 04/01/99 2,000 2,032 ---------- Total Maryland 8,965 ---------- MASSACHUSETTS (4.8%) Boston, City Hospital Project, RB, Callable 08/15/00 @ 102 (FHA) 7.650%, 02/15/10 1,275 1,410 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ MASSACHUSETTS--CONTINUED Commonwealth of Massachusetts, GO, VRDN (C) (D) 4.000%, 12/01/97 $ 7,010 $ 7,010 ---------- Total Massachusetts 8,420 ---------- NEBRASKA (1.2%) Omaha, Public Power & Electric Authority, Ser A, RB, Pre-Refunded 02/01/02 @ 101.50 (F) 6.500%, 02/01/17 2,000 2,180 ---------- NEW JERSEY (21.1%) Economic Development Authority, Water Facilities, Ser PJ-B, RB, VRDN (AMBAC) (C) (D) 3.750%, 11/01/25 7,000 7,000 State, Transportation Anticipation Note, Ser A, RB, Callable 03/01/01 @ 100 (FSA) 4.900%, 09/01/01 3,750 3,793 State, Transportation Anticipation Note, Ser A, RB, Callable 03/01/03 @ 100 (FSA) 5.400%, 09/01/02 7,000 7,218 5.500%, 09/01/03 13,000 13,478 State, Transportation Anticipation Note, Ser A, RB, Callable 03/01/00 @ 100 (FSA) 4.800%, 09/01/00 5,500 5,546 ---------- Total New Jersey 37,035 ---------- NEW YORK (20.2%) New York, Ser B, GO 5.600%, 08/15/06 1,500 1,513 New York, Ser J, GO (MBIA) 6.000%, 02/15/05 3,000 3,194 State, Pre-Refunded 03/01/00 @ 102 (AMBAC) (F) 7.100%, 03/01/20 1,650 1,794 74 ================================================================================ - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ NEW YORK--CONTINUED State Dorm Authority, RB, Callable 07/01/14 @ 100 (FSA) 5.750%, 07/01/18 $1,800 $ 1,860 State Dorm Authority, State University Educational Facilities, RB (FGIC) 5.875%, 05/15/11 2,000 2,115 State Dorm Authority, State University Educational Facilities, Ser A, RB, Pre-Refunded 05/15/00 @ 102 (F) 7.700%, 05/15/12 5,000 5,539 State Local Assistance Corporation, Ser A, RB, Pre-Refunded 04/01/01 @ 102 (F) 7.000%, 04/01/16 5,000 5,524 State Urban Development RB, Callable 01/01/03 @ 102 (AMBAC) 5.625%, 01/01/07 2,300 2,391 State Urban Development, RB, Pre-Refunded 01/01/01 @ 102 (F) 7.875%, 01/01/10 3,000 3,383 State Urban Development, Ser A, RB (MBIA) 6.250%, 04/01/06 2,000 2,186 Triborough, New York, State Bridge & Tunnel Authority, Ser S, RB, Pre-Refunded 01/01/01 @ 101.5 (F) 7.000%, 01/01/11 2,000 2,191 Triborough, New York, State Bridge & Tunnel Authority, Ser X, RB, Callable 01/01/02 @ 101.50 6.250%, 01/01/04 3,550 3,802 ---------- Total New York 35,492 ---------- NORTH CAROLINA (0.8%) Johnston County, COP (MBIA) 4.150%, 09/01/98 1,380 1,382 ---------- - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ PENNSYLVANIA (0.6%) Philadelphia, Water & Waste, RB (MBIA) 6.250%, 08/01/12 $1,050 $ 1,150 ---------- TENNESSEE (3.7%) Shelby County, GO, Pre-Refunded 12/01/00 @ 102 (F) 6.250%, 12/01/09 2,000 2,149 State, GO 5.000%, 05/01/99 4,220 4,284 ---------- Total Tennessee 6,433 ---------- TEXAS (5.3%) El Paso, GO, Callable 08/15/07 @ 100 (FGIC) 5.000%, 08/15/11 1,000 964 5.000%, 08/15/12 1,000 958 Harris County, Health Facility Development, Ser A, RB 6.000%, 06/01/12 3,990 4,234 Texas Water Development Board State Revolving Fund - Senior Lien, RB, Callable 07/15/02 @ 102 6.000%, 07/15/03 2,000 2,133 University of Texas, RB 6.300%, 08/15/99 1,000 1,041 ---------- Total Texas 9,330 ---------- UTAH (1.0%) Intermountain Power Agency, Ser E, RB (FSA) 6.250%, 07/01/09 1,545 1,699 ---------- VIRGINIA (2.9%) Fairfax County, Ser C, GO, Callable 05/01/03 @ 102 5.250%, 05/01/07 5,000 5,107 ---------- WASHINGTON (0.6%) Grant County, Washington School District, GO (FGIC) 6.000%, 12/01/08 1,000 1,073 ---------- 75 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 INVESTMENT GRADE TAX-EXEMPT BOND FUND--CONCLUDED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ WISCONSIN (0.9%) Milwaukee County, Ser A, GO (MBIA) 5.250%, 10/01/03 $1,550 $ 1,593 ---------- Total Municipal Bonds (Cost $178,251) 179,724 ---------- CASH EQUIVALENTS (9.9%) AIM Management Institutional Tax-Free Portfolio (C) 8,685 8,685 SEI Tax Exempt Trust Institutional Tax Free Portfolio (C) 8,753 8,753 ---------- Total Cash Equivalents (Cost $17,438) 17,438 ---------- Total Investments (112.2% ) (Cost $195,689) 197,162 ---------- OTHER ASSETS AND LIABILITIES (-12.2%) Investment securities purchased payable (24,673) Other assets and liabilities, net 3,193 ---------- Total Other Assets and Liabilities (21,480) ---------- - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 12,396,746 outstanding shares of beneficial interest $137,067 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 2,834,763 outstanding shares of beneficial interest 30,459 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 416,782 outstanding shares of beneficial interest 4,716 Accumulated net realized gain on investments 1,967 Net unrealized appreciation on investments 1,473 ---------- Total Net Assets (100.0%) $ 175,682 ========== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 11.22 ========== Net Asset Value and Redemption Price Per Share -- Investor Shares $ 11.24 ========== Maximum Offering Price Per Share -- Investor Class ($11.24 (Divide) 96.25%) $ 11.68 ========== Net Asset Value, Offering and Redemption Price Per Share-- Flex Shares (1) $ 11.23 ========== (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 76 FLORIDA TAX-EXEMPT BOND FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ MUNICIPAL BONDS (89.0%) FLORIDA (78.7%) Alachua County, State Health Facilities Authority, Ser B, RB, VRDN (MBIA) (C) (D) 3.900%, 12/01/26 $2,300 $2,300 Brevard County, School Board, Ser A, COP (AMBAC) 5.400%, 07/01/12 1,500 1,510 Brevard County, State Health Facilities Authority, Holmes Medical Center Project, RB, Callable 10/01/03 @ 102 (MBIA) 5.700%, 10/01/08 3,000 3,103 Brevard County, State Health Facilities Authority, Wuesthoff Memorial Hospital Project, RB (MBIA) 6.250%, 04/01/06 930 1,018 Broward County, School District GO, Pre-Refunded 02/15/99 @ 102 (F) 7.125%, 02/15/08 400 426 Dade County, Aviation Revenue, Ser A, RB, Callable 10/01/05 @ 102 (AMBAC) 6.000%, 10/01/09 500 534 Dade County, School Board, COP (AMBAC) 5.750%, 08/01/03 600 631 Dade County, School District, GO Pre-Refunded 07/01/99 @ 102 (F) 7.200%, 07/01/02 2,000 2,151 7.375%, 07/01/08 250 270 Dade County, Seaport, RB (MBIA) 6.200%, 10/01/08 750 826 6.200%, 10/01/10 1,000 1,094 Dade County, State Educational Facilities Authority, University of Miami, Ser A, RB (MBIA) 6.000%, 04/01/08 755 814 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ FLORIDA--CONTINUED Dade County, Water & Sewer System, RB (FGIC) 6.250%, 10/01/09 $ 750 $ 827 5.250%, 10/01/21 825 790 Deerfield Beach, Water & Sewer Revenue, RB (FGIC) 6.125%, 10/01/06 250 273 Gainsville, Utilities Systems, Ser A, RB 5.750%, 10/01/04 1,300 1,379 5.750%, 10/01/09 500 529 Gulf Breeze, Local Government Lien, Ser B, RB, Mandatory Tender 12/01/08 (FGIC) 5.650%, 12/01/15 460 472 Gulf Breeze, Local Government Lien, Ser B, RB, Mandatory Tender 12/01/09 (FGIC) 5.750%, 12/01/15 410 421 Hillsborough County, Capital Improvement Program Ser B, RB Callable 07/01/06 @ 102 (MBIA) 5.125%, 07/01/22 3,000 2,794 Hillsborough County, Capital Improvement Revenue, RB (FGIC) 5.900%, 08/01/04 300 320 Hillsborough County, School Board Revenue, COP, Callable 07/01/06 @ 100 (MBIA) 5.875%, 07/01/08 1,000 1,060 Hillsborough County, University Community Hospital, RB (MBIA) 6.500%, 08/15/19 145 163 Indian Trace Community, Water Management Split Benefit, Ser A-1, RB, Callable 05/01/05 @ 102 (MBIA) 5.500%, 05/01/07 455 474 Jacksonville Excise Taxes, Ser B, RB, AMT, Callable 10/01/01 @ 101 (FGIC) 4.900%, 10/01/02 590 595 77 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 FLORIDA TAX-EXEMPT BOND FUND--CONTINED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ FLORIDA--CONTINUED Jacksonville, Florida Excise Tax, Ser B, RB, AMT, Callable 10/01/03 @ 100 (FGIC) 5.200%, 10/01/04 $1,500 $1,527 Lakeland, Electric & Water Revenue, RB (FGIC) 6.500%, 10/01/05 1,000 1,113 Lakeland, Electric & Water Revenue, RB 6.650%, 10/01/98 100 103 Manatee County, Community Redevelopment Administration, Center Project, RB, Callable 04/01/00 @ 102.00 (MBIA) 7.000%, 04/01/08 1,000 1,076 North Broward, Hospital District Revenue, RB (MBIA) 5.950%, 01/01/01 1,000 1,044 Orange County, Health Facilities Authority, RB (MBIA) 6.250%, 10/01/13 1,000 1,093 Orange County, Public Facilities Revenue, Ser A, RB, Callable 10/01/04 @ 102 (AMBAC) 5.650%, 10/01/07 200 210 Orlando, Community Water & Electric Revenue, RB (ETM) 9.625%, 10/01/03 450 569 Orlando, Community Water & Electric Revenue, Ser D, RB 6.750%, 10/01/17 500 582 Palm Beach, Health Facilities Revenue, JFK Medical Center Project, RB, Pre-Refunded 12/01/03 @ 102 (FSA) (F) 5.750%, 12/01/14 165 177 Pinellas County, Morton Plant Health Systems Project, RB, Callable 11/15/03 @ 102 (MBIA) 5.500%, 11/15/08 1,500 1,541 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ FLORIDA--CONTINUED Plant City, Utility System Revenue, RB, Callable 10/01/04 @ 101 (MBIA) 6.000%, 10/01/15 $ 400 $ 426 Reedy Creek, Utility Revenue, Ser 1991-1, RB, Pre-Refunded 10/01/01 @ 101 (MBIA) (F) 6.250%, 10/01/11 240 258 South Broward, Hospital District, RB, Callable 05/01/03 @ 102 (AMBAC) 7.500%, 05/01/08 1,920 2,195 State Board General Financial Services, Department of Environmental Preservation, RB (AMBAC) 5.125%, 07/01/07 1,500 1,518 State Board of Education, Capital Outlay, RB 6.600%, 06/01/98 125 128 State Board of Education Capital Outlay, GO, Pre-Refunded 06/01/00 @ 102 (F) 7.250%, 06/01/23 2,695 2,953 State Board of Education, Capital Outlay, Ser B, GO, Callable 06/01/02 @ 101 5.900%, 06/01/12 450 463 State Board of Education, Capital Outlay, Ser B, RB, Callable 06/01/02 @ 101 6.000%, 06/01/15 170 175 State Board of Education, Ser C, GO, Pre-Refunded 06/01/97 @ 102 (ETM) (F) 7.100%, 06/01/07 190 194 State Board of Finance Department, General Services Revenue, Environmental Preservation 2000, Ser A, RB (AMBAC) 5.300%, 07/01/04 460 474 78 ================================================================================ - -------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------- FLORIDA--CONTINUED State Department of Natural Resources, Preservation 2000 Project, Ser A, RB, Callable 07/01/01 @ 102 (AMBAC) 6.750%, 07/01/06 $ 80 $ 87 State Keys, Aqueduct Authority Revenue, RB, Pre-Refunded 09/01/01 @ 101 (AMBAC) (F) 6.750%, 09/01/21 170 186 State Pollution Control, Ser N, GO, Callable 07/01/96 @ 102 8.000%, 07/01/97 420 422 Tallahassee Construction Utility System, RB, Pre-Refunded 10/01/99 @ 102 (F) 6.900%, 10/01/14 240 258 Tampa, RB, Callable 10/1/01 @ 102 (AMBAC) 7.050%, 10/01/07 1,000 1,105 ---------- Total Florida 44,651 ---------- PUERTO RICO (10.3%) Commonwealth, Highway & Transportation Authority, Ser Z, RB (MBIA) 6.250%, 07/01/14 2,000 2,193 Commonwealth, GO, (MBIA) 5.650%, 07/01/15 1,000 1,026 Electric Power Authority, Ser S, RB 5.500%, 07/01/00 200 205 Electric Power Authority, RB, (MBIA) 6.125%, 07/01/09 1,000 1,094 - -------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------- PUERTO RICO--CONTINUED Public Buildings Authority, Guaranteed Government Facilities, Ser A, RB (AMBAC) 6.250%, 07/01/14 $ 750 $ 822 Public Buildings Authority Revenue, Public Education & Health Facilities, RB 5.300%, 07/01/03 475 483 ---------- Total Puerto Rico 5,823 ---------- Total Municipal Bonds (Cost $49,674) 50,474 ---------- CASH EQUIVALENTS (9.8%) AIM Management Institutional Tax-Free Portfolio 2,782 2,782 SEI Tax Exempt Trust Institutional Tax Free Portfolio 2,767 2,767 ---------- Total Cash Equivalents (Cost $5,549) 5,549 ---------- Total Investments (98.8%) (Cost $55,223) 56,023 ---------- OTHER ASSETS AND LIABILITIES, NET (1.2%) 690 ---------- 79 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 FLORIDA TAX-EXEMPT BOND FUND--CONCLUDED - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 4,910,796 outstanding shares of beneficial interest $50,028 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 313,587 outstanding shares of beneficial interest 3,103 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 291,278 outstanding shares of beneficial interest 2,992 Accumulated net realized loss on investments (210) Net unrealized appreciation on investments 800 ---------- Total Net Assets (100.0%) $ 56,713 ========== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 10.28 ========== Net Asset Value and Redemption Price Per Share-- Investor Shares $ 10.29 ========== Maximum Offering Price Per Share -- Investor Class ($10.29 (Divide) 96.25%) $ 10.69 ========== Net Asset Value, Offering and Redemption Price Per Share-- Flex Shares (1) $ 10.30 ========== (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 80 ================================================================================ TENNESSEE TAX-EXEMPT BOND FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ MUNICIPAL BONDS (89.1%) PUERTO RICO (11.9%) Commonwealth, GO, Callable 07/01/05 @ 100 (MBIA) 5.500%, 07/01/13 $175 $ 176 Commonwealth, Highway & Transportation Authority, Ser Z, RB (MBIA) 6.250%, 07/01/15 500 549 --------- Total Puerto Rico 725 --------- TENNESSEE (77.2%) Chattanooga, GO, Callable 08/01/02 @ 102 5.900%, 08/01/05 50 53 Chattanooga, Health Facilities Board, Memorial Hospital Project, Ser A, RB (MBIA) 6.300%, 09/01/05 20 22 Chattanooga-Hamilton County, Erlanger Medical Center Project, RB (FSA) 5.600%, 10/01/08 50 52 Hamilton County, GO, Callable 07/01/04 @ 102 5.500%, 07/01/08 100 103 Harpeth Valley, Utility District Revenue, RB, Callable 09/01/03 @ 102 5.625%, 09/01/07 100 104 Jackson, Water & Sewer Utilities Revenue, RB, Callable 07/01/06 @ 100 (AMBAC) 5.250%, 07/01/11 200 198 Johnson City, Water & Sewer Regulation System, GO, Callable 05/01/06 @ 100 (AMBAC) 5.800%, 05/01/09 100 104 Kingsport, GO 5.500%, 09/01/02 50 52 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ TENNESSEE--CONTINUED Knox County, First Utility District Sewer Revenue, RB, Callable 12/01/97 @ 100 (ETM) 7.250%, 12/01/05 $ 55 $ 64 Knox County, Health Facilities Board, Mercy Health Systems, Ser B, RB, Callable 09/01/05 @ 100 (AMBAC) 5.875%, 09/01/15 50 51 Knoxville, Natural Gas Revenue, Ser E, RB, Callable 03/01/03 @ 100 5.900%, 03/01/10 100 103 Madison County, Ser A, GO, Callable 08/01/01 @ 102 6.000%, 08/01/05 40 42 Madison County, Water Revenue, RB, Callable 02/01/08 @ 100 (MBIA) 5.500%, 02/01/09 250 255 Memphis-Shelby County, Airport Authority, Ser B, RB, AMT (MBIA) 6.500%, 02/15/09 85 94 Memphis-Shelby County, Airport Authority, RB, Callable 09/01/05 @ 100 (MBIA) 5.550%, 09/01/08 50 52 Metro Government, Nashville & Davidson County, Convention Center Project, GO (ETM) 6.250%, 03/01/10 200 219 Metro Government, Nashville & Davidson County, Correctional Facility Improvements, RB, Callable 09/01/01 @ 102 7.000%, 09/01/11 100 109 Metro Government, Nashville & Davidson County, Electric System Revenue, RB (ETM) 6.000%, 07/01/04 100 107 81 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 TENNESSEE TAX-EXEMPT BOND FUND--CONCLUDED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ TENNESSEE--CONTINUED Metro Government, Nashville & Davidson County, Electric System Revenue, RB 5.625%, 05/15/14 $200 $ 203 Metro Government, Nashville & Davidson County, Vanderbilt University Hospital, RB, Callable 07/01/06 @ 100 (ETM) 6.100%, 07/01/10 100 106 Metro Government, Nashville & Davidson County, Vanderbilt University, Ser A, RB 5.500%, 01/01/06 125 130 Metro Government, Nashville & Davidson County, Water & Sewer Revenue, RB (ETM) 6.500%, 12/01/14 225 251 Metro Government, Nashville & Davidson County, Water & Sewer, RB, Callable 01/01/04 @ 100 (AMBAC) 5.900%, 01/01/07 100 105 Nashville & Davidson County, State Sports Authority Stadium Project, RB, Callable 07/01/06 @ 101 (AMBAC) 5.750%, 07/01/15 100 102 Shelby County, School Boards, GO, Callable 03/01/02 @ 101 5.800%, 03/01/10 300 309 Shelby County, Ser A, GO 5.500%, 03/01/10 300 307 Shelby County, Ser B, GO 5.100%, 03/01/00 750 763 State GO, Ser A, Callable 03/01/07 @ 100 5.500%, 03/01/09 50 52 State GO, Ser C 5.000%, 03/01/04 100 102 State Housing Development Agency, Ser A, RB (AMBAC) 6.550%, 01/01/08 50 52 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ TENNESSEE--CONTINUED State Local Development Authority, State Loan Program, Ser A, RB, Callable 03/01/04 @ 100 7.000%, 03/01/12 $ 50 $ 54 State Metropolitan Nashville Airport, Ser B, RB, Pre-Refunded 07/01/01 @ 102 (FGIC)(F) 7.750%, 07/01/06 100 113 State School Board Authority, Higher Education Facilities, Ser A, RB, Callable 05/01/02 @ 101.50 5.800%, 05/01/04 150 158 Sullivan County, Health Facilities Board, Holston Valley Health, RB, Callable 02/15/03 @ 102 (MBIA) 5.750%, 02/15/13 50 51 Williamson County, Rural School, GO, Callable 09/01/06 @ 100 5.400%, 09/01/07 50 52 --------- Total Tennessee 4,694 --------- Total Municipal Bonds (Cost $5,299) 5,419 --------- CASH EQUIVALENTS (9.8%) Aim Management Institutional Tax Free Portfolio 292 292 SEI Tax-Exempt Trust Institutional Tax-Free Portfolio 302 302 --------- Total Cash Equivalents (Cost $594) 594 --------- Total Investments (98.9%) (Cost $5,893) 6,013 --------- OTHER ASSETS AND LIABILITIES, NET (1.1%) 67 --------- 82 - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 204,829 outstanding shares of beneficial interest $ 1,913 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 166,059 outstanding shares of beneficial interest 1,570 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 259,932 outstanding shares of beneficial interest 2,489 Accumulated net realized loss on investments (12) Net unrealized appreciation on investments 120 --------- Total Net Assets (100.0%) $ 6,080 ========= Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 9.63 ========= Net Asset Value and Redemption Price Per Share -- Investor Shares $ 9.65 ========= Maximum Offering Price Per Share -- Investor Class ($9.65 (Divide) 96.25%) $ 10.03 ========= Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 9.64 ========= (1) The Flex Shares have a contingent sales charge. Fora description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 83 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 GEORGIA TAX-EXEMPT BOND FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ MUNICIPAL BONDS (89.6%) GEORGIA (89.6%) Albany-Dougherty County, State Hospital Authority, Ser B, Anticipation Certificate, Pre-Refunded 09/01/00 @ 102 (AMBAC) (F) 7.500%, 09/01/20 $ 255 $ 282 Athens, Water & Sewer Revenue, RB (ETM) (F) 5.700%, 07/01/00 165 171 Atlanta Airport Facility, RB 6.000%, 01/01/03 500 531 6.000%, 01/01/04 500 534 Augusta, Water & Sewer, RB, Callable 05/01/02 @ 102 6.200%, 05/01/03 130 141 Bibb County, GO 7.000%, 01/01/04 985 1,103 Bulloch County School District, GO 5.250%, 02/01/17 1,000 968 Clayton County, Water & Sewer Authority, RB (AMBAC) 5.350%, 05/01/09 1,500 1,519 Cobb County & Marietta, Coliseum & Exhibit Hall Authority, RB (MBIA) 5.500%, 10/01/12 940 956 Cobb County & Marietta, Water Authority, RB 5.100%, 11/01/04 1,000 1,019 Cobb County, GO 5.000%, 02/01/03 1,025 1,040 Cobb County, Water & Sewer Authority, Callable 07/01/04 @ 102 5.125%, 07/01/05 345 352 Columbus Water & Sewer, RB (FGIC) 5.625%, 05/01/13 1,055 1,070 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ GEORGIA--CONTINUED Dalton-Whitfield County, Hospital Authority, RB, Pre-Refunded 07/01/00 @ 102 (F) 7.000%, 07/01/03 $ 355 $ 386 DeKalb County, Development Authority, Emory University Project, RB (F) 5.375%, 11/01/05 1,650 1,710 DeKalb County, Development Authority, Emory University Project, Ser A, RB 5.200%, 11/01/08 500 506 DeKalb County, School District, Ser A, GO 6.250%, 07/01/11 1,500 1,649 DeKalb County, Water & Sewer Authority, RB, Callable 10/01/03 @ 102 5.125%, 10/01/14 1,455 1,398 Douglas County, School District, GO (MBIA) 5.650%, 01/01/09 805 832 Douglasville - Douglas County, Water and Sewer Authority, RB (AMBAC) 5.625%, 06/01/15 350 357 East Point Building Authority, RB (AMBAC) 4.800%, 02/01/07 535 525 Fayette County, School District, GO 6.250%, 03/01/07 450 494 Fayette County, Water Authority, RB (MBIA) (ETM) 8.550%, 10/01/01 300 346 Forsyth County, School District, GO (MBIA) 5.350%, 07/01/10 680 685 Forsyth County, GO 6.500%, 07/01/06 1,000 1,113 84 ================================================================================ - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ GEORGIA--CONTINUED Fulton County, Hospital Authority, Northside Hospital Project, Ser B, RB, Pre-Refunded 10/01/02 @ 102 (MBIA) (F) 6.600%, 10/01/11 $2,000 $2,214 Gwinnett County Recreation Authority,RB 5.800%, 02/01/06 785 835 5.875%, 02/01/07 1,390 1,489 Gwinnett County, School District, GO 6.400%, 02/01/06 500 553 Gwinnett County, School District, Ser B, GO 6.400%, 02/01/07 1,000 1,113 Hall County, GO 6.300%, 12/01/05 675 739 Hartwell, Combined Utility Revenue, RB, Callable 01/01/06 @ 102 (FSA) 5.500%, 01/01/16 1,000 991 Henry County, GO 6.300%, 08/01/08 300 331 Henry County, School District, School Improvements, RB 6.450%, 08/01/11 500 555 Henry County, School District, Ser A, GO 6.150%, 08/01/06 150 163 Henry County, School District, Ser B, GO (MBIA) 5.500%, 08/01/01 350 363 Housing Authority, Single Family Mortgage, Ser B, Sub-ser B-1, RB 5.550%, 12/01/07 550 561 Medical Center Hospital Authority, Columbus Regional Healthcare System, RB (MBIA) 6.000%, 08/01/06 1,000 1,070 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ GEORGIA--CONTINUED Meriwether County, School District, GO (FSA) 7.000%, 02/01/06 $ 740 $ 847 5.500%, 02/01/16 1,000 990 Milledgeville, Water & Sewer, RB (FSA) 6.000%, 12/01/16 1,000 1,069 Paulding County, School District, Ser A, GO 6.625%, 02/01/07 1,000 1,123 6.625%, 02/01/08 500 563 Private Colleges & Universities Facilities Authority, Emory University Project, Ser C, RB, Callable 10/01/02 @ 102 5.900%, 10/01/04 305 325 Private Colleges & Universities Facilities Authority, Spelman College Project, RB (FGIC) 6.000%, 06/01/09 475 502 Richmond County Georgia Water & Sewer, Ser A, RB (FGIC) 5.125%, 10/01/17 1,000 951 Rockdale County, School District, RB, Pre-Refunded 01/01/99 @ 102 (F) 6.400%, 01/01/05 150 157 Savannah, Water & Sewer Revenue, RB (ETM) (F) 6.450%, 12/01/04 1,000 1,104 State GO, Ser B, Pre-Refunded 07/01/99 @ 102 (F) 6.800%, 07/01/06 460 491 State GO, Ser C 6.500%, 04/01/08 1,000 1,127 State Housing & Financial Authority, Single Family Mortgage, Ser B, Sub-ser B-1, RB (FHA) 5.550%, 12/01/10 325 325 85 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 GEORGIA TAX-EXEMPT BOND FUND--CONCLUDED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ GEORGIA--CONTINUED State Housing & Financial Authority, Single Family Mortgage, Ser B, Sub-ser B-1, RB (FHA) 5.600%, 12/01/11 $ 450 $ 450 State Municipal Electric Authority, RB (ETM) (F) 8.000%, 01/01/15 465 587 Vidalia, Water & Sewer Revenue, RB (ETM) (F) 6.000%, 07/01/07 605 654 Walker County School District, GO 5.000%, 02/01/03 1,000 1,010 --------- Total Georgia 42,939 --------- Total Municipal Bonds (Cost $42,637) 42,939 --------- REPURCHASE AGREEMENT (2.6%) Lehman Brothers 5.02%, dated 05/30/97, matures 06/02/97, repurchase price $1,233,287 (collateralized by U.S. Treasury Note, par value $1,247,488, 5.625%, 08/31/97: total market value $1,265,810) 1,233 1,233 --------- Total Repurchase Agreement (Cost $1,233) 1,233 --------- CASH EQUIVALENTS (8.4%) AIM Management Institutional Tax-Free Portfolio (C) 2,025 2,025 SEI Tax Exempt Trust Institutional Tax Free Portfolio (C) 2,007 2,007 --------- Total Cash Equivalents (Cost $4,032) 4,032 --------- - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ Total Investments (100.6% ) (Cost $47,902) $ 48,204 --------- OTHER ASSETS AND LIABILITIES, NET (-0.6%) (299) --------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 4,084,294 outstanding shares of beneficial interest 39,434 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 360,308 outstanding shares of beneficial interest 3,511 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 479,124 outstanding shares of beneficial interest 4,651 Accumulated net realized gain on investments 7 Net unrealized appreciation on investments 302 --------- Total Net Assets (100.0%) $ 47,905 ========= Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 9.73 ========= Net Asset Value and Redemption Price Per Share -- Investor Shares $ 9.74 ========= Maximum Offering Price Per Share -- Investor Class ($9.74 (Divide) 96.25%) $ 10.12 ========= Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 9.73 ========= (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 86 ================================================================================ INVESTMENT GRADE BOND FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ U.S. TREASURY OBLIGATIONS (21.2%) U.S. Treasury Bonds 7.500%, 11/15/16 $36,100 $ 38,056 8.125%, 08/15/19 81,000 91,127 6.625%, 02/15/27 10,000 9,635 U.S. Treasury Note 6.750%, 04/30/00 4,000 4,039 --------- Total U.S. Treasury Obligations (Cost $141,586) 142,857 --------- CORPORATE OBLIGATIONS (69.9%) FINANCE (51.7%) American General Finance 6.875%, 07/01/99 13,000 13,097 Aristar 6.750%, 05/15/99 23,000 23,115 Associates of North America, MTN 6.650%, 08/30/99 9,500 9,524 Bear Stearns 7.000%, 03/01/07 23,000 22,425 General Motors Acceptance, MTN 6.750%, 11/04/04 21,000 20,422 General Motors Acceptance 7.125%, 05/01/01 23,500 23,676 Homeside Lending, MTN 6.875%, 05/15/00 21,600 21,573 Household Finance, MTN 7.150%, 06/15/00 13,000 13,130 International Lease Finance 6.700%, 04/30/99 23,500 23,618 Merrill Lynch, MTN 6.640%, 04/09/99 19,000 19,071 Morgan Stanley Group 6.875%, 03/01/07 17,000 16,554 RHG Finance 8.875%, 10/01/05 17,100 18,489 Salomon 6.500%, 03/01/00 28,000 27,755 6.750%, 02/15/03 23,000 22,368 Service International 7.375%, 04/15/04 20,500 20,756 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ FINANCE--CONTINUED Sunamerica 6.200%, 10/31/99 $25,000 $ 24,813 US West Capital Funding 7.300%, 01/15/07 27,500 27,328 --------- Total Finance 347,714 --------- INDUSTRIAL (11.3%) Ford Capital 9.500%, 06/01/10 15,000 17,306 Lockheed Martin 6.550%, 05/15/99 16,000 16,020 Philip Morris 7.250%, 09/15/01 24,500 24,592 6.800%, 12/01/03 4,000 3,900 7.500%, 04/01/04 14,500 14,573 --------- Total Industrial 76,391 --------- UTILITIES (6.9%) AT&T Capital, MTN 6.920%, 04/29/99 25,000 25,125 General Electric Capital (C) 6.660%, 05/01/18 21,000 21,052 --------- Total Utilities 46,177 --------- Total Corporate Obligations (Cost $471,229) 470,282 --------- U.S. GOVERNMENT AGENCY OBLIGATIONS (4.2%) FHLMC 8.000%, 06/01/02 8,047 8,244 7.500%, 09/01/03 19,625 19,896 --------- Total U.S. Government Agency Obligations (Cost $28,159) 28,140 --------- 87 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 INVESTMENT GRADE BOND FUND--CONCLUDED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ REPURCHASE AGREEMENT (0.4%) Deutsche Bank 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $2,739,802 (collateralized by U.S. Treasury Note, par value $2,777,000, 5.125%, 12/31/98: market value $2,794,004) $2,739 $ 2,739 --------- Total Repurchase Agreement (Cost $2,739) 2,739 --------- Total Investments (95.7%) (Cost $643,713) 644,018 --------- OTHER ASSETS AND LIABILITIES, NET (4.3%) 28,556 --------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 62,361,667 outstanding shares of beneficial interest 644,729 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 3,264,729 outstanding shares of beneficial interest 34,279 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 566,749 outstanding shares of beneficial interest 5,854 Accumulated net realized loss on investments (12,593) Net unrealized appreciation on investments 305 --------- Total Net Assets (100.0%) $ 672,574 ========= Net Asset Value, Offering and Redemption Price Per Share-- Trust Shares $ 10.16 ========= Net Asset Value and Redemption Price Per Share -- Investor Shares $ 10.16 ========= Maximum Offering Price Per Share -- Investor Class ($10.16 (Divide) 96.25%) $ 10.56 ========= Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 10.17 ========= (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 88 ================================================================================ SHORT-TERM BOND FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ U.S. TREASURY OBLIGATIONS (36.0%) U.S. Treasury Bond 6.125%, 05/15/98 $2,000 $ 2,005 U.S. Treasury Notes 5.875%, 08/15/98 1,750 1,747 4.750%, 09/30/98 1,500 1,476 4.750%, 10/31/98 9,000 8,843 5.500%, 02/28/99 8,750 8,659 5.875%, 11/15/99 3,000 2,971 7.500%, 11/15/01 3,750 3,892 U.S. Treasury STRIPS 0.000%, 08/15/03 5,750 3,851 --------- Total U.S. Treasury Obligations (Cost $33,597) 33,444 --------- CORPORATE OBLIGATIONS (43.1%) FINANCE (22.7%) American General 6.250%, 03/15/03 1,100 1,060 Associates of North America, MTN 5.980%, 12/19/00 1,250 1,220 7.080%, 04/15/03 1,500 1,502 Bankers Trust New York 6.625%, 07/30/99 2,250 2,250 Chrysler Financial 6.440%, 06/23/99 1,000 1,000 Dean Witter Discover, MTN 6.000%, 02/08/01 1,000 966 First Chicago NBD 6.500%, 11/01/01 2,250 2,214 FNMA, MTN 5.760%, 02/26/01 2,100 2,034 Ford Motor Credit 6.250%, 11/08/00 1,500 1,476 General Motors Acceptance 7.125%, 05/01/01 1,750 1,763 Household Finance 9.625%, 07/15/00 1,250 1,349 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ FINANCE--CONTINUED International Lease Finance, MTN 6.050%, 02/01/00 $2,250 $ 2,216 Norwest Financial 7.200%, 04/01/04 2,000 2,020 --------- Total Finance 21,070 --------- INDUSTRIAL (13.7%) Dayton Hudson 6.800%, 10/01/01 2,250 2,230 Federal Express 6.250%, 04/15/98 750 752 Philip Morris (D) 9.000%, 05/15/98 1,500 1,540 Philip Morris 7.500%, 01/15/02 1,250 1,264 RJR Nabisco 8.300%, 04/15/99 1,000 1,031 Sears Roebuck Acceptance, MTN 6.820%, 10/17/02 500 496 6.540%, 02/20/03 1,200 1,170 Sherwin-Williams 6.250%, 02/01/00 1,000 991 Tenneco 10.075%, 02/01/01 3,000 3,296 --------- Total Industrial 12,770 --------- UTILITIES (6.7%) General Electric Capital, Callable & Putable 4/14/98 @ 100 (C)(D) 6.650%, 04/14/08 2,000 2,006 Indiana & Michigan Power, MTN 6.400%, 03/01/00 2,250 2,230 NYNEX Credit, MTN 6.900%, 06/15/99 2,000 2,015 --------- Total Utilities 6,251 --------- Total Corporate Obligations (Cost $40,297) 40,091 --------- 89 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 SHORT-TERM BOND FUND--CONCLUDED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (4.9%) FHLMC 6.500%, 04/01/98 $ 892 $ 884 8.000%, 01/01/00 894 910 5.375%, 04/13/00 1,000 989 FNMA 8.500%, 11/01/01 1,758 1,801 --------- Total U.S. Agency Mortgage-Backed Obligations (Cost $4,534) 4,584 --------- ASSET-BACKED SECURITIES (9.4%) Chase Manhattan Auto Grantor Trust, Ser 1996-B, Cl A 6.610%, 09/15/02 1,947 1,955 Metris Master Trust, Ser 1997-1, Cl A 6.870%, 11/20/05 2,750 2,767 Olympic Automobile Receivables Trust, Ser 1996-D, Cl A3 5.950%, 06/15/01 2,500 2,477 Union Pacific Equipment Trust, Ser 96-A 7.060%, 05/15/03 1,500 1,506 --------- Total Asset-Backed Securities (Cost $8,697) 8,705 --------- CASH EQUIVALENTS (2.8%) SEI Daily Income Trust Prime Obligation Portfolio 2,583 2,583 --------- Total Cash Equivalents (Cost $2,583) 2,583 --------- Total Investments (96.2%) (Cost $89,708) 89,407 --------- - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ OTHER ASSETS AND LIABILITIES, NET (3.8%) $ 3,549 --------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 9,063,741 outstanding shares of beneficial interest 90,146 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 220,117 outstanding shares of beneficial interest 2,202 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 108,300 outstanding shares of beneficial interest 1,087 Undistributed net investment income 141 Accumulated net realized loss on investments (319) Net unrealized depreciation on investments (301) --------- Total Net Assets (100.0%) $ 92,956 ========= Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 9.90 ========= Net Asset Value and Redemption Price Per Share -- Investor Shares $ 9.91 ========= Maximum Offering Price Per Share -- Investor Class ($9.91 (Divide) 98.00%) $ 10.11 ========= Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 9.91 ========= (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 90 SHORT-TERM U.S. TREASURY SECURITIES FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ U.S. TREASURY OBLIGATIONS (97.3%) U.S. Treasury Bonds 6.125%, 05/15/98 $2,250 $ 2,255 6.000%, 08/15/99 2,500 2,487 U.S. Treasury Notes 5.125%, 06/30/98 2,250 2,233 5.875%, 08/15/98 3,400 3,394 5.500%, 11/15/98 1,600 1,588 8.875%, 02/15/99 4,200 4,382 6.375%, 05/15/99 1,900 1,905 6.875%, 07/31/99 4,250 4,303 5.875%, 11/15/99 2,000 1,980 5.875%, 02/15/00 1,000 988 6.875%, 03/31/00 750 760 --------- Total U.S. Treasury Obligations (Cost $26,305) 26,275 --------- CASH EQUIVALENT (1.6%) SEI Daily Income Trust Treasury II Portfolio 437 437 --------- Total Cash Equivalent (Cost $437) 437 --------- Total Investments (98.9%) (Cost $26,742) 26,712 --------- OTHER ASSETS AND LIABILITIES, NET (1.1%) 288 --------- - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 2,225,584 outstanding shares of beneficial interest $22,198 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 396,977 outstanding shares of beneficial interest 3,986 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 110,713 outstanding shares of beneficial interest 1,103 Accumulated net realized loss on investments (257) Net unrealized depreciation on investments (30) --------- Total Net Assets (100.0%) $ 27,000 ========= Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 9.88 ========= Net Asset Value and Redemption Price Per Share -- Investor Shares $ 9.88 ========= Maximum Offering Price Per Share -- Investor Class ($9.88 (Divide) 99.00%) $ 9.98 ========= Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 9.85 ========= (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 91 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ U.S. TREASURY OBLIGATIONS (33.7%) U.S. Treasury Notes 8.875%, 02/15/99 $10,300 $ 10,747 9.125%, 05/15/99 11,200 11,789 8.000%, 08/15/99 6,000 6,210 7.500%, 10/31/99 8,800 9,030 8.500%, 11/15/00 5,000 5,317 --------- Total U.S. Treasury Obligations (Cost $43,159) 43,093 --------- U.S. GOVERNMENT AGENCY OBLIGATIONS (64.0%) FHLMC 6.000%, 07/01/00 4,568 4,415 8.000%, 06/01/02 1,149 1,178 7.000%, 10/01/02 4,532 4,543 8.000%, 12/01/02 2,855 2,886 7.000%, 03/01/04 14,946 14,947 FHLMC REMIC, Ser 1910-Ac 6.500%, 10/15/15 10,000 9,946 FHLMC REMIC, Ser 1637-E 5.750%, 02/15/19 2,699 2,645 FHLMC REMIC, Ser 1614-H 6.000%, 06/15/20 4,550 4,411 FNMA 7.500%, 07/01/03 8,811 8,924 7.000%, 03/01/04 14,834 14,830 8.500%, 04/01/17 1,106 1,157 FNMA REMIC, Ser G96-1PC 7.000%, 08/17/12 4,921 4,954 FNMA REMIC, Ser 1992-134G 6.000%, 11/25/18 5,586 5,460 GNMA 9.000%, 11/15/17 1,412 1,513 --------- Total U.S. Government Agency Obligations (Cost $81,888) 81,809 --------- - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ REPURCHASE AGREEMENT (1.9%) J.P. Morgan 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $2,376,897 (collateralized by various FNMA obligations, total par value $3,182,000, 7.500%-8.115%, 05/25/23-05/01/27; total market value $2,425,338) $2,376 $ 2,376 --------- Total Repurchase Agreement (Cost $2,376) 2,376 --------- Total Investments (99.6%) (Cost $127,423) 127,278 --------- OTHER ASSETS AND LIABILITIES, NET (0.4%) 460 --------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 12,371,227 outstanding shares of beneficial interest 124,063 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 242,520 outstanding shares of beneficial interest 2,441 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 140,719 outstanding shares of beneficial interest 1,424 Distributions in excess of net investment income (2) Accumulated net realized loss on investments (43) Net unrealized depreciation on investments (145) --------- Total Net Assets (100.0%) $ 127,738 ========= 92 Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 10.02 ========= Net Asset Value and Redemption Price Per Share -- Investor Shares $ 10.00 ========= Maximum Offering Price Per Share -- Investor Class ($10.00 (Divide) 97.50%) $ 10.26 ========= Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 10.02 ========= (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 93 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 U.S. GOVERNMENT SECURITIES FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ U.S. TREASURY OBLIGATIONS (28.0%) U.S. Treasury Bonds 7.250%, 05/15/16 $1,000 $ 1,029 6.875%, 08/15/25 1,000 988 6.750%, 08/15/26 550 535 6.500%, 11/15/26 565 533 U.S. Treasury Notes 7.750%, 11/30/99 200 207 8.500%, 11/15/00 1,000 1,063 8.000%, 05/15/01 200 210 7.500%, 11/15/01 200 208 7.500%, 05/15/02 750 781 7.875%, 11/15/04 275 295 7.500%, 02/15/05 500 525 6.500%, 10/15/06 50 49 7.625%, 02/15/25 400 431 --------- Total U.S. Treasury Obligations (Cost $6,994) 6,854 --------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (66.1%) FHLMC 6.000%, 02/01/01 112 108 7.000%, 01/01/09 127 126 7.000%, 04/01/09 611 608 7.000%, 08/01/10 888 883 7.000%, 05/01/12 990 984 FNMA 7.500%, 06/01/11 947 958 7.000%, 09/17/11 1,430 1,421 7.000%, 10/25/16 951 926 7.500%, 04/01/27 987 983 FNMA REMIC, Ser 1997-6, Cl H 7.000%, 08/18/08 1,058 1,037 FNMA REMIC, Ser G93-40, Cl VC 6.500%, 08/25/10 261 248 FNMA REMIC, Ser 1997-34, Cl VC 7.500%, 05/01/12 1,000 1,009 FNMA REMIC, Ser 1996-9, Cl H 6.500%, 11/25/13 1,337 1,265 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ FNMA REMIC, Ser 993-156, Cl B 6.500%, 04/25/18 $ 100 $ 95 FNMA REMIC, Ser 1990-143, Cl J 8.750%, 12/25/20 140 146 GNMA 7.500%, 10/20/09 72 73 8.250%, 01/15/12 99 102 10.000%, 06/15/19 4 5 7.000%, 11/15/22 466 453 8.000%, 02/15/23 37 38 8.500%, 03/15/23 81 84 7.500%, 04/15/23 132 132 7.500%, 09/15/23 875 872 7.000%, 01/15/24 161 157 7.500%, 04/15/24 861 857 7.000%, 06/15/24 902 877 8.000%, 08/15/24 83 85 8.000%, 09/15/24 27 28 8.000%, 10/15/24 35 36 8.000%, 11/15/24 37 39 8.500%, 12/15/24 73 77 8.500%, 02/15/25 36 37 7.000%, 12/15/25 489 476 GNMA REMIC, Ser 1995-6A, Cl E 7.500%, 05/20/23 1,000 990 --------- Total U.S. Agency Mortgage-Backed Obligations (Cost $16,289) 16,215 --------- CASH EQUIVALENTS (5.8%) SEI Daily Income Trust Government II Portfolio (C) 229 229 SEI Daily Income Trust Treasury II Portfolio (C) 1,188 1,188 --------- Total Cash Equivalents (Cost $1,417) 1,417 --------- Total Investments (99.9%) (Cost $24,700) 24,486 --------- 94 ================================================================================ - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ OTHER ASSETS AND LIABILITIES, NET (0.1%) $ 29 --------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 1,943,402 outstanding shares of beneficial interest 19,658 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 223,920 outstanding shares of beneficial interest 2,266 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 279,601 outstanding shares of beneficial interest 2,866 Accumulated net realized loss on investments (61) Net unrealized depreciation on investments (214) --------- Total Net Assets (100.0%) $ 24,515 ========= Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 10.02 ========= - ------------------------------------------------------------ - ------------------------------------------------------------ Net Asset Value and Redemption Price Per Share -- Investor Shares $ 10.02 ========= Maximum Offering Price Per Share -- Investor Class ($10.02 (Divide) 96.25%) $ 10.41 ========= Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 10.02 ========= (1) The Flex Shares have a contingent sales charge. For a description of a possible sales charge, see notes to the financial statements. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 95 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 PRIME QUALITY MONEY MARKET FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ COMMERCIAL PAPER (45.9%) ABN-Amro Finance 5.350%, 06/05/97 $ 1,500 $ 1,499 Banc One Funding 5.600%, 08/04/97 10,211 10,109 Bank of Montreal 5.520%, 07/01/97 20,000 19,908 Bankers Trust 5.500%, 11/17/97 1,000 974 BAT Capital 5.530%, 06/24/97 5,000 4,982 5.700%, 07/14/97 10,450 10,379 5.580%, 07/15/97 20,127 19,990 Cargill Financial 5.550%, 06/16/97 20,000 19,954 Caterpillar Financial Services 5.600%, 09/11/97 16,000 15,746 Central Illinois Public Services 5.500%, 06/05/97 5,700 5,697 Commerzbank 5.350%, 06/10/97 9,135 9,123 Deutsche Bank Finance 5.350%, 06/06/97 30,000 29,978 Dominion Semiconductor 5.650%, 06/04/97 18,497 18,488 5.550%, 06/23/97 5,000 4,983 5.550%, 06/24/97 15,000 14,947 Dresser Industries 5.550%, 06/30/97 20,500 20,408 Ford Motor Credit 5.650%, 07/03/97 1,800 1,791 Ford Motor Credit Puerto Rico 5.620%, 07/08/97 2,000 1,988 General Electric Capital 5.520%, 06/24/97 10,000 9,965 5.380%, 07/09/97 15,000 14,915 Golden Peanut 5.400%, 07/15/97 3,750 3,725 GTE Funding 5.510%, 06/09/97 16,000 15,980 Hertz 5.620%, 07/25/97 25,000 24,789 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------- COMMERCIAL PAPER--CONTINUED International Business Machines Credit 5.550%, 06/19/97 $35,000 $34,908 J.C. Penny Funding 5.350%, 06/09/97 21,000 20,975 Mobil Australia Finance 5.580%, 06/30/97 1,500 1,493 National Australia Funding 5.550%, 06/02/97 35,000 34,995 5.430%, 08/13/97 4,500 4,450 National City Credit 5.650%, 07/28/97 8,000 7,928 5.665%, 08/21/97 15,000 14,809 New England Power 5.520%, 06/06/97 3,500 3,497 Paccar Financial 5.350%, 06/04/97 1,500 1,499 Pactel Capital Resources 5.510%, 06/23/97 26,000 25,912 Panasonic 5.350%, 06/09/97 13,000 12,985 RTZ America 5.550%, 06/25/97 10,000 9,963 5.650%, 11/17/97 12,475 12,144 Sherwin Williams 5.620%, 07/21/97 4,000 3,969 5.640%, 08/04/97 8,325 8,242 5.640%, 08/05/97 4,800 4,751 5.640%, 08/11/97 7,500 7,417 5.680%, 08/22/97 3,000 2,961 Society Generale North America 5.500%, 09/10/97 5,000 4,923 Sony Capital 5.500%, 06/05/97 6,690 6,686 Southern New England Telcommunications 5.580%, 06/11/97 2,000 1,997 Transamerica Finance 5.520%, 06/04/97 9,700 9,696 5.540%, 06/19/97 4,955 4,941 96 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ COMMERCIAL PAPER--CONTINUED U.S. Borax 5.400%, 06/09/97 $ 3,700 $ 3,696 5.370%, 06/20/97 40,000 39,887 5.650%, 07/16/97 6,000 5,958 5.670%, 07/28/97 5,000 4,955 Virginia Electric & Power 5.650%, 07/16/97 8,000 7,943 Waste Management Technologies 5.580%, 06/24/97 25,000 24,911 5.650%, 06/27/97 5,000 4,980 5.720%, 08/12/97 14,700 14,532 --------- Total Commercial Paper (Cost $628,321) 628,321 --------- CORPORATE OBLIGATIONS (15.5%) FINANCE (10.0%) American General Finance 7.700%, 11/15/97 5,000 5,034 8.250%, 01/15/98 1,250 1,269 American General, MTN 9.750%, 10/15/97 2,650 2,690 9.950%, 10/29/97 2,100 2,136 Associates of North America 5.875%, 08/15/97 750 750 6.625%, 11/15/97 16,755 16,811 8.125%, 01/15/98 1,000 1,014 Bank America, MTN 6.875%, 11/20/97 2,000 2,009 BAT Capital, MTN 6.470%, 09/15/97 10,000 10,022 Beneficial 9.125%, 02/15/98 1,875 1,914 Caterpillar Finance (C) 5.619%, 07/28/97 1,000 1,000 Corestates Capital (C) 5.610%, 09/02/97 30,000 30,000 Dean Witter Discover 6.000%, 03/01/98 19,865 19,873 First Chicago, MTN 11.150%, 10/31/97 5,000 5,102 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ FINANCE--CONTINUED Ford Motor Credit, MTN 6.450%, 02/05/98 $5,000 $ 5,018 Household Finance, MTN (C) 5.460%, 08/04/97 5,000 5,000 International Lease Finance, MTN 7.500%, 01/15/98 3,000 3,030 5.750%, 02/02/98 5,000 4,997 5.740%, 02/03/98 5,000 4,997 International Lease Finance 5.840%, 06/09/97 5,000 5,000 5.625%, 03/01/98 4,800 4,791 NationsBank 6.625%, 01/15/98 1,000 1,004 Texaco Capital 8.650%, 01/30/98 2,000 2,035 Toyota Motor Credit, MTN 7.750%, 12/19/97 1,500 1,514 --------- Total Finance 137,010 --------- INDUSTRIAL (2.8%) Ford Capital 9.750%, 06/05/97 2,150 2,151 9.375%, 01/01/98 6,351 6,476 Philip Morris 8.750%, 06/15/97 2,000 2,002 9.250%, 12/01/97 15,180 15,414 6.375%, 01/15/98 1,000 1,003 Rockwell International 7.625%, 02/17/98 1,000 1,010 Smithkline Beecham, MTN 6.200%, 01/20/98 5,250 5,261 Walt Disney 8.000%, 12/19/97 3,595 3,634 Waste Management Technologies 8.125%, 02/01/98 2,000 2,029 --------- Total Industrial 38,980 --------- UTILITIES (2.7%) Hydro-Quebec, MTN 7.120%, 12/19/97 2,500 2,517 Northern State Power 5.875%, 10/01/97 12,000 12,004 97 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 PRIME QUALITY MONEY MARKET FUND--CONCLUDED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ UTILITIES--CONTINUED Pacific Gas & Electric, MTN 6.900%, 06/23/97 $ 4,500 $ 4,503 Pacific 5.880%, 10/15/97 5,000 4,997 Pacificorp, MTN 8.850%, 06/20/97 10,000 10,014 Southern California Edison 5.875%, 02/01/98 2,500 2,499 --------- Total Utilities 36,534 --------- Total Corporate Obligations (Cost $212,524) 212,524 --------- BANK NOTES (7.6%) Boatmans National Bank (C) 5.690%, 06/17/97 25,000 25,000 FCC National Bank (C) 5.640%, 05/08/98 15,000 14,993 FCC National Bank 5.880%, 11/05/97 25,000 25,003 Fifth Third Bank 5.430%, 06/12/97 10,000 10,000 Morgan Guaranty Trust 5.950%, 06/06/97 19,300 19,301 PNC Bank (C) 5.628%, 06/06/97 10,000 10,000 --------- Total Bank Notes (Cost $104,297) 104,297 --------- U.S. GOVERNMENT AGENCY OBLIGATIONS (6.6%) FNMA (C) 5.350%, 09/29/97 25,000 24,996 FNMA, MTN (C) 5.360%, 11/14/97 40,000 39,991 FNMA, MTN Ser B (C) 5.250%, 09/03/97 20,000 19,997 SLMA Callable 08/18/97 @100 5.370%, 02/08/99 5,000 4,987 --------- Total U.S. Government Agency Obligations (Cost $89,971) 89,971 --------- - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ ASSET-BACKED SECURITIES (5.7%) Americredit Auto Receivables Trust, Ser 1997-A, Cl A1 5.515%, 04/06/98 $20,452 $ 20,453 Americredit Auto Receivables Trust, Ser 1996-D, Cl A1 5.425%, 12/12/97 11,936 11,939 Americredit Auto Receivables Trust, Ser 1997-B, Cl A 5.790%, 06/12/98 30,000 30,000 Chase Manhattan Auto Owner Trust, Ser 1997-A, Cl A1 5.545%, 04/10/98 6,789 6,789 Ford Credit Auto Owner Trust, Ser 1996-B, Cl A1 5.514%, 10/15/97 1,351 1,352 Navistar Financial Owner Trust, Ser 1996-B, Cl A1 5.490%, 11/20/97 910 911 Olympic Automobile Recievable Trust, Ser 1996-D 5.430%, 12/15/97 121 122 WFS Financial Owner Trust, Ser 1996-D, Cl A1 5.500%, 01/16/98 6,287 6,287 --------- Total Asset-Backed Securities (Cost $77,853) 77,853 --------- CERTIFICATES OF DEPOSIT (13.1%) Bank of America, Toronto 5.730%, 07/31/97 38,000 38,000 Bankers Trust New York (C) 5.630%, 10/16/97 25,000 24,995 Bankers Trust, Toronto 5.690%, 08/21/97 21,000 21,000 CIBC 5.970%, 03/19/98 5,000 4,999 Societe Generale 5.690%, 08/22/97 40,000 40,000 Swiss Bank 5.530%, 06/30/97 30,000 30,000 Swiss Bank (C) 6.149%, 06/19/97 10,000 10,000 98 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ CERTIFICATES OF DEPOSIT--CONTINUED Swiss Bank 5.490%, 07/09/97 $10,000 $ 10,000 --------- Total Certificates Of Deposit (Cost $178,994) 178,994 --------- U.S. TREASURY OBLIGATIONS (1.5%) U.S. Treasury Notes 7.250%, 02/15/98 20,000 20,200 --------- Total U.S. Treasury Obligations (Cost $20,200) 20,200 --------- REPURCHASE AGREEMENTS (6.6%) Deutsche Bank 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $10,007,654 (collateralized by FHMLC obligation, par value $10,337,964, 6.092%, 10/01/32: market value $10,203,089) 10,003 10,003 Salomon Brothers 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $10,007,654 (collateralized by various FHLMC obligations, total par value $17,813,437, 5.500%-9.000, 08/01/00-06/01/26; and various FNMA obligations, total par value $18,383,048, 6.000%-9.000%, 12/01/01-05/01/27: total market value $10,246,600) 10,003 10,003 Swiss Bank 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $13,337,430 (collateralized by FNMA obligation, par value $17,012,000, 6.071%, 04/01/34: market value $13,664,762) 13,331 13,331 REPURCHASE AGREEMENTS--CONTINUED Union Bank of Switzerland 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $59,196,682 (collateralized by various FHLMC obligations, total par value $61,959,824, 0.000%-8.500%, 12/01/07- 12/01/26; and FNMA obligation, par value $3,000,000, 6.400% 02/25/03: total market value $60,374,115) $59,169 $ 59,169 ---------- Total Repurchase Agreements (Cost $92,506) 92,506 ---------- Total Investments (102.5%) (Cost $1,404,666) 1,404,666 ---------- OTHER ASSETS AND LIABILITIES, NET (-2.5%) (34,567) ---------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 1,086,903,240 outstanding shares of beneficial interest 1,086,903 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 283,601,522 outstanding shares of beneficial interest 283,602 Accumulated net realized loss on investments (406) ---------- Total Net Assets (100.0%) $1,370,099 ========== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 1.00 ========== Net Asset Value, Offering Price and Redemption Price Per Share -- Investor Shares $ 1.00 ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 99 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 U.S. GOVERNMENT SECURITIES MONEY MARKET FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ U.S. GOVERNMENT AGENCY OBLIGATIONS (25.9%) U.S. Treasury Notes 5.750%, 10/31/97 $30,000 $ 30,025 7.375%, 11/15/97 55,000 55,405 5.000%, 01/31/98 10,000 9,950 7.250%, 02/15/98 10,000 10,100 --------- Total U.S. Government Agency Obligations (Cost $105,480) 105,480 --------- REPURCHASE AGREEMENTS (73.2%) Barclays 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $20,009,183 (collateralized by FHLMC obligation, par value $8,960,000, 5.890%, 03/26/98; FNMA obligation, par value $4,315,000, 6.200%, 06/06/00; SLMA obligation, par value $7,000,000, 5.880%, 02/06/01: total market value $20,401,553) 20,000 20,000 Deutsche Bank 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $20,040,319 (collateralized by various U.S. Treasury obligations, total par value $19,827,000, 5.750%-8.125%, 12/31/98- 05/15/21: total market value $20,432,188) 20,031 20,031 Merrill Lynch 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $98,954,749 (collateralized by various GNMA obligations, total par value $328,491,658, 7.000%-11.000%, 02/15/02-11/15/23: total market value $100,889,610) 98,909 98,909 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ Morgan Stanley 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $99,259,385 (collateralized by various GNMA obligations, total par value $709,897,000, 0.698%-8.000%, 01/01/00-06/15/26: total market value $104,959,999) $99,214 $ 99,214 Salomon Brothers 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $20,093,747 (collateralized by various U.S. Government Notes, total par value $20,034,000, 6.875%-8.875%, 10/15/97-03/31/00: total market value $20,489,252) 20,085 20,085 Swiss Bank 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $20,012,200 (collateralized by various U.S. Treasury obligations, total par value $19,625,000, 5.875%-7.250%, 06/30/00- 08/15/22: total market value $20,426,087) 20,003 20,003 Union Bank of Switzerland 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $20,015,030 (collateralized by various FHLMC obligations, total par value $20,185,000, 5.980%-7.554%, 02/26/04-07/31/06: total market value $20,410,150) 20,006 20,006 --------- Total Repurchase Agreements (Cost $298,248) 298,248 --------- Total Investments (99.1%) (Cost $403,728) 403,728 --------- OTHER ASSETS AND LIABILITIES, NET (0.9%) 3,800 --------- 100 ================================================================================ - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 344,391,123 outstanding shares of beneficial interest $ 344,391 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 63,197,343 outstanding shares of beneficial interest 63,197 Accumulated net realized loss on investments (60) --------- Total Net Assets (100.0%) $ 407,528 ========= Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 1.00 ========= Net Asset Value, Offering Price and Redemption Price Per Share -- Investor Shares $ 1.00 ========= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 101 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 TAX-EXEMPT MONEY MARKET FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ MUNICIPAL BONDS (98.5%) ALABAMA (1.1%) McIntosh, Industrial Development Board, Ciba-Geigy Project, Ser A, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 $3,500 $ 3,500 Special Care Facilities, Montgomery Hospital Revenue, RB, VRDN (FGIC) (C)(D) 3.900%, 06/04/97 1,400 1,400 --------- Total Alabama 4,900 --------- ALASKA (0.2%) Anchorage, GO, Ser A, (MBIA) 5.000%, 02/01/98 1,045 1,054 --------- ARIZONA (1.7%) Maricopa County, Pollution Control Authority, Ser A, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 4,000 4,000 Pima County, Industrial Development Authority, Tuscon Electric Project, Ser A, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 2,600 2,600 Scottsdale, GO 7.500%, 07/01/97 840 842 --------- Total Arizona 7,442 --------- ARKANSAS (0.2%) State, Industrial Development Financial Authority, Ser A, RB, VRDN, AMT (C)(D)(E) 4.000%, 06/04/97 1,000 1,000 --------- CALIFORNIA (1.7%) Contra Costa County, Multi-Family Mortgage, Delta Square Project, Ser A, RB, VRDN (C)(D)(E) 3.850%, 06/05/97 4,200 4,200 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ CALIFORNIA--CONTINUED Higher Education Loan Authority, Ser A, VRDN, callable 06/01/98 @ 100 (C)(D)(E) 3.950%, 06/01/01 $1,900 $ 1,900 State, Higher Education Loan Authority, Student Loan, Ser 95E-5, RB, VRDN, AMT (C)(D)(E) 3.950%, 06/04/97 1,200 1,200 --------- Total California 7,300 --------- COLORADO (1.9%) North Glen, Castle Garden Retirement Center, VRDN (C)(D)(E) 3.850%, 06/05/97 1,200 1,200 State, TRAN, Ser A, RB 4.500%, 06/27/97 7,000 7,003 --------- Total Colorado 8,203 --------- DELAWARE (0.4%) State Educational Development Authority, VRDN (C)(D)(E) 4.225%, 06/05/97 1,875 1,875 --------- FLORIDA (10.3%) Citrus Park, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 1,500 1,500 Dade County, Water & Sewer System, Ser 94, RB, VRDN (FGIC) (C)(E) 3.850%, 06/04/97 8,000 8,000 Jacksonville, TECP 3.400%, 06/09/97 1,000 1,000 3.500%, 06/26/97 10,000 10,000 Jacksonville, Pollution Control Revenue, TECP 3.500%, 06/12/97 5,000 5,000 Local Government, TECP 3.450%, 06/16/97 4,000 4,000 3.550%, 06/19/97 5,500 5,500 Pinellas County, TECP 3.750%, 07/01/97 3,600 3,600 102 ================================================================================ - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ FLORIDA--CONTINUED State Board of Education, Capital Outlay, GO 6.500%, 06/01/97 $4,575 $ 4,575 Sunshine State Government,Finance Commission Revenue, TECP 3.500%, 06/12/97 1,400 1,400 --------- Total Florida 44,575 --------- GEORGIA (5.0%) Barrow County School District, Ser 97, GO 4.000%, 02/01/98 1,000 1,000 Burke County, Development Authority Pollution Control, RB (AMBAC) 3.600%, 12/01/97 1,500 1,500 Burke County, Oglethorpe Power, Ser A, VRDN (FGIC) (C)(D) 3.850%, 06/04/97 4,400 4,400 Fulton County, Development Authority, American Red Cross Project, RB, VRDN (C)(D)(E) 3.950%, 06/05/97 1,500 1,500 Gordon County, Development Authority, Sara Lee Project, RB, VRDN (C)(D) 3.950%, 06/05/97 1,400 1,400 Lafayette, Industrial Development Authority, Blue-Bird Project, Ser 1991, VRDN (C)(D)(E) 3.950%, 06/05/97 1,000 1,000 Marietta Housing Finance Authority, Franklin Walk Apartments Project, VRDN (C) 3.975%, 06/05/97 1,600 1,600 Monroe County, Industrial Development Authority, Forsyth Inns Project, RB, VRDN (C)(D)(E) 3.950%, 06/04/97 2,525 2,525 Municipal Electric Authority, VRDN (FGIC) (C)(D) 4.100%, 06/05/97 3,000 3,000 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ GEORGIA--CONTINUED Private College Facilities Authority, Emory University, RB, VRDN Optional Put 12/01/97 @ 100, (C)(D)(E) 3.700%, 12/01/04 $3,465 $ 3,465 --------- Total Georgia 21,390 --------- IDAHO (1.6%) Nez Pierce County, Pollution Control Board, Potlatch Corp. Project, RB, VRDN (C)(D)(E) 3.900%, 06/05/97 3,000 3,000 Idaho State, TAN, GO 4.500%, 06/30/97 4,000 4,002 --------- Total Idaho 7,002 --------- ILLINOIS (4.7%) Bloomington, Airport Authority, VRDN (C)(D)(E) 3.950%, 06/04/97 1,500 1,500 Chicago, Tender Notes, GO (E) 3.650%, 02/05/98 2,000 2,000 DuPage County, First Preservation District, GO, Pre-Refunded 11/01/97 @ 102 (F) 8.100%, 11/01/06 1,200 1,245 Educational Facilities, Chicago Children's Museum, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 1,600 1,600 Health Facilities Authority, Advocate Healthcare Network, Ser B, RB, VRDN (C)(D) 3.950%, 06/04/97 3,000 3,000 Illinois Health Facility Authority, RB, VRDN (C)(D) 4.000%, 06/05/97 3,000 3,000 Savanna, Industrial Development Authority, Metform Project, Ser B, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 1,400 1,400 103 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 TAX-EXEMPT MONEY MARKET FUND--CONTINUED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ ILLINOIS--CONTINUED Savanna, Industrial Development Authority, Ser A, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 $ 500 $ 500 State, Health Facilities Authority, Streeterville Project, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 2,000 2,000 State, Health Facilities Authority, University of Chicago Hospital Project, Ser C, VRDN (MBIA) (C)(D) 3.850%, 06/04/97 4,000 4,000 --------- Total Illinois 20,245 --------- INDIANA (5.6%) Allen County, Industrial Economic Development, Mattel Power Wheels Project, RB, VRDN, AMT (C)(D)(E) 4.200%, 06/04/97 1,500 1,500 Fort Wayne, Industrial Economic Development Authority, ND Tech Project, RB, VRDN, AMT (C)(D)(E) 4.050%, 06/04/97 1,000 1,000 Hammond Industrial Local Public, Adv. Fdg Project, Ser A-2, GO 4.200%, 01/08/98 6,000 6,017 Health Facility Authority, Clarian Health Partners, Ser B, RB, VRDN, (C)(D)(E) 3.900%, 06/04/97 2,000 2,000 Indianapolis, Industrial Economic Development Authority, Allied Signal Project, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 3,500 3,500 Indianapolis, Industrial Multi-Family Housing Authority, Crossing Partners Project, RB, VRDN, AMT (C)(D)(E) 4.150%, 06/04/97 8,700 8,700 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ INDIANA--CONTINUED Rockport County, Pollution Control Authority, Aep Generating Project, Ser B, RB, VRDN (AMBAC) (C)(D) 4.150%, 06/02/97 $1,600 $ 1,600 --------- Total Indiana 24,317 --------- IOWA (0.6%) West Des Moines, Commercial Development Authority, Greyhound Lines Project, VRDN (C)(D)(E) 3.800%, 06/04/97 2,500 2,500 --------- KENTUCKY (0.9%) Jefferson County, Industrial Building Fisher- Klosterman Project, RB, VRDN (C)(D)(E) 4.050%, 06/05/97 2,500 2,500 State, Economic Development Financial Authority Hospital Facilities - Baptist Healthcare, RB, VRDN (C)(D)(E) 3.850%, 06/05/97 1,400 1,400 --------- Total Kentucky 3,900 --------- LOUISIANA (2.4%) Lake Charles, Harbor & Terminal District Authority, Reynolds Metals Project, VRDN (C)(D)(E) 3.900%, 06/04/97 3,000 3,000 Plaqeumines, Port Facilities, International Marine Terminal Project, Ser B, RB, Optional Put 03/15/98 @ 100 (D)(E) 3.750%, 03/15/06 1,000 1,000 Louisiana Port Authority, Occidental Petroleum Project, RB, VRDN (C)(D)(E) 3.800%, 06/04/97 4,500 4,500 104 - ------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------- LOUISIANA--CONTINUED State, Offshore Terminal Authority Deepwater Port, Loop Inc - First Stage Project, Ser A, RB, VRDN, (C)(E) 3.850%, 06/04/97 $2,000 $ 2,000 --------- Total Louisiana 10,500 --------- MAINE (1.0%) State, TAN, GO 4.500%, 06/27/97 4,500 4,502 --------- MARYLAND (2.7%) Baltimore County, Allied Signal Project, RB, VRDN (C)(D)(E) 4.000%, 06/04/97 1,000 1,000 Baltimore, Industrial Development Authority, Days Inn of America Project, RB Callable 12/01/97 @ 100 (F) 12.625%, 12/01/04 2,000 2,087 Montgomery County, Housing Opportunities Multi-Family Commission, Ser A, RB 3.700%, 11/13/97 3,650 3,650 State, Health & Higher Education Authority, Pooled Loan Program, Ser B, VRDN (C)(D)(E) 3.850%, 06/04/97 5,000 5,000 --------- Total Maryland 11,737 --------- MICHIGAN (3.4%) Michigan City, Industrial Economic Development, Performance Packaging, RB, VRDN (C)(D)(E) 4.150%, 06/04/97 1,000 1,000 Midland County, Economic Development, Dow Chemical Project, Ser B, RB, VRDN, (C)(D) 4.000%, 06/02/97 5,575 5,575 Oakland County, Economic Development, VRDN (C)(D)(E) 4.100%, 06/04/97 1,000 1,000 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ MICHIGAN--CONTINUED State, Housing Development Authority, WoodLand Meadows, RB, VRDN, AMT (C)(D)(E)(F) 4.050%, 06/04/97 $1,000 $ 1,000 State, Housing Development Authority, Harbortown, VRDN (C)(D)(E) 3.975%, 06/05/97 3,000 3,000 State, Strategic Industrial Development Authority, Norcor Manufacturing Project, RB, VRDN (C)(D)(E) 4.000%, 06/03/97 3,000 3,000 --------- Total Michigan 14,575 --------- MISSISSIPPI (0.8%) Jackson County, Chevron USA Project, Ser 93, RB, VRDN (C)(D) 4.050%, 06/02/97 3,500 3,500 --------- MISSOURI (0.7%) Environmental Improvement and Energy Resource, Utilicorp United Project, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 700 700 State, Industrial Development Authority, Bachman Machine Project, Ser A, RB, VRDN, AMT (C)(D)(E) 4.200%, 06/04/97 90 90 State, Industrial Development Authority, Plastic Enterprises Project, Ser A, RB, VRDN, AMT (C)(D)(E)(F) 4.200%, 06/04/97 385 385 State, Industrial Development Authority, Precision Stainless Project, Ser I, RB, VRDN, AMT (C)(D)(E) 4.200%, 06/04/97 70 70 105 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 TAX-EXEMPT MONEY MARKET FUND--CONTINUED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ MISSOURI--CONTINUED State, Custody Receipt, Third Street Building Project, Ser A, GO, VRDN (C)(D)(E) 4.200%, 06/04/97 $ 2,000 $ 2,000 --------- Total Missouri 3,245 --------- NEVADA (6.3%) Clark County, Airport Improvement Authority, Ser A, VRDN, (MBIA) (C)(D) 3.850%, 06/04/97 10,000 10,000 Clark County, Airport Improvement, Sub Lien, Ser A-1, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 4,300 4,300 Clark County, Nevada Power Project, Ser A, VRDN, AMT (C)(D)(E) 4.150%, 06/04/97 5,000 5,000 Clark County, School District, VRDN (C)(D)(E) 3.960%, 06/05/97 8,000 8,000 --------- Total Nevada 27,300 --------- NEW HAMPSHIRE (5.5%) State, Business Finance Authority, TECP 3.650%, 07/29/97 7,000 7,000 State, Business Finance Authority, Pollution Control, Ser D, VRDN, AMT (C) 4.000%, 06/04/97 6,000 6,000 State, Business Finance Authority, TECP (E) 3.400%, 06/11/97 5,000 5,000 State, Housing Finance Authority, Multi-Family, Fairways Project, Ser 1, RB, VRDN, AMT (C)(D)(E) 4.000%, 06/04/97 5,000 5,000 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ NEW HAMPSHIRE--CONTINUED State, Pollution Control Authority, CT Power and Light, Ser A, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 $ 800 $ 800 --------- Total New Hampshire 23,800 --------- NEW MEXICO (2.2%) Hurley, New Mexico, Pollution Control Authority, RB, VRDN (C)(D)(E) 4.150%, 06/02/97 2,200 2,200 State, Educational Assistance Foundation, Student Loan Program, VRDN (AMBAC) (C)(D) 4.100%, 06/05/97 3,490 3,490 State, Mortgage Financial Authority, Ser B-CR-123, Optional Put 07/01/97 @ 100 3.400%, 07/01/17 3,995 3,995 --------- Total New Mexico 9,685 --------- NEW YORK (1.8%) Urban Development Corporation, Senior Lien, VRDN (C)(D) 3.960%, 06/05/97 7,600 7,600 --------- NORTH CAROLINA (2.1%) Educational Facilities, Guilford College, VRDN (C)(D)(E) 4.000%, 06/04/97 2,300 2,300 Mecklenburg County, Industrial Facilities & Pollution Control, Sterigenics International Project, RB, VRDN, AMT (C)(D)(E) 4.250%, 06/04/97 2,000 2,000 State Municipal Power Authority, Finance Authority, TECP (E) 3.400%, 06/10/97 5,000 5,000 --------- Total North Carolina 9,300 --------- 106 ================================================================================ - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ NORTH DAKOTA (0.4%) Mercer County, Solid Waste Disposal Authority, United Power Project, RB, VRDN, AMT (C)(D)(E) 3.550%, 06/02/97 $1,900 $ 1,900 --------- OHIO (5.1%) Columbus, Sewer Revenue (C)(D) 3.800%, 06/05/97 9,600 9,600 State, Air Quality Development Authority, JMG Limited Partnership, Ser A, RB, VRDN, AMT (C)(D)(E) 3.900%, 06/04/97 3,000 3,000 State, Higher Education Authority, Lake Erie Project, RB, VRDN (C)(D)(E) 3.950%, 06/05/97 5,100 5,100 State, Pollution Control Authority, Duquesne Project, RB, VRDN, AMT (C)(D)(E) 3.950%, 06/04/97 3,000 3,000 Trumbull County, St. Joseph Riverside Hospital Project, RB, Pre-Refunded 11/01/97 @ 102 (F) 7.750%, 11/01/13 1,500 1,555 --------- Total Ohio 22,255 --------- PENNSYLVANIA (3.8%) Beaver County, Industrial Development Authority, Duquesne Light Company Project, Ser B, VRDN (C)(D)(E) 3.800%, 06/04/97 1,000 1,000 Philadelphia School District, TRAN 4.500%, 06/30/97 5,000 5,002 Philadelphia, TRAN 4.500%, 06/30/97 4,000 4,002 State, Ser A, VRDN Pre-Refunded 11/01/99 @ 101.5, (C)(F) 3.960%, 06/05/97 6,500 6,500 --------- Total Pennsylvania 16,504 --------- - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ RHODE ISLAND (0.9%) State, TAN 4.500%, 06/30/97 $4,000 $ 4,002 --------- SOUTH CAROLINA (1.2%) York County, Pollution Control Revenue, Ser N-4, VRDN, Optional Put on 9/15/97 @ 100 (C)(D)(E) 3.550%, 09/15/14 5,000 5,000 --------- TENNESSEE (2.5%) Covington, Industrial Development Board, Charms Project, RB, VRDN, AMT (C)(D)(E) 4.050%, 06/04/97 3,000 3,000 Hamilton County, Industrial Development Board, Tennessee Aquarium Project, VRDN (C)(D)(E) 3.950%, 06/05/97 3,000 3,000 Memphis-Shelby County, Industrial Development Board, Ponderosa Fibres American Project, RB, VRDN, AMT (C)(D)(E) 4.100%, 06/05/97 1,600 1,600 Nashville & Davidson County, Industrial Development Authority, Multi-Family Mortgage, Chimneytop II Project, RB, VRDN (C)(D)(E) 3.950%, 06/02/97 1,325 1,325 Nashville & Davidson County, Vanderbilt University, Ser 85A, VRDN, Optional Put 1/15/98, (C)(D)(E) 3.650%, 01/15/15 2,000 2,002 --------- Total Tennessee 10,927 --------- TEXAS (9.2%) Brazos River, TECP (E) 3.450%, 06/09/97 2,700 2,700 Brownsville, Utility System, TECP 3.450%, 06/12/97 4,000 4,000 107 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 TAX-EXEMPT MONEY MARKET FUND--CONCLUDED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ TEXAS--CONTINUED Georgetown, Higher Education Financing Authority, Southwestern University Project, Ser 84, RB, VRDN (C)(D)(E) 3.950%, 06/04/97 $2,000 $ 2,000 Harris County, Health Facilities Authority, Memorial Hospital Project, Ser B, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 1,500 1,500 Harris County, Housing Finance Corporation, Ser 1985, VRDN (C)(D)(E) 4.225%, 06/05/97 900 900 Harris County, Industrial Development Authority, Lubrizol Project, RB, VRDN (C)(D) 3.850%, 06/04/97 1,600 1,600 Harris County, Toll Roads, Ser H, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 5,500 5,500 Lone Star, Airport Improvement, Ser A2, RB, VRDN (C)(D) 4.000%, 06/02/97 1,700 1,700 South Higher Education Authority, RB, VRDN, AMT (C)(D)(E) 3.950%, 06/04/97 5,000 5,000 State, Public Finance Authority, TECP 3.650%, 08/11/97 5,000 5,000 State, TAN 4.750%, 08/29/97 10,000 10,019 --------- Total Texas 39,919 --------- UTAH (1.5%) Carbon County, Pollution Control Authority, Pacificorp Project, RB, VRDN (AMBAC) (C)(D) 4.150%, 06/02/97 1,600 1,600 Intermountain Power Agency, Ser E, RB, Optional Put 09/15/97 @ 100 (E) 3.500%, 07/01/14 1,000 1,000 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ UTAH--CONTINUED Intermountain Power Agency, Optional Put 06/16/97 @ 100, RB, VRDN (C)(D)(E) 3.930%, 06/17/97 $4,000 $ 4,000 --------- Total Utah 6,600 --------- ERMONT (0.2%) State, Ser B, GO, 4.600%, 08/01/97 1,000 1,001 --------- VIRGINIA (3.6%) Bedford County, Industrial Development Authority, VRDN (C)(D)(E) 4.000%, 06/05/97 2,500 2,500 Chesterfield County, Industrial Development Authority, Allied Signal Project, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 3,000 3,000 Commonwealth, Ser 1994, VRDN (C)(D) 4.060%, 06/05/97 4,000 4,000 Front Royal & Warren County, Industrial Development Authority, Pen Tab Industries Project, RB, VRDN, AMT (C)(D)(E) 4.000%, 06/05/97 3,000 3,000 Peninsula Port Authority, Dominion Term Project, Ser 1987C, VRDN (C)(D)(E) 3.950%, 06/02/97 3,300 3,300 --------- Total Virginia 15,800 --------- WASHINGTON (2.6%) Pierce County, Washington Economic Development, Weyerhaeuser Real Estate Project, RB, VRDN (C)(D) 3.850%, 06/04/97 3,000 3,000 Port of Seattle, VRDN (C)(D)(E) 3.900%, 06/04/97 1,600 1,600 108 ================================================================================ - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ WASHINGTON--CONTINUED State Public Power Supply System, Nuclear Project #1, 1993-1A3, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 $3,500 $ 3,500 State Student Loan Finance Association, Ser B, RB, VRDN, AMT (C)(D)(E) 3.950%, 06/05/97 3,000 3,000 --------- Total Washington 11,100 --------- WEST VIRGINIA (0.9%) Marshall County, Pollution Control Authority, Allied Signal Project, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 2,000 2,000 Marshall County, PPG Industries Project, RB, VRDN (C)(D)(E) 4.100%, 06/05/97 2,000 2,000 --------- Total West Virginia 4,000 --------- WISCONSIN (0.7%) Milwaukee, Ser BY, GO 7.250%, 06/15/97 1,000 1,001 Milwaukee, School Order Notes, Ser B 4.250%, 08/21/97 1,000 1,002 Racine, Wisconsin Promissory Notes, Ser 96 B, GO 3.700%, 12/15/97 1,165 1,165 --------- Total Wisconsin 3,168 --------- WYOMING (1.1%) Sweetwater, Ser A, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 4,600 4,600 --------- Total Municipal Bonds (Cost $428,223) 428,223 --------- - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ CASH EQUIVALENT (1.3%) AIM Management Institutional Tax-Free Portfolio $5,853 $ 5,853 --------- Total Cash Equivalent (Cost $5,853) 5,853 --------- Total Investments (99.8%) (Cost $434,076) 434,076 --------- OTHER ASSETS AND LIABILITIES (0.2%) Total Other Assets and Liabilities, Net 943 --------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 333,003,932 outstanding shares of beneficial interest 333,004 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 102,018,739 outstanding shares of beneficial interest 102,019 Accumulated net realized loss on investments (4) --------- Total Net Assets (100.0%) $ 435,019 ========= Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 1.00 ========= Net Asset Value, Offering Price and Redemption Price Per Share -- Investor Shares $ 1.00 ========= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 109 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 KEY TO ABBREVIATIONS USED IN THE STATEMENT OF NET ASSETS ADR American Depository Receipt AMBAC Security insured by the American Municipal Bond Assurance Company AMT Alternative Minimum Tax ARM Adjustable Rate Mortgage Cl Class COP Certificate of Participation CV Convertible Security ETM Escrowed to Maturity F Foreign Registry Shares FGIC Security insured by the Financial Guaranty Insurance Corporation FHA Federal Housing Authority FHLMC Federal Home Loan Mortgage Corporation FNMA Federal National Mortgage Association FSA Security insured by Financial Security Assurance GDR Global Depository Receipt GDS Global Depository Shares GNMA Government National Mortgage Association GO General Obligation LYON Liquid Yield Option Note MBIA Security insured by the Municipal Bond Investors Assurance MTN Medium Term Note RB Revenue Bond REIT Real Estate Investment Trust REMIC Real Estate Mortgage Investment Conduit Ser Series SLMA Student Loan Marketing Association STRIPS Separately Traded Registered Interest and Principal Security TAN Tax Anticipation Note TECP Tax Exempt Commercial Paper TRAN Tax & Revenue Anticipation Note VRDN Variable Rate Demand Note * Non-income producing securities (A) Zero Coupon Bond (B) Private Placement Security (C) Variable rate security. The rate reported on the Statement of Net Assets is the rate in effect on May 31, 1997. (D) Put and demand features exist requiring the issuer to repurchase the instrument prior to maturity. (E) Securities are held in connection with a letter of credit issued by a major bank. (F) Collateralized by U.S. Government Securities (G) In local currency 110 ================================================================================ [This Page Left Intentionally Blank] STATEMENT OF OPERATIONS (000) ================================================================================ STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1997
MID-CAP SMALL CAP CAPITAL VALUE INCOME EQUITY EQUITY GROWTH STOCK FUND FUND FUND FUND ------------ --------- ---------- --------- 06/01/96- 06/01/96- 01/31/97*- 06/01/96- 05/31/97 05/31/97 05/31/97 05/31/97 ------------ --------- ---------- --------- Income: Interest Income .................................................. $ 5,035 $ 1,386 $ 92 $ 6,139 Dividend Income .................................................. 44,675 2,627 765 18,021 Less: Foreign Taxes Withheld ..................................... -- -- -- -- -------- ------- ------ -------- Total Investment Income .......................................... 49,710 4,013 857 24,160 -------- ------- ------ -------- Expenses: Investment Advisory Fees ......................................... 12,026 3,328 322 14,003 Less: Investment Advisory Fees Waived ............................ -- (318) (48) (1,226) Less: Contribution from Advisor .................................. -- -- -- -- Administrator Fees ............................................... 1,009 194 18 818 Transfer Agent Fees-- Trust Shares ............................... 16 15 6 16 Transfer Agent Fees-- Investor Shares ............................ 103 31 -- 166 Transfer Agent Fees-- Flex Shares ................................ 53 24 -- 37 Transfer Agent Out of Pocket Fees ................................ 114 22 1 98 Printing Expenses ................................................ 102 20 2 85 Custody Fees ..................................................... 73 14 1 62 Professional Fees ................................................ 77 15 2 63 Trustee Fees ..................................................... 22 4 -- 19 Registration Fees ................................................ 138 27 22 58 Distribution Fees-- Investor Shares .............................. 470 82 -- 1,345 Less: Distribution Fees Waived-- Investor Shares ................. (32) (26) -- (236) Distribution Fees-- Flex Shares .................................. 444 74 -- 213 Less: Distribution Fees Waived-- Flex Shares ..................... (11) (20) -- (12) Insurance and Other Fees ......................................... 46 14 -- 40 Amortization of Deferred Organization Costs ...................... 11 -- 10 8 -------- ------- ------ -------- Total Expenses ................................................... 14,661 3,500 336 15,557 -------- ------- ------ -------- Net Investment Income (Loss) ..................................... 35,049 513 521 8,603 -------- ------- ------ -------- Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold ...................... 243,189 33,978 1,757 221,554 Net Realized Loss on Foreign Currency Transactions ............... -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency ................................ -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments ................................................. 33,953 4,912 7,644 43,851 -------- ------- ------ -------- Total Net Realized and Unrealized Gain on Investments ................................................. 277,142 38,890 9,401 265,405 -------- ------- ------ -------- Net Increase in Net Assets from Operations ....................... $312,191 $39,403 $9,922 $274,008 ======== ======= ====== ======== EMERGING INTERNATIONAL INTERNATIONAL BALANCED MARKETS EQUITY EQUITY FUND EQUITY FUND INDEX FUND FUND --------- ---------- --------- ------------ 06/01/96- 01/31/97*- 06/01/96- 06/01/96- 05/31/97 05/31/97 05/31/97 05/31/97 --------- ---------- --------- ------------ Income: Interest Income .................................................. $ 3,654 $ 49 $ 13 $ 922 Dividend Income .................................................. 1,113 272 1,382 6,838 Less: Foreign Taxes Withheld ..................................... -- (14) (108) (645) ------- ------ ------- ------- Total Investment Income .......................................... 4,767 307 1,287 7,115 ------- ------ ------- ------- Expenses: Investment Advisory Fees ......................................... 1,177 137 658 4,494 Less: Investment Advisory Fees Waived ............................ (151) (53) (80) (157) Less: Contribution from Advisor .................................. -- -- -- -- Administrator Fees ............................................... 83 7 48 240 Transfer Agent Fees-- Trust Shares ............................... 16 5 18 12 Transfer Agent Fees-- Investor Shares ............................ 17 -- 21 14 Transfer Agent Fees-- Flex Shares ................................ 17 -- 15 17 Transfer Agent Out of Pocket Fees ................................ 9 1 9 22 Printing Expenses ................................................ 8 6 7 21 Custody Fees ..................................................... 6 34 70 484 Professional Fees ................................................ 6 1 6 15 Trustee Fees ..................................................... 2 -- 2 5 Registration Fees ................................................ 21 11 5 111 Distribution Fees-- Investor Shares .............................. 15 -- 22 21 Less: Distribution Fees Waived-- Investor Shares ................. (13) -- (14) (10) Distribution Fees-- Flex Shares .................................. 43 -- 10 33 Less: Distribution Fees Waived-- Flex Shares ..................... (14) -- (10) (15) Insurance and Other Fees ......................................... 4 4 15 18 Amortization of Deferred Organization Costs ...................... -- 10 3 2 ------- ------ ------- ------- Total Expenses ................................................... 1,246 163 805 5,327 ------- ------ ------- ------- Net Investment Income (Loss) ..................................... 3,521 144 482 1,788 ------- ------ ------- ------- Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold ...................... 11,411 80 4,148 31,885 Net Realized Loss on Foreign Currency Transactions ............... -- (18) (50) (949) Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency ................................ -- -- (21) 16 Net Change in Unrealized Appreciation (Depreciation) on Investments ................................................. 5,223 2,108 (466) 51,213 ------- ------ ------- ------- Total Net Realized and Unrealized Gain on Investments ................................................. 16,634 2,170 3,611 82,165 ------- ------ ------- ------- Net Increase in Net Assets from Operations ....................... $20,155 $2,314 $ 4,093 $83,953 ======= ====== ======= ======= INVESTMENT GRADE FLORIDA TENNESSEE SUNBELT TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT EQUITY FUND BOND FUND BOND FUND BOND FUND ---------- ---------------- ---------- ----------- 06/01/96- 06/01/96- 06/01/96- 06/01/96- 05/31/97 05/31/97 05/31/97 05/31/97 ---------- ---------------- ---------- ----------- Income: Interest Income .................................................. $ 18 $ 8,107 $2,318 $282 Dividend Income .................................................. 2,081 -- -- -- Less: Foreign Taxes Withheld ..................................... -- -- -- -- ------ ------- ------ ---- Total Investment Income .......................................... 2,099 8,107 2,318 282 ------ ------- ------ ---- Expenses: Investment Advisory Fees ......................................... 4,842 1,272 293 35 Less: Investment Advisory Fees Waived ............................ (442) (189) (73) (35) Less: Contribution from Advisor .................................. -- -- -- (10) Administrator Fees ............................................... 283 115 31 4 Transfer Agent Fees-- Trust Shares ............................... 16 16 16 16 Transfer Agent Fees-- Investor Shares ............................ 44 34 13 12 Transfer Agent Fees-- Flex Shares ................................ 20 15 14 13 Transfer Agent Out of Pocket Fees ................................ 33 15 3 -- Printing Expenses ................................................ 30 13 3 -- Custody Fees ..................................................... 21 9 2 1 Professional Fees ................................................ 22 9 2 -- Trustee Fees ..................................................... 7 3 1 -- Registration Fees ................................................ 31 12 6 1 Distribution Fees-- Investor Shares .............................. 119 148 6 3 Less: Distribution Fees Waived-- Investor Shares ................. (39) (47) (6) -- Distribution Fees-- Flex Shares .................................. 45 51 27 23 Less: Distribution Fees Waived-- Flex Shares ..................... (18) (15) (21) (8) Insurance and Other Fees ......................................... 13 7 2 -- Amortization of Deferred Organization Costs ...................... -- 8 -- -- ------ ------- ------ ---- Total Expenses ................................................... 5,027 1,476 319 55 ------ ------- ------ ---- Net Investment Income (Loss) ..................................... (2,928) 6,631 1,999 227 ------ ------- ------ ---- Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold ...................... 24,062 2,924 (209) (11) Net Realized Loss on Foreign Currency Transactions ............... -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency ................................ -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments ................................................. (18,818) 2,169 1,157 153 ------ ------- ------ ---- Total Net Realized and Unrealized Gain on Investments ................................................. 5,244 5,093 948 142 ------ ------- ------ ---- Net Increase in Net Assets from Operations ....................... $2,316 $11,724 $2,947 $369 ====== ======= ====== ==== *Commencement of Operations Amounts designated as "--" are either $0 or round to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 112 & 113 STATEMENT OF OPERATIONS (000) (concluded) ================================================================================ STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1997
GEORGIA INVESTMENT TAX-EXEMPT GRADE BOND SHORT-TERM BOND FUND FUND BOND FUND ---------- ---------- ---------- 06/01/96- 06/01/96- 06/01/96- 05/31/97 05/31/97 05/31/97 ---------- ---------- ---------- Interest Income ..................................................... $1,875 $43,028 $5,793 ------ ------- ------ Expenses: Investment Advisory Fees ......................................... 246 4,793 624 Less: Investment Advisory Fees Waived ............................ (64) (645) (138) Administrator Fees ............................................... 25 435 65 Less: Administrator Fees Waived .................................. -- -- -- Transfer Agent Fees-- Trust Shares ............................... 16 16 16 Transfer Agent Fees-- Investor Shares ............................ 13 46 13 Transfer Agent Fees-- Flex Shares ................................ 14 19 13 Transfer Agent Out of Pocket Fees ................................ 3 54 8 Printing Expenses ................................................ 2 49 7 Custody Fees ..................................................... 2 34 5 Professional Fees ................................................ 2 34 5 Trustee Fees ..................................................... 1 11 2 Registration Fees ................................................ 5 64 13 Distribution Fees-- Investor Shares .............................. 6 153 5 Less: Distribution Fees Waived-- Investor Shares ................. (6) (59) (5) Distribution Fees-- Flex Shares .................................. 46 54 10 Less: Distribution Fees Waived-- Flex Shares ..................... (26) (24) (10) Insurance and Other Fees ......................................... 1 22 3 Amortization of Deferred Organization Costs ...................... -- 8 5 ------ ------- ------ Total Expenses ................................................... 286 5,064 641 ------ ------- ------ Net Investment Income ............................................... 1,589 37,964 5,152 ------ ------- ------ Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold ...................... 7 (5,113) (321) Net Change in Unrealized Appreciation on Investments .................................................. 882 10,558 1,027 ------ ------- ------ Total Net Realized and Unrealized Gain (Loss) on Investments .................................................. 889 5,445 706 ------ ------- ------ Net Increase in Net Assets from Operations .......................... $2,478 $43,409 $5,858 ====== ======= ====== SHORT-TERM U.S. TREASURY LIMITED-TERM U.S. SECURITIES FEDERAL MORTGAGE GOVERNMENT FUND SECURITIES FUND SECURITIES FUND ------------- ---------------- --------------- 06/01/96- 06/01/96- 06/01/96- 05/31/97 05/31/97 05/31/97 ------------- ---------------- --------------- Interest Income ..................................................... $1,410 $6,871 $1,411 ------ ------ ------ Expenses: Investment Advisory Fees ......................................... 156 691 150 Less: Investment Advisory Fees Waived ............................ (73) (151) (59) Administrator Fees ............................................... 16 71 14 Less: Administrator Fees Waived .................................. -- -- -- Transfer Agent Fees-- Trust Shares ............................... 16 16 16 Transfer Agent Fees-- Investor Shares ............................ 14 13 13 Transfer Agent Fees-- Flex Shares ................................ 14 14 15 Transfer Agent Out of Pocket Fees ................................ 2 6 1 Printing Expenses ................................................ 2 6 1 Custody Fees ..................................................... 1 4 1 Professional Fees ................................................ 1 5 1 Trustee Fees ..................................................... -- 1 -- Registration Fees ................................................ 17 30 19 Distribution Fees-- Investor Shares .............................. 7 6 10 Less: Distribution Fees Waived-- Investor Shares ................. (7) (6) (9) Distribution Fees-- Flex Shares .................................. 21 16 30 Less: Distribution Fees Waived-- Flex Shares ..................... (20) (16) (15) Insurance and Other Fees ......................................... 1 3 1 Amortization of Deferred Organization Costs ...................... 4 2 2 ------ ------ ------ Total Expenses ................................................... 172 711 191 ------ ------ ------ Net Investment Income ............................................... 1,238 6,160 1,220 ------ ------ ------ Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold ...................... (25) 1 (17) Net Change in Unrealized Appreciation on Investments .................................................. 88 303 214 ------ ------ ------ Total Net Realized and Unrealized Gain (Loss) on Investments .................................................. 62 304 197 ------ ------ ------ Net Increase in Net Assets from Operations .......................... $1,301 $6,464 $1,417 ====== ====== ====== TAX-EXEMPT PRIME QUALITY U.S. GOVERNMENT MONEY MONEY MARKET SECURITIES MONEY MARKET FUND MARKET FUND FUND ------------- --------------- ---------- 06/01/96- 06/01/96- 06/01/96- 05/31/97 05/31/97 05/31/97 ------------- --------------- ---------- Interest Income ..................................................... $82,489 $20,206 $15,230 ------- ------- ------- Expenses: Investment Advisory Fees ......................................... 9,767 2,455 2,361 Less: Investment Advisory Fees Waived ............................ (2,181) (519) (674) Administrator Fees ............................................... 1,009 254 289 Less: Administrator Fees Waived .................................. (348) (41) -- Transfer Agent Fees-- Trust Shares ............................... 16 16 16 Transfer Agent Fees-- Investor Shares ............................ 35 23 18 Transfer Agent Fees-- Flex Shares ................................ -- -- -- Transfer Agent Out of Pocket Fees ................................ 107 34 36 Printing Expenses ................................................ 95 26 29 Custody Fees ..................................................... 69 21 22 Professional Fees ................................................ 80 21 23 Trustee Fees ..................................................... 21 7 7 Registration Fees ................................................ 162 27 38 Distribution Fees-- Investor Shares .............................. 551 106 149 Less: Distribution Fees Waived-- Investor Shares ................. (208) (40) (59) Distribution Fees-- Flex Shares .................................. -- -- -- Less: Distribution Fees Waived-- Flex Shares ..................... -- -- -- Insurance and Other Fees ......................................... 25 8 9 Amortization of Deferred Organization Costs ...................... 8 8 8 ------- ------- ------- Total Expenses ................................................... 9,208 2,406 2,272 ------- ------- ------- Net Investment Income ............................................... 73,281 17,800 12,958 ------- ------- ------- Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold ...................... (121) (51) 10 Net Change in Unrealized Appreciation on Investments .................................................. -- -- -- ------- ------- ------- Total Net Realized and Unrealized Gain (Loss) on Investments .................................................. (121) (51) 10 ------- ------- ------- Net Increase in Net Assets from Operations .......................... $73,160 $17,749 $12,968 ======= ======= ======= Amounts designated as "--" are either $0 or round to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 114 & 115 STATEMENT OF CHANGES IN NET ASSETS (000) ================================================================================ STI CLASSIC FUNDS FOR THE YEAR ENDED MAY 31, 1997
VALUE INCOME MID-CAP EQUITY SMALL CAP STOCK FUND FUND EQUITY FUND ------------------- ------------------- ---------- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 01/31/97*- 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 --------- --------- --------- --------- ---------- Operations: Net Investment Income (Loss) .................. $ 35,049 $ 33,101 $ 513 $ 1,365 $ 521 Net Realized Gain on Investments .............. 243,189 196,134 33,978 29,513 1,757 Net Realized Loss on Foreign Currency Transactions ................................ -- -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency ............. -- -- -- -- -- Net Change in Unrealized Appreciation (Depreciation)on Investments ................ 33,953 60,796 4,912 12,518 7,644 ---------- ---------- -------- -------- -------- Increase in Net Assets from Operations ...... 312,191 290,031 39,403 43,396 9,922 ---------- ---------- -------- -------- -------- Distributions to Shareholders: Net Investment Income: Trust Shares ................................ (30,805) (29,124) (962) (1,285) (205) Investor Shares ............................. (2,820) (2,618) (17) (30) -- Flex Shares ................................. (606) (206) -- (1) -- Capital Gains: Trust Shares ................................ (166,191) (92,363) (24,244) (13,072) -- Investor Shares ............................. (18,030) (9,853) (1,770) (922) -- Flex Shares ................................. (5,570) (1,106) (676) (167) -- ---------- ---------- -------- -------- -------- Total Distributions ........................... (224,022) (135,270) (27,669) (15,477) (205) ---------- ---------- -------- -------- -------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued ................. 380,339 371,542 113,386 133,402 126,046 Reinvestment of Cash Distributions .......... 179,808 111,671 22,790 13,361 137 Cost of Shares Repurchased .................. (392,524) (369,739) (113,291) (44,487) (4,851) ---------- ---------- -------- -------- -------- Increase (Decrease) in Net Assets From Trust Share Transactions .......................... 167,623 113,474 22,885 102,276 121,332 ---------- ---------- -------- -------- -------- Investor Shares: Proceeds from Shares Issued ................. 31,242 31,177 5,664 10,027 -- Reinvestment of Cash Distributions .......... 20,626 12,291 1,783 948 -- Cost of Shares Repurchased .................. (24,774) (19,420) (5,934) (2,010) -- ---------- ---------- -------- -------- -------- Increase (Decrease) in Net Assets From Investor Share Transactions .......................... 27,094 24,048 1,513 8,965 -- ---------- ---------- -------- -------- -------- Flex Shares: Proceeds from Shares Issued ................. 43,363 24,893 5,680 5,125 -- Reinvestment of Cash Distributions .......... 6,080 1,301 666 163 -- Cost of Shares Repurchased .................. (6,096) (1,416) (1,648) (450) -- ---------- ---------- -------- -------- -------- Increase (Decrease) in Net Assets From Flex Share Transactions ..................... 43,347 24,778 4,698 4,838 -- ---------- ---------- -------- -------- -------- Increase (Decrease) in Net Assets From Share Transactions .............................. 238,064 162,300 29,096 116,079 121,332 ---------- ---------- -------- -------- -------- Total Increase (Decrease) in Net Assets ... 326,233 317,061 40,830 143,998 131,049 ---------- ---------- -------- -------- -------- Net Assets: Beginning of Period ........................... 1,401,294 1,084,233 276,905 132,907 -- ---------- ---------- -------- -------- -------- End of Period ................................. $1,727,527 $1,401,294 $317,735 $276,905 $131,049 ========== ========== ======== ======== ======== (1)Shares Issued and Redeemed: Trust Shares: Shares Issued ............................... 29,343 29,898 9,011 10,952 12,290 Shares Issued in Lieu of Cash Distributions . 14,654 9,282 1,853 1,144 13 Shares Redeemed ............................. (30,076) (30,154) (9,008) (3,620) (466) ---------- ---------- -------- -------- -------- Net Trust Share Transactions .................. 13,921 9,026 1,856 8,476 11,837 ---------- ---------- -------- -------- -------- Investor Shares: Shares Issued ............................... 2,411 2,522 455 824 -- Shares Issued in Lieu of Cash Distributions . 1,683 1,023 145 82 -- Shares Redeemed ............................. (1,906) (1,569) (472) (165) -- ---------- ---------- -------- -------- -------- Net Investor Share Transactions ............... 2,188 1,976 128 741 -- ---------- ---------- -------- -------- -------- Flex Shares: Shares Issued ............................... 3,360 2,014 459 419 -- Shares Issued in Lieu of Cash Distributions 500 108 55 14 -- Shares Redeemed ............................. (470) (113) (134) (37) -- ---------- ---------- -------- -------- -------- Net Flex Share Transactions ................... 3,390 2,009 380 396 -- ========== ========== ======== ======== ======== EMERGING INTERNATIONAL MARKETS EQUITY CAPITAL GROWTH FUND BALANCED FUND EQUITY FUND INDEX FUND --------------------- ------------------- -------------- ------------------ 06/01/96- 06/01/95- 06/01/96- 06/01/95- 01/31/97*- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 05/31/97 05/31/96 --------- --------- --------- --------- ---------- --------- --------- Operations: Net Investment Income (Loss) .................. $ 8,603 $ 9,278 $ 3,521 $ 3,088 $ 144 $ 482 $ 800 Net Realized Gain on Investments .............. 221,554 224,050 11,411 11,091 80 4,148 1,134 Net Realized Loss on Foreign Currency Transactions ................................ -- -- -- -- (18) (50) -- Net Change in Unrealized Appreciation (Depreciation on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency ............. -- -- -- -- -- (21) (7) Net Change in Unrealized Appreciation (Depreciation)on Investments ................. 43,851 63,301 5,223 1,891 2,108 (466) 6,362 ---------- ---------- -------- -------- ------- ------- ------- Increase in Net Assets from Operations ...... 274,008 296,629 20,155 16,070 2,314 4,093 8,289 ---------- ---------- -------- -------- ------- ------- ------- Distributions to Shareholders: Net Investment Income: Trust Shares ................................ (7,993) (9,644) (3,051) (2,933) -- (614) (1,048) Investor Shares ............................. (338) (570) (139) (115) -- (35) (59) Flex Shares ................................. -- (5) (77) (31) -- -- (7) Capital Gains: Trust Shares ................................ (180,731) (41,659) (9,775) (904) -- (1,696) (743) Investor Shares ............................. (35,976) (7,343) (505) (44) -- (154) (43) Flex Shares ................................. (3,858) (227) (388) (18) -- (27) (6) ---------- ---------- -------- -------- ------- ------- ------- Total Distributions ........................... (228,896) (59,448) (13,935) (4,045) -- (2,526) (1,906) ---------- ---------- -------- -------- ------- ------- ------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued ................. 295,281 187,108 75,303 54,735 42,043 21,944 62,965 Reinvestment of Cash Distributions .......... 178,092 48,431 12,606 3,784 -- 1,958 1,417 Cost of Shares Repurchased .................. (406,707) (439,271) (54,011) (47,301) (4,862) (62,693) (68,891) ---------- ---------- -------- -------- ------- ------- ------- Increase (Decrease) in Net Assets From Trust Share Transactions ................................ 66,666 (203,732) 33,898 11,218 37,181 (38,791) (4,509) ---------- ---------- -------- -------- ------- ------- ------- Investor Shares: Proceeds from Shares Issued ................. 22,778 21,971 1,430 1,315 -- 2,579 3,017 Reinvestment of Cash Distributions .......... 36,046 7,818 633 155 -- 189 101 Cost of Shares Repurchased .................. (38,034) (34,867) (1,149) (844) -- (2,981) (1,782) ---------- ---------- -------- -------- ------- ------- ------- Increase (Decrease) in Net Assets From Investor Share Transactions .......................... 20,790 (5,078) 914 626 -- (213) 1,336 ---------- ---------- -------- -------- ------- ------- ------- Flex Shares: Proceeds from Shares Issued ................. 23,389 10,505 3,065 3,359 -- 334 992 Reinvestment of Cash Distributions .......... 3,813 230 462 49 -- 27 13 Cost of Shares Repurchased .................. (2,774) (641) (787) (428) -- (410) (127) ---------- ---------- -------- -------- ------- ------- ------- Increase (Decrease) in Net Assets From Flex Share Transactions ..................... 24,428 10,094 2,740 2,980 -- (49) 878 ---------- ---------- -------- -------- ------- ------- ------- Increase (Decrease) in Net Assets From Share Transactions .............................. 111,884 (198,716) 37,552 14,824 37,181 (39,053) (2,295) ---------- ---------- -------- -------- ------- ------- ------- Total Increase (Decrease) in Net Assets ... 156,996 38,465 43,772 26,849 39,495 (37,486) 4,088 ---------- ---------- -------- -------- ------- ------- ------- Net Assets: Beginning of Period ........................... 1,183,545 1,145,080 119,665 92,816 -- 97,494 93,406 ---------- ---------- -------- -------- ------- ------- ------- End of Period ................................. $1,340,541 $1,183,545 $163,437 $119,665 $39,495 $60,008 $97,494 ========== ========== ======== ======== ======= ======= ======= (1)Shares Issued and Redeemed: Trust Shares: Shares Issued ............................... 20,391 13,624 6,572 4,974 4,128 2,030 5,971 Shares Issued in Lieu of Cash Distributions . 13,369 3,617 1,122 346 -- 184 134 Shares Redeemed ............................. (27,687) (32,204) (4,686) (4,335) (468) (5,800) (6,536) ---------- ---------- -------- -------- ------- ------- ------- Net Trust Share Transactions .................. 6,073 (14,963) 3,008 985 3,660 (3,586) (431) ---------- ---------- -------- -------- ------- ------- ------- Investor Shares: Shares Issued ............................... 1,573 1,605 122 119 -- 241 286 Shares Issued in Lieu of Cash Distributions . 2,717 585 56 14 -- 18 10 Shares Redeemed ............................. (2,607) (2,576) (99) (76) -- (277) (170) ---------- ---------- -------- -------- ------- ------- ------- Net Investor Share Transactions ............... 1,683 (386) 79 57 -- (18) 126 ---------- ---------- -------- -------- ------- ------- ------- Flex Shares: Shares Issued ............................... 1,620 768 265 305 -- 31 95 Shares Issued in Lieu of Cash Distributions 289 17 41 5 -- 3 1 Shares Redeemed ............................. (191) (46) (68) (38) -- (38) (12) ---------- ---------- -------- -------- ------- ------- ------- Net Flex Share Transactions ................... 1,718 739 238 272 -- (4) 84 ========== ========== ======== ======== ======= ======= ======= INTERNATIONAL EQUITY FUND SUNBELT EQUITY FUND ------------------- --------------------- 06/01/96- 12/01/95*- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 --------- --------- --------- --------- Operations: Net Investment Income (Loss) .................. $ 1,788 $ 986 $ (2,928) $ (1,275) Net Realized Gain on Investments .............. 31,885 4,059 24,062 39,898 Net Realized Loss on Foreign Currency Transactions ................................ (949) (265) -- -- Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency ............. 16 (10) -- -- Net Change in Unrealized Appreciation (Depreciation)on Investments ................ 51,213 13,617 (18,818) 84,777 -------- -------- -------- -------- Increase in Net Assets from Operations ...... 83,953 18,387 2,316 123,400 -------- -------- -------- -------- Distributions to Shareholders: Net Investment Income: Trust Shares ................................ (638) -- -- -- Investor Shares ............................. -- -- -- -- Flex Shares ................................. -- -- -- -- Capital Gains: Trust Shares ................................ (9,573) -- (29,932) (5,188) Investor Shares ............................. (182) -- (2,119) (426) Flex Shares ................................. (75) -- (360) (20) -------- -------- -------- -------- Total Distributions ........................... (10,468) -- (32,411) (5,634) -------- -------- -------- -------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued ................. 382,588 212,805 208,763 132,237 Reinvestment of Cash Distributions .......... 9,386 -- 27,551 4,956 Cost of Shares Repurchased .................. (187,406) (17,640) (239,412) (92,700) -------- -------- -------- -------- Increase (Decrease) in Net Assets From Trust Shares Transactions ......................... 204,568 195,165 (3,098) 44,493 -------- -------- -------- -------- Investor Shares: Proceeds from Shares Issued ................. 7,794 3,467 6,043 5,187 Reinvestment of Cash Distributions .......... 181 -- 2,111 426 Cost of Shares Repurchased .................. (2,060) (220) (7,103) (7,209) -------- -------- -------- -------- Increase (Decrease) in Net Assets From Investor Share Transactions .......................... 5,915 3,247 1,051 (1,596) -------- -------- -------- -------- Flex Shares: Proceeds from Shares Issued ................. 7,049 911 3,978 2,489 Reinvestment of Cash Distributions .......... 74 -- 354 20 Cost of Shares Repurchased .................. (424) (3) (1,172) (123) -------- -------- -------- -------- Increase (Decrease) in Net Assets From Flex Share Transactions ..................... 6,699 908 3,160 2,386 -------- -------- -------- -------- Increase (Decrease) in Net Assets From Share Transactions .............................. 217,182 199,320 1,113 45,283 -------- -------- -------- -------- Total Increase (Decrease) in Net Assets ... 290,667 217,707 (28,982) 163,049 -------- -------- -------- -------- Net Assets: Beginning of Period ........................... 217,707 -- 444,137 281,088 -------- -------- -------- -------- End of Period ................................. $508,374 $217,707 $415,155 $444,137 ======== ======== ======== ======== (1)Shares Issued and Redeemed: Trust Shares: Shares Issued ............................... 31,059 20,338 16,289 10,848 Shares Issued in Lieu of Cash Distributions . 785 -- 2,176 437 Shares Redeemed ............................. (14,649) (1,635) (18,979) (7,882) -------- -------- -------- -------- Net Trust Share Transactions .................. 17,195 18,703 (514) 3,403 -------- -------- -------- -------- Investor Shares: Shares Issued ............................... 634 324 473 428 Shares Issued in Lieu of Cash Distributions . 15 -- 169 38 Shares Redeemed ............................. (166) (21) (569) (614) -------- -------- -------- -------- Net Investor Share Transactions ............... 483 303 73 (148) -------- -------- -------- -------- Flex Shares: Shares Issued ............................... 566 84 310 202 Shares Issued in Lieu of Cash Distributions 6 -- 29 2 Shares Redeemed ............................. (34) -- (95) (10) -------- -------- -------- -------- Net Flex Share Transactions ................... 538 84 244 194 ======== ======== ======== ======== *Commencement of operations. Amounts designated as "--" are either $0 or round to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 116 & 117 STATEMENT OF CHANGES IN NET ASSETS (000) (continued) ================================================================================ STI CLASSIC FUNDS FOR THE YEAR ENDED MAY 31, 1997
FLORIDA TENNESSEE INVESTMENT GRADE TAX- TAX-EXEMPT TAX-EXEMPT EXEMPT BOND FUND BOND FUND BOND FUND -------------------- --------------------- -------------------- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 05/31/96 --------- --------- --------- --------- --------- --------- Operations: Net Investment Income ................... $ 6,631 $ 5,851 $ 1,999 $ 1,235 $ 227 $ 185 Net Realized Gain (Loss) on Investments . 2,924 5,634 (209) 220 (11) 13 Net Change in Unrealized Appreciation (Depreciation) on Investments ......... 2,169 (3,672) 1,157 (723) 153 (96) -------- -------- ------- ------- ------ ------ Increase in Net Assets from Operations 11,724 7,813 2,947 732 369 102 -------- -------- ------- ------- ------ ------ Distributions to Shareholders: Net Investment Income: Trust Shares .......................... (5,248) (4,292) (1,748) (996) (74) (80) Investor Shares ....................... (1,226) (1,492) (154) (171) (65) (54) Flex Shares ........................... (159) (120) (101) (65) (88) (51) Capital Gains: Trust Shares .......................... (2,384) (3,335) (126) (111) -- -- Investor Shares ....................... (623) (1,295) (11) (21) -- -- Flex Shares ........................... (92) (137) (9) (10) -- -- -------- -------- ------- ------- ------ ------ Total Distributions ..................... (9,732) (10,671) (2,149) (1,374) (227) (185) -------- -------- ------- ------- ------ ------ Capital Transactions (1): Trust Shares: Proceeds from Shares Issued ........... 45,948 87,347 27,976 30,124 1,241 414 Reinvestment of Cash Distributions .... 3,196 4,062 314 228 33 36 Cost of Shares Repurchased ............ (36,027) (42,946) (9,265) (9,139) (1,174) (264) -------- -------- ------- ------- ------ ------ Increase (Decrease) in Net Assets From Trust Share Transactions .............. 13,117 48,463 19,025 21,213 100 186 -------- -------- ------- ------- ------ ------ Investor Shares: Proceeds from Shares Issued ........... 2,163 4,535 923 1,865 450 668 Reinvestment of Cash Distributions .... 1,619 2,347 128 127 51 35 Cost of Shares Repurchased ............ (9,763) (10,550) (1,919) (1,235) (459) (333) -------- -------- ------- ------- ------ ------ Increase (Decrease) in Net Assets From Investor Share Transactions ........... (5,981) (3,668) (868) 757 42 370 -------- -------- ------- ------- ------ ------ Flex Shares: Proceeds from Shares Issued ........... 1,973 6,823 1,182 2,844 836 2,235 Reinvestment of Cash Distributions .... 222 222 80 50 53 36 Cost of Shares Repurchased ............ (3,111) (1,413) (1,011) (153) (456) (215) -------- -------- ------- ------- ------ ------ Increase (Decrease) in Net Assets From Flex Share Transactions ............... (916) 5,632 251 2,741 433 2,056 -------- -------- ------- ------- ------ ------ Increase (Decrease) in Net Assets From Share Transactions .................... 6,220 50,427 18,408 24,711 575 2,612 -------- -------- ------- ------- ------ ------ Total Increase (Decrease) in Net Assets 8,212 47,569 19,206 24,069 717 2,529 -------- -------- ------- ------- ------ ------ Net Assets: Beginning of Period ..................... 167,470 119,901 37,507 13,438 5,363 2,834 -------- -------- ------- ------- ------ ------ End of Period ........................... $175,682 $167,470 $56,713 $37,507 $6,080 $5,363 ======== ======== ======= ======= ====== ====== (1)Shares Issued and Redeemed: Trust Shares: Shares Issued ......................... 4,112 7,736 2,728 2,945 130 43 Shares Issued in Lieu of Cash Distributions 286 362 31 22 3 4 Shares Redeemed ....................... (3,216) (3,816) (907) (902) (122) (28) -------- -------- ------- ------- ------ ------ Net Trust Share Transactions ............ 1,182 4,282 1,852 2,065 11 19 -------- -------- ------- ------- ------ ------ Investor Shares: Shares Issued ......................... 193 401 89 182 47 70 Shares Issued in Lieu of Cash Distributions 144 208 13 12 5 4 Shares Redeemed ....................... (869) (934) (188) (120) (48) (35) -------- -------- ------- ------- ------ ------ Net Investor Share Transactions ......... (532) (325) (86) 74 4 39 -------- -------- ------- ------- ------ ------ Flex Shares: Shares Issued ......................... 176 603 115 277 88 233 Shares Issued in Lieu of Cash Distributions 20 20 8 5 6 4 Shares Redeemed ....................... (277) (125) (99) (15) (48) (23) -------- -------- ------- ------- ------ ------ Net Flex Share Transactions ............. (81) 498 24 267 46 214 ======== ======== ======= ======= ====== ====== GEORGIA SHORT-TERM TAX-EXEMPT INVESTMENT GRADE SHORT-TERM BOND U.S. TREASURY BOND FUND BOND FUND FUND SECURITIES FUND ------------------- ------------------- ------------------- ------------------- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 05/31/96 --------- --------- --------- --------- --------- --------- --------- --------- Operations: Net Investment Income ................... $ 1,589 $ 971 $ 37,964 $ 35,694 $ 5,152 $ 4,224 $ 1,238 $ 915 Net Realized Gain (Loss) on Investments . 7 330 (5,113) 19,716 (321) 1,358 (25) 95 Net Change in Unrealized Appreciation (Depreciation) on Investments ......... 882 (789) 10,558 (32,383) 1,027 (2,395) 88 (294) ------- ------- -------- -------- ------- ------- ------- ------- Increase in Net Assets from Operations 2,478 512 43,409 23,027 5,858 3,187 1,301 716 ------- ------- -------- -------- ------- ------- ------- ------- Distributions to Shareholders: Net Investment Income: Trust Shares .......................... (1,285) (747) (35,713) (33,703) (4,983) (4,065) (934) (551) Investor Shares ....................... (139) (139) (1,950) (1,908) (120) (133) (205) (308) Flex Shares ........................... (165) (88) (270) (114) (51) (26) (99) (56) Capital Gains: Trust Shares .......................... (153) (26) -- -- (311) (124) -- -- Investor Shares ....................... (17) (6) -- -- (7) (4) -- -- Flex Shares ........................... (26) (4) -- -- (4) (1) -- -- ------- ------- -------- -------- ------- ------- ------- ------- Total Distributions ..................... (1,785) (1,010) (37,933) (35,725) (5,476) (4,353) (1,238) (915) ------- ------- -------- -------- ------- ------- ------- ------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued ........... 29,571 17,893 218,768 203,235 43,385 60,843 17,856 5,744 Reinvestment of Cash Distributions .... 761 215 27,532 26,403 3,426 2,588 465 334 Cost of Shares Repurchased ............ (14,098) (7,944)(217,253) (161,583) (48,636) (32,113) (6,510) (5,409) ------- ------- -------- -------- ------- ------- ------- ------- Increase (Decrease) in Net Assets From Trust Share Transactions .............. 16,234 10,164 29,047 68,055 (1,825) 31,318 11,811 669 ------- ------- -------- -------- ------- ------- ------- ------- Investor Shares: Proceeds from Shares Issued ........... 573 661 5,838 8,832 602 642 745 966 Reinvestment of Cash Distributions .... 137 109 1,770 1,510 111 90 204 278 Cost of Shares Repurchased ............ (677) (596) (10,944) (7,248) (1,240) (606) (1,238) (4,147) ------- ------- -------- -------- ------- ------- ------- ------- Increase (Decrease) in Net Assets From Investor Share Transactions .................... 33 174 (3,336) 3,094 (527) 126 (289) (2,903) ------- ------- -------- -------- ------- ------- ------- ------- Flex Shares: Proceeds from Shares Issued ........... 1,697 4,355 3,077 5,179 523 1,014 825 2,603 Reinvestment of Cash Distributions .... 172 75 237 88 50 22 85 39 Cost of Shares Repurchased ............ (1,499) (150) (2,217) (508) (469) (53) (2,259) (188) ------- ------- -------- -------- ------- ------- ------- ------- Increase (Decrease) in Net Assets From Flex Share Transactions ............... 370 4,280 1,097 4,759 104 983 (1,349) 2,454 ------- ------- -------- -------- ------- ------- ------- ------- Increase (Decrease) in Net Assets From Share Transactions ........................ 16,637 14,618 26,808 75,908 (2,248) 32,427 10,173 220 ------- ------- -------- -------- ------- ------- ------- ------- Total Increase (Decrease) in Net Assets 17,330 14,120 32,284 63,210 (1,866) 31,261 10,236 21 ------- ------- -------- -------- ------- ------- ------- ------- Net Assets: Beginning of Period ..................... 30,575 16,455 640,290 577,080 94,822 63,561 16,764 16,743 ------- ------- -------- -------- ------- ------- ------- ------- End of Period ........................... $47,905 $30,575 $672,574 $640,290 $92,956 $94,822 $27,000 $16,764 ======= ======= ======== ======== ======= ======= ======= ======= (1)Shares Issued and Redeemed: Trust Shares: Shares Issued ......................... 3,062 1,832 21,475 19,682 4,380 6,066 1,806 579 Shares Issued in Lieu of Cash Distributions 78 22 2,709 2,550 345 258 47 34 Shares Redeemed ....................... (1,457) (823) (21,378) (15,629) (4,902) (3,190) (659) (547) ------- ------- -------- -------- ------- ------- ------- ------- Net Trust Share Transactions ............ 1,683 1,031 2,806 6,603 (177) 3,134 1,194 66 ------- ------- -------- -------- ------- ------- ------- ------- Investor Shares: Shares Issued ......................... 59 68 575 856 61 64 75 97 Shares Issued in Lieu of Cash Distributions 14 11 174 146 11 9 21 28 Shares Redeemed ....................... (70) (61) (1,076) (701) (125) (60) (125) (418) ------- ------- -------- -------- ------- ------- ------- ------- Net Investor Share Transactions ......... 3 18 (327) 301 (53) 13 (29) (293) ------- ------- -------- -------- ------- ------- ------- ------- Flex Shares: Shares Issued ......................... 175 448 303 499 52 101 84 262 Shares Issued in Lieu of Cash Distributions 18 8 23 8 5 2 9 4 Shares Redeemed ....................... (154) (15) (218) (49) (47) (5) (228) (19) ------- ------- -------- -------- ------- ------- ------- ------- Net Flex Share Transactions ............. 39 441 108 458 10 98 (135) 247 ======== ======= ======== ======== ======= ======= ======= ======= LIMITED-TERM FEDERAL MORTGAGE U. S. GOVERNMENT SECURITIES FUND SECURITIES FUND -------------------- -------------------- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 --------- --------- --------- --------- Operations: Net Investment Income ................... $ 6,160 $ 3,181 $ 1,220 $ 602 Net Realized Gain (Loss) on Investments . 1 389 (17) (24) Net Change in Unrealized Appreciation (Dep on Investments ........................ 303 (1,359) 214 (557) -------- ------- ------- ------- Increase in Net Assets from Operations 6,464 2,211 1,417 21 -------- ------- ------- ------- Distributions to Shareholders: Net Investment Income: Trust Shares .......................... (5,933) (3,012) (916) (453) Investor Shares ....................... (146) (68) (147) (68) Flex Shares ........................... (81) (37) (157) (81) Capital Gains: Trust Shares .......................... (159) -- -- (18) Investor Shares ....................... (4) -- -- (3) Flex Shares ........................... (3) -- -- (5) -------- ------- ------- ------- Total Distributions ..................... (6,326) (3,117) (1,220) (628) -------- ------- ------- ------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued ........... 75,207 46,841 19,904 9,824 Reinvestment of Cash Distributions .... 4,139 1,846 297 144 Cost of Shares Repurchased ............ (28,939) (16,287) (11,131) (2,556) -------- ------- ------- ------- Increase (Decrease) in Net Assets From Tru Transactions .......................... 50,407 32,400 9,070 7,412 -------- ------- ------- ------- Investor Shares: Proceeds from Shares Issued ........... 1,381 2,404 1,272 2,290 Reinvestment of Cash Distributions .... 141 51 140 50 Cost of Shares Repurchased ............ (1,615) (533) (1,599) (456) -------- ------- ------- ------- Increase (Decrease) in Net Assets From Investor Share Transactions ........... (93) 1,922 (187) 1,884 -------- ------- ------- ------- Flex Shares: Proceeds from Shares Issued ........... 500 1,538 764 3,019 Reinvestment of Cash Distributions .... 72 27 130 59 Cost of Shares Repurchased ............ (517) (196) (958) (148) -------- ------- ------- ------- Increase (Decrease) in Net Assets From Flex Share Transactions ............... 55 1,369 (64) 2,930 -------- ------- ------- ------- Increase (Decrease) in Net Assets From Transactions .................. 50,369 35,691 8,819 12,226 -------- ------- ------- ------- Total Increase (Decrease) in Net Assets 50,507 34,785 9,016 11,619 -------- ------- ------- ------- Net Assets: Beginning of Period ..................... 77,231 42,446 15,499 3,880 -------- ------- ------- ------- End of Period ........................... $127,738 $77,231 $24,515 $15,499 ======== ======= ======= ======= (1)Shares Issued and Redeemed: Trust Shares: Shares Issued ......................... 7,497 4,639 1,986 952 Shares Issued in Lieu of Cash Distributions 413 182 30 14 Shares Redeemed ....................... (2,886) (1,610) (1,110) (249) -------- ------- ------- ------- Net Trust Share Transactions ............ 5,024 3,211 906 717 -------- ------- ------- ------- Investor Shares: Shares Issued ......................... 138 238 127 225 Shares Issued in Lieu of Cash Distributions 14 5 14 5 Shares Redeemed ....................... (161) (53) (159) (45) -------- ------- ------- ------- Net Investor Share Transactions ......... (9) 190 (18) 185 -------- ------- ------- ------- Flex Shares: Shares Issued ......................... 50 152 77 294 Shares Issued in Lieu of Cash Distributions 7 2 13 6 Shares Redeemed ....................... (51) (19) (95) (15) -------- ------- ------- ------- Net Flex Share Transactions ............. 6 135 (5) 285 ======== ======= ======= ======= Amounts designated as "--" are either $0 or round to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 118 & 119 STATEMENT OF CHANGES IN NET ASSETS (000) (concluded) ================================================================================ STI CLASSIC FUNDS FOR THE YEAR ENDED MAY 31, 1997
U.S. GOVERNMENT PRIME QUALITY SECURITIES TAX-EXEMPT MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND -------------------- --------------------- ------------------- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 05/31/96 --------- --------- --------- --------- --------- --------- Operations: Net Investment Income .................................. $ 73,281 $ 54,132 $ 17,800 $ 20,311 $ 12,958 $ 12,217 Net Realized Gain (Loss) on Investments ................ (121) (82) (51) 90 10 9 ---------- ---------- -------- ---------- -------- -------- Increase in Net Assets from Operations ............. 73,160 54,050 17,749 20,401 12,968 12,226 ---------- ---------- -------- ---------- -------- -------- Distributions to Shareholders: Net Investment Income: Trust Shares ......................................... (60,224) (44,689) (14,924) (17,516) (10,054) (9,342) Investor Shares ...................................... (13,057) (9,442) (2,876) (2,795) (2,904) (2,872) Capital Gains: Trust Shares ......................................... -- -- -- -- -- -- Investor Shares ...................................... -- -- -- -- -- -- ---------- ---------- -------- ---------- -------- -------- Total Distributions ................................ (73,281) (54,131) (17,800) (20,311) (12,958) (12,214) ---------- ---------- -------- ---------- -------- -------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued .......................... 2,786,281 2,131,623 705,839 1,156,411 980,872 719,678 Reinvestment of Cash Distributions ................... 2,069 1,223 274 60 -- 3 Cost of Shares Redeemed .............................. (2,752,496) (1,881,171) (687,215) (1,265,169) (921,487) (661,491) ---------- ---------- -------- ---------- -------- -------- Increase (Decrease) in Net Assets From Trust Share Transactions 35,854 251,675 18,898 (108,698) 59,385 58,190 ---------- ---------- -------- ---------- -------- -------- Investor Shares: Proceeds from Shares Issued .......................... 928,946 1,012,310 182,325 231,451 305,724 322,435 Reinvestment of Cash Distributions ................... 10,375 8,255 2,379 2,414 2,569 2,480 Cost of Shares Redeemed .............................. (871,451) (962,468) (180,124) (221,906) (301,505) (317,341) ---------- ---------- -------- ---------- -------- -------- Increase in Net Assets From Investor Share Transactions 67,870 58,097 4,580 11,959 6,788 7,574 ---------- ---------- -------- ---------- -------- -------- Increase in Net Assets From Share Transactions ....... 103,724 309,772 23,478 (96,739) 66,173 65,764 ---------- ---------- -------- ---------- -------- -------- Total Increase (Decrease) in Net Assets ............ 103,603 309,691 23,427 (96,649) 66,183 65,776 ---------- ---------- -------- ---------- -------- -------- Net Assets: Beginning of Period .................................... 1,266,496 956,805 384,101 480,750 368,836 303,060 ---------- ---------- -------- ---------- -------- -------- End of Period .......................................... $1,370,099 $1,266,496 $407,528 $ 384,101 $435,019 $368,836 ---------- ---------- -------- ---------- -------- -------- (1) Shares Issued and Redeemed: Trust Shares: Shares Issued ........................................ 2,786,281 2,131,623 705,839 1,156,411 980,872 719,678 Shares Issued in Lieu of Cash Distributions .......... 2,069 1,223 274 60 -- 3 Shares Redeemed ...................................... (2,752,496)(1,881,171) (687,215) (1,265,169) (921,487) (661,491) ---------- ---------- -------- ---------- -------- -------- Net Trust Share Transactions ....................... 35,854 251,675 18,898 (108,698) 59,385 58,190 ---------- ---------- -------- ---------- -------- -------- Investor Shares: Shares Issued ........................................ 928,946 1,012,310 182,325 231,451 305,724 322,435 Shares Issued in Lieu of Cash Distributions .......... 10,375 8,255 2,379 2,414 2,569 2,480 Shares Redeemed ...................................... (871,451) (962,468) (180,124) (221,906) (301,505) (317,341) ---------- ---------- -------- ---------- -------- -------- Net Investor Share Transactions .................... 67,870 58,097 4,580 11,959 6,788 7,574 ---------- ---------- -------- ---------- -------- -------- Amounts designated as "--" are either $0 or round to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 120 [This Page Left Intentionally Blank] FINANCIAL HIGHLIGHTS ================================================================================ STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET REALIZED AND NET UNREALIZED GAINS NET ASSET VALUE INVESTMENT (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM BEGINNING OF PERIOD INCOME (LOSS) ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS ------------------- ------------- ---------------- --------------------- ---------------------- VALUE INCOME STOCK FUND Trust Shares 1997 $13.15 $ 0.30 $ 2.32 $(0.30) $ (1.76) 1996 11.59 0.35 2.71 (0.34) (1.16) 1995 10.54 0.32 1.56 (0.32) (0.51) 1994 10.23 0.29 0.70 (0.32) (0.36) 1993(1) 10.00 0.11 0.16 (0.04) -- Investor Shares 1997 $13.13 $ 0.25 $ 2.32 $(0.26) $ (1.76) 1996 11.58 0.30 2.71 (0.30) (1.16) 1995 10.52 0.28 1.56 (0.27) (0.51) 1994 10.23 0.26 0.67 (0.27) (0.37) 1993(2) 9.73 0.09 0.44 (0.03) -- Flex Shares 1997 $13.08 $ 0.18 $ 2.29 $(0.18) $ (1.76) 1996(3) 11.59 0.26 2.65 (0.26) (1.16) MID-CAP EQUITY FUND (B) Trust Shares 1997 $12.76 $ 0.03 $ 1.69 $(0.05) $ (1.22) 1996 11.00 0.08 2.63 (0.08) (0.87) 1995 9.85 0.08 1.15 (0.08) -- 1994(4) 10.00 0.02 (0.16) (0.01) -- Investor Shares 1997 $12.74 $(0.03) $ 1.69 $(0.01) $ (1.22) 1996 10.99 0.03 2.62 (0.03) (0.87) 1995 9.84 0.03 1.15 (0.03) -- 1994(5) 10.00 0.01 (0.17) -- -- Flex Shares 1997 $12.69 $(0.07) $ 1.64 $ -- $ (1.22) 1996(6) 11.13 -- 2.45 (0.02) (0.87) SMALL CAP EQUITY FUND Trust Shares 1997(7) $10.00 $ 0.05 $ 1.04 $(0.02) $ -- CAPITAL GROWTH FUND Trust Shares 1997 $14.90 $ 0.12 $ 3.13 $(0.12) $ (2.94) 1996 12.18 0.12 3.32 (0.13) (0.59) 1995 11.99 0.16 0.57 (0.14) (0.40) 1994 11.95 0.16 0.31 (0.17) (0.26) 1993(8) 10.36 0.12 1.57 (0.10) -- Investor Shares 1997 $14.89 $ 0.03 $ 3.10 $(0.02) $ (2.94) 1996 12.17 0.03 3.32 (0.04) (0.59) 1995 11.98 0.09 0.57 (0.07) (0.40) 1994 11.93 0.09 0.31 (0.09) (0.26) 1993(9) 10.00 0.06 1.93 (0.06) -- Flex Shares 1997 $14.84 $(0.01) $ 3.07 $ -- $ (2.94) 1996(3) 12.20 0.02 3.26 (0.05) (0.59) RATIO OF RATIO OF EXPENSES TO NET ASSET NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS VALUE END TOTAL END OF EXPENSES TO INCOME (LOSS) TO (EXCLUDING WAIVERS OF PERIOD RETURN (A) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) --------- ---------- ------------ ------------------ ------------------ ------------------- VALUE INCOME STOCK FUND Trust Shares 1997 $13.71 22.18% $1,488,062 0.91% 2.40% 0.91% 1996 13.15 27.91% 1,244,399 0.92% 2.86% 0.92% 1995 11.59 19.06% 991,977 0.95% 3.16% 0.95% 1994 10.54 9.95% 573,082 0.88% 3.21% 0.97% 1993(1) 10.23 9.05%* 137,761 0.80%* 4.32%* 0.96%* Investor Shares 1997 $13.68 21.69% $ 165,999 1.30% 2.01% 1.31% 1996 13.13 27.39% 130,597 1.30% 2.47% 1.37% 1995 11.58 18.71% 92,256 1.30% 2.80% 1.41% 1994 10.52 9.27% 60,589 1.25% 2.80% 1.44% 1993(2) 10.23 19.42%* 24,779 1.15%* 4.51%* 1.63%* Flex Shares 1997 $13.61 20.91% $ 73,466 2.00% 1.33% 2.03% 1996(3) 13.08 26.52%* 26,298 2.00%* 1.72%* 2.15%* MID-CAP EQUITY FUND (B) Trust Shares 1997 $13.21 14.23% $ 287,370 1.15% 0.23% 1.26% 1996 12.76 25.54% 253,905 1.15% 0.70% 1.29% 1995 11.00 12.56% 125,562 1.15% 0.88% 1.32% 1994(4) 9.85 (1.39%)+ 57,036 1.15%* 1.20%* 1.68%* Investor Shares 1997 $13.17 13.76% $ 20,245 1.60% (0.21%) 1.85% 1996 12.74 24.93% 17,971 1.60% 0.25% 1.96% 1995 10.99 11.96% 7,345 1.60% 0.43% 2.27% 1994(5) 9.84 (1.60%)+ 3,004 1.60%* 0.74%* 4.60%* Flex Shares 1997 $13.04 13.06% $ 10,120 2.20% (0.85%) 2.58% 1996(6) 12.69 23.00%* 5,029 2.20%* (0.37%)* 3.04%* SMALL CAP EQUITY FUND Trust Shares 1997(7) $11.07 10.97%+ $ 131,049 1.20%* 1.86%* 1.37%* CAPITAL GROWTH FUND Trust Shares 1997 $15.09 24.66% $1,085,128 1.15% 0.83% 1.25% 1996 14.90 28.97% 981,498 1.15% 0.90% 1.27% 1995 12.18 6.63% 984,205 1.15% 1.38% 1.28% 1994 11.99 3.87% 891,870 1.15% 1.25% 1.29% 1993(8) 11.95 17.90%* 507,692 1.15%* 1.43%* 1.28%* Investor Shares 1997 $15.06 23.74% $ 218,660 1.80% 0.19% 2.02% 1996 14.89 28.18% 191,078 1.80% 0.24% 2.08% 1995 12.17 5.93% 160,875 1.80% 0.73% 2.10% 1994 11.98 3.26% 170,795 1.80% 0.64% 2.11% 1993(9) 11.93 20.49%* 131,858 1.80%* 0.81%* 2.06%* Flex Shares 1997 $14.96 23.24% $ 36,753 2.27% (0.29%) 2.43% 1996(3) 14.84 27.48%* 10,969 2.27%* (0.29%)* 2.68%* RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS PORTFOLIO AVERAGE (EXCLUDING WAIVERS TURNOVER COMMISSION AND REIMBURSEMENTS) RATE RATE** ------------------- --------- ---------- VALUE INCOME STOCK FUND Trust Shares 1997 2.40% 105.03% $0.0609 1996 2.86% 133.99% n/a 1995 3.16% 125.71% n/a 1994 3.12% 149.28% n/a 1993(1) 4.16%* 34.71% n/a Investor Shares 1997 2.00% 105.03% $0.0609 1996 2.40% 133.99% n/a 1995 2.69% 125.71% n/a 1994 2.61% 149.28% n/a 1993(2) 4.04%* 34.71% n/a Flex Shares 1997 1.30% 105.03% $0.0609 1996(3) 1.57%* 133.99% n/a MID-CAP EQUITY FUND (B) Trust Shares 1997 0.12% 151.68% $0.0587 1996 0.56% 115.62% n/a 1995 0.71% 65.63% n/a 1994(4) 0.67%* 7.99% n/a Investor Shares 1997 (0.46%) 151.68% $0.0587 1996 (0.11%) 115.62% n/a 1995 (0.24%) 65.63% n/a 1994(5) (2.26%)* 7.99% n/a Flex Shares 1997 (1.23%) 151.68% $0.0587 1996(6) (1.21%)* 115.62% n/a SMALL CAP EQUITY FUND Trust Shares 1997(7) 1.69%* 27.46% $0.0523 CAPITAL GROWTH FUND Trust Shares 1997 0.73% 141.32% $0.0620 1996 0.78% 156.46% n/a 1995 1.25% 127.79% n/a 1994 1.11% 123.87% n/a 1993(8) 1.30%* 95.02% n/a Investor Shares 1997 (0.03%) 141.32% $0.0620 1996 (0.04%) 156.46% n/a 1995 0.43% 127.79% n/a 1994 0.33% 123.87% n/a 1993(9) 0.55%* 95.02% n/a Flex Shares 1997 (0.45%) 141.32% $0.0620 1996(3) (0.70%)* 156.46% n/a * Annualized. ** Average commission rate paid per share for security purchases and sales during the period. Presentation of the rate is only required for fiscal years beginning after September 1, 1995. + Returns are for the period indicated and have not been annualized. (1) Commenced operations on February 12, 1993. (2) Commenced operations on February 17, 1993. (3) Commenced operations on June 1, 1995. (4) Commenced operations on February 2, 1994. (5) Commenced operations on February 1, 1994. (6) Commenced operations on June 5, 1995. (7) Commenced operations on January 31, 1997 (8) Commenced operations on July 1, 1992. (9) Commenced operations on June 9, 1992. (A) Total return figures do not reflect applicable sales loads. (B) During the fiscal year ended May 31, 1996, the Aggressive Growth Fund changed its name to the Mid-Cap Equity Fund.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 122 & 123 FINANCIAL HIGHLIGHTS (continued) ================================================================================ STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET REALIZED AND NET UNREALIZED GAINS NET ASSET VALUE INVESTMENT (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM BEGINNING OF PERIOD INCOME (LOSS) ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS ------------------- ------------- ---------------- --------------------- ---------------------- BALANCED FUND Trust Shares 1997 $11.55 $ 0.33 $ 1.47 $ (0.32) $(1.09) 1996 10.26 0.33 1.41 (0.34) (0.11) 1995 9.76 0.33 0.49 (0.32) -- 1994(1) 10.00 0.11 (0.29) (0.06) -- Investor Shares 1997 $11.60 $ 0.29 $ 1.48 $ (0.29) $(1.09) 1996 10.30 0.30 1.41 (0.30) (0.11) 1995 9.79 0.28 0.51 (0.28) -- 1994(2) 10.00 0.03 (0.24) -- -- Flex Shares 1997 $11.53 $ 0.22 $ 1.45 $ (0.21) $(1.09) 1996(3) 10.36 0.24 1.29 (0.25) (0.11) EMERGING MARKETS EQUITY FUND Trust Shares 1997(4) $10.00 $ 0.04 $ 0.75 $ -- $ -- INTERNATIONAL EQUITY INDEX FUND Trust Shares 1997 $10.96 $ 0.10 $ 0.69 $ (0.11) $(0.30) 1996 10.24 0.10 0.84 (0.13) (0.09) 1995(5) 10.00 0.08 0.19 (0.02) (0.01) Investor Shares 1997 $10.88 $ 0.03 $ 0.72 $ (0.07) $(0.30) 1996 10.20 0.05 0.85 (0.13) (0.09) 1995(5) 10.00 0.05 0.17 (0.01) (0.01) Flex Shares 1997 $10.87 $(0.05) $ 0.72 $ -- $(0.30) 1996(6) 10.24 -- 0.82 (0.10) (0.09) INTERNATIONAL EQUITY FUND Trust Shares 1997 $11.40 $ 0.03 $ 2.57 $ (0.02) $(0.35) 1996(7) 10.00 0.05 1.35 -- -- Investor Shares 1997 $11.38 $(0.01) $ 2.56 $ -- $(0.35) 1996(8) 10.44 0.04 0.90 -- -- Flex Shares 1997 $11.37 $(0.04) $ 2.49 $ -- $(0.35) 1996(8) 10.44 0.02 0.91 -- -- SUNBELT EQUITY FUND Trust Shares 1997 $14.11 $(0.09) $ 0.25 $ -- $(0.99) 1996 10.03 (0.04) 4.32 -- (0.20) 1995 9.70 (0.01) 0.38 -- (0.04) 1994(1) 10.00 -- (0.30) -- -- Investor Shares 1997 $13.95 $(0.14) $ 0.24 $ -- $(0.99) 1996 9.96 (0.11) 4.30 -- (0.20) 1995 9.69 (0.05) 0.36 -- (0.04) 1994(2) 10.00 (0.02) (0.29) -- -- Flex Shares 1997 $13.97 $(0.14) $ 0.16 $ -- $(0.99) 1996(9) 10.20 (0.07) 4.04 -- (0.20) RATIO OF RATIO OF EXPENSES TO NET ASSET NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS VALUE END TOTAL END OF EXPENSES TO INCOME (LOSS) TO (EXCLUDING WAIVERS OF PERIOD RETURN (A) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) --------- ---------- ------------ ------------------ ------------------ ------------------- BALANCED FUND Trust Shares 1997 $11.94 16.66% $ 151,358 0.95% 2.89% 1.08% 1996 11.55 17.26% 111,638 0.95% 3.00% 1.09% 1995 10.26 8.72% 89,051 0.95% 3.44% 1.11% 1994(1) 9.76 (1.78%)+ 90,579 0.95%* 2.76%* 1.25%* Investor Shares 1997 $11.99 16.27% $ 6,012 1.25% 2.58% 1.64% 1996 11.60 16.88% 4,896 1.25% 2.70% 1.89% 1995 10.30 8.29% 3,765 1.25% 3.17% 1.80% 1994(2) 9.79 (2.10%)+ 2,311 1.25%* 2.46%* 4.91%* Flex Shares 1997 $11.90 15.40% $ 6,067 2.01% 1.84% 2.45% 1996(3) 11.53 15.58%* 3,131 2.00%* 1.85%* 2.97%* EMERGING MARKETS EQUITY FUND Trust Shares 1997(4) $10.79 7.90%+ $ 39,495 1.55%* 1.37%* 2.04%* INTERNATIONAL EQUITY INDEX FUND Trust Shares 1997 $11.34 7.48% $ 53,516 1.05% 0.71% 1.15% 1996 10.96 9.29% 90,980 1.05% 0.84% 1.19% 1995(5) 10.24 2.69%+ 89,446 1.05%* 1.13%* 1.31%* Investor Shares 1997 $11.26 7.12% $ 5,592 1.45% 0.28% 1.88% 1996 10.88 8.90% 5,597 1.45% 0.48% 2.06% 1995(5) 10.20 2.18%+ 3,960 1.45%* 0.67%* 2.44%* Flex Shares 1997 $11.24 6.41% $ 900 2.10% (0.39%) 3.69% 1996(6) 10.87 8.32%+ 917 2.10%* (0.24%)* 4.14%* INTERNATIONAL EQUITY FUND Trust Shares 1997 $13.63 23.29% $489,325 1.46% 0.51% 1.51% 1996(7) 11.40 14.00%+ 213,306 1.46%* 1.36%* 1.65%* Investor Shares 1997 $13.58 22.85% $ 10,674 1.81% 0.18% 2.05% 1996(8) 11.38 9.00%+ 3,448 1.81%* 1.73%* 3.14%* Flex Shares 1997 $13.47 21.98% $ 8,375 2.51% (0.27%) 3.03% 1996(8) 11.37 8.91%+ 953 2.51%* 1.08%* 5.86%* SUNBELT EQUITY FUND Trust Shares 1997 $13.28 1.48% $ 381,371 1.15% (0.65%) 1.26% 1996 14.11 43.19% 412,430 1.15% (0.34%) 1.28% 1995 10.03 3.81% 258,908 1.15% (0.12%) 1.30% 1994(1) 9.70 (2.99%)+ 128,280 1.15%* (0.19%)* 1.58%* Investor Shares 1997 $13.06 1.05% $ 28,095 1.60% (1.10%) 1.84% 1996 13.95 42.58% 29,002 1.60% (0.79%) 1.93% 1995 9.96 3.20% 22,180 1.60% (0.57%) 1.98% 1994(2) 9.69 (3.10%)+ 16,077 1.60%* (0.63%)* 2.04%* Flex Shares 1997 $13.00 0.46% $ 5,689 2.20% (1.72%) 2.69% 1996(9) 13.97 39.86%* 2,705 2.20%* (1.43%)* 3.62%* RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS PORTFOLIO AVERAGE (EXCLUDING WAIVERS TURNOVER COMMISSION AND REIMBURSEMENTS) RATE RATE** ------------------- --------- ---------- BALANCED FUND Trust Shares 1997 2.76% 196.73% $0.0608 1996 2.86% 154.63% n/a 1995 3.28% 156.61% n/a 1994(1) 2.46%* 105.65% n/a Investor Shares 1997 2.19% 196.73% $0.0608 1996 2.06% 154.63% n/a 1995 2.62% 156.61% n/a 1994(2) (1.20%)* 105.65% n/a Flex Shares 1997 1.40% 196.73% $0.0608 1996(3) 0.88%* 154.63% n/a EMERGING MARKETS EQUITY FUND Trust Shares 1997(4) 0.88%* 23.88% $0.0019 INTERNATIONAL EQUITY INDEX FUND Trust Shares 1997 0.61% 1.82% $0.0244 1996 0.70% 30.46% n/a 1995(5) 0.87%* 10.37% n/a Investor Shares 1997 (0.15%) 1.82% $0.0244 1996 (0.13%) 30.46% n/a 1995(5) (0.32%)* 10.37% n/a Flex Shares 1997 (1.98%) 1.82% $0.0244 1996(6) (2.28%)* 30.46% n/a INTERNATIONAL EQUITY FUND Trust Shares 1997 0.46% 139.37% $0.0313 1996(7) 1.17%* 113.34% n/a Investor Shares 1997 (0.06%) 139.37% $0.0313 1996(8) 0.40%* 113.34% n/a Flex Shares 1997 (0.79%) 139.37% $0.0313 1996(8) (2.27%)* 113.34% n/a SUNBELT EQUITY FUND Trust Shares 1997 (0.76%) 72.17% $0.0674 1996 (0.47%) 106.27% n/a 1995 (0.27%) 80.03% n/a 1994(1) (0.62%)* 21.42% n/a Investor Shares 1997 (1.34%) 72.17% $0.0674 1996 (1.12%) 106.27% n/a 1995 (0.95%) 80.03% n/a 1994(2) (1.07%)* 21.42% n/a Flex Shares 1997 (2.21%) 72.17% $0.0674 1996(9) (2.85%)* 106.27% n/a * Annualized. ** Average commission rate paid per share for security purchases and sales during the period. Presentation of the rate is only required for fiscal years beginning after September 1, 1995. + Returns are for the period indicated and have not been annualized. (1) Commenced operations on January 3, 1994. (2) Commenced operations on January 4, 1994. (3) Commenced operations on June 14, 1995. (4) Commenced operations on January 31, 1997. (5) Commenced operations on June 6, 1994. (6) Commenced operations on June 8, 1995. (7) Commenced operations on December 1, 1995. (8) Commenced operations on January 2, 1996. (9) Commenced operations on June 5, 1995. (A) Total return figures do not reflect applicable sales loads.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 124 & 125 FINANCIAL HIGHLIGHTS (continued) ================================================================================ STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET REALIZED AND NET UNREALIZED GAINS NET ASSET VALUE INVESTMENT (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM BEGINNING OF PERIOD INCOME (LOSS) ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS ------------------- ------------- ---------------- --------------------- ---------------------- INVESTMENT GRADE TAX-EXEMPT BOND FUND Trust Shares 1997 $11.10 $ 0.44 $ 0.33 $(0.44) $(0.21) 1996 11.28 0.45 0.19 (0.45) (0.37) 1995 10.68 0.46 0.60 (0.46) -- 1994(1) 11.37 0.22 (0.34) (0.22) (0.35) Investor Shares 1997 $11.12 $ 0.40 $ 0.33 $(0.40) $(0.21) 1996 11.30 0.41 0.19 (0.41) (0.37) 1995 10.69 0.42 0.61 (0.42) -- 1994 10.79 0.33 0.25 (0.33) (0.35) 1993(2) 10.00 0.35 0.82 (0.35) (0.03) Flex Shares 1997 $11.11 $ 0.35 $ 0.33 $(0.35) $(0.21) 1996(3) 11.30 0.37 0.18 (0.37) (0.37) FLORIDA TAX-EXEMPT BOND FUND Trust Shares 1997 $10.06 $ 0.46 $ 0.25 $(0.46) $(0.03) 1996 10.18 0.46 (0.07) (0.46) (0.05) 1995 9.75 0.44 0.43 (0.44) -- 1994(4) 10.00 0.13 (0.25) (0.13) -- Investor Shares 1997 $10.07 $ 0.44 $ 0.25 $(0.44) $(0.03) 1996 10.18 0.44 (0.06) (0.44) (0.05) 1995 9.75 0.42 0.43 (0.42) -- 1994(5) 10.00 0.13 (0.25) (0.13) -- Flex Shares 1997 $10.08 $ 0.39 $ 0.25 $(0.39) $(0.03) 1996(3) 10.19 0.39 (0.06) (0.39) (0.05) TENNESSEE TAX-EXEMPT BOND FUND Trust Shares 1997 $ 9.40 $ 0.43 $ 0.23 $(0.43) $ -- 1996 9.50 0.43 (0.11) (0.42) -- 1995 9.22 0.44 0.28 (0.44) -- 1994(6) 10.00 0.12 (0.77) (0.13) -- Investor Shares 1997 $ 9.42 $ 0.41 $ 0.23 $(0.41) $ -- 1996 9.53 0.41 (0.10) (0.42) -- 1995 9.23 0.44 0.29 (0.43) -- 1994(7) 10.00 0.13 (0.77) (0.13) -- Flex Shares 1997 $ 9.41 $ 0.37 $ 0.23 $(0.37) $ -- 1996(8) 9.59 0.37 (0.18) (0.37) -- GEORGIA TAX-EXEMPT BOND FUND Trust Shares 1997 $ 9.56 $ 0.42 $ 0.22 $(0.42) $(0.05) 1996 9.63 0.43 (0.05) (0.43) (0.02) 1995 9.42 0.42 0.21 (0.42) -- 1994(5) 10.00 0.14 (0.58) (0.14) -- Investor Shares 1997 $ 9.58 $ 0.40 $ 0.21 $(0.40) $(0.05) 1996 9.65 0.41 (0.05) (0.41) (0.02) 1995 9.44 0.40 0.21 (0.40) -- 1994(7) 10.00 0.13 (0.56) (0.13) -- Flex Shares 1997 $ 9.56 $ 0.35 $ 0.22 $(0.35) $(0.05) 1996(9) 9.72 0.36 (0.14) (0.36) (0.02) RATIO OF RATIO OF EXPENSES TO NET ASSET NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS VALUE END TOTAL END OF EXPENSES TO INCOME TO (EXCLUDING WAIVERS OF PERIOD RETURN (A) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) --------- ---------- ------------ ------------------ ------------------ ------------------- INVESTMENT GRADE TAX-EXEMPT BOND FUND Trust Shares 1997 $11.22 7.13% $139,144 0.75% 3.96% 0.86% 1996 11.10 5.82% 124,507 0.75% 4.01% 0.89% 1995 11.28 10.21% 78,208 0.75% 4.34% 0.91% 1994(1) 10.68 (1.10%)+ 44,595 0.75%* 3.46%* 0.95%* Investor Shares 1997 $11.24 6.69% $ 31,857 1.15% 3.56% 1.38% 1996 11.12 5.40% 37,427 1.15% 3.61% 1.42% 1995 11.30 9.91% 41,693 1.15% 3.88% 1.43% 1994 10.69 5.37% 46,182 1.14% 2.96% 1.51% 1993(2) 10.79 11.88%* 15,844 1.12%* 3.61%* 1.83%* Flex Shares 1997 $11.23 6.19% $ 4,681 1.63% 3.08% 2.15% 1996(3) 11.11 4.91%* 5,536 1.63%* 3.12%* 2.25%* FLORIDA TAX-EXEMPT BOND FUND Trust Shares 1997 $10.28 7.22% $ 50,487 0.65% 4.48% 0.80% 1996 10.06 3.87% 30,790 0.65% 4.49% 0.88% 1995 10.18 9.26% 10,118 0.65% 4.63% 1.13% 1994(4) 9.75 (1.19%)+ 3,192 0.65%* 3.86%* 1.12%* Investor Shares 1997 $10.29 7.00% $ 3,226 0.85% 4.28% 1.31% 1996 10.07 3.76% 4,025 0.85% 4.28% 1.36% 1995 10.18 9.04% 3,320 0.85% 4.36% 1.50% 1994(5) 9.75 (1.22%)+ 2,280 0.85%* 3.67%* 3.20%* Flex Shares 1997 $10.30 6.48% $ 3,000 1.35% 3.78% 2.28% 1996(3) 10.08 3.27%* 2,692 1.35%* 3.79%* 2.54%* TENNESSEE TAX-EXEMPT BOND FUND Trust Shares 1997 $ 9.63 7.16% $ 1,973 0.65% 4.51% 1.72% 1996 9.40 3.43% 1,823 0.65% 4.49% 1.68% 1995 9.50 8.17% 1,664 0.65% 4.90% 2.65% 1994(6) 9.22 (6.52%)+ 594 0.65%* 4.24%* 1.43%* Investor Shares 1997 $ 9.65 6.93% $ 1,602 0.85% 4.31% 1.76% 1996 9.42 3.28% 1,523 0.85% 4.29% 2.08% 1995 9.53 8.24% 1,170 0.85% 4.70% 2.10% 1994(7) 9.23 (6.39%)+ 1,127 0.85%* 3.74%* 6.60%* Flex Shares 1997 $ 9.64 6.42% $ 2,505 1.35% 3.81% 2.34% 1996(8) 9.41 1.98%* 2,017 1.34%* 3.80%* 2.74%* GEORGIA TAX-EXEMPT BOND FUND Trust Shares 1997 $ 9.73 6.79% $ 39,732 0.65% 4.31% 0.81% 1996 9.56 3.89% 22,950 0.65% 4.36% 0.89% 1995 9.63 6.94% 13,187 0.65% 4.56% 0.98% 1994(5) 9.42 (4.43%)+ 4,338 0.65%* 4.12%* 1.06%* Investor Shares 1997 $ 9.74 6.47% $ 3,511 0.85% 4.10% 1.33% 1996 9.58 3.69% 3,418 0.85% 4.17% 1.41% 1995 9.65 6.70% 3,268 0.85% 4.31% 1.43% 1994(7) 9.44 (4.29%)+ 3,300 0.85%* 3.93%* 2.36%* Flex Shares 1997 $ 9.73 6.06% $ 4,662 1.35% 3.60% 2.07% 1996(9) 9.56 2.25%* 4,207 1.35%* 3.66%* 2.35%* RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS TURNOVER AND REIMBURSEMENTS) RATE ------------------- --------- INVESTMENT GRADE TAX-EXEMPT BOND FUND Trust Shares 1997 3.85% 489.02% 1996 3.87% 513.90% 1995 4.18% 591.91% 1994(1) 3.26%* 432.46% Investor Shares 1997 3.33% 489.02% 1996 3.34% 513.90% 1995 3.60% 591.91% 1994 2.59% 432.46% 1993(2) 2.90%* 344.87% Flex Shares 1997 2.56% 489.02% 1996(3) 2.50%* 513.90% FLORIDA TAX-EXEMPT BOND FUND Trust Shares 1997 4.33% 134.62% 1996 4.26% 62.68% 1995 4.15% 105.01% 1994(4) 3.39%* 53.24% Investor Shares 1997 3.82% 134.62% 1996 3.77% 62.68% 1995 3.71% 105.01% 1994(5) 1.32%* 53.24% Flex Shares 1997 2.85% 134.62% 1996(3) 2.60%* 62.68% TENNESSEE TAX-EXEMPT BOND FUND Trust Shares 1997 3.44% 16.09% 1996 3.46% 41.00% 1995 2.90% 27.73% 1994(6) 3.46%* 13.05% Investor Shares 1997 3.40% 16.09% 1996 3.06% 41.00% 1995 3.45% 27.73% 1994(7) (2.01%)* 13.05% Flex Shares 1997 2.82% 16.09% 1996(8) 2.40%* 41.00% GEORGIA TAX-EXEMPT BOND FUND Trust Shares 1997 4.15% 14.81% 1996 4.12% 60.02% 1995 4.23% 24.50% 1994(5) 3.71%* 25.90% Investor Shares 1997 3.62% 14.81% 1996 3.61% 60.02% 1995 3.73% 24.50% 1994(7) 2.42%* 25.90% Flex Shares 1997 2.88% 14.81% 1996(9) 2.66%* 60.02% * Annualized. + Returns are for the period indicated and have not been annualized. (1) Commenced operations on October 21, 1993 (2) Commenced operations on June 9, 1992. (3) Commenced operations on June 1, 1995. (4) Commenced operations on January 25, 1994. (5) Commenced operations on January 18, 1994. (6) Commenced operations on January 27, 1994. (7) Commenced operations on January 19, 1994. (8) Commenced operations on June 5, 1995. (9) Commenced operations on June 6, 1995. (A) Total return figures do not reflect applicable sales loads.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 126 & 127 FINANCIAL HIGHLIGHTS (continued) =============================================================================== STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET REALIZED AND NET UNREALIZED GAINS NET ASSET VALUE INVESTMENT (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM BEGINNING OF PERIOD INCOME (LOSS) ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS ------------------- ------------- ---------------- --------------------- ---------------------- INVESTMENT GRADE BOND FUND Trust Shares 1997 $10.07 $ 0.60 $ 0.09 $(0.60) $ -- 1996 10.26 0.60 (0.19) (0.60) -- 1995 9.89 0.61 0.37 (0.61) -- 1994 10.45 0.50 (0.36) (0.50) (0.20) 1993(1) 10.09 0.45 0.36 (0.45) -- Investor Shares 1997 $10.06 $ 0.56 $ 0.10 $(0.56) $ -- 1996 10.26 0.56 (0.20) (0.56) -- 1995 9.89 0.57 0.38 (0.58) -- 1994 10.44 0.46 (0.35) (0.46) (0.20) 1993(2) 10.00 0.44 0.44 (0.44) -- Flex Shares 1997 $10.07 $ 0.51 $ 0.10 $(0.51) $ -- 1996(3) 10.33 0.52 (0.26) (0.52) -- SHORT-TERM BOND FUND Trust Shares 1997 $ 9.86 $ 0.53 $ 0.07 $(0.53) $(0.03) 1996 9.98 0.54 (0.10) (0.54) (0.02) 1995 9.79 0.53 0.19 (0.53) -- 1994 10.01 0.42 (0.21) (0.42) (0.01) 1993(4) 10.00 0.08 0.01 (0.08) -- Investor Shares 1997 $ 9.88 $ 0.51 $ 0.06 $(0.51) $(0.03) 1996 10.01 0.52 (0.10) (0.53) (0.02) 1995 9.81 0.51 0.19 (0.50) -- 1994 10.03 0.40 (0.21) (0.40) (0.01) 1993(5) 10.06 0.06 (0.03) (0.06) -- Flex Shares 1997 $ 9.88 $ 0.48 $ 0.06 $(0.48) $(0.03) 1996(6) 10.02 0.47 (0.12) (0.47) (0.02) SHORT-TERM U.S. TREASURY SECURITIES FUND Trust Shares 1997 $ 9.84 $ 0.51 $ 0.04 $(0.51) $ -- 1996 9.93 0.55 (0.09) (0.55) -- 1995 9.82 0.47 0.11 (0.47) -- 1994 9.98 0.33 (0.11) (0.33) (0.05) 1993(4) 10.00 0.07 (0.02) (0.07) -- Investor Shares 1997 $ 9.84 $ 0.50 $ 0.04 $(0.50) $ -- 1996 9.94 0.54 (0.10) (0.54) -- 1995 9.83 0.46 0.11 (0.46) -- 1994 9.99 0.32 (0.12) (0.31) (0.05) 1993(7) 10.01 0.06 (0.02) (0.06) -- Flex Shares 1997 $ 9.82 $ 0.47 $ 0.03 $(0.47) $ -- 1996(8) 9.96 0.48 (0.14) (0.48) -- LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND Trust Shares 1997 $ 9.99 $ 0.58 $ 0.04 $(0.58) $(0.01) 1996 10.11 0.62 (0.14) (0.60) -- 1995(9) 10.00 0.58 0.13 (0.60) -- Investor Shares 1997 $ 9.97 $ 0.56 $ 0.04 $(0.56) $(0.01) 1996 10.11 0.60 (0.14) (0.60) -- 1995(10) 9.98 0.58 0.13 (0.58) -- Flex Shares 1997 $ 9.99 $ 0.52 $ 0.04 $(0.52) $(0.01) 1996(3) 10.14 0.55 (0.15) (0.55) -- RATIO OF RATIO OF EXPENSES TO NET ASSET NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS VALUE END TOTAL END OF EXPENSES TO INCOME TO (EXCLUDING WAIVERS OF PERIOD RETURN (A) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) --------- ---------- ------------ ------------------ ------------------ ------------------- INVESTMENT GRADE BOND FUND Trust Shares 1997 $10.16 6.99% $633,646 0.75% 5.89% 0.85% 1996 10.07 4.02% 599,514 0.75% 5.81% 0.87% 1995 10.26 10.39% 543,308 0.75% 6.22% 0.88% 1994 9.89 1.17% 460,538 0.75% 4.77% 0.88% 1993(1) 10.45 9.34%* 336,132 0.74%* 5.14%* 0.87%* Investor Shares 1997 $10.16 6.66% $ 33,165 1.15% 5.48% 1.41% 1996 10.06 3.50% 36,155 1.15% 5.40% 1.44% 1995 10.26 10.04% 33,772 1.15% 5.79% 1.49% 1994 9.89 0.86% 35,775 1.14% 4.39% 1.41% 1993(2) 10.44 9.21%* 24,375 1.14%* 4.75%* 1.46%* Flex Shares 1997 $10.17 6.16% $ 5,763 1.64% 5.00% 2.20% 1996(3) 10.07 2.50%* 4,621 1.64%* 4.84%* 2.49%* SHORT-TERM BOND FUND Trust Shares 1997 $ 9.90 6.30% $ 89,701 0.65% 5.37% 0.78% 1996 9.86 4.45% 91,156 0.65% 5.39% 0.81% 1995 9.98 7.60% 60,952 0.65% 5.49% 0.85% 1994 9.79 2.02% 34,772 0.65% 4.15% 0.85% 1993(4) 10.01 4.45%* 25,334 0.64%* 3.88%* 1.11%* Investor Shares 1997 $ 9.91 5.97% $ 2,182 0.85% 5.16% 1.58% 1996 9.88 4.23% 2,700 0.85% 5.20% 1.72% 1995 10.01 7.44% 2,609 0.85% 5.24% 1.56% 1994 9.81 1.81% 2,381 0.85% 3.94% 2.52% 1993(5) 10.03 1.65%* 716 0.85%* 3.85%* 7.22%* Flex Shares 1997 $ 9.91 5.62% $ 1,073 1.20% 4.82% 3.02% 1996(6) 9.88 3.73%* 966 1.20%* 4.77%* 4.06%* SHORT-TERM U.S. TREASURY SECURITIES FUND Trust Shares 1997 $ 9.88 5.76% $ 21,988 0.65% 5.23% 0.92% 1996 9.84 4.73% 10,149 0.65% 5.56% 1.00% 1995 9.93 6.11% 9,599 0.65% 4.91% 1.08% 1994 9.82 2.17% 12,723 0.65% 3.23% 0.81% 1993(4) 9.98 2.22%* 30,336 0.63%* 3.34%* 1.04%* Investor Shares 1997 $ 9.88 5.59% $ 3,921 0.80% 5.05% 1.35% 1996 9.84 4.52% 4,192 0.80% 5.43% 1.32% 1995 9.94 6.03% 7,144 0.80% 4.74% 1.33% 1994 9.83 2.01% 4,841 0.78% 3.11% 1.41% 1993(7) 9.99 1.84%* 2,423 0.80%* 3.16%* 3.42%* Flex Shares 1997 $ 9.85 5.19% $ 1,091 1.05% 4.75% 2.51% 1996(8) 9.82 3.72%* 2,423 1.05%* 5.03%* 2.97%* LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND Trust Shares 1997 $10.02 6.43% $123,903 0.65% 5.81% 0.78% 1996 9.99 4.84% 73,370 0.65% 6.04% 0.84% 1995(9) 10.11 7.50%+ 41,823 0.65%* 6.43%* 0.93%* Investor Shares 1997 $10.00 6.17% $ 2,426 0.90% 5.55% 1.48% 1996 9.97 4.59% 2,512 0.90% 5.75% 2.25% 1995(10) 10.11 7.45%+ 623 0.90%* 6.27%* 7.74%* Flex Shares 1997 $10.02 5.80% $ 1,409 1.25% 5.20% 2.66% 1996(3) 9.99 4.10%* 1,349 1.25%* 5.38%* 3.59%* NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS TURNOVER AND REIMBURSEMENTS) RATE ------------------- --------- INVESTMENT GRADE BOND FUND Trust Shares 1997 5.79% 297.82% 1996 5.69% 184.33% 1995 6.09% 237.66% 1994 4.64% 259.19% 1993(1) 5.01%* 299.32% Investor Shares 1997 5.22% 297.82% 1996 5.11% 184.33% 1995 5.45% 237.66% 1994 4.12% 259.19% 1993(2) 4.43%* 299.32% Flex Shares 1997 4.44% 297.82% 1996(3) 3.99%* 184.33% SHORT-TERM BOND FUND Trust Shares 1997 5.24% 117.83% 1996 5.23% 162.62% 1995 5.29% 200.49% 1994 3.95% 74.85% 1993(4) 3.41%* 63.89% Investor Shares 1997 4.43% 117.83% 1996 4.33% 162.62% 1995 4.53% 200.49% 1994 2.27% 74.85% 1993(5) (2.52%)* 63.89% Flex Shares 1997 3.00% 117.83% 1996(6) 1.91%* 162.62% SHORT-TERM U.S. TREASURY SECURITIES FUND Trust Shares 1997 4.96% 92.89% 1996 5.21% 94.00% 1995 4.48% 87.98% 1994 3.07% 116.57% 1993(4) 2.93%* 36.44% Investor Shares 1997 4.50% 92.89% 1996 4.91% 94.00% 1995 4.21% 87.98% 1994 2.48% 116.57% 1993(7) 0.54%* 36.44% Flex Shares 1997 3.29% 92.89% 1996(8) 3.11%* 94.00% LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND Trust Shares 1997 5.68% 133.45% 1996 5.85% 83.01% 1995(9) 6.15%* 67.63% Investor Shares 1997 4.97% 133.45% 1996 4.40% 83.01% 1995(10) (0.57%)* 67.63% Flex Shares 1997 3.79% 133.45% 1996(3) 3.04%* 83.01% * Annualized. + Returns are for the period indicated and have not been annualized. (1) Commenced operations on July 16, 1992. (2) Commenced operations on June 11, 1992. (3) Commenced operations on June 7, 1995. (4) Commenced operations on March 15, 1993. (5) Commenced operations on March 22, 1993. (6) Commenced operations on June 20, 1995. (7) Commenced operations on March 18, 1993. (8) Commenced operations on June 22, 1995. (9) Commenced operations on June 7, 1994. (10) Commenced operations on July 17, 1994.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 128 & 129 FINANCIAL HIGHLIGHTS (concluded) ================================================================================ STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET REALIZED AND NET UNREALIZED GAINS NET ASSET VALUE INVESTMENT (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM BEGINNING OF PERIOD INCOME ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS ------------------- ------------- ---------------- --------------------- ---------------------- U.S. GOVERNMENT SECURITIES FUND Trust Shares 1997 $ 9.91 $ 0.62 $ 0.11 $(0.62) $ -- 1996 10.27 0.62 (0.33) (0.62) (0.03) 1995(1) 9.98 0.53 0.29 (0.53) -- Investor Shares 1997 $ 9.90 $ 0.58 $ 0.12 $(0.58) $ -- 1996 10.26 0.59 (0.33) (0.59) (0.03) 1995(2) 10.00 0.56 0.26 (0.56) -- Flex Shares 1997 $ 9.91 $ 0.53 $ 0.11 $(0.53) $ -- 1996(3) 10.31 0.52 (0.37) (0.52) (0.03) PRIME QUALITY MONEY MARKET FUND Trust Shares 1997 $ 1.00 $ 0.05 $ -- $(0.05) $ -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.05 -- (0.05) -- 1994 1.00 0.03 -- (0.03) -- 1993(4) 1.00 0.03 -- (0.03) -- Investor Shares 1997 $ 1.00 $ 0.05 $ -- $(0.05) $ -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.05 -- (0.05) -- 1994 1.00 0.03 -- (0.03) -- 1993(4) 1.00 0.03 -- (0.03) -- U.S. GOVERNMENT SECURITIES MONEY MARKET FUND Trust Shares 1997 $ 1.00 $ 0.05 $ -- $(0.05) $ -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.05 -- (0.05) -- 1994 1.00 0.03 -- (0.03) -- 1993(4) 1.00 0.03 -- (0.03) -- Investor Shares 1997 $ 1.00 $ 0.05 $ -- $(0.05) $ -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.04 -- (0.04) -- 1994 1.00 0.03 -- (0.03) -- 1993(4) 1.00 0.03 -- (0.03) -- TAX-EXEMPT MONEY MARKET FUND Trust Shares 1997 $ 1.00 $ 0.03 $ -- $(0.03) $ -- 1996 1.00 0.03 -- (0.03) -- 1995 1.00 0.03 -- (0.03) -- 1994 1.00 0.02 -- (0.02) -- 1993(4) 1.00 0.02 -- (0.02) -- Investor Shares 1997 $ 1.00 $ 0.03 $ -- $(0.03) $ -- 1996 1.00 0.03 -- (0.03) -- 1995 1.00 0.03 -- (0.03) -- 1994 1.00 0.02 -- (0.02) -- 1993(4) 1.00 0.02 -- (0.02) -- RATIO OF RATIO OF EXPENSES TO NET ASSET NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS VALUE END TOTAL END OF EXPENSES TO INCOME TO (EXCLUDING WAIVERS OF PERIOD RETURN (A) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) --------- ---------- ------------ ------------------ ------------------ ------------------- U.S. GOVERNMENT SECURITIES FUND Trust Shares 1997 $10.02 7.54% $ 19,471 0.75% 6.19% 1.02% 1996 9.91 2.77% 10,277 0.75% 6.05% 1.25% 1995(1) 10.27 8.64%+ 3,291 0.75%* 6.67%* 3.33%* Investor Shares 1997 $10.02 7.21% $ 2,243 1.15% 5.76% 1.79% 1996 9.90 2.47% 2,396 1.15% 5.68% 2.50% 1995(2) 10.26 8.61%+ 589 1.15%* 6.08%* 6.84%* Flex Shares 1997 $10.02 6.57% $ 2,801 1.66% 5.26% 2.42% 1996(3) 9.91 1.42%* 2,826 1.66%* 5.18%* 2.86%* PRIME QUALITY MONEY MARKET FUND Trust Shares 1997 $ 1.00 5.01% $1,086,555 0.58% 4.90% 0.76% 1996 1.00 5.25% 1,050,800 0.58% 5.11% 0.78% 1995 1.00 4.79% 799,189 0.58% 4.77% 0.79% 1994 1.00 2.88% 583,399 0.58% 2.86% 0.79% 1993(4) 1.00 2.92%* 410,991 0.58%* 2.85%* 0.78%* Investor Shares 1997 $ 1.00 4.84% $ 283,544 0.75% 4.74% 0.97% 1996 1.00 5.08% 215,696 0.75% 4.94% 1.00% 1995 1.00 4.62% 157,616 0.75% 4.55% 1.01% 1994 1.00 2.71% 129,415 0.75% 2.67% 0.99% 1993(4) 1.00 2.75%* 61,578 0.75%* 2.68%* 1.02%* U.S. GOVERNMENT SECURITIES MONEY MARKET FUND Trust Shares 1997 $ 1.00 4.83% $ 344,350 0.61% 4.73% 0.76% 1996 1.00 5.14% 325,493 0.61% 5.02% 0.78% 1995 1.00 4.67% 434,111 0.61% 4.64% 0.80% 1994 1.00 2.77% 309,228 0.61% 2.69% 0.77% 1993(4) 1.00 2.79%* 453,567 0.61%* 2.71%* 0.78%* Investor Shares 1997 $ 1.00 4.69% $ 63,178 0.75% 4.59% 0.96% 1996 1.00 4.99% 58,608 0.75% 4.88% 0.99% 1995 1.00 4.51% 46,639 0.75% 4.51% 1.02% 1994 1.00 2.63% 32,395 0.75% 2.54% 0.97% 1993(4) 1.00 2.65%* 16,688 0.75%* 2.57%* 1.11%* TAX-EXEMPT MONEY MARKET FUND Trust Shares 1997 $ 1.00 3.09% $ 333,006 0.50% 3.04% 0.66% 1996 1.00 3.28% 273,613 0.50% 3.23% 0.68% 1995 1.00 3.10% 215,413 0.45% 3.12% 0.70% 1994 1.00 2.08% 143,982 0.42% 2.05% 0.71% 1993(4) 1.00 2.12%* 78,416 0.41%* 2.07%* 0.70%* Investor Shares 1997 $ 1.00 2.97% $ 102,013 0.62% 2.92% 0.83% 1996 1.00 3.16% 95,223 0.62% 3.10% 0.85% 1995 1.00 3.00% 87,647 0.55% 3.00% 0.87% 1994 1.00 1.96% 61,675 0.54% 1.93% 0.88% 1993(4) 1.00 2.00%* 35,209 0.53%* 1.95%* 0.95%* RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS TURNOVER AND REIMBURSEMENTS) RATE ------------------- --------- U.S. GOVERNMENT SECURITIES FUND Trust Shares 1997 5.92% 21.15% 1996 5.55% 83.38% 1995(1) 4.09%* 30.39% Investor Shares 1997 5.12% 21.15% 1996 4.33% 83.38% 1995(2) 0.39%* 30.39% Flex Shares 1997 4.50% 21.15% 1996(3) 3.98%* 83.38% PRIME QUALITY MONEY MARKET FUND Trust Shares 1997 4.72% -- 1996 4.91% -- 1995 4.56% -- 1994 2.65% -- 1993(4) 2.65%* -- Investor Shares 1997 4.52% -- 1996 4.69% -- 1995 4.29% -- 1994 2.43% -- 1993(4) 2.41%* -- U.S. GOVERNMENT SECURITIES MONEY MARKET FUND Trust Shares 1997 4.58% -- 1996 4.85% -- 1995 4.45% -- 1994 2.53% -- 1993(4) 2.54%* -- Investor Shares 1997 4.38% -- 1996 4.64% -- 1995 4.24% -- 1994 2.32% -- 1993(4) 2.21%* -- TAX-EXEMPT MONEY MARKET FUND Trust Shares 1997 2.88% -- 1996 3.05% -- 1995 2.87% -- 1994 1.76% -- 1993(4) 1.78%* -- Investor Shares 1997 2.71% -- 1996 2.87% -- 1995 2.68% -- 1994 1.59% -- 1993(4) 1.53%* -- * Annualized. + Returns are for the period indicated and have not been annualized. (A) Total Return figures do not reflect applicable sales loads. (1) Commenced operations on July 31, 1994. (2) Commenced operations on June 9, 1994. (3) Commenced operations on June 7, 1995. (4) Commenced operations on June 8, 1992.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 130 & 131 NOTES TO FINANCIAL STATEMENTS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 1. Organization: The STI Classic Funds (the "Trust") was organized as a Massachusetts Business Trust under a Declaration of Trust dated January 15, 1992. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with twenty-three portfolios: the Value Income Stock Fund, the Mid-Cap Equity Fund, the Small Cap Equity Fund, the Capital Growth Fund, the Balanced Fund, the Emerging Markets Equity Fund, the International Equity Index Fund, the International Equity Fund, the Sunbelt Equity Fund, the Investment Grade Tax-Exempt Bond Fund, the Florida Tax-Exempt Bond Fund, the Tennessee Tax-Exempt Bond Fund, the Georgia Tax-Exempt Bond Fund, the Investment Grade Bond Fund, the Short-Term Bond Fund, the Short-Term U.S. Treasury Securities Fund, the Limited-Term Federal Mortgage Securities Fund, and the U.S. Government Securities Fund, (collectively the "Non-Dollar Funds"), the Prime Quality Money Market Fund, the U.S. Government Securities Money Market Fund, the Tax-Exempt Money Market Fund, the Classic Institutional Cash Management Money Market Fund and the Classic Institutional U.S. Treasury Securities Money Market Fund, (collectively the "Money Market Funds"). The assets of each portfolio are segregated, and a shareholder's interest is limited to the Fund in which shares are held. Each Fund's prospectus provides a description of the Fund's investment objectives, policies and strategies. 2. Significant Accounting Policies: The following is a summary of significant accounting policies followed by the Trust. SECURITY VALUATION -- Investment securities held by the Money Market Funds are stated at amortized cost, which approximates market value. Investment securities held by the Non-Dollar Funds that are listed on a securities exchange for which market quotations are available are valued at the last quoted sales price each business day. If there is no such reported sale, these securities and unlisted securities for which market quotations are readily available are valued at the most recently quoted bid price. Foreign securities in the Emerging Markets Equity Fund, the International Equity Fund and the International Equity Index Fund are valued based upon quotations from the primary market in which they are traded. Debt obligations with sixty days or less remaining until maturity may be valued at their amortized cost. FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a regulated investment company for Federal income tax purposes and distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required. SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on the date the security is purchased or sold (trade date). Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Costs used in determining net realized gains and losses on the sales of investment securities are those of the specific securities sold adjusted for the accretion and amortization of purchase discounts and premiums during the respective holding period. Purchase discounts and premiums on securities held by the Money Market Funds are accreted and amortized ratably to maturity and are included in interest income. Purchase discounts and premiums on securities held by the Non-Dollar Funds are accreted and amortized to maturity using the scientific interest method, which approximates the effective interest method. REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default of the counterparty. If the counterparty defaults and the value of the collat- 132 ================================================================================ eral declines or if the counterparty enters into an insolvency proceeding, realization of the collateral by the Funds may be delayed or limited. NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is calculated each business day, by dividing the total value of each Fund's assets, less liabilities, by the number of shares outstanding. The maximum offering price per share for Investor shares of the Investment Grade Bond, the Investment Grade Tax-Exempt Bond, the Capital Growth, the Value Income Stock, the Sunbelt Equity, the Mid-Cap Equity, the Balanced, the Florida Tax-Exempt Bond, the Georgia Tax-Exempt Bond, the Tennessee Tax-Exempt Bond, the U.S. Government Securities, the International Equity, and the International Equity Index Funds is equal to the net asset value per share plus a sales load of 3.75%. The maximum offering price per share for Investor shares of the Short-Term U.S. Treasury Securities Fund is equal to the net asset value per share plus a sales load of 1.00%. The maximum offering price per share for Investor shares of the Short-Term Bond Fund is equal to the net asset value per share plus a sales load of 2.00%. The maximum offering price per share for Investor shares of the Limited-Term Federal Mortgage Securities Fund is equal to the net asset value per share plus a sales load of 2.50% Flex Shares of the Funds may be purchased at their net asset value. Shares redeemed within the first year after purchase will be subject to a contingent deferred sales charge ("CDSC") equal to 2.00% of the net asset value of the shares at the time of redemption. The CDSC will not apply to shares redeemed after such time. FOREIGN CURRENCY TRANSLATION -- The books and records of the Emerging Markets Equity, the International Equity and the International Equity Index Funds are maintained in U.S. dollars on the following basis: (I) market value of investment securities, assets and liabilities at the current rate of exchange; and (II) purchases and sales of investment securities, income and expenses at the relevant rates of exchange prevailing on the respective dates of such transactions. The Emerging Markets Equity, the International Equity and the International Equity Index Funds do not isolate that portion of gains and losses on investments in equity securities that is due to changes in the foreign exchange rates from that which is due to changes in market prices of equity securities. The Emerging Markets Equity, the International Equity and the International Equity Index Funds report certain foreign currency related transactions as components of realized and unrealized gains and losses for financial reporting purposes, whereas such components are treated as ordinary income for Federal income tax purposes. OTHER -- Expenses that are directly related to a specific Fund are charged to that Fund. Class specific expenses are borne by that class. Other operating expenses of the Trust are pro-rated to the Funds on the basis of relative net assets. Fund expenses are pro-rated to the respective classes on the basis of relative net assets. Distributions from net investment income of each of the Money Market Funds and the Investment Grade Bond, the Investment Grade Tax-Exempt Bond, the Short-Term U.S. Treasury Securities, the Short-Term Bond, the Florida Tax-Exempt Bond, the Georgia Tax-Exempt Bond, the Tennessee Tax-Exempt Bond, the U.S. Government Securities and the Limited-Term Federal Mortgage Securities Funds are declared each business day and paid to shareholders on 133 NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 a monthly basis. Distributions from net investment income are declared and paid each calendar quarter by the Capital Growth, the Value Income Stock, the Sunbelt Equity, the Mid-Cap Equity, the Small Cap Equity and the Balanced Funds. Distributions from net investment income are declared and paid annually by the Emerging Markets Equity, the International Equity and the International Equity Index Funds. Any net realized capital gains on sales of securities are distributed to shareholders at least annually. RECLASSIFICATION OF COMPONENTS OF NET ASSETS -- The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from generally accepted accounting principles. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital or accumulated net realized gain, as appropriate, in the period that the differences arise. Accordingly, the following permanent differences, primarily attributable to a net operating loss in the Sunbelt Equity Fund and the classification of short-term capital gains and ordinary income for tax purposes related to the other funds, have been reclassified to/from the following accounts: UNDISTRIBUTED ACCUMULATED NET INVESTMENT PAID-IN-CAPITAL REALIZED GAIN INCOME (000) (000) (000) --------------- ------------- -------------- Mid-Cap Equity Fund $-- $(207) $ 207 International Equity Index Fund -- (204) 204 International Equity Fund -- 83 (83) Sunbelt Equity Fund (2,967) -- 2,967 Short-Term Bond Fund -- (54) 54 These reclassifications have no effect on net assets or net asset values per share. USE OF ESTIMATES -- The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates. 3. Organization Costs and Transactions with Affiliates: The Trust incurred organization costs of approximately $808,836 including approximately $395,594 relating to state registration fees. These costs have been deferred in the accounts of the Funds and are being amortized on a straight line basis over a period of sixty months commencing with operations with the exception of state registration fees, which are being amortized over a period of twelve months. The costs include legal fees of approximately $60,383 for organizational work performed by a law firm of which two officers of the Trust are partners. On March 18, 1992, the Trust sold initial shares of beneficial interest to SEI Fund Resources (the "Administrator"). In the event any of the initial shares of the Trust are redeemed by any holder thereof during the period that the Trust is amortizing its organizational costs, the redemption proceeds payable to the holder thereof will be reduced by the unamortized organizational costs in the same ratio as the number of initial shares being redeemed bears to the number of initial shares outstanding at the time of redemption. Certain officers of the Trust are also officers of the Administrator and/or SEI Investments Distribution Co. (the "Distributor"). Such officers are paid no fees by the Trust for serving as officers of the Trust. 134 ================================================================================ 4. Administration, Transfer Agency Servicing and Distribution Agreements: The Trust and the Administrator are parties to an Administration Agreement dated May 29, 1995, under which the Administrator provides administrative services for an annual fee (expressed as a percentage of the combined average daily net assets of the Trust and STI Classic Variable Annuity Trust) of: .10% up to $1 billion, .07% on the next $4 billion, .05% on the next $3 billion, .045% on the next $2 billion and .04% for over $10 billion. The Trust and Federated Services Company are parties to a Transfer Agency servicing agreement dated May 14, 1994 under which Federated Services Company provides transfer agency services to the Trust. The Trust and the Distributor are parties to a Distribution Agreement dated May 29, 1995 regarding the Flex Shares and a Distribution Agreement dated November 21, 1995 with respect to the Trust and Investor shares. The Distributor will receive no fees for its distribution services under this agreement for the Trust Shares of any Fund. With respect to the Investor Shares and Flex Shares, the Distributor receives amounts, pursuant to a Distribution Plan and (in the case of Flex Shares) a Distribution and Service Plan, as outlined in the table in footnote 5 under the column titled "Distribution Fee". 5. Investment Advisory and Custodian Agreements: The Trust and STI Capital Management, N.A., ("STI Capital Management, N.A."), Trusco Capital Management ("Trusco"), the SunTrust Bank, Atlanta and SunTrust Bank, Chattanooga have entered into advisory agreements dated May 29, 1992, June 15, 1993, December 20, 1993 and December 20, 1993 respectively. Under terms of the respective agreements, the Funds are charged the following annual fees based upon average daily net assets: MAXIMUM FLEX SHARE MAXIMUM DISTRI- MAXIMUM TRUST INVESTOR INVESTOR BUTION FLEX ANNUAL SHARE SHARE SHARE AND SHARE ADVISORY MAXIMUM DISTRI- MAXIMUM SERVICE MAXIMUM FEE EXPENSE BUTION FEE EXPENSE FEE EXPENSE -------- ------- ---------- ------- -------- ------- TRUSCO: International Equity Index Fund* ....... .90% 1.05% .38% 1.45% 1.00% 2.10% Sunbelt Equity Fund ........ 1.15% 1.15% .43% 1.60% 1.00% 2.20% Short-Term Bond Fund ........ .65% .65% .23% .85% 1.00% 1.20% Short-Term U.S. Treasury Securities Fund ........ .65% .65% .18% .80% 1.00% 1.05% U.S. Government Securities Fund ........ .74% .75% .38% 1.15% 1.00% 1.66% Prime Quality Money Market Fund ........ .65% .58% .20% .75% -- -- U.S. Government Securities Money Market Fund ........ .65% .61% .17% .75% -- -- Tax-Exempt Money Market Fund ........ .55% .60% .15% .72% -- -- 135 NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 MAXIMUM FLEX SHARE MAXIMUM DISTRI- MAXIMUM TRUST INVESTOR INVESTOR BUTION FLEX ANNUAL SHARE SHARE SHARE AND SHARE ADVISORY MAXIMUM DISTRI- MAXIMUM SERVICE MAXIMUM FEE EXPENSE BUTION FEE EXPENSE FEE EXPENSE -------- ------- ---------- ------- -------- ------- STI CAPITAL MANAGEMENT, N.A.: Value Income Stock Fund .. .80% .95% .33% 1.30% 1.00% 2.00% Mid-Cap Equity Fund ........ 1.15% 1.15% .43% 1.60% 1.00% 2.20% Capital Growth Fund ........ 1.15% 1.15% .68% 1.80% 1.00% 2.27% Balanced Fund .95% .95% .28% 1.25% 1.00% 2.01% Small Cap Equity Fund . 1.15% 1.20% -- -- -- -- Investment Grade Tax-Exempt Bond Fund ... .74% .75% .43% 1.15% 1.00% 1.63% Florida Tax-Exempt Bond Fund ... .65% .65% .18% .85% 1.00% 1.35% Investment Grade Bond Fund ........ .74% .75% .43% 1.15% 1.00% 1.64% Limited-Term Federal Mortgage Securities Fund ........ .65% .65% .23% .90% 1.00% 1.25% International Equity Fund . 1.25% 1.46% .33% 1.81% 1.00% 2.51% Emerging Markets Equity Fund . 1.30% 1.55% -- -- -- -- SUNTRUST BANK, ATLANTA: Georgia Tax-Exempt Bond Fund ... .65% .65% .18% .85% 1.00% 1.35% SUNTRUST BANK, CHATTANOOGA: Tennessee Tax-Exempt Bond Fund ... .65% .65% .18% .85% 1.00% 1.35% - ----------------- *Trusco and SunBank serve as joint advisors to the International Equity Index Fund. The Investment Advisors, the Administrator and the Distributor have voluntarily agreed to waive all or a portion of their fees (and to reimburse Funds' expenses) in order to limit operating expenses to an amount as outlined in the table above. Fee waivers and expense reimbursements are voluntary and may be terminated at any time. SunTrust Bank, Atlanta, formerly Trust Company Bank, acts as custodian for all the Funds except the Emerging Markets Equity, the International Equity and the International Equity Index Funds who utilize the Bank of New York as custodian. Fees of the Custodians are paid on the basis of the net assets of the Funds. The Custodians play no role in determining the investment policies of the Trust or which securities are to be purchased or sold in the Funds. 6. Investment Transactions: The cost of purchases and the proceeds from sales of securities, excluding short-term investments and U.S. Government Securities, for the period ended May 31, 1997, were as follows: PURCHASES SALES (000) (000) ----------- --------- Value Income Stock Fund ....................... $1,510,065 $1,479,214 Mid-Cap Equity Fund ........................... 418,847 401,422 Small Cap Equity Fund ......................... 138,246 20,448 Capital Growth Fund ........................... 1,613,504 1,785,362 Balanced Fund ................................. 162,679 134,261 Emerging Markets Equity Fund .................. 39,912 6,023 International Equity Index Fund ............... 1,316 43,227 International Equity Fund ..................... 683,881 480,728 Sunbelt Equity Fund ........................... 297,705 337,710 Investment Grade Tax-Exempt Bond Fund ......... 737,733 729,258 Florida Tax-Exempt Bond Fund .................. 69,939 56,743 Tennessee Tax-Exempt Bond Fund ................ 858 814 Georgia Tax-Exempt Bond Fund .................. 18,954 5,152 Investment Grade Bond Fund .................... 833,857 550,764 Short-Term Bond Fund .......................... 57,688 42,957 Short-Term U.S. Treasury Securities Fund ...... -- -- Limited-Term Federal Mortgage Securities Fund . -- -- U.S. Government Securities Fund ............... -- -- The cost of purchases and proceeds from sales of U.S. Government Securities were: PURCHASES SALES (000) (000) ----------- --------- Value Income Stock Fund ............... $ -- $ -- Mid-Cap Equity Fund ................... -- -- Small Cap Equity Fund ................. -- -- Capital Growth Fund ................... -- -- Balanced Fund ......................... 79,476 93,071 Emerging Markets Equity Fund .......... -- -- International Equity Index Fund ....... -- -- International Equity Fund ............. -- -- Sunbelt Equity Fund ................... -- -- Investment Grade Tax-Exempt Bond Fund . -- -- Florida Tax-Exempt Bond Fund .......... -- -- Tennessee Tax-Exempt Bond Fund ........ -- -- Georgia Tax-Exempt Bond Fund .......... -- -- 136 =============================================================================== PURCHASES SALES (000) (000) ----------- --------- Investment Grade Bond Fund ................. $1,016,624 $1,283,246 Short-Term Bond Fund ....................... 49,756 70,593 Short-Term U.S. Treasury Securities Fund ... 32,074 21,455 Limited-Term Federal Mortgage Securities Fund ......................... 187,177 136,508 U.S. Government Securities Fund ............ 12,660 4,083 At May 31, 1997, the total cost of securities and the net realized gains or losses on securities sold for Federal income tax purposes were not materially different from amounts reported for financial reporting purposes. The aggregate gross unrealized appreciation and depreciation for securities held by the Funds at May 31, 1997, were as follows: VALUE INCOME MID-CAP SMALL CAP CAPITAL STOCK EQUITY EQUITY GROWTH FUND FUND FUND FUND (000) (000) (000) (000) ------------ ------ --------- ------- Aggregate gross unrealized appreciation ......... $181,099 $36,213 $8,808 $201,727 Aggregate gross unrealized depreciation ......... (26,682) (10,378) (1,164) (20,916) -------- ------- ------ ------- Net unrealized appreciation $154,417 $25,835 $7,644 $180,811 ======== ======= ====== ======= EMERGING INTERNATIONAL INTERNATIONAL SUNBELT BALANCED MARKETS EQUITY EQUITY EQUITY FUND EQUITY FUND INDEX FUND FUND FUND (000) (000) (000) (000) (000) -------- ----------- ------------- ------------- ------- Aggregate gross unrealized appreciation .. $13,349 $3,401 $12,670 $69,379 $94,010 Aggregate gross unrealized depreciation .. (1,442) (1,293) (4,169) (4,549) (12,447) ------- ------ ------- ------- ------- Net unrealized appreciation .. $11,907 $2,108 $ 8,501 $64,830 $81,563 ======= ====== ======= ======= ======= INVESTMENT GRADE TAX-EXEMPT FLORIDA TENNESSEE BOND TAX-EXEMPT TAX-EXEMPT FUND BOND FUND BOND FUND (000) (000) (000) ----------- ---------- ----------- Aggregate gross unrealized appreciation $1,557 $843 $132 Aggregate gross unrealized depreciation (84) (43) (12) ------ ---- ---- Net unrealized appreciation .......... $1,473 $800 $120 ====== ==== ==== INVESTMENT GEORGIA GRADE SHORT- TAX-EXEMPT BOND TERM BOND FUND FUND FUND (000) (000) (000) ---------- --------- ---------- Aggregate gross unrealized appreciation $425 $3,182 $ 172 Aggregate gross unrealized depreciation (123) (2,877) (473) ---- ------ ----- Net unrealized appreciation/(depreciation) $302 $ 305 $(301) ==== ====== ===== SHORT- LIMITED- TERM TERM U.S. FEDERAL U.S. TREASURY MORTGAGE GOVERNMENT SECURITIES SECURITIES SECURITIES FUND FUND FUND (000) (000) (000) ---------- ---------- ---------- Aggregate gross unrealized appreciation $ 23 $ 268 $ 85 Aggregate gross unrealized depreciation (53) (413) (299) ---- ----- ----- Net unrealized appreciation/(depreciation) $(30) $(145) $(214) ==== ===== ===== Subsequent to October 31, 1996, the Funds recognized net capital losses for tax purposes that have been deferred to 1997 and can be used to offset future capital gains at May 31, 1997. The Funds also had capital loss carryforwards at May 31, 1997 as follows: CAPITAL LOSS POST CARRYOVER EXPIRES EXPIRES EXPIRES EXPIRES 10/31 5/31/97 2002 2003 2004 2005 DEFERRAL FUND (000) (000) (000) (000) (000) (000) ------------ ------- ------- ------- ------- -------- Florida Tax-Exempt Bond Fund $ 127 $-- $ -- $-- $ 127 $ 83 Tennessee Tax Exempt Bond Fund 12 -- -- -- 12 -- Investment Grade Bond Fund 10,613 -- 6,388 -- 4,225 -- Short-Term Bond Fund 137 -- -- -- 137 120 Short-Term U.S. Treasury Securities Fund 232 -- 203 29 -- 26 Limited-Term Federal Mortgage Securities Fund -- -- -- -- -- 28 U.S. Government Securities Fund 31 -- -- -- 31 20 Prime Quality Money Market Fund 379 3 173 -- 203 -- U.S. Government Securities Money Market Fund 62 -- 11 -- 51 -- Tax-Exempt Money Market Fund 4 -- -- 4 -- -- For tax purposes, the losses in the Funds can be carried forward for a maximum of eight years to offset any net realized capital gains. 137 NOTES TO FINANCIAL STATEMENTS (concluded) ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 7. Concentration of Credit Risk: The Prime Quality Money Market Fund invests primarily in high quality money market instruments rated in the highest short-term rating category by Standard & Poor's Ratings Group ("S&P") or Moody's Investors Services, Inc. ("Moody's") or, if not rated, are determined by the Advisor to be of comparable quality. The U.S. Government Securities Money Market Fund invests exclusively in U.S. Treasury obligations, U.S. Government subsidiary corporation securities which are backed by the full faith and credit of the U.S. Government and repurchase agreements with approved dealers collateralized by U.S. Treasury securities and U.S. Government subsidiary corporation securities. The Tax-Exempt Money Market Fund invests in high quality, U.S. dollar denominated municipal securities rated in one of the two highest short-term rating categories or, if not rated, are determined by the Advisor to be of comparable quality. The Investment Grade Bond Fund, the Short-Term Bond Fund and the Balanced Fund invest primarily in investment grade obligations rated at least BBB or better by S&P or Baa or better by Moody's or, if not rated, are determined by the Advisor to be of comparable quality. The Investment Grade Tax-Exempt Fund invests primarily in investment grade municipal securities. Municipal securities must be rated BBB or better by S&P or Baa or better by Moody's in the case of bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case of notes; A-1, A-2 or P-1, P-2 in the case of commercial paper; and VMIG-1, VMIG-2 in the case of variable rate demand obligations. The Short-Term U.S. Treasury Securities Fund invests exclusively in obligations issued by the U.S. Treasury with a maximum remaining maturity of 3 years or less. The Florida Tax-Exempt Bond Fund, the Georgia Tax-Exempt Bond Fund, and the Tennessee Tax-Exempt Bond Fund invest primarily in municipal bonds concentrated in each of their respective states. Municipal securities must be rated BBB or better by S&P or Baa or better by Moody's in the case of bonds; A-1, A-2 or P-1, P-2 in the case of tax-exempt commercial paper; and VMIG-1, VMIG-2 in the case of variable rate demand obligations. The U.S. Government Securities Fund invests primarily in obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities, including mortgage backed securities. The Limited-Term Federal Mortgage Securities Fund invests in mortgage related securities issued or guaranteed by U.S. Government agencies. Up to 35% of the U.S. Government Securities Fund and the Limited-Term Federal Mortgage Securities Fund may be invested in corporate, or government bonds that carry a rating of BBB or better by S&P or Baa or better by Moody's. The ability of the issuers of the securities held by the Funds to meet their obligations may be affected by economic developments in a specific industry, state or region, or by changing business conditions. 8. Consent of Sole Shareholder: On December 30, 1996, the sole shareholder of the Emerging Markets Equity Fund and Small Cap Equity Fund (the "Funds") approved the following: SEI Fund Resources as administrator of the Funds, STI Capital Management, N.A. as investment advisor to the assets of the Funds, SEI Investments Distribution Co. as distributor of the shares of the Funds, the Distribution and Service Plan for Flex Shares, the Distribution Plan for Investor Shares, and Arthur Andersen LLP as independent public accountants of the Funds. 138 NOTICE TO SHAREHOLDERS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 UNAUDITED For shareholders that do not have a May 31, 1997 tax year end, this notice is for informational purposes only. For shareholders with a May 31, 1997 tax year end, please consult your tax advisor as to the pertinence of this notice. For the fiscal year ended May 31, 1997, each portfolio is designating the following items with regard to distributions paid during the year:
(A)* (B)* (C) LONG TERM ORDINARY CAPITAL GAINS INCOME TOTAL DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS FUND (TAX BASIS) (TAX BASIS) (TAX BASIS) - -------- ------------- ------------- ------------- Value Income Stock 31.66% 68.34% 100% Mid-Cap Equity 53.39% 46.61% 100% Small Cap Equity 0% 100% 100% Capital Growth 36.04% 63.96% 100% Balanced 28.88% 71.12% 100% Emerging Markets Equity 0% 0% 0% International Equity Index 68.28% 31.72% 100% International Equity 0% 100% 100% Sunbelt Equity 78.18% 21.82% 100% Investment Grade Tax-Exempt Bond .90% 99.10% 100% Florida Tax-Exempt Bond 2.50% 97.50% 100% Tennessee Tax-Exempt Bond 0% 100% 100% Georgia Tax-Exempt Bond 6.68% 93.32% 100% Investment Grade Bond 0% 100% 100% Short-Term Bond 0% 100% 100% Short-Term U.S. Treasury Securities 0% 100% 100% Limited-Term Federal Mortgage Securities 1.81% 98.19% 100% U.S. Government Securities 0% 100% 100% Prime Quality Money Market 0% 100% 100% U.S. Government Securities Money Market 0% 100% 100% Tax-Exempt Money Market 0% 100% 100% (D)** (E)*** QUALIFYING TAX-EXEMPT FUND DIVIDENDS(1) INTEREST - -------- ------------ ---------- Value Income Stock 24.34% 0% Mid-Cap Equity 17.39% 0% Small Cap Equity 100% 0% Capital Growth 9.03% 0% Balanced 8.08% 0% Emerging Markets Equity 0% 0% International Equity Index 0% 0% International Equity 0% 0% Sunbelt Equity 0% 0% Investment Grade Tax-Exempt Bond 0% 65.39% Florida Tax-Exempt Bond 0% 94.61% Tennessee Tax-Exempt Bond 0% 92.09% Georgia Tax-Exempt Bond 0% 93.94% Investment Grade Bond 0% 0% Short-Term Bond 0% 0% Short-Term U.S. Treasury Securities 0% 0% Limited-Term Federal Mortgage Securities 0% 0% U.S. Government Securities 0% 0% Prime Quality Money Market 0% 0% U.S. Government Securities Money Market 0% 0% Tax-Exempt Money Market 0% 99.44% - ------------------ (1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction. * Items (A) and (B) are based on a percentage of each fund's total distributions. ** Item (D) is based on the net income of the fund. *** Item (E) is based on the ordinary income distributions of the fund.
139 NOTICE TO SHAREHOLDERS =============================================================================== STI CLASSIC FUNDS MAY 31, 1997 FOR TAXPAYERS FILING ON A CALENDAR YEAR BASIS, THIS NOTICE IS FOR INFORMATIONAL PURPOSES ONLY. The STI Classic International Equity Index Fund and STI Classic International Equity Fund have made an election under section 853 of the Internal Revenue Code (the "Code") to provide a foreign tax deduction or credit to their shareholders for the fiscal year ended May 31, 1997. The information provided below is pertinent to taxpayers who meet the following two criteria: 1) file a U.S. Federal Income Tax Return and 2) held shares of the Fund on the dividend record date of December 30, 1996 and satisfy the applicable requirements of the Code. The amount per share of income from, and foreign taxes paid to, each country is listed in the following schedule:
STI CLASSIC INTERNATIONAL EQUITY INDEX FUND TRUST SHARES INVESTOR SHARES FLEX SHARES GROSS FOREIGN GROSS FOREIGN GROSS FOREIGN COUNTRY DIVIDEND TAXES PAID DIVIDEND TAXES PAID DIVIDEND TAXES PAID - ------ -------- ---------- -------- ---------- -------- ---------- Australia 0.0018 0.0003 0.0012 0.0003 0.0004 0.0003 Austria 0.0059 0.0004 0.0037 0.0004 0.0005 0.0004 Belgium 0.0054 0.0015 0.0039 0.0015 0.0016 0.0015 Denmark 0.0014 0.0004 0.0010 0.0004 0.0004 0.0004 Finland 0.0014 0.0004 0.0010 0.0004 0.0004 0.0004 France 0.0216 0.0076 0.0162 0.0076 0.0080 0.0076 Germany 0.0197 0.0028 0.0131 0.0028 0.0033 0.0028 Hong Kong 0.0018 0.0000 0.0011 0.0000 0.0001 0.0000 Italy 0.0113 0.0028 0.0080 0.0028 0.0030 0.0028 Japan 0.0186 0.0053 0.0134 0.0053 0.0057 0.0053 Netherlands 0.0068 0.0019 0.0049 0.0019 0.0020 0.0019 Norway 0.0016 0.0005 0.0012 0.0005 0.0005 0.0005 Spain 0.0113 0.0031 0.0081 0.0031 0.0033 0.0031 Sweden 0.0028 0.0008 0.0020 0.0008 0.0009 0.0008 Switzerland 0.0027 0.0004 0.0018 0.0004 0.0005 0.0004 United Kingdom 0.0290 0.0082 0.0209 0.0082 0.0088 0.0082 United States 0.0017 0.0000 0.0010 0.0000 0.0000 0.0000 ------ ------ ------ ------ ------ ------ 0.1448 0.0364 0.1025 0.0364 0.0394 0.0364
Please consult your tax advisor for proper treatment of this information. 140 ================================================================================ UNAUDITED FOR TAXPAYERS FILING ON A CALENDAR YEAR BASIS, THIS NOTICE IS FOR INFORMATIONAL PURPOSES ONLY. The amount per share of income from and foreign taxes paid to each country is listed in the following schedule: STI CLASSIC INTERNATIONAL EQUITY FUND TRUST SHARES GROSS FOREIGN COUNTRY DIVIDEND TAXES PAID ------ -------- ---------- Argentina 0.0003 0.0000 Australia 0.0012 0.0002 Brazil 0.0001 0.0000 Canada 0.0016 0.0008 Chile 0.0001 0.0001 Denmark 0.0002 0.0001 Finland 0.0027 0.0014 France 0.0026 0.0017 Germany 0.0016 0.0008 Hong Kong 0.0016 0.0000 Indonesia 0.0005 0.0003 Italy 0.0021 0.0012 Japan 0.0022 0.0011 Mexico 0.0004 0.0000 Netherlands 0.0059 0.0031 New Zealand 0.0005 0.0003 Panama 0.0003 0.0000 Peru 0.0004 0.0000 Singapore 0.0011 0.0007 South Africa 0.0003 0.0000 Spain 0.0017 0.0009 Sweden 0.0040 0.0021 Switzerland 0.0015 0.0007 United Kingdom 0.0037 0.0018 United States 0.0030 0.0000 ------ ------ 0.0396 0.0173 Please consult your tax advisor for proper treatment of this information. 141 NOTES NOTES NOTES INVESTMENT ADVISORS STI Capital Management, N.A. Trusco Capital Management, Inc. SunTrust Bank, Chattanooga, N.A. SunTrust Bank, Atlanta STI Classic Funds are not deposits, are not insured or guaranteed by the FDIC or any other government agency, and are not endorsed by and do not constitute obligations of SunTrust Banks, Inc. or any other of its affiliates. Investment in the Funds involves risk, including the possible loss of principal. There is no guarantee that any STI Classic Fund will achieve its investment objective. The STI Classic Funds are advised by affiliates of SunTrust Banks, Inc. DISTRIBUTOR SEI Investments Distribution Co. This information must be preceded or accompanied by a current prospectus for each Fund described. ANNUAL ................................................................................ FINANCIAL REPORT ................................................................................ STI CLASSIC FUNDS ................................................................................ A Family of Mutual Funds ................................................................................ CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND May 31, 1997 [Logo Omitted] REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and Board of Trustees of STI Classic Funds: We have audited the accompanying statements of net assets of the Classic Institutional Cash Management Money Market Fund and the statements of assets and liabilities, including the schedule of investments, of the Classic Institutional U.S. Treasury Securities Money Market Fund of STI Classic Funds (the "Trust") as of May 31, 1997, and the related statements of operations, changes in net assets, and financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Trust'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 May 31, 1997, by correspondence with the custodian and the application of alternative auditing procedures with respect to unsettled securities transactions. 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 the Classic Institutional Cash Management Money Market Fund and Classic Institutional U.S. Treasury Securities Money Market Fund of STI Classic Funds as of May 31, 1997, the results of their operations, changes in their net assets, and financial highlights for the periods presented, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Philadelphia, PA July 11, 1997 1 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- COMMERCIAL PAPER (70.0%) A1 Credit 5.640%, 06/02/97 $13,000 $12,998 American Express 5.500%, 08/28/97 500 493 Banc One Funding 5.620%, 07/21/97 4,000 3,969 5.680%, 08/14/97 3,811 3,767 Bank of America Toronto, Yankee 5.730%, 07/31/97 5,500 5,500 Bank of Montreal 5.520%, 07/01/97 10,000 9,954 Bank of New York 5.500%, 06/02/97 3,350 3,350 Bankers Trust 5.500%, 11/17/97 200 195 BAT Capital 5.530%, 06/24/97 10,000 9,965 Bell Atlantic Network Funding 5.600%, 06/12/97 1,000 998 Campbell Soup 5.550%, 07/07/97 2,550 2,536 Cargill Global Funding 5.550%, 06/16/97 5,000 4,988 5.820%, 11/25/97 500 486 Caterpillar Financial Services 5.600%, 09/11/97 4,915 4,837 Dean Witter Discover 5.640%, 08/01/97 6,000 5,943 Dominion Semiconductor 5.650%, 06/03/97 5,000 4,998 5.570%, 06/11/97 5,000 4,992 Dresser Industries 5.550%, 06/30/97 10,000 9,955 Ford Motor Credit 5.520%, 06/24/97 835 832 5.600%, 06/27/97 1,000 996 5.640%, 07/21/97 5,000 4,961 Gannett 5.520%, 06/17/97 4,775 4,763 General Electric Capital 5.400%, 06/02/97 500 500 5.700%, 06/30/97 1,000 995 5.630%, 09/25/97 1,000 982 Golden Peanut 5.400%, 07/15/97 250 248 GTE Funding 5.510%, 06/05/97 3,500 3,498 5.510%, 06/06/97 5,350 5,346 5.530%, 06/17/97 3,000 2,993 Hertz 5.620%, 07/25/97 8,500 8,428 IBM Credit 5.550%, 06/09/97 7,717 7,708 5.550%, 06/19/97 5,000 4,987 John Hancock Capital 5.600%, 06/26/97 9,375 9,339 Marsh & Mclennan 5.700%, 09/05/97 2,393 2,357 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Metlife Funding 5.530%, 07/11/97 $ 2,203 $ 2,189 Monongahela Power 5.700%, 06/02/97 6,320 6,319 National Australia Funding 5.550%, 06/02/97 12,000 11,998 5.430%, 08/13/97 250 247 National City Credit 5.650%, 07/28/97 2,000 1,982 5.665%, 08/21/97 5,000 4,936 New England Power 5.550%, 06/04/97 2,300 2,299 5.520%, 06/06/97 5,550 5,546 5.540%, 06/12/97 2,123 2,119 Pactel Capital Resources 5.510%, 06/23/97 7,000 6,976 Philip Morris 5.700%, 06/02/97 8,000 7,999 5.550%, 06/06/97 1,505 1,504 5.550%, 06/09/97 1,275 1,273 5.550%, 06/18/97 1,240 1,237 Potomac Electric Power 5.600%, 06/06/97 9,360 9,353 Progress Capital 5.520%, 06/09/97 8,798 8,787 5.550%, 06/20/97 1,271 1,267 Royal Bank Canada 5.580%, 07/15/97 3,010 2,989 RTZ America 5.370%, 06/16/97 250 249 5.550%, 06/25/97 250 249 5.570%, 07/08/97 800 795 Sherwin Williams 5.550%, 06/18/97 5,000 4,987 Societe Generale North America 5.500%, 09/10/97 200 197 Sony Capital 5.650%, 06/02/97 4,400 4,399 South Carolina Fuel 5.510%, 06/20/97 4,435 4,422 Southern New England Telcommunications 5.580%, 06/11/97 1,157 1,155 Transamerica Finance 5.650%, 06/02/97 7,500 7,499 5.520%, 06/12/97 5,000 4,992 5.530%, 06/13/97 700 699 U.S. Borax 5.370%, 06/16/97 250 249 5.600%, 07/01/97 2,000 1,991 5.650%, 07/16/97 1,600 1,589 Union Bank Of Switzerland Finance 5.750%, 06/02/97 1,000 1,000 Virgina Electric & Power 5.650%, 07/16/97 2,000 1,986 Waste Management Technologies 5.580%, 06/24/97 3,000 2,989 5.650%, 06/27/97 2,770 2,759 2 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND--CONCLUDED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Xerox Credit 5.520%, 06/12/97 $1,985 $ 1,982 5.510%, 06/24/97 5,100 5,082 -------- Total Commercial Paper (Cost $277,147) 277,147 -------- MUNICIPAL BONDS (0.3%) Compton Community, Redevelopment Agency, Series 1995B, RB (FSA) 6.150%, 08/01/97 1,000 1,000 -------- Total Municipal Bonds (Cost $1,000) 1,000 -------- CORPORATE OBLIGATIONS (5.2%) Associates Corporation of North America 6.750%, 06/13/97 3,000 3,001 8.625%, 06/15/97 500 500 Beneficial MTN 6.850%, 11/19/97 1,500 1,506 6.860%, 11/19/97 2,200 2,209 BP America 8.875%, 12/01/97 200 203 Dow Capital 5.750%, 09/15/97 500 500 FCC National Bank (A) 5.640%, 05/08/98 3,000 2,999 Federal National Mortgage Association MTN 6.520%, 09/08/97 500 501 6.520%, 09/15/97 900 901 First Chicago MTN 11.150%, 10/31/97 1,700 1,735 Household Finance 7.750%, 06/15/97 2,250 2,251 6.250%, 10/15/97 1,000 1,001 Morgan Guaranty Trust 5.950%, 06/06/97 200 200 Teco Energy MTN 9.250%, 06/16/97 3,000 3,004 -------- Total Corporate Obligations (Cost $20,511) 20,511 -------- CERTIFICATES OF DEPOSIT (4.8%) Bankers Trust Toronto 5.690%, 08/21/97 4,000 4,000 Societe Generale Yankee 5.690%, 08/22/97 5,000 5,000 Swiss Bank, Yankee 5.530%, 06/30/97 10,000 10,000 -------- Total Certificates Of Deposit (Cost $19,000) 19,000 -------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- ASSET-BACKED SECURITIES (1.0%) Americredit Auto Receivables Trust, 1997-B, Cl A 5.790%, 06/12/98 $ 4,000 $ 4,000 -------- Total Asset-Backed Securities (Cost $4,000) 4,000 -------- REPURCHASE AGREEMENTS (21.3%) Deutsche Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $76,220,749 (collateralized by various FHLMC obligations, total par value $94,382,160, 0.000%-6.630%, 05/15/08- 09/01/26; FNMA obligation, par value $21,264,738, 0.000%, 01/01/26: total market value $77,708,900) 76,185 76,185 Salomon Brothers 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $8,072,554 (collateralized by various FHLMC obligations, total par value $9,465,582, 6.014%-8.500%, 07/01/02- 11/01/26; various FNMA obligations, total par value $20,886,794, 5.500%-9.000%, 04/01/98-05/01/26: total market value $8,294,005) 8,069 8,069 -------- Total Repurchase Agreements (Cost $84,254) 84,254 -------- Total Investments (102.6%) (Cost $405,912) 405,912 -------- OTHER ASSETS AND LIABILITIES, NET (-2.6%) (10,239) -------- NET ASSETS: Fund shares of the Institutional Shares (unlimited authorization -- no par value) based on 395,673,180 outstanding shares of beneficial interest 395,673 -------- Total Net Assets (100.0%) $395,673 ======== Net Asset Value, Offering and Redemption Price Per Share -- Institutional Shares $ 1.00 ======== Cl Class FHLMC Federal Home Loan Mortgage Corporation FNMA Federal National Mortgage Association FSA Security insured by Financial Security Assurance MTN Medium Term Note RB Revenue Bond (A) Variable rate security. The rate reported on the Statement of Net Assets is the rate in effect on May 31, 1997. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 3 SCHEDULE OF INVESTMENTS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND - ------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------- TREASURY NOTE (4.9%) U.S. Treasury Note 5.750%, 10/31/97 $1,000 $1,000 ------ Total Treasury Note (Cost $1,000) 1,000 ------ REPURCHASE AGREEMENTS (71.1%) Deutsche Bank 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,031,851 (collateralized by U.S. Treasury Bill, par value $948,000, 0.000%, 07/31/97; U.S. Treasury Note, par value $111,000, 5.125%, 12/31/98: total maket value $1,052,006) 1,031 1,031 Merrill Lynch 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,995 (collateralized by U.S. Government STRIPS, total par value $1,995,661, 0.000%, 05/15/02-11/15/14: total market value $1,021,320) 1,001 1,001 Barclays 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $4,677,964 (collateralized by U.S. Treasury Bill, par value $4,955,000, 0.000%, 02/05/98: market value $4,770,173) 4,676 4,676 Morgan Stanley 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,458 (collateralized by U.S. Treasury Note, par value $990,000, 7.25%, 05/15/04: market value $1,021,442) 1,000 1,000 - ----------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------- Salomon Brothers 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,458 (collateralized by various U.S. Treasury Notes, total par value $1,005,000, 6.125%-8.875%, 11/15/97- 07/31/00: total market value $1,022,745) $1,000 $ 1,000 Swiss Bank 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $4,678,206 (collateralized by U.S. Treasury Bond, par value $4,565,000, 7.250%, 08/15/22; U.S. Treasury Note, par value $25,000, 5.875%, 06/30/00: total market value $4,777,310) 4,676 4,676 Union Bank of Switzerland 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,458 (collateralized by U.S. Treasury Note, par value 1,030,000, 5.875%, 11/15/99: market value $1,021,198) 1,000 1,000 ------- Total Repurchase Agreements (Cost $14,384) 14,384 ------- Total Investments (76.0% of Net Assets) (Cost $15,384) $15,384 ======= STRIPS Separately Traded Registered Interest and Principal Security THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 4 STATEMENT OF ASSETS AND LIABILITIES (000) ================================================================================ STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1997
CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND ---------------- Assets: Investments at market value (Cost $15,384) ................................................. $15,384 Receivables for investment securities sold ................................................. 4,951 Other assets ............................................................................... 120 ------- Total Assets ............................................................................... 20,455 ------- Liabilities: Accrued expenses ........................................................................... 26 Distribution payable ....................................................................... 101 Other liabilities .......................................................................... 90 ------- Total Liabilities 217 ------- Net Assets: Fund Shares of the Institutional Shares (unlimited authorization -- no par value) based on 20,238,609 outstanding shares of beneficial interest ............................ 20,239 Accumulated net realized loss on investments ............................................... (1) ------- Total Net Assets ........................................................................... $20,238 ======= Net Asset Value, Offering Price and Redemption Price Per Share -- Institutional Shares ........ $ 1.00 =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 5
STATEMENT OF OPERATIONS (000) =========================================================================================================================== STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1997 CLASSIC CLASSIC INSTITUTIONAL INSTITUTIONAL CASH MANAGEMENT U.S. TREASURY MONEY MARKET SECURITIES MONEY FUND MARKET FUND -------------- -------------- 12/12/96*- 12/12/96*- 05/31/97 05/31/97 ---------- -------- Income: Interest Income ............................................................ $2,784 $491 Expenses: Investment Advisory Fees ................................................... 100 18 Investment Advisory Fees Waived ............................................ (100) (18) Contribution from Advisor .................................................. (131) (20) Administrator Fees ......................................................... 33 6 Registration Fees .......................................................... 108 3 Transfer Agent Fees ........................................................ 8 8 Printing Fees .............................................................. 3 3 Amortization of Deferred Organizational Costs .............................. 8 8 ------ ---- Total Expenses ............................................................. 29 8 ------ ---- Net Investment Income ......................................................... 2,755 483 ------ ---- Net Realized Loss on Securities Sold .......................................... -- (1) ------ ---- Increase in Net Assets Resulting from Operations .............................. $2,755 $482 ====== ==== *Commencement of Operations Amounts designated as "--" are either $0 or round to $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
6
STATEMENT OF CHANGES IN NET ASSETS (000) =========================================================================================================================== STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1997 CLASSIC CLASSIC INSTITUTIONAL INSTITUTIONAL CASH MANAGEMENT U.S. TREASURY MONEY MARKET SECURITIES MONEY FUND MARKET FUND -------------- -------------- 12/12/96*- 12/12/96*- 05/31/97 05/31/97 ---------- -------- Operations: Net Investment Income ........................................ $ 2,755 $ 483 Net Realized Loss on Securities Sold ......................... -- (1) --------- -------- Increase in Net Assets Resulting from Operations ........... 2,755 482 --------- -------- Distributions to Shareholders: Net Investment Income ...................................... (2,755) (483) Capital Gains .............................................. -- -- --------- -------- Total Distributions .......................................... (2,755) (483) --------- -------- Capital Share Transactions (1): ............................... Proceeds from Shares Issued ................................ 578,520 143,133 Reinvestments of Cash Distributions ........................ -- -- Cost of Shares Redeemed .................................... (182,847) (122,894) --------- -------- Increase in Net Assets from Share Transactions ............. 395,673 20,239 --------- -------- Total Increase in Net Assets ............................ 395,673 20,238 --------- -------- Net Assets: Beginning of Period .......................................... -- -- --------- -------- End of Period ................................................ $ 395,673 $ 20,238 ========= ======== (1)Shares Issued and Redeemed: Shares Issued .............................................. 578,520 143,133 Shares Issued in Lieu of Cash Distributions ................ -- -- Shares Redeemed ............................................ (182,847) (122,894) --------- -------- Net Share Transactions ....................................... 395,673 20,239 ========= ======== *Commencement of Operations. Amounts designated as "--" are either $0 or round to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 7
FINANCIAL HIGHLIGHTS =========================================================================================================================== STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD NET REALIZED AND NET UNREALIZED GAINS NET ASSET VALUE INVESTMENT OR (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM BEGINNING OF PERIOD INCOME ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS ------------------ --------- --------------- -------------------- ---------------------- CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND Institutional Shares 1997* $ 1.00 $ 0.02 $ -- $(0.02) $ -- CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND Institutional Shares 1997* $ 1.00 $ 0.02 $ -- $(0.02) $ -- RATIO OF RATIO OF NET INVESTMENT RATIO OF EXPENSES TO INCOME TO NET ASSET NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS AVERAGE NET ASSETS VALUE END TOTAL END OF EXPENSES TO INCOME TO (EXCLUDING WAIVERS (EXCLUDING WAIVERS OF PERIOD RETURN PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) AND REIMBURSEMENTS) --------- ------- ------------ ------------------ ------------------ ------------------- ------------------- $ 1.00 2.51% $ 395,673 0.06% 5.49% 0.52% 5.03% $ 1.00 2.46% $ 20,238 0.09% 5.27% 0.51% 4.85%
COMMENCED OPERATIONS ON DECEMBEER 12, 1996. TOTAL RETURN IS FOR THE PERIOD INDICATED. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 8 & 9 NOTES TO FINANCIAL STATEMENTS ================================================================================ STI CLASSIC FUNDS MAY 31, 1996 1. Organization: The STI Classic Funds (the "Trust") was organized as a Massachusetts Business Trust under a Declaration of Trust dated January 15, 1992. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with twenty-three portfolios: the Value Income Stock Fund, the Mid-Cap Equity Fund, the Small Cap Equity Fund, the Capital Growth Fund, the Balanced Fund, the Emerging Markets Equity Fund, the International Equity Index Fund, the International Equity Fund the Sunbelt Equity Fund, the Investment Grade Tax-Exempt Bond Fund, the Florida Tax-Exempt Bond Fund, the Tennessee Tax-Exempt Bond Fund, the Georgia Tax-Exempt Bond Fund, the Investment Grade Bond Fund, the Short-Term Bond Fund, the Short-Term U.S. Treasury Securities Fund, the Limited-Term Federal Mortgage Securities Fund, and the U.S. Government Securities Fund, (collectively the "Non-Dollar Funds"), the Prime Quality Money Market Fund, the U.S. Government Securities Money Market Fund, the Tax-Exempt Money Market Fund, the Classic Institutional Cash Management Money Market Fund and the Classic Institutional U.S. Treasury Securities Money Market Fund, (collectively the "Money Market Funds"). The assets of each portfolio are segregated, and a shareholder's interest is limited to the Fund in which shares are held. Each Fund's prospectus provides a description of the Fund's investment objectives, policies and strategies. The footnotes herein pertain only to the Classic Institutional Cash Management Money Market Fund and the Classic Institutional U.S. Treasury Securities Fund (collectively the "Funds"). 2. Significant Accounting Policies: The following is a summary of significant accounting policies followed by the Trust: SECURITY VALUATION -- Investment securities held by the Funds are stated at amortized cost, which approximates market value. FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a regulated investment company for Federal income tax purposes and distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required. SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on the date the security is purchased or sold (trade date). Interest income is recognized on an accrual basis. Costs used in determining net realized gains and losses on the sales of investment securities are those of the specific securities sold adjusted for the accretion and amortization of purchase discounts and premiums during the respective holding period. Purchase discounts and premiums on securities held by the Funds are accreted and amortized ratably to maturity and are included in interest income. REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters into an insolvency proceeding, realization of the collateral by the Funds may be delayed or limited. NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is calculated each business day, by dividing the total value of each Fund's assets, less liabilities, by the number of shares outstanding. OTHER -- Expenses that are directly related to a specific Fund are charged to that Fund. Class specific expenses are borne by that class. Other operating expenses of the Trust are pro-rated to the Funds on the basis of relative net assets. Fund expenses are pro-rated to the respective classes on the basis of relative net assets. Distributions from net investment income of each of the Funds are declared on each business day and paid to shareholders on a monthly basis. Any net realized capital gains on sales of securities are distributed to shareholders at least annually. 3. Organization Costs and Transactions with Affiliates: The Trust incurred organization costs of approximately $808,836 including approximately $395,594 relating to state registration fees. These costs have been deferred in the accounts of the Funds and are being amortized on a straight line basis over a period of sixty months commencing with operations with the exception of state registration fees, which are being amortized over a period of twelve months. The costs include legal fees of approximately $60,383 for organizational work performed by a law firm of which two officers of the Trust are partners. On March 18, 1992, the Trust sold initial shares of beneficial interest to SEI Fund Resources (the "Administrator"). In the event any of the initial shares of the Trust are redeemed by any holder thereof during the period that the Trust is amortizing its organizational costs, the redemption proceeds payable to the holder thereof will be reduced by the unamortized organizational costs in the same ratio as the number of initial shares being redeemed bears to the number of initial shares outstanding at the time of redemption. Certain officers of the Trust are also officers of the Administrator and/or SEI Investments Distribution Co. (the "Distributor"). Such officers are paid no fees by the Trust for serving as officers of the Trust. 10 ================================================================================ 4. Administration and Transfer Agency Servicing Agreements: The Trust and the Administrator are parties to an Administration Agreement dated May 29, 1995, under which the Administrator provides administrative services for an annual fee (expressed as a percentage of the combined average daily net assets of the Trust and STI Classic Variable Annuity Trust) of: .10% up to $1 billion, .07% on the next $4 billion, .05% on the next $3 billion, .045% on the next $2 billion and .04% for over $10 billion. The Trust and Federated Services Company are parties to a Transfer Agency servicing agreement dated May 14, 1994 under which Federated Services Company provides transfer agency services to the Trust. 5. Investment Advisory and Custodian Agreements: The Trust and STI Capital Management, N.A., ("STI Capital Management, N.A."), Trusco Capital Management ("Trusco"), the SunTrust Bank, Atlanta and SunTrust Bank, Chattanooga have entered into advisory agreements dated May 29, 1992, July 15, 1993, December 20, 1993 and December 20, 1993 respectively. Under terms of the respective agreements, the Funds are charged the following annual fees based upon average daily net assets: MAXIMUM INSTITUTIONAL ANNUAL SHARE ADVISORY MAXIMUM FEE EXPENSE ------------ ------------ TRUSCO: Classic Institutional Cash Management Money Market Fund .20% .20% Classic Institutional U.S. Treasury Money Market Fund .20% .20% The Investment Advisors and the Administrator have voluntarily agreed to waive all or a portion of their fees (and to reimburse Funds' expenses) in order to limit operating expenses to an amount as outlined in the table above. Fee waivers and expense reimbursements are voluntary and may be terminated at any time. SunTrust Bank, Atlanta, formerly Trust Company Bank, acts as custodian for the Funds. Fees of the Custodians are paid on the basis of the net assets of the Funds. The Custodian plays no role in determining the investment policies of the Trust or which securities are to be purchased or sold in the Funds. 6. Concentration of Credit Risk: The Classic Institutional Cash Management Money Market Fund invests in high quality money market instruments issued by corporations and the U.S. Government and rated by one or more nationally recognized statistical rating organizations, or, if not rated determined by the Advisor to be of comparable quality. The Classic U.S. Treasury Securities Money Market Fund invests in U.S. Treasury Obligations, which are backed by the full faith and credit of the U.S. Government and repurchase agreements with approved dealers collateralized by U.S. Treasury securities. 7. Consents of Sole Shareholder: On November 20, 1996, the sole shareholder of the Classic Institutional Cash Management Money Market Fund and Classic Institutional U.S. Treasury Securities Money Market Fund (the "Funds") approved the following appointments: SEI Financial Service Company to serve as administrator of the Funds, Trusco Capital Management to serve as investment advisor to the assets of the Funds, SEI Investments Distribution Co. to serve as distributor of the shares of the Funds and Arthur Andersen LLP to serve as independent public accountants of the Funds. 11 NOTICE TO SHAREHOLDERS ================================================================================ STI CLASSIC FUNDS MAY 31, 1997 UNAUDITED For shareholders that do not have a May 31, 1997 tax year end, this notice is for informational purposes only. For shareholders with a May 31, 1997 tax year end, please consult your tax advisor as to the pertinence of this notice. For the fiscal year ended May 31, 1997, each portfolio is designating the following items with regard to distributions paid during the year:
(A)* (B)* LONG TERM ORDINARY (C) CAPITAL GAINS INCOME TOTAL (D)** (E)*** DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS QUALIFYING TAX-EXEMPT FUND (TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS(1) INTEREST - ----- -------------- ------------ ---------- ------------ ---------- Classic Institutional Cash Management Money Market 0% 100% 100% 0% 0% Classic Institutional U.S. Treasury Securities Money Market 0% 100% 100% 0% 0% - ------------------------------------ (1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction. * Items (A) and (B) are based on a percentage of each fund's total distributions. ** Item (D) is based on the net income of the fund. *** Item (E) is based on the ordinary income distributions of the fund.
12 INVESTMENT ADVISORS STI Capital Management, N.A. Trusco Capital Management, Inc. SunTrust Bank, Chattanooga, N.A. SunTrust Bank, Atlanta STI Classic Funds are not deposits, are not insured or guaranteed by the FDIC or any other government agency, and are not endorsed by and do not constitute obligations of SunTrust Banks, Inc. or any other of its affiliates. Investment in the Funds involves risk, including the possible loss of principal. There is no guarantee that any STI Classic Fund will achieve its investment objective. The STI Classic Funds are advised by affiliates of SunTrust Banks, Inc. DISTRIBUTOR SEI Investments Distribution Co. This information must be preceded or accompanied by a current prospectus for each Fund described. -----END PRIVACY-ENHANCED MESSAGE-----