Sterling Capital Equity Income Fund NCSRS Certified semi-annual shareholder report (management investment company)


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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-06719

BB&T Funds

(Exact name of registrant as specified in charter)


3435 Stelzer Road Columbus		43219

(Address of principal executive offices)		(Zip code)

BISYS Fund Services, 3435 Stelzer Road, Columbus, OH 43219

(Name and address of agent for service)

Registrant’s telephone number, including area code: 800-228-1872

Date of fiscal year end: September 30, 2004

Date of reporting period: March 31, 2004

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Reports to Stockholders.

•

Include a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1).

LOGO

March 31, 2004

Semi-Annual

Report

To Shareholders

Notice to Investors

Shares of BB&T Funds:

ARE NOT FDIC INSURED • HAVE NO BANK GUARANTEE • MAY LOSE VALUE

BB&T FUNDS

TABLEOF CONTENTS


*Management Discussion of Performance*
Letter from the President and the Investment Advisor		1

*Fund Summary*
Balanced Fund		2
Large Company Value Fund		3
Large Company Growth Fund		4
Mid Cap Value Fund		5
Mid Cap Growth Fund		6
Small Company Value Fund		7
Small Company Growth Fund		8
Special Opportunities Equity Fund		9
International Equity Fund		10
Short U.S. Government Fund		11
Intermediate U.S. Government Fund		12
Intermediate Corporate Bond Fund		13
Kentucky Intermediate Tax-Free Fund		14
Maryland Intermediate Tax-Free Fund		15
North Carolina Intermediate Tax-Free Fund		16
South Carolina Intermediate Tax-Free Fund		17
Virginia Intermediate Tax-Free Fund		18
West Virginia Intermediate Tax-Free Fund		19
Prime Money Market Fund		20
U.S. Treasury Money Market Fund		21
Capital Managers Funds		22

*Schedule of Portfolio Investments*
Balanced Fund		24
Large Company Value Fund		25
Large Company Growth Fund		26
Mid Cap Value Fund		27
Mid Cap Growth Fund		29
Small Company Value Fund		30
Small Company Growth Fund		32
Special Opportunities Equity Fund		34
International Equity Fund		35
Short U.S. Government Fund		38
Intermediate U.S. Government Fund		40
Intermediate Corporate Bond Fund		43
Kentucky Intermediate Tax-Free Fund		46
Maryland Intermediate Tax-Free Fund		48
North Carolina Intermediate Tax-Free Fund		50
South Carolina Intermediate Tax-Free Fund		53
Virginia Intermediate Tax-Free Fund		55
West Virginia Intermediate Tax-Free Fund		57
Prime Money Market Fund		59
U.S. Treasury Money Market Fund		62
Capital Manager Conservative Growth Fund		63
Capital Manager Moderate Growth Fund		64
Capital Manager Growth Fund		65
Capital Manager Equity Fund		66

*Financial Statements*		68

*Notes to Financial Statements*		124

LETTER FROMTHE PRESIDENTANDTHE INVESTMENT ADVISOR

Dear Shareholders:

We are pleased to send you this semi-annual report for the six months ended March 31, 2004, a period during which market volatility reflected uncertainty over the economic recovery and global events.

As has often been the case in previous reports, the six months period could be characterized as two distinctly different periods. During the final calendar quarter of 2003, stocks posted strong returns, continuing a powerful rebound from three losing years. At the same time, bonds floundered, having been compromised by higher interest rates—bond prices fall when rates rise—and the fact that stocks were simply a more attractive asset class to many investors.

The picture was somewhat different in the second three months of our reporting period, the first calendar quarter of 2004. Stocks opened the year on a positive note, but were soon beset by concerns over earnings momentum combined with full valuations, confusion over the November elections and a spate of bad news on the geopolitical front. These factors conspired to produce the type of uncertainty that typically makes equity investors uncomfortable, and stock prices suffered as a result.

Conversely, investor anxiety is often good news for the bond market, and bonds did stage a modest recovery. Bond yields declined throughout the period, driven lower by growing concerns over terrorism, a perception that the Federal Reserve (the “Fed”) wasn’t likely to raise short-term rates in the near term and disappointment in near-term jobs data. The lower yields translated into moderately higher bond prices.

For the six-month period as a whole, the S&P 500 Index¹returned 14.07%, while the Nasdaq Composite Index¹returned 11.60%. The yield on the bellwether 10-year Treasury bond fell a slight 10 basis points (0.10%), masking marked volatility within the period.

Looking ahead to the next six- to 12-months, we believe fundamental economic conditions point to a scenario in which equities could do reasonably well. We are optimistic about the stock market for a number of reasons:

•	The economic recovery. The economy appears to be moving forward, productivity gains are apparently continuing, earnings growth appears to be positive and we expect the jobs picture to improve. Since the end of our reporting period, new employment data has been positive.

•	Low interest rates. We expect the Federal Reserve to continue to be accommodating, at least in the near term, though the Fed Funds rate could be raised after the November elections.

•	A weaker dollar. The weaker dollar has been boosting exports, which is good for American producers and important to domestic economic growth; we are seeing evidence of this trend in first-quarter earnings numbers.

•

Relative value. Given the low absolute level of interest rates, investors appear to be finding stocks to be more attractive than bonds. Bonds do not seem to offer strong total return potential at this juncture, while stocks, despite short-term price fluctuations, seem poised to provide greater growth opportunities.

All of these factors are very constructive for stocks, in our opinion. Further, as the stock market rally matures, we expect investors to begin to favor higher-quality issues—stocks of companies with solid market positions, relatively low risk and strong earnings growth. We expect this rotation into quality to benefit our own equity funds, which follow an investment approach that features high-quality stocks.

Bonds, on the other hand, offer less attractive prospects, in our opinion. Although we don’t believe the Fed will raise interest rates anytime soon, investors may begin to anticipate rate hikes, and bond prices could suffer. As a result, we have positioned our fixed-income portfolio to emphasize yield generation and to limit the impact of rising rates.

We understand that significant economic and geopolitical events can produce uncertainty and even some discomfort among shareholders. If you have any questions or concerns, please feel free to take full advantage of the expertise of your investment professional, or call us at 1-800-453-7348.

Finally, we are pleased to announce that Jeffrey J. Schappe has been named chief investment officer for BB&T Asset Management, Inc., investment adviser to the BB&T Funds. Jeff is a highly accomplished investment professional who will directly oversee the investment management process of the BB&T Funds. Jeff will play a leading role in supervising our investment process with a focus on maintaining discipline and consistency.

Sincerely,

/s/ George O. Martinez

George O. Martinez

President

BB&T Funds

/s/ Keith F. Karlawish

Keith F. Karlawish

President

BB&T Asset Management, Inc.

S&P 500 Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange, and is a measure of the U.S. Stock market as a whole. NASDAQ Composite Index is a market price only index that tracks the performance of domestic common stocks traded on the regular Nasdaq market as well as National Market System traded foreign common stocks and American Depository Receipts. Investors cannot invest directly in an index, although they can invest directly in the underlying securities.

The foregoing information and opinions are for general information only. BB&T Asset Management, Inc. does not guarantee their accuracy or completeness, nor assume liability for any loss, which may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sale of any security or offering individual or personalized investment advice.

BB&T BALANCED FUND

PORTFOLIO MANAGER

David R. Ellis

Paige Henderson, CFA

Brad D. Eppard, CFA

The BB&T Balanced Fund is managed by David R. Ellis, Paige Henderson, CFA, and Brad D. Eppard, CFA. Mr. Ellis graduated from the University of North Carolina-Chapel Hill, where he received a B.S. in Business, and has been managing investors’ money since 1982. Ms. Henderson graduated from the University of North Carolina-Chapel Hill, where she received a B.S.B.A. in Business Administration and an M.B.A., and has 12 years of investment experience. Mr. Eppard received a B.A. in Business Administration and Accounting from the Radford University, and has 18 years of investment experience. The managers are supported by the BB&T Balanced Portfolio Management Team, which includes Keith F. Karlawish, CFA; Richard B. Jones, CFA; James L. Luke, CFA; and Robert F. Millikan, CFA. The team brings to the Fund more than a century of combined investment management experience, along with a broad range of specialized skills encompassing value stocks, growth stocks and fixed-income securities.

INVESTMENT CONCERNS

Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return.

PORTFOLIO MANAGERS’ PERSPECTIVE

“The Fund’s name sums up our investment philosophy: to provide competitive returns, above-average yield and relatively low volatility by balancing our assets between the equity and fixed-income asset classes. We take a blended approach to security selection. Our stock portfolio is comprised mostly of high-quality, large-capitalization companies that, in our opinion, represent substantial absolute or relative value, fueled by solid growth prospects. Our bond holdings also emphasize value and relative stability and serve to both generate income and smooth out short-term fluctuations.”

The BB&T Balanced Fund was closed on April 29, 2004. This report covers the six-month period that ended March 31, 2004.

We exploited a positive environment for stocks.

Throughout the last six months, global events and domestic economic activity kept the markets on edge. However, by the end of the period, stocks were solidly higher, while bonds mostly treaded water. Our overweighting in stocks for the entire period helped to produce historically strong returns for our shareholders.

However, the Fund underperformed the S&P 500 Index, and in most cases outperformed the Lehman Brothers Intermediate Government Bond Index.

This decision to emphasize stocks was based on our belief that we are in a period of very strong economic growth, which should lead to expanded earnings for many American companies. At the same time, this environment is not particularly constructive for bonds; bond yields have bounced off 40-year lows and are likely to continue heading back upwards, which would hurt bond prices (yields and prices move in opposite directions).

The Fund’s fixed-income holdings were invested in U.S. Government agencies and U.S. Treasury Notes. The average credit quality of the securities in the portfolio was AAA.¹

As of March 31, 2004, the Fund’s top five equity holdings (as a percentage of the portfolio’s net assets) were¹:


Bank of America Corp.	2.2	%
Citigroup, Inc.	2.1	%
Emerson Electric Co.	1.9	%
Pepsico, Inc.	1.9	%
General Electric Co.	1.8	%

As of March 31, 2004, approximately 57.9% of the portfolio was in common stocks, 38.4% in U.S. government agencies, and 3.5% in cash equivalents.¹


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		10 Year
A Shares*	7/1/93	1.95	%	14.23	%	–0.88	%	5.98	%
B Shares**	1/1/96²	3.16	%	16.79	%	–0.53	%	5.97	%
C Shares***	2/1/03²	7.17	%	20.67	%	–0.10	%	6.39	%
Institutional Shares	7/1/93	8.31	%	21.51	%	0.57	%	6.86	%
S&P 500 Index	6/30/93	14.07	%	35.10	%	–1.20	%	11.68	%
Lehman Brothers Int. Government Bond Index	6/30/93	2.00	%	3.58	%	6.71	%	6.75	%

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC), maximum of 5.00%.

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please visit our website at www.bbandt.com.

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

Class B Shares were not in existence prior to 1/1/96. Performance for periods prior to that is based on the historical performance of the Class A Shares, and has been adjusted for the maximum CDSC applicable to the Class B Shares, but does not include the Class B Shares 12b-1 fees, which, if reflected, performance would have been lower. Class C Shares were not in existence prior to 2/1/01. Performance for periods prior to that is based on the historical performance of the Class A Shares, and has been adjusted for the maximum CDSC applicable to Class C Shares, but does not include the Class C Shares 12b-1 fees, which, if reflected, performance would have been lower.

The Fund is measured against the S&P 500 Index, which is generally considered to be representative of the performance of the stock market as a whole, and against the Lehman Brothers Intermediate Government Bond Index, widely used as a broad measure of the performance of U.S. Government Bonds with maturities of less than 10 years. The indices are unmanaged and do not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T LARGE COMPANY VALUE FUND

PORTFOLIO MANAGER

Richard B. Jones, CFA

The BB&T Large Company Value Fund is managed by Richard B. Jones, CFA, Director of Value Equity Portfolio Management for BB&T Asset Management, Inc. A graduate of Miami (Ohio) University, where he earned a B.S. in Business. Mr. Jones also earned an M.B.A. from the Ohio State University, and has been managing investors’ money since 1984. He is supported by the BB&T Value Equity Portfolio Management Team, which includes David R. Ellis, Buel S. Sears, CFA; John T. Kvantas, CFA and Eric Farls, CFA. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of equity management skills.

INVESTMENT CONCERNS

Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes. Common stocks, and funds investing in common stocks, generally provide greater return potential when compared with other types of investments. Value-based investments are subject to the risk that the broad market may not recognize their intrinsic value.

PORTFOLIO MANAGERS’ PERSPECTIVE

“We use a simple, but disciplined, process that relies on both quantitative and qualitative techniques. We screen roughly 2,000 large, financially strong companies to find about 100 top-quality names that meet our value criteria; from this list, we normally own about 70 stocks, each of which plays a distinct role in enabling us to build a diversified portfolio. We are long-term investors, approaching each purchase with the intent to own it for three to five years, if all goes well. Consequently, the Fund’s turnover rate is low, 10-30%, which makes the Fund very efficient for taxable accounts.”

The Fund participated in the market’s sustained rally.

The last calendar quarter of 2003 was a very strong period for the stock market, capping a year that saw prices rise significantly in virtually every sector. What drove the market higher were robust gross national product (GDP)³growth, strong corporate earnings growth, and an environment in which earnings outlooks were revised upwards. The Fed continued to keep interest rates at 40-year lows, inflation remained benign and the federal government took measures to stimulate the economy.

As we headed into 2004, one of the big early drivers for the market was the series of strong earnings reports for the fourth calendar quarter of 2003; sales growth also was stronger than had been expected. Corporations continued to accumulate cash and improve their balance sheets to the point that many companies could spend excess cash to expand their operations. Capital spending did raise a positive factor that had been missing for almost two years. On the downside, however, government data didn’t show any meaningful job creation throughout the first three months of 2004, at least not until the quarter was over (positive reports were released in early April). The consistently poor job numbers were a drag on the economy and on investor sentiment–along with the train bombing in Spain and other acts of terrorism, which sparked fears of geopolitical instability.

In the value sector, conditions remained positive, continuing a trend we’ve been seeing for the better part of a year. The Fund took advantage of the constructive climate; like the overall market, our performance was stronger in the last quarter of 2003, but we were up in both fiscal quarters.

We didn’t make dramatic changes to our portfolio, though we have cast an eye toward some high-quality technology names that had stumbled earlier and were available at prices we considered attractive on a valuation basis.

As of March 31, 2004, the Fund’s top five equity holdings (as a percentage of the portfolio’s net assets) were¹:


ConocoPhillips	2.7	%
Kimberly-Clark Corp.	2.7	%
Emerson Electric Co.	2.4	%
Gannett Company, Inc.	2.4	%
The Walt Disney Co.	2.2	%

We certainly are aware of what is happening on the geopolitical scene, and in the U.S. economy. At the same time, the way we manage the Fund is on a stock-by-stock basis, finding companies we believe are attractively priced, and which complement stocks we already own in the portfolio.

Having said that, while conditions appear moderately positive for stocks, we do worry somewhat about what could happen later in the year. Stock valuations are near historical highs, inflation could begin to creep higher and the Fed is likely to push short term interest rates higher.


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		10 Year
A Shares*	10/9/92	8.84	%	25.59	%	0.83	%	9.22	%
B Shares**	1/1/96²	10.07	%	28.19	%	1.08	%	9.17	%
C Shares***	2/1/01²	14.03	%	32.21	%	1.53	%	9.60	%
Institutional Shares	10/9/92	15.61	%	33.58	%	2.27	%	10.14	%
Russell 1000 Value Index	N/A	17.65	%	40.82	%	3.89	%	12.61	%

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC), maximum of 5.00%.

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

³	Gross Domestic Product is the measure of the market value of the goods and services produced by labor and property in the United States.

The Fund is measured against the Russell 1000 Value Index an unmanaged index which consists of 1,000 of the largest capitalized U.S. domiciled companies. Companies in this index generally have low price-to-book and price-to-earnings ratios, higher dividend yields, and lower forecasted growth values. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower

BB&T LARGE COMPANY GROWTH FUND

PORTFOLIO MANAGER

James L. Luke, CFA

The BB&T Large Company Growth Fund is managed by James L. Luke, CFA, Director of Growth Equity Portfolio Management for BB&T Asset Management, Inc. Mr. Luke graduated from Valdosta State University with a B.S. in Business Administration-Finance and has been managing investors’ money since 1969. Mr. Luke is supported by the BB&T Growth Equity Portfolio Management Team, which includes David P. Nolan, Raiford Garrabrant, CFA, Cary Nordan, CFA and Brandon Carl. The team brings to the Fund more than five decades of combined investment management experience, along with a broad range of growth-stock investing skills.

INVESTMENT CONCERNS

PORTFOLIO MANAGERS’ PERSPECTIVE

“We use quantitative screening to target the most attractive stocks among large, established growth companies in the market’s fastest-growing sectors. Our multifactor scoring model evaluates and ranks several thousand companies with market capitalizations greater than $5 billion. We then take a closer look at the companies in the top third of our rankings, clarifying data and identify how a particular stock could enhance our portfolio, which normally is comprised of 65–75 issues. All the while, we are careful not to overpay for any particular stock. The price we are willing to pay for growth is based on our evaluation of whether a stock’s growth potential will be delivered.”

The Fund did well, though market forces created obstacles.

While the Fund’s absolute return was quite robust by historical standards–and slightly ahead of our principal benchmark, the Russell 1000^{^®}Growth Index–market conditions favored small companies over large companies, and value stocks over growth stocks. Consequently, we were swimming against the current, so to speak, but still delivered solid performance.

The stock market was strong at the beginning of the period, as it was for 2003 as a whole. But in November, we saw performance in the technology sector, which had led the market, begin to wane; technology stocks became more volatile and less reliable. This was followed by a definite shift, in investor sentiment–first, toward lower Beta³(less volatile) stocks, and then, toward higher-quality stocks with stronger valuations. In response, we did begin to trim back on the portfolio’s volatility.

Coming off that strong quarter, the market carried its momentum into 2004, as earnings for the fourth quarter of 2003 were very positive.

But then a series of negative events in early March caused the market to pull back. We had a very disappointing payroll report, followed by the terrorist attack in Madrid. By March 11, the market was down for the year, wiping out the positive returns of the first two months–though the index did recover to post a modest, quarterly gain by the end of March.

During the quarter, overall, we saw the market move more toward stocks with value characteristics. What seemed to work well in the market were stocks with relatively high dollar prices–as opposed to low-priced stocks that did well in 2003–and low market capitalizations, along with value characteristics such as low price-to-earnings, price-to-book, price-to-cash flow, and price-to-sales ratios, and low Betas³. In other words, traditional value stocks led the market, which created a challenge for our growth-oriented Fund, though we did reasonably well during our second fiscal quarter.

As of March 31, 2004, the Fund’s top five equity holdings (as a percentage of the portfolio’s net assets) were:¹


Pfizer, Inc.	2.8	%
Tyco International, Ltd.	2.5	%
Cisco Systems, Inc.	2.4	%
Intel Corp.	2.2	%
St. Jude Medical, Inc.	2.2	%


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		Since Inception
A Shares*	10/3/97	5.02	%	21.39	%	–4.93	%	–0.31	%
B Shares**	10/3/97	6.01	%	23.86	%	–4.70	%	–0.12	%
C Shares***	2/1/01²	9.99	%	27.81	%	–4.50	%	–0.11	%
Institutional Shares	10/3/97	11.55	%	29.12	%	–3.61	%	0.83	%
Russell 1000 Growth Index	10/3/97	11.28	%	32.18	%	–6.13	%	1.08	%

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC), maximum of 5.00%..

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

²	Class C Shares were not in existence prior to 2/1/01. Performance for periods prior to that is based on the historical performance of the Class B Shares, and has been adjusted for the maximum CDSC applicable to the Class C Shares.

Price/Earnings (P/E) Ratio is the price of a stock divided by its historical earnings per share. Price-to-Book Ratio (P/B) is used to compare a stock’s market value to its book value. This ratio gives some idea of whether you’re paying too much for what would be left if the company went bankrupt immediately. Price-to-Cash Flow (P/C) is the price per share divided by cash flow per share. It’s used as a measure of the market’s expectations regarding a firm’s future financial health. Beta is a measure of the volatility of a stock relative to the overall market. A beta of less than one indicates lower historical risk than the market; a beta of more than one indicates higher historical risk than the market.

The Fund is measured against the Russell 1000 Growth Index an unmanaged index which is comprised of 1,000 of the largest capitalized U.S. domiciled companies with higher price-to-book ratios and higher forecasted growth values whose common stock is traded in the United States on the New York Stock Exchange, American Stock Exchange and NASDAQ. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T MID CAP VALUE FUND

PORTFOLIO MANAGER

Buel S. Sears, CFA

The BB&T Mid Cap Value Fund is managed by Buel S. Sears, CFA, who has been managing investors’ money since 1982. Mr. Sears is supported by the BB&T Value Equity Portfolio Management Team, which includes Richard B. Jones, CFA, David R. Ellis, John T. Kvantas, CFA, and Eric Farls, CFA. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of equity management skills.

INVESTMENT CONCERNS

Mid-capitalization funds typically carry additional risks since smaller companies generally have a higher risk of failure, and historically, their stocks have experienced a greater degree of market volatility than stocks on average.

PORTFOLIO MANAGERS’ PERSPECTIVE

“We seek to provide our shareholders with three important investment benefits: current income, long-term growth of capital and a commitment to controlling volatility. We diversify among economic sectors, industries and individual companies, with no more than 5% of the portfolio invested in any single security. We take a hard look at how companies in different industries can have similar risk profiles and we build our portfolio with an awareness of these correlations. We also provide value to our shareholders by stressing low turnover, which can both reduce costs and improve tax efficiency.”

The Fund owned a diverse group of winning stocks.

A lot of factors helped boost stocks in general, and mid-capitalization value names, in particular. Quite plainly, we had the best of all worlds: low inflation, high earnings growth rates, increased capital investment by businesses, continued spending by consumers and significant tax cuts. We also saw a bit of a positive turn in the employment picture.

The Fund also benefited from market rotation away from riskier stocks with weak fundamentals to lower-risk stocks with strong fundamentals; we generally favor the latter type of equities.

During the last six months, the Fund’s total return was enhanced not so much by strong stock selection. Some of our best performers included Activision (1.4% of the portfolio’s net assets), which publishes top Playstation titles; Andrew Corp. (1.4%), which produces wireless infrastructure on a global basis; National Semiconductor Corp. (1.4%), a semiconductor leader; American Power Conversion, Inc. (1.3%), a maker of uninterruptible power supplies; and Sunoco, Inc. (1.4%), a top gasoline refiner. In the stock market, money is being made where businesses and consumers are spending money, and we’ve been trying to be ahead of the curve.¹

As of March 31, 2004, the Fund’s top five equity holdings (as a percentage of the portfolio’s net assets) were¹:


Jefferson-Pilot Corp.	2.8	%
Kerr-McGee Corp.	2.4	%
Compass Bancshares, Inc.	2.4	%
Caremark Rx, Inc.	2.3	%
Arthur J. Gallagher & Co.	2.3	%

Earnings growth will be key.

Looking out over the next six- to 12-months, we believe economic activity will continue to be healthy. Still, one negative aspect to the market backdrop may be heightened awareness of geopolitical risks, and we acknowledge that year-over-year earnings growth could slow. Further, we believe interest rates will likely begin to rise after the November elections. The bottom line for most companies may be, can they continue to sustain strong earnings growth rates? If earnings expectations are met, stocks can flourish; if there are disappointments, the market could have trouble advancing.


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		Since Inception
A Shares*	8/1/96²	11.60	%	34.15	%	5.99	%	10.00	%
B Shares**	7/25/01²	13.06	%	37.29	%	6.64	%	10.54	%
C Shares***	7/25/01²	16.96	%	41.28	%	6.77	%	10.52	%
Institutional Shares	8/1/96²	18.58	%	42.69	%	7.54	%	11.12	%
Russell MidCap Value Index	8/1/96	21.38	%	51.60	%	10.57	%	13.39	%

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC), maximum of 5.00%..

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

Performance shown for Class A and Institutional Shares includes the performance of the OVB Equity Income Portfolio for the periods prior to its consolidation with the BB&T Mid Cap Value Fund on 7/23/01. The performance shown reflects reinvestment of all dividend and capital gains distributions. Class B and C Shares were not in existence prior to 7/25/01. Performance for periods prior to 7/25/01 is based on the historical performance of the Class A Shares, and has been adjusted for the maximum CDSC applicable to Class B and C Shares, respectively, but such performance does not reflect Class B and C Shares’ 12b-1 fees and expenses. With those adjustments, performance would be lower than that shown.

The Fund is measured against the the Russell MidCap Value Index an unmanaged index which measures the performance of those securities in the Russell 1000 with lower price-to-book ratios or lower forecasted growth values. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T MID CAP GROWTH FUND

PORTFOLIO MANAGER

David P. Nolan

The BB&T Mid Cap Growth Fund is managed by David P. Nolan. A graduate of Wake Forest University, where he received a B.S. in Business, Mr. Nolan managed common and collective trust funds from 1985 to 1993 and has managed the Mid Cap Growth Fund since its inception in 1993. He is supported by the BB&T Growth Equity Portfolio Management Team, which includes James L. Luke, CFA, Raiford Garrabrant, CFA, Cary Nordan, CFA and Brandon Carl. The team brings to the Fund more than five decades of combined investment management experience, along with a broad range of growth-stock investing.

INVESTMENT CONCERNS

PORTFOLIO MANAGERS’ PERSPECTIVE

“We believe that companies situated in the mid-capitalization sector—which we define as between $2–10 billion in market cap—can achieve the most striking growth rates in their respective life cycles. This is the ‘sweet spot’ for many companies, which have survived the challenges of their early years and are now reaching the point where their businesses are expanding rapidly. They also can have an edge over larger companies, whose businesses have matured and who struggle to maintain double-digit growth rates. For these reasons, well-managed mid-cap companies offer outstanding investment opportunities for our shareholders.”

Diversification and stock selection were strong contributors.

The last six months were marked by rapid rotation of investor sentiment among strikingly different types of stocks.

During the first two months of our reporting period–October and November of 2003–we saw the continuation of a rally among stocks with low-quality fundamentals and high risk factors. But in December, there was a dramatic reversal, as high-flying, risky stocks stumbled. This trend continued into January and February, when dividend-paying stocks with high-quality fundamentals outperformed significantly. Then in March, the last month of our reporting period, riskier stocks came back to the fore.

Nonetheless, the Fund produced historically strong returns for the period as a whole, helped in some measure by the fact that the mid-cap sector did much better than large-cap stocks. However, the Fund did underperform the Russell MidCap Growth Index for the period.

We also benefited from strong stock selection. Some of our winners for the period included such technology names as Novell, Inc. (1.1% of the portfolio’s net assets), Autodesk (1.4%), and Mobile Telesystems (1.2%). In health care, Protein Design Labs, Inc. (1.1%), Caremark RX, Inc. (2.0%), Zimmer Holdings, Inc. (1.1%), Varian Medical Systems, Inc. (1.1%) and Fisher Scientific International, Inc. (1.1%) have been strong performers.¹

Looking at the range of stocks that did well for us during a very inconsistent period, it’s clear that our broad diversification was a positive factor.

As of March 31, 2004, the Fund’s top five equity holdings (as a percentage of the portfolio’s net assets) were¹:


Coach, Inc.	2.4	%
PETsMART, Inc.	2.2	%
Harman International Industries, Inc.	2.2	%
T. Rowe Price Group, Inc.	2.2	%
Caremark Rx, Inc.	2.0	%

Rising interest rates and inflation could dampen returns.

In 2003, continued low interest rates contributed to rising stock prices. But over the next year, rates should rise, as inflationary pressures build; commodity prices have already started to run up. While the environment will still be moderately positive for stocks, we expect to see more challenges than we faced during the last year or so.

We also believe earnings growth will decelerate somewhat in the coming months. As a result, higher-quality stocks, those with predictable earnings, should do reasonably well. In such an environment, the market usually puts a premium on quality and rewards stocks with strong characteristics.


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		10 Year
A Shares*	12/30/93²	7.18	%	37.30	%	–3.07	%	9.50	%
B Shares**	7/25/01²	8.33	%	40.72	%	–2.43	%	9.93	%
C Shares***	7/25/01²	12.21	%	44.72	%	–2.30	%	9.93	%
Institutional Shares	12/1/93²	13.89	%	46.23	%	–1.65	%	10.46	%
Russell MidCap Growth Index	N/A	17.58	%	49.63	%	2.29	%	10.27	%

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC), maximum of 5.00%..

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

Fund performance as shown for Class A and Institutional Shares includes the performance of the OVB Capital Appreciation Portfolio for the periods prior to its consolidation with the BB&T Mid Cap Growth Fund on 7/23/01. The performance shown reflects reinvestment of all dividend and capital gains distributions. The Class B and C Shares were not in existence prior to 7/25/01. Performance for periods prior to 7/25/01 is based on the historical performance of the Class A Shares and has been adjusted for the maximum CDSC applicable to Class B and C Shares, respectively, but such performance does not reflect Class B and C Shares’ 12b-1 fees and expenses. With those adjustments, performance would be lower.

The Fund is measured against the Russell MidCap Growth Index an unmanaged index which measures the performance of those securities in the Russell 1000 Index with higher price-to-book ratios and lower forecasted growth values. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T SMALL COMPANY VALUE FUND

PORTFOLIO MANAGER

John T. Kvantas, CFA

The BB&T Small Company Value Fund is managed by John T. Kvantas, CFA. A graduate of the University of Illinois Champaign-Urbana, where he received a B.S. in Accountancy, Mr. Kvantas also earned an M.B.A. from the Fuqua School of Business at Duke University, and has been managing investors’ money since 1995. He is supported by the BB&T Value Equity Portfolio Management Team, which includes Robert Carroll; David R. Ellis; Eric Farls, CFA; Richard B. Jones, CFA; and Buel S. Sears, CFA. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of equity management skills.

INVESTMENT CONCERNS

Small-capitalization funds typically carry additional risks since smaller companies generally have a higher risk of failure, and historically, their stocks have experienced a greater degree of market volatility than stocks on average.

PORTFOLIO MANAGERS’ PERSPECTIVE

“We use disciplined, bottom-up analysis to uncover fundamentally strong, attractively priced value stocks in a very specific universe: stocks with market capitalizations between $100 million and $3 billion. At the BB&T Funds, we believe that diversification can be a very useful tool for long-term investors, and shareholders can use our small-cap value fund to diversify their portfolios beyond the large-cap and mid-cap arenas. While small-cap stocks may be more volatile than their larger counterparts, they provide the benefit of generally not moving in tandem with the overall market. At the same time, on a year-to-year basis, value stocks may produce returns that are very dissimilar to the performance of growth stocks. Consequently, we believe that many BB&T shareholders will appreciate how our Fund can add a strong dose of diversification to their portfolios.”

Small-cap value stocks prospered.

The small-cap value sector was the place to be over the last six-months. Indeed, for much of the last four years, small stocks have outperformed large-and mid-cap stocks, and value stocks have generally delivered better returns than growth stocks, and the Fund has benefited both from sector strength and good stock selection.

Further, we’ve seen investor sentiment rotate in recent months away from low-quality, high-risk stocks, and back toward the type of high-quality names we favor. These stocks are characterized by solid fundamentals, such as good cash-flow generation, conservative balance sheets and attractive valuation ratios.

Naturally, the big question at this point is: Can small-cap value stocks continue to deliver oversized returns? To be honest, we feel that our sector is pretty fully valued, but we’ve felt that way for some time now, and the stocks we own, as a group, have continued to do well. And historically, over extended periods of time, small stocks as a group do better than large stocks – one reason being that it’s easier to grow earnings at smaller companies.

Nonetheless, we are committed to keeping the portfolio as close to fully invested as possible. So where have we been buying in recent months? We’ve taken the view that, even if small-company value stocks look fully valued in general, we’ll try to choose companies that look attractive, relative to their peers–companies that have maintained solid fundamentals over the last year, but haven’t participated completely in the recent market rally. We continue to be overweight in energy stocks and have added a bit to our industrial holdings. We’ve also been selling some technology holdings that we’ve owned only a short time, but that have gone up significantly.

As of March 31, 2004, the Fund’s top five equity holdings (as a percentage of the portfolio’s net assets) were:¹


Hilb Rogal & Hamilton Co.	2.0	%
Strattec Security Corp.	1.8	%
USF Corp.	1.7	%
Protective Life Corp.	1.7	%
CNA Surety Corp.	1.6	%

It’s getting tougher to find attractively valued stocks.

As a rule, we don’t focus too much on broad economic or geopolitical influences; they’re very hard to predict accurately. Nevertheless, recent data leads us to believe that the economy is continuing to grow, and interest rates remain low by historical standards. But we must acknowledge that the economic recovery has been facilitated by low rates and broad tax cuts, and both of those factors have run their course; the economy now has to generate its own growth without such constructive stimuli.

As for our approach going forward, we will continue to operate as we have in the past: search for companies with strong fundamentals, available at relatively reasonable prices. But at the moment, we have to admit that it’s getting tough to find new ideas, where we can put fresh money to work.


Aggregate Total Return	As of March 31, 2004

Class	Inception Date	Six Months		Since Inception
A Shares*	5/19/03	12.30	%	28.53	%
B Shares**	5/19/03	13.71	%	30.33	%
C Shares***	5/19/03	17.62	%	34.23	%
Institutional Shares	5/19/03	19.27	%	36.49	%
Russell 2000 Value Index	5/16/03	24.42	%	44.71	%

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC), maximum of 5.00%..

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

The Fund is measured against the Russell 2000 Value Index, an unmanaged index which measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T SMALL COMPANY GROWTH FUND

PORTFOLIO MANAGER

Raiford Garrabrant, CFA

The BB&T Small Company Growth Fund is managed by Raiford Garrabrant, CFA. Mr. Garrabrant graduated from the University of North Carolina at Chapel Hill with a B.S. in Business Administration and has been managing investors’ money since 1992. Mr. Garrabrant is supported by the BB&T Growth Equity Portfolio Management Team, which includes Brandon Carl; James L. Luke, CFA; David Nolan; and Cary Nordan, CFA. The team brings to the Fund more than five decades of combined investment management experience, along with a broad range of growth-stock investing skills.

INVESTMENT CONCERNS

PORTFOLIO MANAGERS’ PERSPECTIVE

“Small companies are vastly different, in many ways, from larger corporations, and successfully investing in the small-cap sector—which we define as companies having market capitalizations under $3 billion—requires special care and discipline. With small stocks, for example, the risk we confront is more company-specific than market related; these stocks tend to move more on news about their individual company or on industry dynamics than do larger stocks. There also is less efficiency in the pricing of small-company stocks. All these factors make small-company stocks more risky, yet they are laden with enormous opportunities for long-term growth and stock-price appreciation. Investors should never forget that from small companies with promising ideas, come large companies with dominant market positions.”

Market sentiment rotated toward higher-quality stocks.

The last six months were a good time to be invested in small-company growth stocks. Earnings drive the prices of the type of stocks we buy, and earnings growth was strong–even stronger than expected–for much of the period. Even better, earnings estimates continued to be revised upward, taking investor expectations, and stock prices, higher still.

Coming into the period, the market had been rising on the strength displayed by low-price, high-risk stocks with poor fundamentals. In the first calendar quarter of 2004, this trend reversed, and higher-quality stocks–such as the ones the Fund favors–began to assume market leadership.

In recent months, we have been shedding some of our technology holdings and adding to such sector weightings as health care. A year ago, it was beneficial to own the shares of companies with volatile earnings and extreme sensitivity to economic cycles; those are the stocks that can give you the most upside during the initial leg up which started last Spring.

But over the next 12-months, we want to be overweighted in companies that can maintain long-term growth, companies that are not driven so cyclically. These stocks should be relatively durable, in our opinion, if the economy were to plateau or slow down.

As of March 31, 2004, the Fund’s top five equity holdings (as a percentage of the portfolio’s net assets) were:¹


Take-Two Interactive Software, Inc.	2.0	%
Aeropostale, Inc.	1.9	%
Patina Oil & Gas Corp.	1.9	%
RSA Security, Inc.	1.8	%
SafeNet, Inc.	1.7	%

The economy and the stock market look solid.

Looking ahead, we are bullish on the economy, while remaining cognizant of the fact that the Fed’s next move may be to raise interest rates, not lower them. This is one key reason why we own the stocks of companies who, we believe, can grow earnings year in and year out, and not depend on an improving economy and lower interest rates.

But generally, we feel the economy is moving in the right direction. Shortly after the end of our reporting period, new employment data indicated that the jobs picture is finally starting to improve; that was the missing link in the economic recovery.

We don’t expect stocks to provide the outsized gains of calendar year 2003. But as long as interest rates don’t rise rapidly, and stocks are able to maintain earnings, we look forward to a productive period.


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		Since Inception
A Shares*	12/7/94	4.26	%	32.78	%	–5.03	%	6.13	%
B Shares**	1/1/96²	5.21	%	35.79	%	–4.75	%	6.10	%
C Shares***	2/1/01²	9.09	%	39.74	%	–4.35	%	6.54	%
Institutional Shares	12/7/94	10.71	%	41.18	%	–3.66	%	7.09	%
Russell 2000 Growth Index	12/7/94	18.97	%	63.16	%	2.31	%	7.24	%

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC), maximum of 5.00%..

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

Class B Shares were not in existence prior to 1/1/96. Performance for periods prior to that is based on the historical performance of the Class A Shares and has been adjusted for the Class B Shares CDSC, but does not include the Class B Shares 12b-1 fees, which, if reflected, would have lowered performance. Class C Shares were not in existence before 2/1/01. Performance for periods prior to that is based on the historical performance of the Class A Shares and has been adjusted for the maximum CDSC applicable to Class C Shares, but does not reflect the Class C Shares 12b-1 fees, which, if reflected, performance would have been lower.

The Fund is measured against the Russell 2000 Growth Index an unmanaged index which is comprised of the securities in the Russell 2000 Index which have a greater-than-average growth orientation. Securities in this index tend to exhibit higher price-to-book and price-to-earnings ratios. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T SPECIAL OPPORTUNITIES FUND

PORTFOLIO MANAGER

George F. Shipp, CFA

The BB&T Special Opportunities Equity Fund is managed by George F. Shipp, CFA, chief investment officer of Scott & Stringfellow, Inc., subadvisor to the Fund. Mr. Shipp, who joined Scott & Stringfellow in 1982, holds a B.A. from the University of Virginia and an MBA from the Darden Graduate School of Business at the University of Virginia. Mr. Shipp is supported by an investment management team from Scott & Stringfellow, which includes W. Moultrie Dotterer, CFA; R. Griffith Jones, Jr.; and Farley C. Shiner, CPA. The team brings to the Fund more than three decades of combined investment management experience, along with a broad range of investing skills.

INVESTMENT CONCERNS

Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes. Common stocks, and funds investing in common stocks, generally provide greater return potential when compared with other types of investments.A concentrated portfolio may add a measure of volatility to performance, as major fluctuations in any one holding will likely affect the fund more than a fund with greater diversification.

PORTFOLIO MANAGERS’ PERSPECTIVE

“We aggressively pursue attractive opportunities wherever they can be found, limiting ourselves to neither a particular sector nor a single investing style. From a universe of 6,000 publicly traded companies, we build a concentrated portfolio that normally holds no more than 30 securities — blending relatively young growth stocks marked by above-average revenue and earnings growth, with larger, more-established value stocks that are out of favor for reasons we believe to be only temporary. This balanced approach enables us to act upon our investment team’s very best ideas and build a portfolio marked by diversification, above-average fundamentals and below-market risk characteristics.”

A recovering economy lifted share prices.

The Fund began operations in June 2003. We are gratified that during the last six months, our first full reporting period, the Fund’s Institutional Shares significantly outperformed our benchmark, the S&P 500 Index.

In terms of the economy, with all of the stimulus that was being brought to bear–such as historically low interest rates and lower taxes–it was assumed that economic growth would continue to improve. Indeed, the economy did grow throughout 2003. Corporate earnings surprises on the upside and still-benign inflation (though inflation concerns started to rise after the period), added fuel to the economic engine.

It would seem logical that in a rebounding economy, shares of retail companies would do quite well. While we are not economists–our investment approach is based on individual stock selection, not on trying to predict which sectors will heat up in the near term – the portfolio benefited from an overweighting in the consumer discretionary sector; we owned such stocks as YUM! Brands (4.1% of the portfolio’s net assets), Anheuser-Busch Companies (3.8%) and Hain Celestial Group (3.7%). We also ended the period overweighted in health care and energy stocks.¹

Recent portfolio additions include Mantech International (3.7%), which does most of its business with the Dept. of Defense and U.S. intelligence agencies; Pioneer Natural Resources (3.0%), an energy company with a history of drill-bit success; Spectrasite, Inc. (3.8%), the third-largest owner and operator of cell-phone towers; and WCI Communities (3.8%) a high-end home builder concentrated in Florida.¹

We also had a somewhat above-average cash weighting, and we expect this could be the case as we move forward. Part of our investment strategy is to have enough flexibility to avoid being forced by market conditions to sell a position we don’t want to sell. Also, if we see a fresh opportunity, we want to have enough cash available to buy a meaningful stake immediately.

As of March 31, 2004, the Fund’s top five equity holdings (as a percentage of the portfolio’s net assets) were¹:


YUM! Brands, Inc.	4.0	%
Coventry Health Care, Inc.	3.9	%
Allstate Corp.	3.9	%
XTO Energy, Inc.	3.8	%
Cendant Corp.	3.8	%

Economic growth could start to slow.

To be honest, we never know which way the stock market is going to go in the short run, and we regularly remind ourselves of that fact. That said, we’re optimistic that, with corporate earnings rising and interest rates still low, we could realize positive performance over the next six months – while not expecting the outsize returns of the last six months.

In a larger sense, the economy still looks relatively good, but prospects for further growth are not as promising as they were at the beginning of our reporting period. In response, we have begun to shed some of our consumer discretionary holdings.


Aggregate Total Return	As of March 31, 2004

Class	Inception Date	Six Months		Since Inception
A Shares*	6/2/03	13.57	%	19.56	%
B Shares**	6/2/03	15.05	%	21.05	%
C Shares***	6/2/03	19.05	%	25.05	%
Institutional Shares	6/2/03	20.66	%	27.06	%
S&P 500 Index	5/31/03	14.07	%	18.58	%

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC), maximum of 5.00%..

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

The Fund is measured against the S&P 500 Index, an unmanaged index which is generally considered to be representative of the performance of the stock market as a whole. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T INTERNATIONAL EQUITY FUND

PORTFOLIO MANAGER

UBS Global Asset Management

The BB&T International Equity Fund is managed by a team of portfolio managers at UBS Global Asset Management, subadviser to the Fund. Key team members include Thomas P. Madsen, CFA, managing director and global head of equities; Bruno Bertocci, executive director and global portfolio manager; and Lydia J. Miller, managing director and global portfolio manager. Mr. Madsen earned BBA and MS degrees from the University of Wisconsin and has 24 years of investing experience. Mr. Bertocci received a BA degree from Oberlin College and an MBA from the Harvard Graduate School of Business and also has 24 years of investing experience. Ms. Miller earned a BS from the Pennsylvania State University and an MBA from the University of Chicago, and brings 18 years of investing experience to the team.

INVESTMENT CONCERNS

There are risks associated with investing in foreign companies, such as erratic market conditions, economic and political instability and fluctuations in currency and exchange rates.

PORTFOLIO MANAGERS’ PERSPECTIVE

“Our investment philosophy focuses on a stock’s price, relative to its intrinsic (or fundamental) value. We identify discrepancies between a security’s intrinsic value and its observed market price—both across and within global equity markets. We attempt to exploit these discrepancies using a disciplined fundamental approach. Our research teams evaluate companies in their markets around the world and assign relative price/value rankings based on the present value of each company’s expected future cash flows. Our equity strategy team utilizes a global network of resources to systematically develop portfolio strategy in the context of integrated global capital markets. Currency strategies are developed separately and coordinated with country allocations. The result is a diversified portfolio of international stocks that we believe could provide solid, long-term performance while potentially managing risk.”

Our bottom-up approach has led us to find compelling opportunities

During the last six months, many of the same economic factors that boosted economic growth in the U.S. did the same in many foreign markets. Consequently, international stocks as a group did quite well, by historical standards. While we’ve seen a moderate amount of rotation into higher-quality names in recent months, for most of the period, low-price, lower-quality issues have led the way. Globally, investors have shown the same appetite for risk, and these circumstances have played out across geographic regions, as well as across market sectors. Further, emerging markets have outperformed developed markets.

It’s not surprising, therefore, that regions with lower-quality stocks, on balance, have outperformed regions with higher-quality stocks.

While the most economically sensitive, and leveraged, companies–including technology names–have run up very quickly, there are still very attractive opportunities for a bottom-up manager to selectively identify companies characterized by strong fundamentals and positive, long-term outlooks. We’re focusing particularly on consumer, health care and financial names. In this latter sector, we are overweighted in banks, as opposed to large, diversified financial conglomerates.

From a country perspective, our single largest under-weighting is in Germany, where we have found most companies to be unattractively overleveraged (dependent on debt) and, in our opinion, overvalued by investors. Conversely, we are overweighted in the United Kingdom, where we have been drawn to a number of energy and consumer stocks.

As of March 31, 2004, the Fund’s country composition (as a percentage of the portfolio’s net assets) was¹:


Continental Europe	39.2	%
Great Britain	32.3	%
Japan	19.2	%
Other Pacific Basin	6.3	%
Emerging Markets	0.8	%

As of March 31, 2004, the Fund’s top five equity holdings (as a percentage of the portfolio’s net assets) were¹:


Vodafone Group PLC	3.2	%
BP PLC	2.8	%
Total SA	2.8	%
Nestle SA	2.5	%
Royal Bank of Scotland Group PLC	2.4	%

We don’t expect to make dramatic changes this year

Looking out over the next six- to 12-months, we expect to see continued economic growth, though probably at a slower pace than was evident in the third and fourth calendar quarters of 2003. Also, we wouldn’t be surprised if many central banks began tightening credit by raising short-term interest rates, though such a move would be driven by our own Federal Reserve, which could very well hold steady until after the November elections.

As for the global stock markets themselves, we’re finding most stocks to be fairly valued, narrowing available opportunities. We’ll continue to focus on such areas as U.K. consumer stocks, and on a global level, banks and health care names.


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		Since Inception
A Shares*	1/2/97	12.10	%	35.04	%	–3.09	%	0.31	%
B Shares**	1/2/97	13.42	%	37.71	%	–2.86	%	0.39	%
C Shares***	2/1/01²	17.24	%	41.71	%	–2.71	%	0.39	%
Institutional Shares	1/2/97	18.88	%	43.33	%	–1.75	%	1.37	%
MSCI EAFE Index	12/30/96	22.27	%	58.15	%	0.83	%	3.67	%

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC), maximum of 5.00%..

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

²	Class C Shares were not in existence before 2/1/01. Performance for periods prior to that is based on the historical performance of the Class B Shares and has been adjusted for the maximum CDSC applicable to Class C Shares.

The Fund is measured against the MSCI EAFE Index, an unmanaged index which is generally representative of the performance of stock markets in that region. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T SHORT U.S. GOVERNMENT FUND

(Formerly known as the BB&T Short U.S. Government Income Fund)

PORTFOLIO MANAGER

Kevin E. McNair, CFA

The BB&T Short U.S. Government Fund is managed by Kevin E. McNair, CFA. Mr. McNair received a B.A. in Economics from the University of North Carolina-Chapel Hill and a Master’s of Economics from North Carolina State University, and has been managing investors’ money since 1994. Mr. McNair is supported by the BB&T Fixed Income Portfolio Management Team, which includes Brad D. Eppard, CFA; Joseph D. Jackson, CFA; W. Bishop Jordan, CFA; Robert F. Millikan, CFA; Dickinson B. Phillips, CFP^™; and Jennifer Skinner. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of specialized skills encompassing a cross-section of fixed-income sectors.

INVESTMENT CONCERNS

PORTFOLIO MANAGERS’ PERSPECTIVE

“This high-quality bond fund is geared toward investors looking for current income to meet their short-term needs, with limited fluctuations in principal. We seek to provide value by rotating among different sectors of the taxable, fixed-income market — Treasuries, mortgage-backed securities, agency paper and corporate debt — purchasing securities that offer the most potential for relative outperformance, and limiting movements in the portfolio’s duration within a relatively tight range.”

Market volatility reflected international tensions.

Interest rates ended the last six months at pretty much the same level as they began it, though we did see some volatility within the period in intermediate- and long-term securities. However, this was not the case at the short end of the yield curve, where the Fund does most of its buying. As the period moved along, employment data remained weak, and a consensus grew that the Federal Reserve would hold off raising short-term interest rates. Consequently, based on these expectations, rates for short-term securities moved hardly at all.

Another dynamic at work in the government bond market was the unstable international situation: the war in Iraq, tension in the Middle East, the bombing in Spain and other continuing concerns about terrorism. When investors got nervous, they often fled to the safety of Treasury securities, but the inflows and outflows of assets were nearly as volatile as global events.

As of March 31, 2004, the effective duration of the Short U.S. Government Fund was 1.61.

Approximately 41.6% of the portfolio was invested in U.S. government agency securities, 32.4% in mortgage-backed securities, 8.6% in corporate debt and asset-backed securities, 15.3% in securities issued by the U.S. Treasury, and 3.0% in cash and cash equivalents. The securities in the portfolio had an average credit quality of Aaa (as rated by Moody’s).¹

We will keep a close watch on jobs numbers and commodity prices.

Looking ahead, we don’t believe it’s wise to keep the portfolio’s duration (interest-rate sensitivity) too long or too short. There’s a great deal of uncertainty about what the Fed might or might not do. Shortly after our period ended, employment data began looking more positive and we believe that sustained improvement in the jobs picture could lead the Fed to raise rates sooner than previously expected.

Further, oil prices have risen sharply in recent months, as have some other commodities, such as metals. If producer costs jump, these costs could be passed on to consumers, igniting inflation and further convincing the Fed that interest rates have to be set higher. All of these factors bear close scrutiny in the months to come.


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		10 Year
A Shares*	11/30/92	–1.94	%	–1.63	%	4.00	%	4.73	%
Institutional Shares	11/30/92	1.26	%	1.67	%	4.88	%	5.31	%
Merrill Lynch 1-5 Year U.S. Government Bond Index	N/A	1.51	%	2.90	%	5.99	%	6.24	%

*	Reflects 3.00% maximum sales charge.

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

The Fund is measured against the Merrill Lynch 1-5 Year U.S. Government Bond Index, an unmanaged index which measures the performance of U.S. Government bonds in that maturity range. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performances reflect the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T INTERMEDIATE U.S. GOVERNMENT FUND

(Formerly known as the BB&T Intermediate U.S. Government Bond Fund)

PORTFOLIO MANAGER

Brad D. Eppard, CFA

The BB&T Intermediate U.S. Government Fund is managed by Brad D. Eppard, CFA. Mr. Eppard received a B.S. in Business Administration and Accounting from Radford University and has been managing investors’ money since 1986. Mr. Eppard is supported by the BB&T Fixed Income Portfolio Management Team, which includes Joseph D. Jackson, CFA; W. Bishop Jordan, CFA; Kevin E. McNair, CFA; Robert F. Millikan, CFA; Dickinson B. Phillips, CFP^™; and Jennifer Skinner. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of specialized skills encompassing a cross-section of fixed-income sectors.

INVESTMENT CONCERNS

PORTFOLIO MANAGERS’ PERSPECTIVE

“This high-quality bond fund should be attractive to investors seeking to capture the total return available from intermediate-term U.S. government bonds. Our process attempts to identify those securities and sectors that are most attractively priced and offer the best potential for relative outperformance. We seek to provide value by strategically investing along the yield curve and rotating among sectors—Treasuries, mortgage-backed securities, agency paper and corporate debt—while keeping movements in the portfolio’s duration within a relatively tight range.”

Bonds were moved by interest rates and jobs data.

When we look at the yield curve over the last six months, it didn’t change dramatically from the beginning of the period to the end. However, in the interim, we saw some significant swings up and down. A lot of investors focused on economic news such as job reports, along with the Federal Reserve’s anticipated response. While employment news improved in April, after our period ended, we were surprised by a string of disappointing numbers throughout the last six months.

Entering the period, we were defensively positioned with the Fund’s duration (a measure of interest-rate sensitivity), since we expected the economy to improve. To be quite frank, we found economic growth to be benign and unsatisfactory. But bad news for the economy can mean good news for the bond market, and the period was marked by a number of bond rallies sparked by less-than-stellar economic data.

While our below-average duration presented a challenge, our sector selection was a plus. We were overweighted in agency securities, which performed well and added to the Fund’s total return.

As of March 31, 2004, the effective duration of the Intermediate U.S. Government Fund was 3.41. Approximately 47.3% of the portfolio was in Agency debt, 34.5% in mortgage-backed securities, 8.7% in corporate bonds, 7.0% in U.S. Treasuries and 2.2% in cash equivalents. The securities in the portfolio’s had an average credit quality of Aaa (as rated by Moody’s).¹

We will continue to seek incremental yield from high-quality securities.

We remain heavily weighted in agency and mortgage-backed securities, which can provide additional income over Treasuries of like maturities. We also have been buying callable maturities with maturities in the neighborhood of three years. Because these securities can be called, or redeemed before maturity, by their issuers, they offer above-average yields. But because they have relatively short maturities, we’re not overly concerned about the risk that they will be called.

We’re also realizing additional income by buying some highly rated corporate bonds; because these securities are not backed by the U.S. government, they provide higher yields.

We believe the most critical factor going forward is the jobs picture. In early April, at the start of our new reporting period, non-farm payrolls came in higher than expected for March, putting pressure on bond prices and hiking interest rates. Perhaps our next important decision could be to choose when to structure the portfolio to be even more defensive than it was at the end of March.

Most likely, we’ll continue doing much of what we did during the last six months: stay slightly defensive from a duration standpoint, seek out opportunities to maximize current income and keep an eye on the employment data.


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		10 Year
A Shares*	10/9/92	–3.90	%	–2.97	%	4.91	%	5.79	%
B Shares**	1/1/96²	–3.41	%	–1.83	%	5.20	%	5.68	%
C Shares***	2/1/01²	0.65	%	2.20	%	5.76	%	6.22	%
Institutional Shares	10/9/92	2.04	%	3.21	%	6.40	%	6.68	%
Lehman Brothers Government/ Mortgage Bond Index	N/A	2.87	%	4.08	%	6.75	%	7.35	%

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC), maximum of 5.00%..

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

Class B Shares were not in existence prior to 1/1/96. Performance for periods prior to that is based on the historical performance of the Class A Shares, and has been adjusted for the maximum CDSC applicable to the Class B Shares, but does not include the Class B Shares 12b-1 fees, which, if reflected, would have lowered performance. Class C Shares were not in existence prior to 2/1/01. Performance for periods prior to that is based on the historical performance of the Class A Shares, and has been adjusted for the maximum CDSC applicable to Class C Shares, but does not include the Class C Shares 12b-1 fees, which if reflected, would have lowered performance.

The Fund is measured by the Lehman Brothers Government/Mortgage Bond Index an unmanaged index which is widely used as a broad measure of the performance of U.S. Government bonds with maturities of less than 10 years, and agency mortgage backed securities. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T INTERMEDIATE CORPORATE BOND FUND

PORTFOLIO MANAGER

Joseph D. Jackson, CFA

The BB&T Intermediate Corporate Bond Fund is managed by Joseph D. Jackson, CFA, who has managed the Fund since its inception. Mr. Jackson graduated from Wake Forest University, where he received a B.A. in History and also earned an M.B.A. Mr. Jackson is supported by the BB&T Fixed Income Portfolio Management Team, which includes Brad D. Eppard, CFA; W. Bishop Jordan, CFA; Kevin E. McNair, CFA; Robert F. Millikan, CFA and Dickinson B. Phillips, CFP^™. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of specialized skills encompassing a cross-section of fixed-income sectors.

INVESTMENT CONCERNS

PORTFOLIO MANAGERS’ PERSPECTIVE

“The majority of the issues we hold are intermediate-term, investment-grade corporate bonds. We expect this type of portfolio to generate more income than is available from short-term corporate securities or from intermediate U.S. government securities. At the same time, this is not a pure income fund with minimal price fluctuations. Because we also pursue long-term capital gains, the Fund will experience short-term volatility from time to time. However, with volatility comes the opportunity to produce an attractive total return, in addition to a relatively generous yield. Therefore, we believe the Fund can benefit both income investors and long-term growth investors seeking to balance the equity portions of their individual portfolios.”

Yield ‘spreads’ narrowed considerably.

In our last report, six months ago, we noted that corporate securities provided significantly higher yields than Treasury securities of like maturities. During the most recent reporting period, which ended March 31, 2004 these yield “spreads” narrowed – that is, the different between corporate yields and Treasury yields were much less pronounced.

A number of factors have conspired to shrink this former yield advantage. We believe that with enormous geopolitical risks – the war in Iraq, there are heightened fears about possible terrorist attacks –concerns over job growth and doubts about the sustainability of the economy, the climate is such that corporate securities don’t offer the yield advantage they did 18, or even 12, months ago. And further yield narrowing, which could drive corporate security prices higher, is unlikely in the near term, in our opinion.

With the yield advantage evaporating, our focus has now turned to protecting some of the growth the Fund has generated over the last year. To this end, we’ve liquidated much of the lower-grade, higher-yielding securities in the portfolio. At this point, we don’t believe we’re being sufficiently compensated for the risk that’s inherent in the bond market. If we can sell a lower-rated bond, and move up in quality without giving up a lot in yield, we think that makes a whole lot of sense.

On the positive side, corporations in general appear to be continuing to clean up their balance sheets; earnings growth is evident, and companies appear to be relying less on leverage (debt) than they did several years ago. But while we have seen marked improvement in these areas, we’re still not sure how the economy will fare beyond the next three to six months.

As of March 31, 2004, the Fund’s effective duration was 5.23. Approximately 93.3% of the portfolio was invested in corporate obligations, 2.3% in U.S. government securities and 2.1% in cash and cash equivalents. The securities in the portfolio had an average credit quality was A3 (as rated by Moody’s).¹

The jobs picture will influence the Federal Reserve.

Interest rates drive bond prices higher or lower, so the direction interest rates take is of primary concern. We believe it’s pretty much a given that the next big move for interest rates will be up. The big question in our mind is, what’s going to happen with employment growth and wage increases? If the jobs data continues to improve, we feel the Fed is likely to raise rates sooner, rather than later.


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		Since Inception
A Shares*	12/2/99	–2.78	%	1.20	%	6.33	%
B Shares**	12/2/99	–2.18	%	2.54	%	6.67	%
C Shares***	2/1/01²	1.82	%	6.54	%	7.06	%
Institutional Shares	12/2/99	3.33	%	7.61	%	8.05	%
Lehman Brothers U.S. Credit Index	11/30/99	3.78	%	8.61	%	9.41	%

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC), maximum of 5.00%..

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

²	Class C Shares were not in existence prior to 2/1/01. Performance for periods prior to that is based on the historical performance of the Class B Shares, and has been adjusted for the maximum CDSC applicable to Class C Shares.

The Fund is measured against the Lehman Brothers U.S. Credit Index, an unmanaged index which is generally representative of fixed-rate, non-convertible domestic corporate debt securities. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T KENTUCKY INTERMEDIATE TAX-FREE FUND

PORTFOLIO MANAGER

Robert F. Millikan, CFA

The BB&T Kentucky Intermediate Tax-Free Fund is managed by Robert F. Millikan, CFA, Director of Fixed Income Management for BB&T Asset Management, Inc. Mr. Millikan received a B.A. in Economics from Wake Forest University, and is a past president of the North Carolina Society of Financial Analysts and chairman of the board of directors of the Carolinas Municipal Advisory Council. Mr. Millikan has been managing investors’ money since 1990. He is supported by the BB&T Fixed Income Portfolio Management Team, which includes Brad D. Eppard, CFA; Joseph D. Jackson, CFA; W. Bishop Jordan, CFA; Kevin E. McNair, CFA and Dickinson B. Phillips, CFP^™. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of specialized skills encompassing a cross-section of fixed-income sectors.

INVESTMENT CONCERNS

Because the Fund is non-diversified and invests primarily in Kentucky municipal securities, the Fund is particularly susceptible to any economic, political, or regulatory developments affecting a particular issuer of Kentucky municipal securities. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return.

PORTFOLIO MANAGERS’ PERSPECTIVE

“The goal of this Fund is to maximize total return while providing high current income that is exempt from both federal and state income taxes (the latter for Kentucky residents). We are municipal bond value investors. We compare the historical relationships among sectors of the municipal market—such as general obligation bonds, revenue bonds and certificate of participation bonds—and allocate greater portions of our assets to sectors that offer the best relative value. The Fund focuses on intermediate-term securities, maintaining an average duration between 3.5 and 8.0, which historically have offered investors the highest possible yield for the given level of risk.”

Broad economic factors produced some volatility

The last six months could correctly be divided into two, three-month periods: the last calendar quarter of 2003, when bonds didn’t do particularly well, and the first quarter of 2004, when bonds produced moderately positive returns.

At the beginning of our reporting period, fixed-income securities came under pressure from rising interest rates – which generally cause bond prices to fall – and a consensus that the economy was recovering strongly, also bad news for bonds. Further, the stock market was moving higher and presented an attractive alternative, which motivated investors to move a significant amount of capital from bonds to stocks. Nonetheless, municipal bonds outperformed their taxable counterparts during the period’s early months, due to a dearth of new municipal issues, which made existing securities more desirable.

Circumstances changed as 2004 began. In the first calendar quarter of the new year, the lack of job growth, as based on non-farm payroll numbers, gave the fixed-income market a boost. We saw a string of three, successive, disappointing employment numbers, which prompted people to doubt the strength of the country’s economic recovery, and seek relative stability in the bond market. Other pluses for bonds, which often benefit from otherwise gloomy news, were geopolitical concerns and rising energy prices. The jobs outlook did turn strongly positive in April, but that was after the end of our reporting period. However, municipal bonds underperformed Treasury and corporate securities, primarily due to a heavy supply of new municipal issuance in March.

Although interest rates across the yield curve fell during the period, municipal bonds offered yields that were attractive on a relative basis.

As of March 31, 2004, 96.6% of the Fund’s bond holdings were debt instruments issued by government entities in Kentucky. Approximately 4.5% was invested in general obligation bonds, 92.8% in revenue bonds and 1.7% invested in cash and cash equivalents. The effective duration of the portfolio was 4.95 and the average credit quality was Aa1 (as rated by Moody’s).¹

Municipal securities should hold up moderately well in the coming months

From a credit perspective, we have a positive outlook for the next six- to 12-months. We anticipate that, among other things, tax receipts in the state will continue to grow, which is a plus for government entities that participate in the municipal market.

We are slightly defensive from an interest-rate standpoint; while we are trying to capture as much incremental income, or yield, as possible, the steepness of the yield curve means that the portfolio’s duration is a bit shorter than average. While we don’t expect interest rates to soar in the next few months, we do believe the next major move for rates will be up, and we don’t want to get caught with too much interest-rate exposure (which could adversely affect the Fund’s net asset value).


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		Since Inception
A Shares*	2/24/03	–1.04	%	1.49	%	3.67	%
Institutional Shares	2/24/03	2.14	%	4.75	%	5.32	%
Lehman Brothers 7-Year Municipal Bond Index	2/28/03	2.32	%	5.60	%	5.12	%

*	Reflects 3.00% maximum sales charge.

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

The Fund is measured against the Lehman Brothers 7-Year Municipal Bond Index an unmanaged index which is representative of municipal bonds with a minimum credit rating of at least Baa, have a maturity value of at least $5 million and a maturity range of 6-8 years. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T MARYLAND INTERMEDIATE TAX-FREE FUND

PORTFOLIO MANAGER

Robert F. Millikan, CFA

The BB&T Maryland Intermediate Tax-Free Fund is managed by Robert F. Millikan, CFA, Director of Fixed Income Management for BB&T Asset Management, Inc. Mr. Millikan received a B.A. in Economics from Wake Forest University, and is past president of the North Carolina Society of Financial Analysts and chairman of the board of directors of the Carolinas Municipal Advisory Council. Mr. Millikan has been managing money since 1990. He is supported by the BB&T Fixed Income Portfolio Management Team, which includes Joseph D. Jackson, CFA; Kevin E. McNair, CFA; W. Bishop Jordan, CFA; Dickinson B. Phillips, CFP and Brad D. Eppard, CFA. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of specialized skills encompassing a cross-section of fixed-income sectors.

INVESTMENT CONCERNS

Because the Fund is non-diversified and invests primarily in Maryland municipal securities, the Fund is particularly susceptible to any economic, political, or regulatory developments affecting a particular issuer of Maryland municipal securities. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return.

PORTFOLIO MANAGERS’ PERSPECTIVE

“The goal of this Fund is to maximize total return while providing high current income that is exempt from both federal and state income taxes (the latter for Maryland residents). We are municipal bond value investors. We compare the historical relationships among sectors of the municipal market—such as general obligation bonds, revenue bonds and certificate of participation bonds—and allocate greater portions of our assets to sectors that offer the best relative value. The Fund focuses on intermediate-term securities, maintaining an average duration between 3.5 and 8.0, which historically have offered investors the highest possible yield for the given level of risk.”

Broad economic factors produced some volatility

Although interest rates across the yield curve fell during the period, municipal bonds offered yields that were attractive on a relative basis.

As of March 31, 2004, 93.7% of the Fund’s bond holdings were debt instruments issued by government entities in Maryland. Approximately 63.2% was invested in general obligation bonds, 39.5% in revenue bonds and 2.1% invested in cash and cash equivalents. The effective duration of the portfolio was 5.00 and the average credit quality was Aa1 (as rated by Moody’s).¹

Municipal securities should hold up moderately well in the coming months


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		Since Inception
A Shares*	2/24/03	–1.12	%	1.24	%	–1.85	%
Institutional Shares	2/24/03	2.07	%	4.61	%	4.61	%
Lehman Brothers 7-Year Municipal Bond Index	2/28/03	2.32	%	5.60	%	5.12	%

*	Reflects 3.00% maximum sales charge.

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

The Fund is measured against the Lehman Brothers 7-Year Municipal Bond Index an unmanaged index which is representative of municipal bonds with a minimum credit rating of at least Baa, have a maturity value of at least $5 million and a maturity range of 6-8 years. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T NORTH CAROLINA INTERMEDIATE TAX-FREE FUND

PORTFOLIO MANAGER

Robert F. Millikan, CFA

The BB&T North Carolina Intermediate Tax-Free Fund is managed by Robert F. Millikan, CFA, Director of Fixed Income Management for BB&T Asset Management, Inc. Mr. Millikan received a B.A. in Economics from Wake Forest University, and is past president of the North Carolina Society of Financial Analysts and chairman of the board of directors of the Carolinas Municipal Advisory Council. Mr. Millikan has been managing investors’ money since 1990. He is supported by the BB&T Fixed Income Portfolio Management Team, which includes Joseph D. Jackson, CFA; Kevin E. McNair, CFA; W. Bishop Jordan, CFA; Dickinson B. Phillips, CFP and Brad D. Eppard, CFA. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of specialized skills encompassing a cross-section of fixed-income sectors.

INVESTMENT CONCERNS

Because the Fund is non-diversified and invests primarily in North Carolina municipal securities, the Fund is particularly susceptible to any economic, political, or regulatory developments affecting a particular issuer of North Carolina municipal securities. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return.

PORTFOLIO MANAGERS’ PERSPECTIVE

“The goal of this Fund is to maximize total return while providing high current income that is exempt from both federal and state income taxes (the latter for North Carolina residents). We are municipal bond value investors. We compare the historical relationships among sectors of the municipal market—such as general obligation bonds, revenue bonds and certificate of participation bonds—and allocate greater portions of our assets to sectors that offer the best relative value. The Fund focuses on intermediate-term securities, maintaining an average duration between 3.5 and 8.0, which historically have offered investors the highest possible yield for the given level of risk.”

Broad economic factors produced some volatility

At the beginning of our reporting period, fixed-income securities came under pressure from rising interest rates–which generally cause bond prices to fall–and a consensus that the economy was recovering strongly, also bad news for bonds. Further, the stock market was moving higher and presented an attractive alternative, which motivated investors to move a significant amount of capital from bonds to stocks. Nonetheless, municipal bonds outperformed their taxable counterparts during the period’s early months, due to a dearth of new municipal issues, which made existing securities more desirable.

Although interest rates across the yield curve fell during the period, municipal bonds offered yields that were attractive on a relative basis.

As of March 31, 2004, 97.6%, and 0.5% of the Fund’s bond holdings were debt instruments issued by government entities in North Carolina and Puerto Rico, respectively. Approximately 39.4% was invested in general obligation bonds, 39.6% in revenue bonds and 4.8% in certificates of participation, with 10.0% escrowed to maturity, 3.0% in pre-refunded and 3.2% invested in cash and cash equivalents. The effective duration of the portfolio was 5.12 and the average credit quality was Aa1 (as rated by Moody’s).¹

Municipal securities should hold up moderately well in the coming months

From a credit perspective, we have a positive outlook for the next six to 12 months. We anticipate that, among other things, tax receipts in the state will continue to grow, which is a plus for government entities that participate in the municipal market.


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		10 Year
A Shares*	10/16/92	–1.36	%	0.56	%	4.25	%	4.62	%
Institutional Shares	10/16/92	1.73	%	3.79	%	5.02	%	5.09	%
Lehman Brothers 7-Year Municipal Bond Index	N/A	2.32	%	5.60	%	6.01	%	6.40	%

*	Reflects 3.00% maximum sales charge.

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

The Fund is measured against the Lehman Brothers 7-Year Municipal Bond Index, an unmanaged index which is representative of municipal bonds with a minimum credit rating of at least Baa, have a maturity value of at least $5 million and a maturity range of 6-8 years. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower

BB&T SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND

PORTFOLIO MANAGER

Robert F. Millikan, CFA

The BB&T South Carolina Intermediate Tax-Free Fund is managed by Robert F. Millikan, CFA, Director of Fixed Income Management for BB&T Asset Management, Inc. Mr. Millikan received a B.A. in Economics from Wake Forest University, and is past president of the North Carolina Society of Financial Analysts and chairman of the board of directors of the Carolinas Municipal Advisory Council. Mr. Millikan has 13 years of investment experience. He is supported by the BB&T Fixed Income Portfolio Management Team, which includes Joseph D. Jackson, CFA; Kevin E. McNair, CFA; W. Bishop Jordan, CFA; Dickinson B. Phillips, CFP and Brad D. Eppard, CFA. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of specialized skills encompassing a cross-section of fixed-income sectors.

INVESTMENT CONCERNS

Because the Fund is non-diversified and invests primarily in South Carolina municipal securities, the Fund is particularly susceptible to any economic, political, or regulatory developments affecting a particular issuer of South Carolina municipal securities. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return.

PORTFOLIO MANAGERS’ PERSPECTIVE

“The goal of this Fund is to maximize total return while providing high current income that is exempt from both federal and state income taxes (the latter for South Carolina residents). We are municipal bond value investors. We compare the historical relationships among sectors of the municipal market—such as general obligation bonds, revenue bonds and certificate of participation bonds—and allocate greater portions of our assets to sectors that offer the best relative value. The Fund focuses on intermediate-term securities, maintaining an average duration between 3.5 and 8.0, which historically have offered investors the highest possible yield for the given level of risk.”

Broad economic factors produced some volatility

At the beginning of our reporting period, fixed-income securities came under pressure from rising interest rates–which generally cause bond prices to fall–and a consensus that the economy was recovering strongly, also bad news for bonds. Further, the stock market was moving higher and presented an attractive alternative, which motivated investors to move a significant amount of capital from bonds to stocks. Nonetheless, municipal bonds outperformed their taxable counterparts during the period’s early months, due to a dearth of new municipal issues, which made existing securities more desirable.

Although interest rates across the yield curve fell during the period, municipal bonds offered yields that were attractive on a relative basis.

As of March 31, 2004, 97.7% of the Fund’s bond holdings were debt instruments issued by government entities in South Carolina. Approximately 43.2% was invested in general obligation bonds, 51.9% in revenue bonds and 1.0% in pre-refunded, with 2.4% escrowed to maturity and 1.5% invested in cash and cash equivalents. The effective duration of the portfolio was 4.95 and the average credit quality was Aa1 (as rated by Moody’s).¹

Municipal securities should hold up moderately well in the coming months


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		Since Inception
A Shares*	10/20/97	–1.18	%	1.12	%	4.32	%	4.63	%
Institutional Shares	10/20/97	2.00	%	4.39	%	5.10	%	5.27	%
Lehman Brothers 7-Year Municipal Bond Index	10/31/97	2.32	%	5.60	%	6.01	%	6.04	%

*	Reflects 3.00% maximum sales charge.

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T VIRGINIA INTERMEDIATE TAX-FREE FUND

PORTFOLIO MANAGER

Robert F. Millikan, CFA

The BB&T Virginia Intermediate Tax-Free Fund is managed by Robert F. Millikan, CFA, Director of Fixed Income Management for BB&T Asset Management, Inc. Mr. Millikan received a B.A. in Economics from Wake Forest University, and is past president of the North Carolina Society of Financial Analysts and chairman of the board of directors of the Carolinas Municipal Advisory Council. Mr. Millikan has 13 years of investment experience. He is supported by the BB&T Fixed Income Portfolio Management Team, which includes Joseph D. Jackson, CFA; Kevin E. McNair, CFA; W. Bishop Jordan, CFA; Dickinson B. Phillips, CFP and Brad D. Eppard, CFA. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of specialized skills encompassing a cross-section of fixed-income sectors.

INVESTMENT CONCERNS

Because the Fund is non-diversified and invests primarily in Virginia municipal securities, the Fund is particularly susceptible to any economic, political, or regulatory developments affecting a particular issuer of Virginia municipal securities. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return.

PORTFOLIO MANAGERS’ PERSPECTIVE

“The goal of this Fund is to maximize total return while providing high current income that is exempt from both federal and state income taxes (the latter for Virginia residents). We are municipal bond value investors. We compare the historical relationships among sectors of the municipal market—such as general obligation bonds, revenue bonds and certificate of participation bonds—and allocate greater portions of our assets to sectors that offer the best relative value. The Fund focuses on intermediate-term securities, maintaining an average duration between 3.5 and 8.0, which historically have offered investors the highest possible yield for the given level of risk.”

Broad economic factors produced some volatility

Although interest rates across the yield curve fell during the period, municipal bonds offered yields that were attractive on a relative basis.

As of March 31, 2004, 96.8% and 2.1% of the Fund’s bond holdings were debt instruments issued by government entities in Virginia and Washington D.C., respectively. Approximately 38.7% was invested in general obligation bonds, 53.8% in revenue bonds and 6.7% in pre-refunded and 0.9% invested in cash and cash equivalents. The effective duration of the portfolio was 5.14 and the average credit quality was Aa1 (as rated by Moody’s).¹

Municipal securities should hold up moderately well in the coming months


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		Since Inception
A Shares*	5/17/99	–1.44	%	0.69	%	4.70	%
Institutional Shares	5/17/99	1.68	%	3.90	%	5.23	%
Lehman Brothers 7-Year Municipal Bond Index	5/31/99	2.32	%	5.60	%	6.28	%

*	Reflects 3.00% maximum sales charge.

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

The Fund is measured against the Lehman Brothers 7-Year Municipal Bond Index an unmanaged index which is representative of municipal bonds with a minimum credit rating of at least Baa, have a maturity value of at least $5 million and a maturity range of 6-8 years. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T WEST VIRGINIA INTERMEDIATE TAX-FREE FUND

PORTFOLIO MANAGER

Robert F. Millikan, CFA

The BB&T West Virginia Intermediate Tax-Free Fund is managed by Robert F. Millikan, CFA, Director of Fixed Income Management for BB&T Asset Management, Inc. Mr. Millikan received a B.A. in Economics from Wake Forest University, and is a past president of the North Carolina Society of Financial Analysts and chairman of the board of directors of the Carolinas Municipal Advisory Council. Mr. Millikan has been managing investors’ money since 1990. He is supported by the BB&T Fixed Income Portfolio Management Team, which includes Brad D. Eppard, CFA; Joseph D. Jackson, CFA; W. Bishop Jordan, CFA; Kevin E. McNair, CFA and Dickinson B. Phillips, CFP^™. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of specialized skills encompassing a cross-section of fixed-income sectors.

INVESTMENT CONCERNS

Because the Fund is non-diversified and invests primarily in West Virginia municipal securities, the Fund is particularly susceptible to any economic, political, or regulatory developments affecting a particular issuer of West Virginia municipal securities. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return.

PORTFOLIO MANAGERS’ PERSPECTIVE

“The goal of this Fund is to maximize total return while providing high current income that is exempt from both federal and state income taxes (the latter for West Virginia residents). We are municipal bond value investors. We compare the historical relationships among sectors of the municipal market—such as general obligation bonds, revenue bonds and certificate of participation bonds—and allocate greater portions of our assets to sectors that offer the best relative value. The Fund focuses on intermediate-term securities, maintaining an average duration between 3.5 and 8.0, which historically have offered investors the highest possible yield for the given level of risk.”

Broad economic factors produced some volatility

At the beginning of our reporting period, fixed-income securities came under pressure from rising interest rates–which generally cause bond prices to fall–and a consensus that the economy was recovering strongly, also bad news for bonds. Further, the stock market was moving higher and presented an attractive alternative, which motivated investors to move a significant amount of capital from bonds to stocks. Nonetheless, municipal bonds outperformed their taxable counterparts during the period’s early months, due to a dearth of new municipal issues, which made existing securities more desirable.

Circumstances changed as 2004 began. In the first calendar quarter of the new year, the lack of job growth, as based on non-farm payroll numbers, gave the fixed-income market a boost. We saw a string of three, successive, disappointing employment numbers, which prompted people to doubt the strength of the country’s economic recovery, and seek relative stability in the bond market. Other pluses for bonds, which often benefit from otherwise gloomy news, were geopolitical concerns and rising energy prices. (The jobs outlook did turn strongly positive in April, but that was after the end of our reporting period.) However, municipal bonds underperformed Treasury and corporate securities, primarily due to a heavy supply of new municipal issuance in March.

Although interest rates across the yield curve fell during the period, municipal bonds offered yields that were attractive on a relative basis.

As of March 31, 2004, 97.8% of the Fund’s bond holdings were debt instruments issued by government entities in West Virginia. Approximately 17.9% was invested in general obligation bonds, 76.6% in revenue bonds with 4.7% escrowed to maturity and 0.8% invested in cash and cash equivalents. The effective duration of the portfolio was 4.95 and the average credit quality was Aa1 (as rated by Moody’s).¹

Municipal securities should hold up moderately well in the coming months


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		10 Year
A Shares*	12/17/93²	–1.27	%	1.00	%	4.23	%	5.34	%
Institutional Shares	12/1/93²	1.95	%	4.45	%	5.13	%	5.94	%
Lehman Brothers 7-Year Municipal Bond Index		2.32	%	5.60	%	6.01	%	6.40	%

*	Reflects 3.00% maximum sales charge.

¹	Portfolio composition is subject to change.

²	Fund performance as shown for Class A and Institutional Shares includes the performance of the OVB West Virginia Tax-Exempt Income Portfolio for the periods prior to its consolidation with the BB&T West Virginia Intermediate Tax-Free Fund on 7/23/01.

The Fund is measured against the Lehman Brothers 7-Year Municipal Bond Index an unmanaged index which is representative of municipal bonds with a minimum credit rating of at least Baa, have a maturity value of at least $5 million and a maturity range of 6-8 years. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

BB&T PRIME MONEY MARKET FUND

PORTFOLIO MANAGER

Federated Investment Management Company

The BB&T Prime Money Market Fund is managed by a team from Federated Investment Management Company, subadvisor to the Fund. The team is comprised of Deborah A. Cunningham, CFA (senior portfolio manager), Paige Wilhelm (co-portfolio manager), William Jamison, Natalie F. Metz, Mary Ellen Tesla and Mark F. Weiss, CFA, and a group of eight money-market traders. On average, team members bring more than a decade of investment management experience to the Fund, with specialization in money market portfolio management and credit analysis.

INVESTMENT CONCERNS

Investments in the BB&T Prime Money Market Fund are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any government agency. Although the Fund seeks to preserve the value of your investments at a $1.00 per share, it is possible to lose money by investing in the Fund.

PORTFOLIO MANAGERS’ PERSPECTIVE

“The Fund’s key objective is to provide high current income while maintaining the stability of our investors’ principal. We also strive to deliver higher income than would be expected from a government money-market fund. To achieve these goals, we employ a ‘barbell’ maturity structure, utilizing floating-rate positions at the very short end of the yield curve and buying longer-term debt with maturities in the range of six to 13 months. We find that this strategy can enable us to remain nimble in a market that is driven, sometimes with challenging volatility, by interest-rate activity.”

Short-term yields remained at historically low levels.

Although the Federal Reserve held off from taking action on interest rates during the period, the yield curve changed fairly dramatically during the period, based on investors’ expectations for potential rate hikes in the not-too-distant future. Earlier in the period, the difference between yields available from ultra-short, overnight paper and one-year securities was as much as 50 basis points (0.50%), a significant spread. Toward the end of the period, however, this spread narrowed to just 12-15 basis points.

With yields as low as they have been, a situation which is not positive for money market investors, we have taken sensible measures to generate incremental income, wherever possible. As always, we have kept close watch on interest-rate risk, and only bought longer-term paper when the spreads mentioned above made such purchases prudent.

As of March 31, 2004, approximately 34.5% of the BB&T Prime Money Market Fund’s portfolio was invested in variable rate instruments, 24.1% in commercial paper, 14.5% in collateralized loan agreements, 10.0% in corporate bonds, 10.4% in certificates of deposit, 4.4% in repurchase agreements, and 2.2% in U.S. government agencies. The average maturity of the Fund’s holdings was 54 days, and the average portfolio short-term credit quality was A-1/P-1.^1,2

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

²	The NAIC allows an insurance company to reclassify its money market funds that were classified as Schedule D and reschedule as Schedule DA-Part 1. Standard & Poor’s Fund Ratings represent an opinion only, not a recommendation to buy or sell.

Past performance does not guarantee future results. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please visit our website at www.bbandt.com.

BB&T U.S. TREASURY MONEY MARKET FUND

PORTFOLIO MANAGER

Kevin E. McNair, CFA

The BB&T U.S. Treasury Money Market Fund is managed by Kevin E. McNair, CFA. Mr. McNair received a B.A. in Economics from the University of North Carolina at Chapel Hill and a Master’s of Economics from North Carolina State University, and has been managing investors’ money since 1994. Mr. McNair is supported by the BB&T Fixed Income Portfolio Management Team, which includes Brad D. Eppard, CFA; Joseph D. Jackson, CFA; W. Bishop Jordan, CFA; Robert F. Millikan, CFA and Dickinson B. Phillips, CFP^™. The team brings to the Fund more than eight decades of combined investment management experience, along with a broad range of specialized skills encompassing a cross-section of fixed-income sectors.

INVESTMENT CONCERNS

Investments in the BB&T U.S. Treasury Money Market Fund are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any government agency. Although the Fund seeks to preserve the value of your investments at a $1.00 per share, it is possible to lose money by investing in the Fund.

PORTFOLIO MANAGERS’ PERSPECTIVE

“The Fund is designed for investors who seek current income, liquidity and stability, but with an added measure of safety offered by a portfolio that invests exclusively in U.S. Government securities. We have found that conservatively laddering the portfolio with Treasury securities and overnight repurchase agreements allows us to take advantage of higher yields along the yield curve. Laddering also provides us with the flexibility to react swiftly to changes in government policy, which can affect money market instruments. An added benefit is the state and local tax exemption provided by the income earned on the portfolio’s Treasury securities. Tax-exempt income boosts the Fund’s after-tax yields for investors, especially those who live in high-tax states.”

Short-term yields remained at historically low levels.

As of March 31, 2004 approximately 51.8% of the BB&T U.S. Treasury Money Market Fund’s portfolio was invested in repurchase agreements, with 25.0% in U.S. Treasury Bills and 23.1% in U.S. Treasury Notes. The average maturity of the Fund’s holdings was 45 days, and the average credit quality was AAA.^1,2

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

²	Standard & Poor’s Fund Ratings represent an opinion only, not a recommendation to buy or sell.

BB&T CAPITAL MANAGERS FUNDS

PORTFOLIO MANAGER

David R. Ellis

The BB&T Capital Manager Funds are managed by David R. Ellis, Director of Asset Allocation and Risk Management for BB&T Asset Management, Inc. Mr. Ellis graduated from the University of North Carolina-Chapel Hill, where he received a B.S. in Business, and has been managing investors’ money since 1982. Mr. Ellis is supported by the BB&T Balanced Portfolio Management Team, which includes Brad D. Eppard, CFA; Keith F. Karlawish, CFA; Richard B. Jones, CFA; James L. Luke, CFA; Robert F. Millikan, CFA; and Paige Henderson, CFA. The team brings to the Fund more than a century of combined investment management experience, along with a broad range of specialized skills encompassing value stocks, growth stocks and fixed-income securities.

INVESTMENT CONCERNS

PORTFOLIO MANAGERS’ PERSPECTIVE

“The great appeal, and principal benefit, of all of our Capital Manager Funds is that, by investing in underlying portfolios of multiple BB&T Funds, they are very broadly diversified among various, distinct asset classes and sectors. This enables investors who might be overwhelmed by the challenges of staying abreast of the financial markets, to take advantage of active professional management. We constantly monitor events in stock and bond markets in all domestic sectors and around the world, and we periodically rebalance each Capital Manager Fund back to predetermined allocation targets. With the Capital Manager Equity Fund, for example, nearly all of our assets normally will be invested in stock funds, but the precise composition of the portfolio will be based on prevailing market conditions.”

Capital Manager Conservative Growth Fund

Capital Manager Moderate Growth Fund

Capital Manager Growth Fund

Capital Manager Equity Fund

The BB&T Capital Manager Equity Fund was formerly named the BB&T Capital Manager Aggressive Growth Fund.

Our emphasis on stocks, over bonds, was the right move.

The last six months proved to be a very positive economic environment for the stock market. We had a very accommodating Federal Reserve – which kept short-term interest rates at 40-year lows – a strong, rebounding economy and growing corporate earnings. All in all, the period represented just about the best kind of climate for stocks.

With this constructive backdrop, we maintained a full allocation to equities in each of our four portfolios; for more than a year, we have been trimming back our exposure to bonds and reallocating those assets into underlying BB&T Funds that invest in stocks. All four funds benefited, in particular, from our holdings in the small-cap and mid-cap sectors; these areas generally outperformed large-cap stocks.

Foreign stocks also sparkled, and our international holdings added value. Considering how we are now in the midst of a global economic recovery, we feel that foreign investments should be an important contributor to the Funds’ performance going forward.

With regard to those assets that remain in underlying bond funds, our managers have been emphasizing yield, by investing in securities – such as agency, mortgage-backed and high-quality corporate bonds – that offer yield premiums over Treasury debt of like maturities.

As we would expect, our more aggressive Funds – those invested more heavily in underlying stock portfolios – performed better than less-aggressive Funds. Still, all four of our Funds produced historically solid returns.

As of March 31, 2004, these were the stock/bond/cash allocations for each of the four Capital Manager Funds¹:


	Common Stocks		Bonds		Cash/Cash Equivalents
Capital Manager Conservative Growth Fund	44.1	%	51.6	%	4.6	%
Capital Manager Moderate Growth Fund	67.5	%	26.4	%	6.2	%
Capital Manager Growth Fund	82.4	%	11.8	%	5.7	%
Capital Manager Equity Fund	94.1	%	0.0	%	5.8	%

We don’t expect inflation to become a serious impediment to growth.

Looking forward, most of the favorable forces mentioned earlier are still in effect. However, recent reports illustrating the strengthening economy are leading some observers to conclude that inflation might be a concern at some point. This could be more problematic for fixed-income investors, because rising rates directly impact bond prices (which move lower when rates rise).

As for equity investors, provided inflation doesn’t become part of companies’ capital allocation decisions – that is, as long as corporate managers don’t cut capital spending due to inflation worries – and doesn’t curtail consumer spending, stocks can continue to climb.

And while we are becoming more aware of cyclical inflation pressures, we believe there are still some widespread, deflationary factors at work – namely, technological innovations that boost worker productivity and continued globalization – and we are not overly concerned about inflation over the next six to 12 months.

¹	Portfolio composition is as of March 31, 2004 and is subject to change.

BB&T CAPITAL MANAGERS FUNDS

CAPITAL MANAGER CONSERVATIVE GROWTH FUND


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		Since Inception
A Shares*	1/29/98¹	1.35	%	10.10	%	1.56	%	2.72	%
B Shares**	1/29/99²	2.06	%	11.86	%	1.94	%	3.17	%
C Shares***	2/1/01³	5.95	%	15.74	%	2.25	%	3.26	%
Institutional Shares	10/2/9⁷	7.61	%	17.10	%	3.01	%	3.95	%

CAPITAL MANAGER MODERATE GROWTH FUND


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		Since Inception
A Shares*	1/29/98¹	3.84	%	17.04	%	0.38	%	1.92	%
B Shares**	1/29/99²	4.92	%	19.32	%	0.67	%	2.28	%
C Shares***	2/1/01³	8.86	%	23.22	%	1.14	%	2.51	%
Institutional Shares	10/2/9⁷	10.45	%	24.57	%	1.82	%	3.10	%

CAPITAL MANAGER GROWTH FUND


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		5 Year		Since Inception
A Shares*	1/29/98¹	5.84	%	21.74	%	–0.89	%	0.99	%
B Shares**	1/29/99²	6.95	%	24.16	%	–0.57	%	1.39	%
C Shares***	2/1/01³	10.93	%	28.34	%	–0.18	%	1.56	%
Institutional Shares	10/2/9⁷	12.47	%	29.55	%	0.54	%	2.12	%

CAPITAL MANAGER EQUITY FUND


Average Annual Total Return	As of March 31, 2004

Class	Inception Date	Six Months		1 Year		Since Inception
A Shares*	3/19/01	7.37	%	25.62	%	–2.90	%
B Shares**	3/19/01	8.61	%	28.44	%	–2.68	%
C Shares***	3/19/01	12.53	%	32.21	%	–1.81	%
Institutional Shares	3/19/01	14.12	%	33.59	%	–0.75	%

CAPITAL MANAGER BENCHMARK INDICES


Average Annual Total Return	As of March 31, 2004

	Inception Date	Six Months		1 Year		Since Inception
S&P 500 Index	10/2/97 3/19/01	14.07	%	35.10	%	3.99 0.91	% %
Lehman Brothers Int. Government Bond Index	10/2/97 3/19/01	2.00	%	3.58	%	6.76 6.46	% %

*	Reflects 5.75% maximum sales charge.

**	Reflects the applicable contingent deferred sales charge (CDSC) maximum of 5.00%..

***	Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase).

Class A Shares were not in existence prior to 1/29/98. Performance for periods prior to that is based on the historical performance of the Institutional Shares, and has been adjusted for the maximum sales charge applicable to the Class A Shares, but does not include the Class A Shares 12b-1 fees, which, if reflected, performance would have been lower.

Class B Shares were not in existence prior to 1/29/99. Performance for periods prior to that is based on the historical performance of the Class A Shares, and has been adjusted for the maximum CDSC applicable to the Class B Shares, but does not include the Class B Shares 12b-1 fees, which, if reflected, performance would have been lower.

Class C Shares were not in existence prior to 2/1/01. Performance for periods prior to that is based on the historical performance of the Class A Shares, and has been adjusted for the maximum CDSC applicable to the Class C Shares, but does not include the Class C Shares 12b-1 fees, which if reflected, performance would have been lower.

A portion of the Fund’s fees have been voluntarily waived. If the fees had not been waived, the Fund’s total return for the period would have been lower.

Balanced Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Common Stocks (57.9%)
Consumer Discretionary (5.6%)
Gannett Company, Inc.	2,550	$	224,757
Johnson Controls, Inc.	4,050		239,558
Lowe’s Companies, Inc.	7,750		435,007
Target Corp.	5,275		237,586
The Walt Disney Co.	16,600		414,834
Viacom Inc. — Class B	9,825		385,238

			1,936,980

Consumer Staples (5.9%)
Kimberly-Clark Corp.	6,475		408,573
PepsiCo, Inc.	11,825		636,775
Sara Lee Corp.	18,351		401,153
Sysco Corp.	5,300		206,965
Wal-Mart Stores, Inc.	6,475		386,493

			2,039,959

Energy (4.7%)
Anadarko Petroleum Corp.	4,725		245,039
Conocophillips	8,625		602,111
Exxon Mobil Corp.	10,925		454,371
Schlumberger, Ltd.	4,900		312,865

			1,614,386

Financials (12.3%)
American Express Co.	9,350		484,798
American International Group, Inc.	4,175		297,886
Bank of America Corp.	9,400		761,211
Charter One Financial, Inc.	6,950		245,752
Citigroup, Inc.	13,725		709,582
Fannie Mae	3,450		256,508
Jefferson-Pilot Corp.	8,425		463,459
Merrill Lynch & Company, Inc.	8,800		524,128
Wells Fargo & Co.	8,975		508,613

			4,251,937

Health Care (7.4%)
Amgen, Inc.(b)	3,075		178,873
Anthem, Inc.(b)	2,650		240,196
Johnson & Johnson	7,700		390,544
Medtronic, Inc.	6,325		302,019
Merck & Company, Inc.	12,750		563,422
Mylan Laboratories, Inc.	6,575		149,450
Pfizer, Inc.	15,225		533,636
Zimmer Holdings, Inc.(b)	2,675		197,362

			2,555,502

Industrials (7.1%)
Emerson Electric Co.	10,875		651,630
General Electric Co.	20,300		619,556
Ingersoll-Rand Co. — Class A	7,250		490,463
United Parcel Service, Inc. — Class B	3,350		233,964
United Technologies Corp.	5,000		431,500

			2,427,113

Information Technology (9.0%)
Automatic Data Processing, Inc.	5,800		243,600
Cisco Systems, Inc.(b)	21,425		503,915


	Shares or Principal Amount	Fair Value

Common Stocks, continued
Information Technology, continued
Dell, Inc.(b)	8,100	$	272,322
Hewlett-Packard Co.	18,975		433,389
IBM Corp.	4,825		443,128
Intel Corp.	13,975		380,120
Microsoft Corp.	16,100		402,017
Oracle Corp.(b)	14,075		169,041
Texas Instruments, Inc.	8,450		246,909

			3,094,441

Materials (2.1%)
Air Products & Chemicals, Inc.	8,100		405,972
Alcoa, Inc.	8,900		308,741

			714,713

Telecommunication Services (1.8%)
SBC Communications, Inc.	12,450		305,523
Verizon Communications, Inc.	8,225		300,542

			606,065

Utilities (2.0%)
Duke Energy Corp.	15,875		358,775
NiSource, Inc.	15,150		321,938

			680,713

Total Common Stocks			19,921,809


U.S. Government Agencies (38.4%)
Federal Home Loan Bank (0.9%)
3.375%, 7/21/08, Callable 1/21/05 @ 100	$ 300,000		304,200

Federal Home Loan Mortgage Corp. (3.7%)
5.25%, 1/15/06	700,000		744,061
5.50%, 7/15/06	500,000		539,780

			1,283,841

Federal National Mortgage Assoc. (2.2%)
4.625%, 5/1/13	750,000		758,286

U.S. Treasury Notes (31.6%)
1.875%, 11/30/05	500,000		503,789
1.875%, 1/31/06	7,000,000		7,046,487
6.25%, 2/15/07	1,550,000		1,735,758
3.375%, 12/15/08	700,000		720,590
7.25%, 8/15/22	650,000		853,938

			10,860,562

Total U.S. Government Agencies			13,206,889


Investment Companies (3.5%)
Federated Government Obligations Fund	997,816		997,816
Federated Prime Cash Obligations Fund	208,229		208,229

Total Investment Companies			1,206,045

Total Investments
(Cost $27,176,424)(a) — 99.8%			34,334,743
Other assets (liabilities) — 0.2%			78,762

Net Assets — 100.0%		$	34,413,505

(a)

Represents cost for financial reporting purposes, is substantially the same for federal income tax purposes, and differs from fair value by net unrealized appreciation/depreciation of securities as follows:


Unrealized appreciation	$	7,292,870
Unrealized depreciation		(134,551	)

Net unrealized appreciation	$	7,158,319

(b)

Represents non-income producing securities.

See accompanying notes to the financial statements.

Large Company Value Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Common Stocks (96.6%)
Consumer Discretionary (9.5%)
Cox Communications, Inc. — Class A(b)	413,000	$	13,050,800
Gannett Company, Inc.	181,000		15,953,340
Mattel, Inc.	274,800		5,067,312
May Department Stores Co.	193,250		6,682,585
The Walt Disney Co.	585,000		14,619,150
V.F. Corp.	64,800		3,026,160
Whirlpool Corp.	78,000		5,371,860

			63,771,207

Consumer Staples (7.0%)
Albertson’s, Inc.	402,720		8,920,248
Altria Group, Inc.	153,590		8,362,976
Kimberly-Clark Corp.	287,000		18,109,699
Sara Lee Corp.	542,010		11,848,339

			47,241,262

Energy (10.3%)
Anadarko Petroleum Corp.	219,500		11,383,270
ChevronTexaco Corp.	133,730		11,738,819
Conocophillips	259,417		18,109,901
Exxon Mobil Corp.	190,000		7,902,100
Royal Dutch Petroleum Co. — NY Shares	282,600		13,446,108
Schlumberger, Ltd.	106,000		6,768,100

			69,348,298

Financials (26.6%)
American Express Co.	212,500		11,018,125
American International Group, Inc.	75,000		5,351,250
Aon Corp.	475,762		13,278,517
Bank of America Corp.	167,300		13,547,954
Citigroup, Inc.	196,666		10,167,632
Equity Residential	189,000		5,641,650
Fannie Mae	116,000		8,624,600
Franklin Resources, Inc.	121,000		6,737,280
ING Groep NV — ADR	296,254		6,532,401
J.P. Morgan Chase & Co.	187,772		7,877,035
Lincoln National Corp.	143,900		6,809,348
Northern Trust Corp.	252,718		11,774,132
Old Republic International Corp.	203,000		4,985,680
PNC Financial Services Group	252,500		13,993,550
St. Paul Companies, Inc.	353,500		14,143,535
SunTrust Banks, Inc.	166,000		11,571,860
Washington Mutual, Inc.	308,000		13,154,680
Wells Fargo & Co.	248,000		14,054,160

			179,263,389

Health Care (10.0%)
Abbott Laboratories	256,000		10,521,600
Becton, Dickinson & Co.	170,600		8,270,688
Bristol-Myers Squibb Co.	228,080		5,526,378
Cigna Corp.	171,000		10,092,420
HCA, Inc.	160,800		6,531,696
Johnson & Johnson	137,600		6,979,072
Merck & Company, Inc.	303,000		13,389,570
Mylan Laboratories, Inc.	51,000		1,159,230
Schering-Plough Corp.	302,400		4,904,928

			67,375,582


	Shares or Principal Amount	Fair Value

Common Stocks, continued
Industrials (9.5%)
CSX Corp.	310,200	$	9,395,958
Emerson Electric Co.	271,370		16,260,490
H & R Block, Inc.	141,000		7,195,230
Parker-Hannifin Corp.	112,000		6,328,000
Pitney Bowes, Inc.	323,800		13,797,118
Raytheon Co.	357,500		11,204,050

			64,180,846

Information Technology (8.7%)
Agilent Technologies, Inc.(b)	185,419		5,864,803
Automatic Data Processing, Inc.	307,400		12,910,800
First Data Corp.	172,000		7,251,520
Hewlett-Packard Co.	390,000		8,907,600
IBM Corp.	57,800		5,308,352
Microsoft Corp.	268,000		6,691,960
Motorola, Inc.	190,000		3,344,000
Nokia Corp. — ADR	415,000		8,416,200

			58,695,235

Materials (4.3%)
Air Products & Chemicals, Inc.	129,700		6,500,564
Alcoa, Inc.	206,000		7,146,140
E.I. DuPont de Nemours & Co.	130,600		5,513,932
Weyerhaeuser Co.	145,500		9,530,250

			28,690,886

Telecommunication Services (5.0%)
AT&T Corp.	113,824		2,227,536
BellSouth Corp.	455,000		12,598,950
SBC Communications, Inc.	470,400		11,543,616
Sprint Corp.	378,400		6,973,912

			33,344,014

Utilities (5.7%)
Dominion Resources, Inc.	164,800		10,596,640
Duke Energy Corp.	277,000		6,260,200
NiSource, Inc.	403,100		8,565,875
TXU Corp.	306,800		8,792,888
Xcel Energy, Inc.	221,275		3,940,908

			38,156,511

Total Common Stocks			650,067,230


Investment Company (3.3%)
Federated Prime Cash Obligations Fund	22,514,106		22,514,106


Securities Held as Collateral for Securities on Loan (18.6%)
Pool of various securities for BB&T Funds — Note 3 — Security Loans	$125,280,306		125,280,306

Total Investments (Cost $670,770,213)(a) — 118.5%			797,861,642
Other assets (liabilities) — (18.5)%			(124,900,050	)

Net Assets — 100.0%		$	672,961,592

(a)

Represents cost for financial reporting purposes, is substantially the same for federal tax purposes, and differs from fair value by net unrealized appreciation/depreciation of securities as follows:


Unrealized appreciation	$138,184,933
Unrealized depreciation	(11,093,504	)

Net unrealized appreciation	$127,091,429

(b)

Represents non-income producing securities.

ADR — American Depository Receipt

See accompanying notes to the financial statements.

Large Company Growth Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Common Stocks (98.9%)
Consumer Discretionary (16.5%)
Best Buy Company, Inc.(b)	133,000	$	6,878,760
eBay, Inc.(b)	100,000		6,933,000
EchoStar Communications Corp. — Class A(b)	85,000		2,783,750
Fortune Brands, Inc.	98,500		7,548,055
Fox Entertainment Group, Inc. — Class A(b)	30,000		813,000
Harley-Davidson, Inc.	78,000		4,160,520
Home Depot, Inc.	184,000		6,874,240
International Game Technology	140,000		6,294,400
Kohl’s Corp.(b)	90,000		4,349,700
Lowe’s Companies, Inc.	108,000		6,062,040
NIKE, Inc. — Class B	60,000		4,672,200
Target Corp.	140,000		6,305,600

			63,675,265

Consumer Staples (10.4%)
Anheuser-Busch Cos., Inc.	130,000		6,630,000
Estee Lauder Companies, Inc. (The) — Class A	140,000		6,207,600
PepsiCo, Inc.	155,000		8,346,750
Procter & Gamble Co.	40,000		4,195,200
Sysco Corp.	190,000		7,419,500
Wal-Mart Stores, Inc.	123,000		7,341,870

			40,140,920

Energy (2.2%)
Anadarko Petroleum Corp.	62,000		3,215,320
Apache Corp.	70,000		3,021,900
Baker Hughes, Inc.	60,000		2,188,800

			8,426,020

Financials (8.5%)
American Express Co.	80,000		4,148,000
American International Group, Inc.	105,000		7,491,750
Capital One Financial Corp.	50,000		3,771,500
Citigroup, Inc.	90,000		4,653,000
J.P. Morgan Chase & Co.	125,000		5,243,750
Morgan Stanley	50,000		2,865,000
PNC Financial Services Group	60,000		3,325,200
Wachovia Corp.	30,000		1,410,000

			32,908,200

Health Care (26.1%)
Amgen, Inc.(b)	9,000		523,530
Boston Scientific Corp.(b)	200,000		8,476,000
Genentech, Inc.(b)	75,000		7,936,500
Genzyme Corp.(b)	100,000		4,704,000
Gilead Sciences, Inc.(b)	100,000		5,577,000
GlaxoSmithKline plc-ADR	115,000		4,594,250
Medtronic, Inc.	115,000		5,491,250
Pfizer, Inc.	308,000		10,795,400
Quest Diagnostics, Inc.	70,000		5,798,100
St. Jude Medical, Inc.(b)	120,000		8,652,000
Stryker Corp.	70,000		6,197,100
Teva Pharmaceutical Industries, Ltd. — ADR	120,000		7,609,200
UnitedHealth Group, Inc.	90,000		5,799,600
Wellpoint Health Networks, Inc.(b)	60,000		6,823,200
Wyeth	224,000		8,411,200
Zimmer Holdings, Inc.(b)	45,000		3,320,100

			100,708,430


	Shares or Principal Amount	Fair Value

Common Stocks, continued
Industrials (9.4%)
Apollo Group, Inc. — Class A(b)	75,000	$	6,458,250
FedEx Corp.	101,000		7,591,160
General Electric Co.	275,000		8,393,000
Tyco International Ltd.	330,000		9,454,500
United Technologies Corp.	51,400		4,435,820

			36,332,730

Information Technology (23.9%)
Affiliated Computer Services, Inc. — Class A(b)	75,000		3,892,500
Analog Devices, Inc.	65,000		3,120,650
Applied Materials, Inc.(b)	205,000		4,382,900
Cisco Systems, Inc.(b)	395,000		9,290,400
Computer Associates International, Inc.	125,000		3,357,500
Dell, Inc.(b)	130,000		4,370,600
Electronic Arts, Inc.(b)	70,000		3,777,200
EMC Corp.(b)	250,000		3,402,500
First Data Corp.	120,000		5,059,200
Flextronics International, Ltd.(b)	175,000		3,013,500
Intel Corp.	319,000		8,676,800
Jabil Circuit, Inc.(b)	125,000		3,678,750
Microsoft Corp.	331,000		8,265,070
National Semiconductor Corp.(b)	100,000		4,443,000
Network Appliance, Inc.(b)	155,000		3,324,750
Oracle Corp.(b)	131,000		1,573,310
SAP — ADR	100,000		3,931,000
Texas Instruments, Inc.	286,000		8,356,920
Taiwan Semiconductor Manufacturing Co., Ltd. — ADR(b)	410,000		4,280,400
Xilinx, Inc.(b)	50,000		1,900,000

			92,096,950

Materials (1.9%)
Alcoa, Inc.	95,000		3,295,550
Newmont Mining Corp.	88,000		4,103,440

			7,398,990

Total Common Stocks			381,687,505

Investment Company (1.1%)
Federated Prime Cash Obligations Fund	4,225,355		4,225,355


Securities Held as Collateral for Securities On Loan (43.6%)
Pool of various securities for BB&T Funds — Note 3 — Security Loans	$168,286,383		168,286,383

Total Investments (Cost $483,137,709)(a) — 143.6%			554,199,243
Other assets (liabilities) — (43.6)%			(168,344,250	)

Net Assets — 100.0%		$	385,854,993

(a)


Unrealized appreciation	$	73,731,044
Unrealized depreciation		(2,669,510	)

Net unrealized appreciation	$	71,061,534

(b)

Represents non-income producing securities.

ADR — American Depository Receipt

See accompanying notes to the financial statements.

Mid Cap Value Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Common Stocks (97.0%)
Consumer Discretionary (9.0%)
American Greetings Corp.(b)	66,000	$	1,502,820
Cato Corp. — Class A	66,000		1,325,280
Circuit City Stores, Inc.	150,000		1,695,000
Genuine Parts Co.	99,000		3,239,280
Knight-Ridder, Inc.	12,000		879,000
Macrovision Corp.(b)	50,000		934,000
McGraw-Hill Companies, Inc.	25,000		1,903,500
Media General, Inc. — Class A	12,000		807,360
Outback Steakhouse, Inc.	50,000		2,435,000
Pier 1 Imports, Inc.	60,000		1,422,000
Tribune Co.	21,900		1,104,636

			17,247,876

Consumer Staples (5.2%)
Heinz (H.J.) Co.	40,000		1,491,600
Ruddick Corp.	80,000		1,619,200
Sensient Technologies Corp.	115,000		2,147,050
SUPERVALU, Inc.	95,000		2,901,300
UST, Inc.	52,000		1,877,200

			10,036,350

Energy (6.6%)
Burlington Resources, Inc.	47,000		2,990,610
EOG Resources, Inc.	25,000		1,147,250
Kerr-McGee Corp.	88,000		4,532,000
Sunoco, Inc.	42,100		2,626,198
Tidewater, Inc.	50,000		1,406,500

			12,702,558

Financials (25.2%)
Ambac Financial Group, Inc.	30,000		2,213,400
American Capital Strategies, Ltd.	44,000		1,462,560
Arthur J. Gallagher & Co.	136,000		4,429,520
Banknorth Group, Inc.	55,000		1,872,200
Charter One Financial, Inc.	66,000		2,333,760
Commerce Bancshares, Inc.	42,100		2,008,591
Compass Bancshares, Inc.	109,000		4,520,230
Edwards (A.G.), Inc.	50,000		1,956,000
Equity Inns, Inc.	140,000		1,288,000
Erie Indemnity Co.	42,000		2,026,920
First American Corp.	115,000		3,498,300
First Industrial Realty Trust	36,000		1,422,000
Gables Residential Trust	40,000		1,450,000
Jefferson-Pilot Corp.	99,000		5,445,990
Mercantile Bankshares Corp.	66,000		2,836,020
Nuveen Investments — Class A	66,000		1,838,760
ProLogis Trust	70,000		2,510,900
SouthTrust Corp.	60,000		1,989,600
Sovran Self Storage, Inc.	50,000		2,088,500
SunTrust Banks, Inc.	15,000		1,045,650

			48,236,901

Health Care (11.0%)
Arrow International, Inc.	50,000		1,494,500
Becton, Dickinson & Co.	53,000		2,569,440
C.R. Bard, Inc.	20,000		1,952,800
Caremark Rx, Inc.(b)	133,515		4,439,374
Mentor Corp.	77,000		2,317,700


	Shares	Fair Value

Common Stocks, continued
Health Care, continued
Mylan Laboratories, Inc.	135,000	$	3,068,550
Perrigo Co.	115,000		2,305,750
Watson Pharmaceuticals, Inc.(b)	36,000		1,540,440
West Pharmaceutical Services, Inc.	36,000		1,346,400

			21,034,954

Industrials (11.9%)
American Power Conversion Corp.	109,000		2,508,090
Banta Corp.	57,000		2,638,530
Burlington Northern Santa Fe Corp.	36,000		1,134,000
Griffon Corp.(b)	80,000		1,728,000
L-3 Communications Holdings, Inc.	42,100		2,504,108
Lincoln Electric Holdings, Inc.	70,000		1,970,500
Northrop Grumman Corp.	22,000		2,165,240
Pall Corp.	50,000		1,134,500
Parker-Hannifin Corp.	15,000		847,500
R.R. Donnelley & Sons Co.	69,000		2,087,250
SPX Corp.	59,000		2,683,320
Stewart & Stevenson Services, Inc.	95,000		1,388,900

			22,789,938

Information Technology (10.4%)
Activision, Inc.(b)	164,250		2,598,435
Andrew Corp.(b)	149,000		2,607,500
AVX Corp.	130,000		2,143,700
Check Point Software Technologies, Ltd.(b)	75,000		1,707,750
Checkpoint Systems, Inc.(b)	99,000		1,871,100
FactSet Research Systems, Inc.	40,000		1,702,400
Harmonic, Inc.(b)	125,000		1,206,250
National Semiconductor Corp.(b)	60,000		2,665,800
Paychex, Inc.	44,000		1,566,400
SunGard Data Systems, Inc.(b)	69,000		1,890,600

			19,959,935

Materials (7.9%)
Albemarle Corp.	103,000		2,987,000
Martin Marietta Materials, Inc.	44,000		2,031,040
Praxair, Inc.	88,000		3,266,560
Rayonier, Inc.	49,000		2,141,790
Sonoco Products Co.	75,000		1,821,000
Worthington Industries, Inc.	150,000		2,875,500

			15,122,890

Telecommunication Services (1.7%)
ALLTEL Corp.	40,000		1,995,600
Wireless Facilities, Inc.(b)	109,000		1,200,090

			3,195,690

Utilities (8.1%)
American States Water Co.	37,500		915,000
Consolidated Edison, Inc.	66,000		2,910,600
FPL Group, Inc.	42,100		2,814,385
National Fuel Gas Co.	99,000		2,435,400
New Jersey Resources Corp.	30,000		1,134,000
NiSource, Inc.	109,000		2,316,250
Northwest Natural Gas Co.	44,000		1,375,000
Piedmont Natural Gas Company, Inc.	40,000		1,688,800

			15,589,435

Total Common Stocks			185,916,527

Continued

Mid Cap Value Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Shares or Principal Amount	Fair Value

Investment Company (3.0%)
Federated Prime Cash Obligations Fund	5,650,590	$	5,650,590


Securities Held as Collateral for Securities on Loan (26.4%)
Pool of various securities for BB&T Funds —Note 3 — Security Loans	$50,511,604		50,511,604

Total Investments (Cost $193,353,594)(a) — 126.4%			242,078,721
Other assets (liabilities) — (26.4)%			(50,582,918	)

Net Assets — 100.0%		$	191,495,803

(a)


Unrealized appreciation	$	49,627,808
Unrealized depreciation		(902,681	)

Net unrealized appreciation	$	48,725,127

(b)

Represents non-income producing securities.

See accompanying notes to the financial statements.

Mid Cap Growth Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Common Stocks (97.9%)
Consumer Discretionary (26.1%)
Advance Auto Parts, Inc.(b)	48,500	$	1,972,495
Aeropostale, Inc.(b)	51,000		1,849,260
Belo Corp. — Class A	44,000		1,221,440
BorgWarner, Inc.	15,500		1,314,865
Cheesecake Factory, Inc.(b)	28,000		1,291,640
Chico’s FAS, Inc.(b)	31,000		1,438,400
Coach, Inc.(b)	77,000		3,156,229
Harman International Industries, Inc.	36,000		2,865,600
Michaels Stores, Inc.	26,500		1,288,430
O’Reilly Automotive, Inc.(b)	28,000		1,121,120
PETsMART, Inc.(b)	107,000		2,916,820
Pulte Homes, Inc.	34,000		1,890,400
Royal Caribbean Cruises, Ltd.	45,000		1,984,500
Ruby Tuesday, Inc.	58,000		1,864,700
Starbucks Corp.(b)	34,000		1,283,500
Starwood Hotels & Resorts Worldwide, Inc.	31,500		1,275,750
Toll Brothers, Inc.(b)	32,000		1,453,760
UnitedGlobalCom, Inc. — Class A(b)	235,400		1,998,546
Urban Outfitters, Inc.(b)	35,700		1,715,742

			33,903,197

Consumer Staples (1.5%)
United Natural Foods, Inc.(b)	40,500		1,947,645

Energy (3.9%)
BJ Services Co.(b)	42,000		1,817,340
National-Oilwell, Inc.(b)	66,000		1,866,480
XTO Energy, Inc.	55,000		1,388,200

			5,072,020

Financials (8.9%)
Ameritrade Holding Corp.(b)	133,000		2,048,200
Commerce Bancorp, Inc.	29,500		1,943,460
Legg Mason, Inc.	17,700		1,642,206
New York Community Bancorp, Inc.	50,000		1,714,000
Providian Financial Corp.(b)	104,000		1,362,400
T. Rowe Price Group, Inc.	52,000		2,799,160

			11,509,426

Health Care (19.2%)
Allergan, Inc.	14,000		1,178,240
Biogen Idec, Inc.(b)	11,500		639,400
Caremark Rx, Inc.(b)	79,335		2,637,889
Celgene Corp.(b)	29,000		1,381,850
Community Health Systems, Inc.(b)	47,500		1,321,925
Fisher Scientific International, Inc.(b)	26,000		1,431,040
Henry Schein, Inc.(b)	17,500		1,249,850
IVAX Corp.(b)	76,000		1,730,520
Millennium Pharmaceuticals, Inc.(b)	75,000		1,267,500
Neurocrine Biosciences, Inc.(b)	29,000		1,713,900
Omnicare, Inc.	44,000		1,950,520
Patterson Dental Co.(b)	24,000		1,646,640
Protein Design Labs, Inc.(b)	60,000		1,429,200
Stryker Corp.	14,000		1,239,420
Teva Pharmaceutical Industries, Ltd. — ADR	19,000		1,204,790
Varian Medical Systems, Inc.(b)	17,500		1,510,425
Zimmer Holdings, Inc.(b)	19,500		1,438,710

			24,971,819

Industrials (7.6%)
Apollo Group, Inc. — Class A(b)	18,000		1,549,980
Career Education Corp.(b)	31,000		1,755,840


	Shares or Principal Amount	Fair Value

Common Stocks, continued
Industrials, continued
Dover Corp.	33,000	$	1,279,410
Fastenal Co.	26,000		1,395,940
Gen-Probe, Inc.(b)	35,000		1,169,350
J.B. Hunt Transport Services, Inc.(b)	44,500		1,253,565
Rockwell Automation, Inc.	44,000		1,525,480

			9,929,565

Information Technology (25.3%)
Activision, Inc.(b)	83,000		1,313,060
Analog Devices, Inc.(b)	28,500		1,368,285
Andrew Corp.(b)	68,000		1,190,000
ASML Holding N.V.(b)	66,000		1,209,780
ATI Technologies, Inc.(b)	81,000		1,320,300
Autodesk, Inc.	56,000		1,770,720
Cognizant Technology Solutions Corp.(b)	29,500		1,334,875
Comverse Technology, Inc.(b)	68,000		1,233,520
Cypress Semiconductor Corp.(b)	59,000		1,207,730
Fairchild Semiconductor International, Inc.(b)	51,000		1,225,530
Flextronics International, Ltd.(b)	100,000		1,722,000
Ingram Micro, Inc. — Class A(b)	115,000		2,081,500
International Rectifier Corp.(b)	26,500		1,218,735
Juniper Networks, Inc.(b)	48,000		1,248,480
Marvell Technology Group, Ltd.(b)	29,000		1,306,450
National Semiconductor Corp.(b)	43,000		1,910,490
Network Appliance, Inc.(b)	58,000		1,244,100
Novell, Inc.(b)	127,000		1,445,260
Polycom, Inc.(b)	56,000		1,188,880
Sanmina — SCI Corp.(b)	97,000		1,067,970
Silicon Laboratories, Inc.(b)	23,000		1,216,240
SINA Corp.(b)	33,000		1,248,390
Vishay Intertechnology, Inc.(b)	60,000		1,280,400
Zebra Technologies Corp. — Class A(b)	21,750		1,508,798

			32,861,493

Materials (3.1%)
Inco, Ltd.(b)	38,500		1,333,255
Peabody Energy Corp.	27,000		1,255,770
Phelps Dodge Corp.(b)	17,000		1,388,220

			3,977,245

Telecommunication Services (2.3%)
Mobile Telesystems — ADR	11,500		1,512,250
VimpelCom — ADR(b)	14,000		1,455,860

			2,968,110

Total Common Stocks			127,140,520


Investment Company (1.3%)
Federated Prime Cash Obligations Fund	1,687,469		1,687,469


Securities Held as Collateral for Securities On Loan (49.5%)
Pool of various securities for BB&T Funds — Note 3 — Security Loans	$64,290,114		64,290,114

Total Investments (Cost $163,346,220)(a) — 148.7%			193,118,103
Other assets (liabilities) — (48.7)%			(63,279,205	)

Net Assets — 100.0%		$	129,838,898

See accompanying notes to the financial statements.

(a)


Unrealized appreciation	$	30,714,970
Unrealized depreciation		(943,087	)

Net unrealized appreciation	$	29,771,883

(b)

Represents non-income producing securities.

ADR — American Depository Receipt

Small Company Value Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Common Stocks (95.6%)
Consumer Discretionary (16.5%)
American Eagle Outfitters, Inc.(b)	26,365	$	710,800
BorgWarner, Inc.	7,410		628,590
CEC Entertainment, Inc.(b)	19,287		669,259
Deb Shops, Inc.	32,284		830,022
M.D.C. Holdings, Inc.	8,085		569,184
Michaels Stores, Inc.	8,427		409,721
OshKosh B’Gosh, Inc. — Class A	19,811		463,577
Payless ShoeSource, Inc.(b)	52,200		728,712
Polaris Industries, Inc.	10,616		482,391
Standard Motor Products, Inc.	22,200		348,096
Stanley Furniture Company, Inc.	19,137		743,090
Strattec Security Corp.(b)	16,207		1,025,417
The Nautilus Group, Inc.	37,696		593,712
The Talbots, Inc.	12,783		457,376
Visteon Corp.	60,000		574,200
Zale Corp.(b)	6,348		390,719

			9,624,866

Consumer Staples (1.7%)
American Italian Pasta Co. — Class A	11,700		467,181
Fresh Del Monte Produce, Inc.	19,321		497,709

			964,890

Energy (7.8%)
Berry Petroleum Co. — Class A	19,868		541,999
Cabot Oil & Gas Corp.	22,144		676,721
Forest Oil Corp.(b)	28,606		722,302
Newfield Exploration Co.(b)	16,275		780,061
Oceaneering International, Inc.(b)	17,712		539,330
Oil States International, Inc.(b)	30,919		415,551
Teekay Shipping Corp.	12,616		869,242

			4,545,206

Financials (26.8%)
AmerUs Group Co.	23,748		958,232
BRE Properties, Inc. — Class A	21,970		754,010
CNA Surety Corp.(b)	86,840		959,582
Colonial BancGroup, Inc.	42,960		794,760
Dime Community Bancshares	35,932		731,216
Downey Financial Corp.	12,280		649,612
First State Bancorp	21,808		672,995
FirstFed Financial Corp.(b)	13,649		629,628
Getty Realty Corp.	6,870		182,536
Heritage Property Investment Trust	22,680		705,348
Hilb, Rogal & Hamilton Co.	31,292		1,192,224
Hub International, Ltd.	40,076		735,395
Innkeepers USA Trust	79,292		724,729
Investment Technology Group, Inc.(b)	26,810		410,193
IPC Holdings, Ltd.	21,150		833,099
Peoples Bancorp, Inc.	26,534		737,911
Protective Life Corp.	26,182		980,515
Providian Financial Corp.(b)	19,100		250,210
The Midland Co.	22,842		569,908
The Mills Corp.	15,944		849,656
The Phoenix Companies, Inc.	46,500		623,565
Triad Guaranty, Inc.(b)	12,920		681,530

			15,626,854

Health Care (8.6%)
AMERIGROUP Corp.(b)	18,112		827,718
Analogic Corp.	17,832		811,178
Invacare Corp.	15,504		699,851


	Shares	Fair Value

Common Stocks, continued
Health Care, continued
Owens & Minor, Inc.	24,743	$	625,998
Pediatrix Medical Group, Inc.(b)	7,184		452,592
Renal Care Group, Inc.(b)	16,188		740,763
Sierra Health Services, Inc.(b)	23,805		866,502

			5,024,602

Industrials (18.9%)
Briggs & Stratton Corp.	8,362		564,184
Curtiss-Wright Corp.	14,540		681,490
EMCOR Group, Inc.(b)	8,502		312,023
Esterline Technologies Corp.(b)	23,400		581,490
Gardner Denver, Inc.(b)	21,940		594,135
Genlyte Group, Inc.(b)	12,166		681,783
Gorman-Rupp Co.	10,940		283,346
Granite Construction, Inc.	30,260		719,280
Insituform Technologies, Inc. — Class A(b)	24,732		386,561
Kaydon Corp.	21,355		587,903
Moog, Inc. — Class A(b)	19,900		678,988
Mueller Industries, Inc.	22,035		748,970
Oshkosh Truck Corp.	13,420		747,494
Precision Castparts Corp.	6,850		301,606
Regal-Beloit Corp.	33,538		670,089
Universal Forest Products, Inc.	19,884		613,620
USF Corp.	29,750		1,018,045
Woodward Governor Co.	12,832		817,912

			10,988,919

Information Technology (6.6%)
Exar Corp.(b)	28,912		534,872
Helix Technology Corp.	6,075		147,319
Imation Corp.	23,855		897,425
Intersil Corp. — Class A	14,530		323,874
Ixia(b)	10,320		111,662
KEMET Corp.(b)	22,288		319,610
Perot Systems Corp. — Class A(b)	33,900		450,870
Rimage Corp.(b)	31,720		491,026
SBS Technologies, Inc.(b)	19,120		295,595
Take-Two Interactive Software, Inc.(b)	6,908		254,076

			3,826,329

Materials (4.9%)
Cambrex Corp.	12,468		335,389
Gibraltar Steel Corp.	20,818		511,706
Glatfelter	45,245		508,554
Minerals Technologies, Inc.	9,968		569,173
Sensient Technologies Corp.	16,000		298,720
Spartech Corp.	26,440		658,356

			2,881,898

Utilities (3.8%)
AGL Resources, Inc.	15,610		453,002
Nicor, Inc.	9,830		346,311
The Empire District Electric Co.	29,160		660,475
The Laclede Group, Inc.	6,168		186,890
UIL Holdings Corp.	12,066		581,219

			2,227,897

Total Common Stocks			55,711,461


Exchange Traded Funds (1.9%)
iShares Russell 2000 Index Fund	4,500		528,435
iShares Russell 2000 Value Fund	3,300		564,960

Total Exchange Traded Funds			1,093,395

Continued

Small Company Value Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Shares or Principal Amount	Fair Value
Investment Company (3.3%)
Federated Prime Cash Obligations Fund	1,940,789	$	1,940,789


Securities Held as Collateral for Securities on Loan (18.2%)
Pool of various securities for BB&T Funds — Note 3 — Security Loans	$10,605,378		10,605,378

Total Investments (Cost $57,552,823)(a) — 119.0%			69,351,023
Other assets (liabilities) — (19.0)%			(11,054,925	)

Net Assets — 100.0%		$	58,296,098

(a) Represents cost for financial reporting purposes, is substantially the same for federal income tax purposes, and differs from fair value by net unrealized appreciation/depreciation of securities as follows:


Unrealized appreciation	$	12,018,392
Unrealized depreciation		(220,192	)

Net unrealized appreciation	$	11,798,200

(b)

Represents non-income producing securities.

See accompanying notes to the financial statements.

Small Company Growth Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Common Stocks (94.9%)
Consumer Discretionary (15.9%)
Aaron Rents, Inc.	32,000	$	796,480
Aeropostale, Inc.(b)	60,000		2,175,600
Aztar Corp.(b)	60,000		1,470,600
Cumulus Media, Inc. — Class A(b)	25,000		499,750
Emmis Communications Corp. — Class A(b)	20,000		476,200
The Finish Line, Inc. — Class A(b)	34,000		1,257,320
Fossil, Inc.(b)	30,000		1,000,500
Hibbet Sporting Goods, Inc.(b)	17,000		648,380
Jos. A. Bank Clothiers, Inc.(b)	45,000		1,620,000
La Quinta Corp.(b)	80,000		603,200
Linens ‘n Things, Inc.(b)	34,000		1,203,940
P.F. Chang’s China Bistro, Inc.(b)	33,000		1,660,230
RARE Hospitality International, Inc.(b)	59,850		1,660,838
Standard Pacific Corp.	20,000		1,200,000
Station Casinos, Inc.	35,000		1,545,950

			17,818,988

Consumer Staples (2.4%)
Central Garden & Pet Co.(b)	30,000		1,080,000
United Natural Foods, Inc.(b)	35,000		1,683,150

			2,763,150

Energy (5.2%)
Atwood Oceanics, Inc.(b)	10,000		355,900
Core Laboratories N.V.(b)	20,000		424,000
Helmerich & Payne, Inc.	20,000		573,000
Maverick Tube Corp.(b)	25,000		588,750
National-Oilwell, Inc.(b)	45,000		1,272,600
Patina Oil & Gas Corp.	80,000		2,100,000
Precision Drilling Corp.(b)	12,000		558,960

			5,873,210

Financials (7.8%)
Affiliated Managers Group, Inc.(b)	22,500		1,228,050
Dime Community Bancshares	67,500		1,373,625
Harbor Florida Bancshares, Inc.	30,100		871,094
Investors Financial Services Corp.	20,000		826,400
Prosperity Bancshares, Inc.	61,200		1,441,872
The South Financial Group, Inc.	44,000		1,301,960
Taubman Centers, Inc.	35,000		880,950
Washington Real Estate Investment Trust	25,000		811,250

			8,735,201

Health Care (25.3%)
Affymetrix, Inc.(b)	20,000		675,000
ALARIS Medical Systems, Inc.(b)	30,000		559,500
Align Technology, Inc.(b)	35,000		665,350
American Healthways, Inc.(b)	40,000		976,800
AMERIGROUP Corp.(b)	20,000		914,000
Amylin Pharmaceuticals, Inc.(b)	60,000		1,421,400
Andrx Corp.(b)	40,000		1,088,000
Aphton Corp.(b)	185,000		869,500
ArthroCare Corp.(b)	41,100		949,820
AtheroGenics, Inc.(b)	72,000		1,646,640
Centene Corp.(b)	25,000		764,750
Impax Laboratories, Inc.(b)	65,000		1,454,050
INAMED Corp.(b)	30,000		1,598,400
Intuitive Surgical, Inc.(b)	45,000		765,000
Inveresk Research Group, Inc.(b)	53,100		1,509,102
Kyphon, Inc.(b)	70,000		1,673,700
Medical Resources, Inc.(b)	269		—
Omicell, Inc.(b)	77,000		1,525,370
Palomar Medical Technologies, Inc.(b)	88,000		1,587,520
POZEN, Inc.(b)	40,000		552,800


	Shares	Fair Value

Common Stocks, continued
Health Care, continued
PSS World Medical, Inc.(b)	98,000	$	1,096,620
Regeneration Technologies, Inc.(b)	90,000		1,021,500
Salix Pharmaceuticals, Ltd.(b)	27,000		783,540
Serologicals Corp.(b)	40,500		826,200
SFBC International, Inc.(b)	45,000		1,339,200
Sonic Innovations, Inc.(b)	90,000		1,093,500
Taro Pharmaceutical Industries Ltd.(b)	17,000		985,830

			28,343,092

Industrials (6.9%)
Bowne & Company, Inc.	35,000		598,500
Engineered Support Systems, Inc.	28,650		1,397,834
Forward Air Corp.(b)	35,000		1,150,450
Gen-Probe, Inc.(b)	20,000		668,200
II-VI, Inc.(b)	54,000		1,320,300
UTI Worldwide, Inc.	39,000		1,742,910
Waste Connections, Inc.(b)	22,000		875,600

			7,753,794

Information Technology (25.9%)
Activision, Inc.(b)	45,000		711,900
Autobytel, Inc.(b)	60,000		792,000
CheckFree Corp.(b)	35,000		1,031,100
CNET Networks, Inc.(b)	135,000		1,394,550
Digital Insight Corp.(b)	83,000		1,719,760
DoubleClick, Inc.(b)	130,000		1,462,500
F5 Networks, Inc.(b)	50,000		1,692,500
Harmonic, Inc.(b)	110,000		1,061,500
iPass, Inc.(b)	90,000		983,700
Lawson Software, Inc.(b)	60,000		498,000
Magma Design Automation, Inc.(b)	35,000		731,850
Manhattan Associates, Inc.(b)	40,000		1,112,000
OmniVision Technologies, Inc.(b)	50,000		1,365,500
Quest Software, Inc.(b)	70,000		1,144,500
RADWARE Ltd.(b)	35,000		929,600
RSA Security, Inc.(b)	105,000		1,972,950
SafeNet, Inc.(b)	50,000		1,877,000
Silicon Laboratories, Inc.(b)	10,000		528,800
SINA Corp.(b)	40,000		1,513,200
Take-Two Interactive Software, Inc.(b)	61,000		2,243,579
THQ, Inc.(b)	40,000		809,200
TIBCO Software, Inc.(b)	100,000		817,000
Trimble Navigation, Ltd.(b)	34,350		787,646
ViaSat, Inc.(b)	70,000		1,741,600

			28,921,935

Materials (2.1%)
Spartech Corp.	25,000		622,500
Symyx Technologies, Inc.(b)	60,000		1,718,400

			2,340,900

Technology (1.5%)
Euronet Worldwide, Inc.(b)	45,000		855,450
Intermagnetics General Corp.(b)	30,000		795,000

			1,650,450

Telecommunication Services (1.9%)
Golden Telecom, Inc.	25,000		850,750
Wireless Facilities, Inc.(b)	115,000		1,266,150

			2,116,900

Total Common Stocks			106,317,620

Continued

Small Company Growth Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Shares or Principal Amount	Fair Value

Investment Companies (4.8%)
Federated Prime Obligations Fund	1,125,634	$	1,125,634
Federated Prime Cash Obligations Fund	4,209,876		4,209,876

Total Investment Companies			5,335,510


Securities Held as Collateral for Securities on Loan (21.8%)
Pool of various securities for BB&T Funds —Note 3 — Security Loans	$24,433,290		24,433,290

Total Investments (Cost $122,840,471)(a) — 121.5%			136,086,420
Other assets (liabilities) — (21.5)%			(24,084,747	)

Net Assets — 100.0%		$	112,001,673

(a)


Unrealized appreciation	$	15,365,538
Unrealized depreciation		(2,119,589	)

Net unrealized appreciation	$	13,245,949

(b)

Represents non-income producing securities.

See accompanying notes to the financial statements.

Special Opportunities Equity Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Common Stocks (91.2%)
Commercial Services (10.7%)
Cendant Corp.	99,200	$	2,419,488
ChoicePoint, Inc.(b)	54,860		2,086,326
WCI Communities, Inc.(b)	93,740		2,346,312

			6,852,126

Consumer Discretionary (21.4%)
Anheuser-Busch Cos., Inc.	46,450		2,368,950
Costco Wholesale Corp.(b)	54,341		2,041,048
Fox Entertainment Group, Inc. — Class A(b)	78,850		2,136,835
Hain Celestial Group, Inc.(b)	102,818		2,271,250
Smithfield Foods, Inc.(b)	84,800		2,299,775
YUM! Brands, Inc.(b)	66,950		2,543,430

			13,661,288

Energy (10.4%)
Apache Corp.	53,700		2,318,229
Pioneer Natural Resources Co.	57,935		1,871,301
XTO Energy, Inc.	96,125		2,426,195

			6,615,725

Financials (10.4%)
Allstate Corp.	54,200		2,463,932
MBIA, Inc.	29,700		1,862,190
Wells Fargo & Co.	40,500		2,295,135

			6,621,257

Health Care (10.8%)
Laboratory Corporation of America Holdings(b)	59,200		2,323,600
MedCath Corp.(b)	150,847		2,339,637
STERIS Corp.(b)	87,502		2,257,552

			6,920,789


	Shares or Principal Amount	Fair Value

Common Stocks, continued
Industrials (3.6%)
L-3 Communications Holdings, Inc.	39,250	$	2,334,590

Information Technology (12.9%)
AVX Corp.	100,200		1,652,298
Comcast Corp. — Class A(b)	79,495		2,284,686
Internet Security Systems, Inc.(b)	112,740		1,988,734
Mantech International Corp. — Class A(b)	112,865		2,312,604

			8,238,322

Insurance (7.3%)
Coventry Health Care, Inc.(b)	58,500		2,476,305
Markel Corp.(b)	7,510		2,162,129

			4,638,434

Telecommunication Services (3.7%)
SpectraSite, Inc.(b)	63,600		2,359,560

Total Common Stocks			58,242,091


U.S. Treasury Bills (2.3%)
0.84%, 4/8/04*	$1,500,000		1,499,735


Investment Companies (3.4%)
Federated Government Obligations Fund	22,379		22,379
Federated Prime Cash Obligations Fund	2,124,046		2,124,046

Total Investment Companies			2,146,425

Total Investments (Cost $52,240,795)(a) — 96.9%			61,888,251
Other assets (liabilities) — 3.1%			1,996,045

Net Assets — 100.0%		$	63,884,296

(a)


Unrealized appreciation	$	9,931,689
Unrealized depreciation		(284,233	)

Net unrealized appreciation	$	9,647,456

(b)

Represents non-income producing securities.

Discount note. Rate disclosed represents the effective yield at March 31, 2004.

See accompanying notes to the financial statements.

International Equity Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Common Stocks (97.8%)
Australia (4.8%)
Banks (2.4%)
Australia & New Zeland Banking Group, Ltd.	117,438	$	1,699,917
Westpac Banking Corp.	290,650		3,894,288

			5,594,205

Gas — Distribution (0.3%)
Australian Gas Light Company, Ltd.	88,737		785,857

Media (0.7%)
News Corp., Ltd.	197,679		1,568,039

Metals & Mining (0.3%)
Rio Tinto PLC	26,009		683,265

Property & Casualty Insurance (0.8%)
QBE Insurance Group, Ltd.	234,495		2,001,503

Specialty Retail & Food Products (0.3%)
Woolworths, Ltd.	79,614		720,259

			11,353,128

Belgium (1.2%)
Banking & Insurance Services (1.2%)
Fortis	133,824		2,845,094

Brazil (0.6%)
Oil & Gas (0.3%)
Petroleo Brasileiro SA — ADR	20,200		676,700

Telecommunications (0.3%)
Tele Norte Leste Participacoes SA — ADR	67,300		873,554

			1,550,254

Finland (2.6%)
Paper & Related Products (0.7%)
UPM — Kymmene, Oyj	92,900		1,701,055

Telecommunications (1.9%)
Nokia, Oyj	220,950		4,529,044

			6,230,099

France (7.5%)
Banks (1.0%)
BNP Paribas SA	40,412		2,469,706

Computer Services (0.6%)
Cap Gemini SA(b)	34,928		1,331,901

Oil & Gas (2.8%)
Total SA	36,539		6,708,473

Pharmaceuticals (1.0%)
Aventis SA	27,353		2,102,562
Sanofi-Synthelabo SA	3,471		226,712

			2,329,274

Real Estate (0.6%)
Unibail	14,218		1,486,036

Telecommunications (0.9%)
France Telecom SA(b)	80,354		2,055,913

Water (0.6%)
Suez SA	70,005		1,429,804

			17,811,107

Germany (0.3%)
Multi-Line Insurance (0.3%)
Allianz AG	6,277		685,063


	Shares	Fair Value

Common Stocks, continued
Great Britain (32.3%)
Banks (6.0%)
Abbey National PLC	102,784	$	859,502
Barclays PLC	496,290		4,371,271
Credit Suisse Group	19,168		664,226
HSBC Holdings PLC	195,704		2,909,768
Royal Bank of Scotland Group PLC	189,413		5,771,708

			14,576,475

Beverages — Wine/Spirits (2.3%)
Diageo PLC	425,352		5,542,489

Building & Construction (0.2%)
Balfour Beatty PLC	109,733		523,341

Diversified Chemicals (0.4%)
BOC Group PLC	62,273		1,030,608

Distribution/Wholesale (0.3%)
Wolseley PLC	41,194		639,357

Diversified Operations/Commercial (0.8%)
Rentokil Initial PLC	538,735		1,804,483

Diversified Operations/Manufacturing (0.2%)
Invensys PLC(b)	1,456,562		522,004

Diversified Telecommunication Services (0.7%)
BT Group PLC	493,041		1,603,860

Electric — Distribution (2.2%)
National Grid Transco PLC	355,754		2,811,437
Scottish & Southern Energy PLC	199,618		2,522,217

			5,333,654

Electronics & Furniture Retail (0.4%)
Kesa Electricals PLC(b)	206,272		1,019,771

Electronic Parts — Distribution (0.5%)
Electrocomponents PLC	184,395		1,157,311

Food & Beverages (0.7%)
Cadbury Schweppes PLC	220,669		1,739,838

Food Service — Catering (0.5%)
Compass Group PLC	197,196		1,299,264

Gas — Distribution (0.7%)
Centrica PLC	422,231		1,771,214

Medical — Drug Distribution (0.3%)
Alliance Unichem PLC	60,512		645,586

Metals & Mining (0.7%)
Rio Tinto PLC	63,328		1,561,919

Oil & Gas (4.8%)
BP PLC	837,188		7,016,135
Shell Transportation & Trading Co. PLC	665,483		4,347,971

			11,364,106

Pharmaceuticals (3.7%)
AstraZeneca Group PLC	79,969		3,708,079
GlaxoSmithKline PLC	257,939		5,062,889

			8,770,968

Retail — Building (1.2%)
Kingfisher PLC	526,476		2,791,480

Retail — Food (1.5%)
Tesco PLC	776,120		3,505,359

Continued

International Equity Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Shares	Fair Value

Common Stocks, continued
Great Britain, continued
Telecommunications (3.2%)
Vodafone Group PLC	3,202,450	$	7,577,740

Tobacco (1.0%)
Gallaher Group PLC	196,192		2,345,518

			77,126,345

Hong Kong (0.5%)
Real Estate (0.5%)
Cheung Kong, Ltd.	151,000		1,269,461

Ireland (2.7%)
Banking & Finance (1.7%)
Bank of Ireland	321,301		4,007,694

Building & Construction (1.0%)
CRH PLC	119,973		2,447,418

			6,455,112

Israel (0.3%)
Pharmaceuticals (0.3%)
Teva Pharmaceutical Industries, Ltd. — ADR	9,500		602,395

Italy (3.4%)
Banking & Finance (1.2%)
UniCredito Italiano S.p.A.	616,230		2,938,265

Multi-Line Insurance (0.5%)
Assicurazioni Generali S.p.A.	47,301		1,206,741

Oil & Gas (1.7%)
Eni S.p.A.	199,927		4,019,493

			8,164,499

Japan (18.7%)
Automobiles & Trucks (3.8%)
Honda Motor Company, Ltd.	120,900		5,578,122
Toyota Motor Corp.	99,000		3,692,219

			9,270,341

Banks (1.2%)
Mitsubishi Tokyo Financial Group, Inc.	132		1,306,868
Sumitomo Mitsui Financial Group, Inc.	210		1,554,285

			2,861,153

Building — Residential/Commercial (0.6%)
Sekisui House, Ltd.	127,000		1,431,932

Cosmetics & Toiletries (1.3%)
Kao Corp.	134,000		3,065,507

Electric Products (0.6%)
Funai Electric Company, Ltd.	9,200		1,335,320

Electronic Components (1.0%)
Rohm Company, Ltd.	18,800		2,434,142

Electronic Equipment (0.2%)
Keyence Corp.	1,900		463,152

Machinery (0.7%)
Toyota Industries Corp.	67,600		1,608,209

Office Equipment (1.0%)
Canon, Inc.	46,000		2,383,236

Optical Supplies (0.4%)
Hoya Corp.	10,800		1,053,684

Paper & Related Products (0.6%)
Nippon Unipac Holding	273		1,456,385


	Shares	Fair Value

Common Stocks, continued
Japan, continued
Pharmaceuticals (1.5%)
Takeda Chemical Industries, Ltd.	79,000	$	3,523,430

Photographic Products (0.6%)
Fuji Photo Film Company, Ltd.	42,000		1,336,281

Property & Casualty Insurance (1.3%)
Sompo Japan Insurance, Inc.	283,000		3,035,786

Telecommunications (1.3%)
Nippon Telegraph & Telephone Corp.	174		986,783
NTT DoCoMo, Inc.	948		2,095,833
Vodafone Holdings K.K.	32		78,743

			3,161,359

Toys (1.4%)
Nintendo Company, Ltd.	32,800		3,313,577

Trading Companies & Distributors (0.7%)
Mitsubishi Corp.	146,000		1,726,150

Transportation (0.5%)
West Japan Railway Co.	320		1,282,645

			44,742,289

Mexico (0.2%)
Brewery (0.2%)
Fomento Economico Mexicano SA — ADR	9,600		472,992

Netherlands (7.1%)
Air Freight & Logistics (1.2%)
TPG NV	135,863		2,858,390

Banking & Finance (0.8%)
ABN AMRO Holding NV	80,806		1,802,340

Electronics (1.0%)
Koninklijke (Royal) Philips Electronics NV(b)	81,524		2,357,349

Publishing (3.3%)
Reed Elsevier NV	281,463		3,714,857
VNU NV	109,236		3,127,794
Wolters Kluwer NV	77,560		1,325,810

			8,168,461

Telecommunications (0.8%)
Koninklijke (Royal) KPN NV(b)	240,181		1,874,256

			17,060,796

Portugal (0.9%)
Electric Integrated (0.2%)
Electricidade de Portugal SA	152,887		432,130

Telecommunications (0.7%)
Portugal Telecom SGPS SA	143,724		1,607,264

			2,039,394

Russia (0.4%)
Oil Comp-Intergrated (0.4%)
LUKOIL — ADR	8,500		1,055,700

South Korea (1.0%)
Banks (0.3%)
Kookmin Bank — ADR	19,600		793,016

Steel (0.5%)
POSCO	7,550		1,066,859

Telecommunications (0.2%)
SK Telecom Company, Ltd. — ADR	27,800		592,140

			2,452,015

Continued

International Equity Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Shares	Fair Value

Common Stocks, continued
Spain (2.3%)
Banking & Finance (1.8%)
Banco Bilbao Vizcaya Argentaria SA(b)	221,878	$	2,936,610
Banco Santander Central Hispano SA	133,312		1,449,870

			4,386,480

Telecommunications (0.5%)
Telefonica SA	72,699		1,099,773

			5,486,253

Sweden (4.0%)
Appliances (0.5%)
Electrolux AB — Class B	56,300		1,149,696

Banking & Finance (1.1%)
Nordea AB	214,500		1,464,835
Svenska Handelsbanken AB — Class A	61,600		1,163,990

			2,628,825

Paper & Related Products (1.0%)
Svenska Cellulosa AB — Class B	62,000		2,478,750

Specialty Retail (0.6%)
Hennes & Mauritz AB — Class B	57,250		1,541,080

Tobacco (0.8%)
Swedish Match AB — Class B	179,500		1,832,774

			9,631,125

Switzerland (6.9%)
Building Materials/Services (0.6%)
Holcim, Ltd.	27,137		1,451,262

Chemicals-Specialty (0.4%)
Givaudan SA	2,040		1,041,860


	Shares or Principal Amount	Fair Value

Common Stocks, continued
Switzerland, continued
Commercial Services & Supplies (0.7%)
Adecco SA	28,522	$	1,575,988

Food Products (2.5%)
Nestle SA	23,636		6,026,307

Insurance (0.4%)
Swiss Re	12,981		894,535

Pharmaceuticals (2.3%)
Novartis AG	34,064		1,446,614
Roche Holding AG	40,254		3,932,141

			5,378,755

			16,368,707

Taiwan (0.1%)
Telecommunications (0.1%)
Chunghwa Telecom Company, Ltd. — ADR	19,500		345,345

Total Common Stocks			233,747,173


Convertible Bonds (0.5%)
Japan (0.5%)
Finance (0.5%)
SMFG Finance, Ltd., 2.25%, 7/11/05(c)	$51,000,000		1,197,747


Investment Company (0.1%)
Bank of New York, Brussels	221,838		221,838

Total Investments (Cost $191,026,127)(a) — 98.4%			235,166,758
Other assets (liabilities) — 1.6%			3,757,183

Net Assets — 100.0%		$	238,923,941

(a)


Unrealized appreciation	$	44,608,991
Unrealized depreciation		(468,360	)

Net unrealized appreciation	$	44,140,631

(b)

Represents non-income producing securities.

(c)

Rule 144A, Section 4(2) or other security which is restricted as to resale to institutional investors. The Investment Advisor, using Board approved procedures, has deemed these securities to be liquid.

ADR — American Depository Receipt.

GDR — Global Depository Reciept.

PLC — Public Limited Company.

At March 31, 2004 the Fund’s foreign currency exchange contracts were as follows:


Currency	Delivery Date	Contract Value		Fair Value		Unrealized Appreciation (Depreciation)
Short
British Sterling Pound	6/17/2004	$	10,149,711	$	10,767,552	$	(617,841	)
British Sterling Pound	6/17/2004		2,090,930		2,098,760		(7,830	)
British Sterling Pound	6/17/2004		2,588,712		2,555,012		33,700

Total Short Contracts		$	14,829,353	$	15,421,324	$	(591,971	)

Long
British Sterling Pound	6/17/2004	$	3,331,485	$	3,285,016	$	(46,469	)
British Sterling Pound	6/17/2004		1,156,285		1,186,256		29,971

Total Long Contracts		$	4,487,770	$	4,471,272	$	(16,498	)

See accompanying notes to the financial statements.

Short U.S. Government Fund(*)

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Corporate Bonds (8.6%)
Building/Construction Products (1.4%)
Vulcan Materials Co., 5.75%, 4/1/04	$ 3,000,000	$	3,000,000

Consumer Staples (1.4%)
Wal-Mart Stores, Inc., 1.08%, 2/22/05**	3,000,000		3,000,645

Financial Services (5.8%)
BP Capital Markets 2.625%, 3/15/07	3,000,000		3,035,547
Citigroup, Inc., 1.20%, 2/7/05**	3,000,000		3,001,266
General Electric Capital Corp., 5.375%, 3/15/07	2,000,000		2,169,453
Lehman Brothers Holdings, 4.00%, 1/22/08	1,000,000		1,037,910
Verizon Global Funding Corp., 6.75%, 12/1/05	3,000,000		3,243,627

			12,487,803

Total Corporate Bonds			18,488,448


Mortgage-Backed Securities (31.4%)
Federal Home Loan Mortgage Corp. (12.2%)
4.00%, 12/15/04, Series 2672, Class — HC, CMO	460,199		460,521
5.00%, 12/1/08, Pool # M80714	1,550,615		1,594,955
4.50%, 12/1/09, Pool # M80791	6,810,772		6,981,004
4.50%, 1/1/10, Pool # M80792	3,532,981		3,623,177
4.00%, 3/1/10, Pool # M80806,	4,313,355		4,387,406
6.50%, 5/1/13, Pool # E00548	641,357		682,211
6.00%, 9/1/16, Pool # E01049	1,684,827		1,776,135
5.50%, 3/15/26, Series 2478, Class — ES, CMO	1,035,481		1,036,272
2.25%, 4/15/16, Series 2613, Class — BM, CMO**	3,386,661		3,391,903
6.00%, 8/15/28, Series 2392, Class — DA, CMO	2,550,179		2,563,116

			26,496,700

Federal National Mortgage Assoc. (17.9%)
3.50%, 3/25/09, Series 2003-92, Class — PA, CMO	5,000,000		5,092,731
4.50%, 1/1/10, Pool # 254626	3,283,464		3,363,106
4.50%, 12/25/09, Series 2003-56, Class — KC, CMO	1,109,381		1,112,789
2.00%, 1/25/11, Series 2003-83, Class — AP, CMO	4,499,294		4,501,420
6.50%, 8/1/13, Pool # 251901	1,536,537		1,636,251
6.00%, 3/1/16, Pool # 253702	1,212,902		1,278,228
6.00%, 4/1/16, Pool # 535846	1,069,425		1,127,024
6.50%, 4/1/16, Pool # 253706	1,808,143		1,925,295
6.00%, 8/1/16, Pool # 545125	771,842		813,427
5.00%, 11/1/17, Pool # 254510	3,217,050		3,309,903
5.00%, 12/1/17, Pool # 254545	3,426,884		3,525,792
4.50%, 3/1/18, Pool # 555292	4,353,798		4,413,500
4.50%, 8/25/09, Series 2003-3, Class — PA CMO	2,277,973		2,314,197
3.50%, 11/25/14 Series 2003-99, Class — TA, CMO	4,207,134		4,244,353

			38,658,016


	Shares or Principal Amount	Fair Value

Mortgage-Backed Securities, continued
Government National Mortgage Association (1.3%)
3.50%, 5/20/22, Series 2003-95, Class — PU, CMO	$ 2,738,870	$	2,774,070

Total Mortgage-Backed Securities			67,928,786


U.S. Government Agencies (42.6%)
Federal Home Loan Bank (14.6%)
4.75%, 6/28/04, Series 217	7,000,000		7,061,698
4.625%, 4/15/05, Series 306	2,000,000		2,068,968
1.79%, 6/17/05	3,000,000		3,003,300
1.53%, 7/1/05	5,000,000		5,000,000
2.25% 12/15/05	3,000,000		3,030,489
2.50%, 4/5/07	3,000,000		3,008,109
3.625%, 11/14/08	8,000,000		8,231,920

			31,404,484

Federal Home Loan Mortgage Corp. (12.8%)
3.00%, 7/15/04	6,000,000		6,033,060
4.25%, 6/15/05	4,000,000		4,141,304
2.00%, 2/23/06, Series MTN, Callable 2/23/05 @ 100	4,000,000		4,018,608
3.125%, 8/25/06, Callable 8/25/04 @ 100	5,000,000		5,035,830
4.875%, 3/15/07	6,000,000		6,449,838
4.00%, 9/13/07, Callable 9/13/04 @ 100	2,000,000		2,025,758

			27,704,398

Federal National Mortgage Assoc. (13.8%)
5.75%, 6/15/05	5,000,000		5,270,330
7.00%, 7/15/05	450,000		482,781
2.75%, 8/11/06, Callable 8/11/04 @ 100	4,000,000		4,019,124
4.75%, 1/2/07	5,000,000		5,329,130
2.625%, 1/19/07, Callable 1/19/05 @ 100	4,000,000		4,012,708
3.05%, 4/16/07, Series MTN 3, Callable 4/16/04 @ 100	2,000,000		2,001,446
6.625%, 10/15/07	4,000,000		4,549,984
3.25%, 2/15/09	4,000,000		4,033,040

			29,698,543

Student Loan Marketing Assoc. (1.4%)
1.29%, 4/25/06, Series MTN**	3,000,000		3,006,909

Total U.S. Government Agencies			91,814,334


U.S. Treasury Notes (15.3%)
2.125%, 10/31/04	5,000,000		5,031,640
1.625%, 3/31/05	3,000,000		3,014,181
2.00%, 5/15/06	10,000,000		10,080,080
3.375%, 11/15/08	11,000,000		11,334,301
3.875%, 1/15/09	1,693,635		1,967,462
2.625% 11/15/06	1,500,000		1,529,532

Total U.S. Treasury Notes			32,957,196


Investment Company (3.0%)
Federated Government Obligations Fund	6,555,240		6,555,240

Continued

Short U.S. Government Fund(*)

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal	Fair Value

Securities Held as Collateral for Securities on Loan (47.7%)
Pool of various securities for BB&T Funds — Note 3 — Security Loans	$102,958,875	$	102,958,875


Total Investments (Cost $318,308,227)(a) — 148.7%			320,702,879
Other assets (liabilities) — (48.7)%			(105,046,264	)

Net Assets — 100.0%		$	215,656,615

(*)

Formerly known as Short U.S. Government Income Fund.

The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The rate reflected is the rate in effect as of March 31, 2004. The maturity date reflected is the final maturity date.

(a)

Represents cost for financial reporting purposes, is substantially the same for federal income tax purposes, and differs from fair value by net unrealized appreciation/depreciation as follows:


Unrealized appreciation		2,549,647
Unrealized depreciation		(154,995	)

Net unrealized appreciation	$	2,394,652

CMO — Collateralized Mortgage Obligation.

See accompanying notes to the financial statements.

Intermediate U.S. Government Fund(*)

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Corporate Bonds (8.7%)
Banking & Financial Services (4.7%)
Bank of America Corp., 6.125%, 7/15/04	$ 600,000	$	608,223
Bank of America Corp., 7.125%, 9/15/06	1,000,000		1,111,820
Barclays Bank PLC, 7.40%, 12/15/09	500,000		600,517
Citicorp, Series C, 7.00%, 7/1/07	750,000		848,711
Citigroup, Inc., 7.25%, 10/1/10	4,000,000		4,763,848
Commercial Credit Co., 6.50%, 8/1/04	750,000		762,821
Fleet Boston Financial Corp., 3.85%, 2/15/08	4,170,000		4,310,788
General Electric Capital Corp., 5.375%, 3/15/07	3,000,000		3,254,178
General Electric Capital Corp., Series MTNA, 6.50%, 12/10/07	300,000		339,509
General Electric Capital Corp., Series A, 7.50%, 6/15/09	500,000		599,027
Goldman Sachs Group, Inc., 4.125%, 1/15/08	1,500,000		1,565,373
Goldman Sachs Group, Inc., Series B, 7.80%, 1/28/10	500,000		604,908
Mercantile Bankshares, Series B, 4.625%, 4/15/13	1,150,000		1,156,987
Merrill Lynch & Company, Inc., 6.00%, 7/15/05	500,000		527,784
Merrill Lynch & Company, Inc., 6.56%, 12/16/07	125,000		142,448
Morgan Stanley Dean Witter, 6.50%, 11/1/05	500,000		538,744
Morgan Stanley Dean Witter, 6.10%, 4/15/06	2,000,000		2,163,020
Morgan Stanley Dean Witter, 5.30%, 3/1/13	1,000,000		1,049,635
Toyota Motor Credit, 5.50%, 12/15/08	375,000		416,241
Wells Fargo & Co., Series J, 6.55%, 12/1/06	600,000		668,189

			26,032,771

Chemicals (0.1%)
E.I. du Pont de Nemours & Co., 6.875%, 10/15/09	200,000		235,466

Consumer Discretionary (0.6%)
Anheuser-Busch Cos., Inc., 5.375%, 9/15/08	350,000		381,449
Anheuser-Busch Cos., Inc., 5.125%, 10/1/08	600,000		648,197
Anheuser-Busch Cos., Inc., 4.375%, 1/15/13	2,000,000		2,012,213

			3,041,859

Consumer Staples (0.6%)
Coca-Cola Co., 5.75%, 3/15/11	1,000,000		1,116,234
Sara Lee Corp., Series MTCN, 5.95%, 1/9/06	650,000		693,607
Wal-Mart Stores, Inc., 5.875%, 10/15/05	1,000,000		1,064,851
Wal-Mart Stores, Inc., 5.45%, 8/1/06	300,000		322,742

			3,197,434


	Principal Amount	Fair Value

Corporate Bonds, continued
Energy (0.3%)
ChevronTexaco Capital Co., 3.50%, 9/17/07	$ 500,000	$	516,384
ChevronTexaco Capital Co., 3.375%, 2/15/08	1,170,000		1,198,390

			1,714,774

Health Care (0.1%)
Abbott Laboratories, 5.625%, 7/1/06	500,000		539,873

Information Technology (0.9%)
IBM Corp., 6.45%, 8/1/07	500,000		564,091
IBM Corp., Series MTN, 5.40%, 10/1/08	500,000		546,197
IBM Corp., 5.375%, 2/1/09	900,000		986,788
IBM Corp., 4.75%, 11/29/12	3,000,000		3,100,883

			5,197,959

Materials (0.1%)
Alcoa, Inc., 7.375%, 8/1/10	500,000		600,502

Miscellaneous Retail (0.2%)
Procter & Gamble, 6.875%, 9/15/09	850,000		1,003,708

Printing & Publishing (0.1%)
Washington Post Co., 5.50%, 2/15/09	500,000		551,845

Telecommunication Servicies (0.8%)
GTE North, Inc, 6.90%, 11/1/08	500,000		571,809
Verizon Pennsylvania, Series A, 5.65%, 11/15/11	4,000,000		4,304,416

			4,876,225

Utilities (0.2%)
WPS Resources Corp., 7.00%, 11/1/09	750,000		874,266

Total Corporate Bonds			47,866,682


Mortgage-Backed Securities (34.5%)
Federal Home Loan Mortgage Corp. (14.8%)
6.00%, 9/1/08, Pool # M80700	776,162		797,735
5.00%, 11/1/09, Pool # M80779	5,539,880		5,698,080
6.50%, 5/1/13, Pool # E00548	641,357		682,211
6.00%, 9/1/16, Pool # E01049	2,332,838		2,459,264
6.00%, 5/1/17, Pool # E89746	3,347,861		3,528,918
5.50%, 9/15/17, Series 2501, Class — MC, CMO	18,663,910		19,858,403
4.50%, 2/1/18, Pool # E94445	12,657,026		12,837,009
4.50%, 8/15/22, Series 2649, Class — VJ	6,049,000		5,884,318
5.50%, 12/15/22, Series 2542, Class — DJ, CMO	5,000,000		5,232,455
5.00%, 7/15/23, Series 2638, Class — DH, CMO	2,302,000		2,299,175
7.00%, 8/15/23, Series 1644, Class — l, CMO	3,311,970		3,489,290
5.50%, 2/1/29, Pool # A18613	10,258,638		10,547,964
6.00%, 2/1/31, Pool # CO1153	1,150,833		1,196,574
6.50%, 12/1/31, Pool # C01271	1,604,418		1,686,083
6.50%, 2/1/32, Pool # C01297	462,427		485,964
2.40%, 7/15/32, Series 2586, Class — FM, CMO**	553,519		553,358
2.60%, 6/15/33, Series 2630, Class — FA, CMO**	4,223,212		4,184,313

			81,421,114

Continued

Intermediate U.S. Government Fund(*)

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Mortgage-Backed Securities, continued
Federal National Mortgage Assoc. (17.6%)
6.00%, 10/1/08, Pool # 254041	$ 567,377	$	581,476
6.00%, 2/1/09, Pool # 254243	1,140,609		1,170,216
6.00%, 4/1/13, Pool # 251656	607,314		640,735
6.00%, 11/1/13, Pool # 323363	927,718		978,771
6.50%, 12/1/13, Pool # 555005	719,542		766,836
6.00%, 3/1/16, Pool # 253702	485,161		511,291
6.00%, 4/1/16, Pool # 535846	2,138,850		2,254,047
6.50%, 5/1/16, Pool # 253799	2,157,441		2,297,224
6.00%, 8/1/16, Pool # 545125	1,029,122		1,084,569
5.00%, 11/1/17, Pool # 254510	3,217,050		3,309,903
5.00%, 12/1/17, Pool # 254545	3,426,884		3,525,792
5.00%, 1/1/18, Pool # 650205	11,364,589		11,694,398
4.50%, 1/25/18, Series 2002-94, Class — HM, CMO	8,000,000		7,977,405
4.50%, 2/1/18, Pool # 683346	4,719,047		4,783,712
4.50%, 3/1/18, Pool # 555292	8,707,596		8,826,999
6.00%, 1/1/23, Pool # 254633	5,261,349		5,499,531
5.00%, 7/25/25, Series 2003-9, Class — JB, CMO	7,228,328		7,655,861
6.00%, 1/1/29, Pool # 252211	1,205,200		1,257,589
6.50%, 5/15/32, Pool # 569804	3,483,109		3,677,672
5.50%, 8/1/32, Pool # 555954	2,736,136		2,829,299
1.59%, 8/25/32, Series 2002-51, Class — FZ, CMO**	1,357,367		1,363,121
5.50%, 1/1/33, Pool # 678321	3,499,078		3,586,983
5.00%, 10/15/32, Series # 2553, Class — DJ, CMO**	5,000,000		4,989,369
2.60%, 6/25/33, Series 2003-48, Class — KF**	3,238,862		3,252,915
5.00%, 7/1/33, Pool # 724965	5,052,657		5,079,984
5.00%, 8/1/33, Pool # 724635	2,222,192		2,234,211
5.00%, 8/1/33, Pool # 738751	2,719,610		2,734,320
5.00%, 10/1/33, Pool # 753298	2,340,510		2,353,169

			96,917,398

Government National Mortgage Assoc. (2.1%)
7.00%, 7/15/29, Pool # 510099	771,533		822,638
7.00%, 8/20/29, Pool # 2796	529,586		563,079
6.50%, 3/20/31, Pool # 3053	1,642,880		1,730,183
6.50%, 4/20/31, Pool # 3068	1,663,674		1,752,083
6.50%, 2/15/32, Pool # 538313	1,471,046		1,553,217
5.50%, 7/16/32, Series 2003-1, Class — PE, CMO	5,000,000		5,031,497

			11,452,697

Total Mortgage-Backed Securities			189,791,209


U.S. Government Agencies (47.3%)
Federal Farm Credit Bank (7.7%)
5.35%, 7/26/06, Series MTN	10,000,000		10,764,400
3.10%, 8/27/07, Callable 8/27/04 @ 100	11,190,000		11,274,317
5.69%, 1/10/08	2,000,000		2,216,606
3.00%, 4/15/08	13,000,000		13,113,971
4.35%, 11/6/09	5,000,000		5,244,650

			42,613,944

Federal Home Loan Bank (11.4%)
6.00%, 7/7/04, Series NM04	250,000		253,261
6.05%, 2/23/05, Series KC05	750,000		782,143
6.05%, 2/25/05, Series KE05	500,000		521,555


	Principal Amount	Fair Value

U.S. Government Agencies, continued
Federal Home Loan Bank, continued
3.20%, 8/26/05, Series WY05	$ 1,650,000	$	1,689,178
5.615%, 3/1/06, Series KY06	1,000,000		1,072,426
5.25%, 8/15/06, Series EY06	1,250,000		1,343,354
2.00%, 2/23/07, Callable 2/23/05 @ 100	13,000,000		13,068,925
2.45%, 3/23/07, Callable 9/24/04 @ 100	6,030,000		6,040,209
3.125%, 8/15/07	10,000,000		10,213,190
6.00%, 6/11/08, Series FJ08	1,100,000		1,239,975
3.375%, 7/21/08, Callable 1/21/05 @ 100	5,000,000		5,069,995
3.875%, 8/22/08, Series 429 Callable 2/22/05 @ 100	1,250,000		1,280,305
3.625%, 11/14/08, Series 439	5,000,000		5,144,950
6.12%, 5/21/09, Series FN09	500,000		570,435
7.375%, 2/12/10, Series BZ10	12,000,000		14,513,699

			62,803,600

Federal Home Loan Mortgage Corp. (14.7%)
6.50%, 11/18/04	1,300,000		1,343,644
5.95%, 1/19/06	400,000		429,938
2.375%, 5/19/06, Series MTN, Callable 5/19/04 @ 100	8,625,000		8,637,938
5.375%, 8/16/06, Callable 8/16/04 @ 100	500,000		507,546
2.80%, 1/26/07, Series MTN, Callable 7/26/04 @ 100	9,500,000		9,543,216
2.75%, 1/30/07, Series MTN1, Callable 7/30/04 @ 100	10,000,000		10,045,729
3.50%, 9/15/07	1,000,000		1,033,578
3.25%, 2/25/08, Callable 2/25/05 @ 100	10,000,000		10,052,699
3.50%, 3/12/08, Callable 9/12/04 @ 100	2,600,000		2,629,136
3.15%, 7/30/08, Series MTN, Callable 7/30/04 @ 100	5,910,000		5,940,933
5.00%, 7/30/09, Callable 7/30/04 @ 100	10,000,000		10,113,639
7.00%, 3/15/10	900,000		1,070,995
6.875%, 9/15/10	500,000		593,934
3.00%, 1/7/11, Series MTN, Callable 1/7/05 @ 100	10,000,000		10,081,699
5.625%, 3/15/11	500,000		557,986
6.50%, 6/6/11, Series MTN, Callable 6/1/04 @ 100	500,000		504,032
5.50%, 9/15/11	750,000		829,255
5.125%, 8/20/12, Callable 8/20/04 @ 100	7,000,000		7,090,006

			81,005,903

Federal National Mortgage Assoc. (11.4%)
1.875%, 12/15/04	5,000,000		5,025,360
6.00%, 12/15/05	1,500,000		1,611,993
5.875%, 2/2/06	1,000,000		1,073,103
2.75%, 8/11/06, Callable 8/11/04 @ 100	5,000,000		5,023,905
3.42%, 3/15/07, Callable 9/15/04 @ 100	5,000,000		5,046,650
6.00%, 5/15/08	500,000		562,164
4.00%, 9/2/08	5,000,000		5,189,235
4.00%, 4/20/09, Callable 4/20/04 @ 100	1,000,000		1,001,377
4.25%, 4/30/09, Callable 4/30/04 @ 100	5,000,000		5,011,255
6.40%, 5/14/09, Callable 5/14/04 @ 100	1,000,000		1,005,894
6.625%, 9/15/09	12,250,000		14,290,115
4.75%, 11/26/10, Callable 11/26/04 @ 100	6,100,000		6,181,368
6.08%, 12/15/10, Series MTN	500,000		571,679

Continued

Intermediate U.S. Government Fund(*)

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

U.S. Government Agencies, continued
Federal National Mortgage Assoc., continued
6.00%, 12/21/11, Callable 12/21/04 @ 100	$ 1,000,000	$	1,033,665
4.125%, 4/15/14	10,000,000		9,833,870

			62,461,633

Sovereign Agencies (2.1%)
Financing Corporation, 8.60%, 9/26/19	500,000		704,565
Tennessee Valley Authority, Series A, 5.625%, 1/18/11	7,000,000		7,810,166
Tennessee Valley Authority, 7.14%, 5/23/12	2,400,000		2,892,938

			11,407,669

Total U.S. Government Agencies			260,292,749


U.S. Treasury Notes (7.0%)
2.00%, 5/15/06	1,450,000		1,461,612
4.625%, 5/15/06	250,000		265,615
3.50%, 11/15/06	250,000		260,576
6.25%, 2/15/07	1,250,000		1,399,805
5.625%, 5/15/08	1,250,000		1,404,199
3.25%, 8/15/08	1,000,000		1,028,160


	Shares or Principal Amount	Fair Value

U.S. Treasury Notes, continued
3.375%, 11/15/08	$12,750,000	$	13,137,485
6.00%, 8/15/09	500,000		577,053
5.00%, 8/15/11	750,000		826,436
5.50%, 8/15/28	12,000,000		13,088,904
5.25%, 11/15/28	5,000,000		5,278,905

Total U.S. Treasury Notes			38,728,750


Investment Company (2.2%)
Federated Government Obligations Fund	12,227,541		12,227,541


Securities Held as Collateral for Securities on Loan (44.5%)
Pool of various securities for BB&T Funds — Note 3 — Security Loans	$245,269,855		245,269,855

Total Investments (Cost $779,897,653)(a) — 144.2%			794,176,786
Other assets (liabilities) — (44.2)%			(243,294,532	)

Net Assets — 100.0%		$	550,882,254

(*)

Formerly known as Intermediate U.S. Government Bond Fund.

(a)


Unrealized appreciation	$	14,769,037
Unrealized depreciation		(489,905	)

Net unrealized appreciation	$	14,279,133

The interest rate for this variable rate note, which will change periodically, is based on either to prime rate or an index of markets rates. The rate reflected is the rate in effect as of March 31, 2004. The maturity date reflected is the final maturity date.

CMO — Collateralized Mortgage Obligation.

See accompanying notes to the financial statements.

Intermediate Corporate Bond Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Corporate Bonds (93.3%)
Aerospace & Defense (0.4%)
Raytheon Co., 5.50%, 11/15/12	$ 1,000,000	$	1,060,623

Air Freight & Logistics (0.5%)
Fedex Corp., 9.65%, 6/15/12	1,000,000		1,334,120

Auto — Cars/Light Trucks (0.8%)
DaimlerChrysler Holdings, 4.75%, 1/15/08	2,000,000		2,085,346

Banking & Financial Services (28.0%)
AIG SunAmerica Global Financial, 5.85%, 8/1/08,(b)	2,000,000		2,218,962
Bank of America Corp., 7.40%, 1/15/11	2,000,000		2,400,656
Bank of America Corp., 5.125%, 11/15/14	2,000,000		2,069,422
Bank of New York, 7.30%, 12/1/09	2,000,000		2,388,904
Bank One Corp., 5.25%, 1/30/13	1,000,000		1,049,442
Berkshire Hathaway, Inc., 3.375%, 10/15/08,(b)	3,000,000		3,029,091
Capital One Bank, 4.25%, 12/1/08	1,000,000		1,025,115
Citigroup, Inc., 5.625%, 8/27/12	3,000,000		3,282,129
Citigroup, Inc., 5.875%, 2/22/33	1,000,000		1,021,707
Countrywide Home Loan, 4.25%, 12/19/07	1,000,000		1,048,257
Dun & Bradstreet Corp., Series B, 6.625%, 3/15/06	2,000,000		2,141,458
Erac USA Finance Co., 7.35%, 6/15/08,(b)	2,000,000		2,315,826
First Tennessee Bank, 4.625%, 5/15/13	1,000,000		1,008,667
FMR Corp., 7.57%, 6/15/29,(b)	1,000,000		1,240,192
Ford Motor Credit Co., 6.50%, 1/25/07	3,000,000		3,204,615
Ford Motor Credit Co., 5.625%, 10/1/08	2,000,000		2,064,250
General Motors Acceptance Corp., 2.00%, 5/18/06*	1,000,000		996,483
General Motors Acceptance Corp., 4.50%, 7/15/06	1,000,000		1,033,353
General Motors Acceptance Corp., 6.125%, 9/15/06	2,000,000		2,138,356
General Electric Capital Corp., 5.00%, 2/15/07	2,000,000		2,146,274
General Motors Acceptance Corp., 6.875%, 8/28/12	1,000,000		1,080,133
Household Finance Corp., 6.50%, 11/15/08	2,000,000		2,263,882
Household Finance Corp., 6.375%, 11/27/12	1,000,000		1,131,580
International Lease Finance Corp., 4.35%, 9/15/08	1,000,000		1,042,152
J.P. Morgan Chase & Co., 4.50%, 11/15/10	1,000,000		1,031,510
J.P. Morgan Chase & Co., 4.875%, 3/15/14	2,000,000		2,021,552
Key Bank, 7.00%, 2/1/11	1,000,000		1,169,959
Legg Mason, Inc., 6.75%, 7/2/08	2,140,000		2,418,084
Manufacturers & Traders Trust Co., 8.00%, 10/1/10	2,000,000		2,459,492
MBNA America Bank, Series BKNT, 5.375%, 1/15/08	1,000,000		1,079,156
Morgan Stanley Dean Witter, 6.75%, 4/15/11	3,000,000		3,465,332
Pemex Finance, Ltd., 9.69%, 8/15/09	1,000,000		1,187,540


	Principal Amount	Fair Value

Corporate Bonds, continued
Banking & Financial Services, continued
State Street Corp., 7.65%, 6/15/10	$ 2,000,000	$	2,448,550
Synovus Financial, 7.25%, 12/15/05	3,000,000		3,287,490
US Bancorp, 3.125%, 3/15/08	1,000,000		1,008,134
Virginia Electric & Power, 4.50%, 12/15/10	1,000,000		1,031,550
Wachovia Corp., 3.50%, 8/15/08	1,000,000		1,017,400
Wachovia Corp., 4.875%, 2/15/14	1,000,000		1,021,530
Washington Mutual, Inc., 7.50%, 8/15/06	2,000,000		2,240,814
Wells Fargo Bank, 6.45%, 2/1/11	2,000,000		2,299,972
Wells Fargo Bank, 5.00%, 11/15/14	1,000,000		1,032,065

			73,561,036

Beverages (0.4%)
Anheuser-Busch Cos., Inc., 5.95%, 1/15/33	1,000,000		1,067,569

Building/Construction Products (1.1%)
Masco Corp., 6.00%, 5/3/04	1,000,000		1,003,370
Vulcan Materials Co., 5.75%, 4/1/04	2,000,000		2,000,000

			3,003,370

Chemicals (0.8%)
Cabot Corp., 5.25%, 9/1/13,(b)	1,000,000		1,028,475
Engelhard Corp., 4.25%, 5/15/13	1,000,000		988,061

			2,016,536

Coal & Other Minerals & Ores (0.4%)
BHP Billiton Finance, 4.80%, 4/15/13	1,000,000		1,033,677

Commercial Printing (0.4%)
Donnelley (R.R.) & Sons, 3.75%, 4/1/09,(b)	1,000,000		1,009,919

Computers (2.6%)
Dell Computer Corp., 6.55%, 4/15/08	2,970,000		3,351,544
First Data Corp., 4.70%, 11/1/06	2,000,000		2,125,354
IBM Corp., 8.375%, 11/1/19	1,000,000		1,355,329

			6,832,227

Data Processing/Management (1.2%)
Certegy, Inc., 4.75%, 9/15/08,(b)	500,000		525,304
Oracle Corp., 6.91%, 2/15/07	1,500,000		1,676,601
SunGard Data Systems, Inc., 4.875%, 1/15/14,(b)	1,000,000		1,004,952

			3,206,857

Electric — Integrated (1.6%)
FirstEnergy Corp., Series A, 5.50%, 11/15/06	1,000,000		1,063,287
NiSource Finance Corp., 5.40%, 7/15/14	1,000,000		1,032,664
Southern Cal Edison, 6.00%, 1/15/34	1,000,000		1,027,086
TXU Energy Co., 7.00%, 3/15/13,(b)	1,000,000		1,145,971

			4,269,008

Electronic Components — Semiconductors (1.0%)
Applied Materials, Inc., 6.75%, 10/15/07	2,250,000		2,560,176

Engineering — Research & Development Services (0.4%)
Science Applications Institute, 7.125%, 7/1/32	1,000,000		1,177,376

Entertainment/Leisure (1.4%)
Gtech Holdings Corp., 4.75%, 10/15/10,(b)	1,000,000		1,042,353

Continued

Intermediate Corporate Bond Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Corporate Bonds, continued
Entertainment/Leisure, continued
International Game Technology, 8.375%, 5/15/09	$ 2,230,000	$	2,710,039

			3,752,392

Food Processing (0.4%)
ConAgra Foods, Inc., 6.00%, 9/15/06	1,000,000		1,084,561

Foreign Government (2.4%)
People’s Republic of China, 4.75%, 10/29/13	1,000,000		1,014,412
Republic of Chile, 5.50%, 1/15/13	1,000,000		1,056,800
United Mexican States, 1.84%, 1/13/09*	1,000,000		1,006,000
United Mexican States, 6.375%, 1/16/13	3,000,000		3,249,000

			6,326,212

Health Care (1.5%)
Anthem, Inc., 6.80%, 8/1/12	1,425,000		1,652,051
HCA, Inc., 6.25%, 2/15/13	1,000,000		1,041,998
Quest Diagnostic, Inc., 7.50%, 7/12/11	1,000,000		1,195,719

			3,889,768

Industrial Conglomerates (1.2%)
General Electric Co., 5.00%, 2/1/13	2,000,000		2,094,156
Tyco International Group SA, 6.375%, 10/15/11	1,000,000		1,093,778

			3,187,934

Insurance (1.3%)
John Hancock Global Funding, 7.90%, 7/2/10,(b)	2,000,000		2,432,878
Marsh & Mclennan, Inc., 6.625%, 6/15/04	1,000,000		1,010,347

			3,443,225

Internal Combustion Engines (0.5%)
Briggs & Stratton Corp., 8.875%, 3/15/11	1,000,000		1,235,000

Investment Banks/Brokers (2.7%)
Bear Stearns Co., Inc., 5.70%, 11/15/14	1,000,000		1,077,434
Credit Suisse First Boston USA, 5.50%, 8/15/13	1,000,000		1,063,374
Goldman Sachs Group, Inc., 4.75%, 7/15/13	3,000,000		2,999,676
Lehman Brothers Holdings, 3.50%, 8/7/08	1,000,000		1,013,294
Merrill Lynch & Company, Inc., 4.00%, 11/15/07	1,000,000		1,040,747

			7,194,525

Linen Supply & Related Items (0.4%)
Cintas Corp. No. 2, 6.00%, 6/1/12	1,000,000		1,120,219

Measuring & Controlling Devices, (0.4%)
Thermo Electron, 7.625%, 10/30/08	1,000,000		1,155,396

Media (4.1%)
AOL Time Warner, Inc., 7.625%, 4/15/31	2,000,000		2,339,860
Clear Channel Communications, 7.65%, 9/15/10	1,000,000		1,186,472
Comcast Corp., 5.50%, 3/15/11	2,000,000		2,126,796
Comcast Corp., 5.30%, 1/15/14	1,000,000		1,023,754
Harman Intl, 7.125%, 2/15/07	2,000,000		2,233,166
Liberty Media Corp., 2.61%, 9/17/06*	1,000,000		1,011,864
Viacom, Inc, 5.50%, 5/15/33	1,000,000		971,678

			10,893,590

Medical Products (0.7%)
Becton, Dickinson & Co., 7.00%, 8/1/27	1,650,000		1,946,144


	Principal Amount	Fair Value

Corporate Bonds, continued
Metals (3.1%)
Alcan, Inc., 6.125%, 12/15/33	$ 1,000,000	$	1,054,462
Barrick Gold Finance, Inc., 7.50%, 5/1/07	3,000,000		3,455,646
Newmont Mining, 8.625%, 5/15/11	2,000,000		2,513,106
Placer Dome, Inc., 6.45%, 10/15/35,(b)	1,000,000		1,074,222

			8,097,436

Motorcycle/Motor Scooter (0.4%)
Harley Davidson Funding, 3.625%, 12/15/08,(b)	1,000,000		1,021,407

Motors & Generators (0.5%)
Ametek, Inc., 7.20%, 7/15/08	1,255,000		1,387,202

Natural Gas Transmission (0.4%)
Trans Canada Pipelines, 4.00%, 6/15/13	1,000,000		967,100

Oil & Gas (4.0%)
BP Canada Finance, 3.375%, 10/31/07	1,000,000		1,027,861
ConocoPhillips, 6.95%, 4/15/29	2,000,000		2,331,104
Marathon Oil, 6.80%, 3/15/32	1,000,000		1,122,451
Murphy Oil Corp., 6.375%, 5/1/12	2,000,000		2,260,062
Occidental Petroleum, 7.65%, 2/15/06	2,585,000		2,849,466
Phillips Petroleum Co., 8.50%, 5/25/05	1,000,000		1,078,637

			10,669,581

Oil & Gas Exploration Products & Services (1.4%)
Cooper Cameron Corp., 2.65%, 4/15/07	1,000,000		998,060
Noble Corp., 6.95%, 3/15/09	1,500,000		1,733,051
XTO Energy, Inc., 4.90%, 2/1/14	1,000,000		1,003,784

			3,734,895

Oil Company — Exploration & Production (1.2%)
EOG Resources Canada, 4.75%, 3/15/14,(b)	1,000,000		1,014,310
Pemex Project Funding Master Trust, 6.125%, 8/15/08	1,000,000		1,079,000
Pemex Project Funding Master Trust, 7.375%, 12/15/14	1,000,000		1,112,500

			3,205,810

Petroleum Refining (0.8%)
Valero Energy Corp., 3.50%, 4/1/09	2,000,000		1,984,536

Pharmaceuticals (4.7%)
Abbott Laboratories, 3.75%, 3/15/11	2,000,000		1,988,176
Bausch & Lomb, Inc., 7.125%, 8/1/28	1,000,000		1,053,382
Bristol - Myers Squibb Co. 4.75%, 10/1/06	2,000,000		2,117,820
Laboratory Corporation of America, 5.50%, 2/1/13	2,679,000		2,846,052
Medpartners, Inc., 7.375%, 10/1/06	2,000,000		2,200,000
Schering-Plough Corp., 6.50%, 12/1/33	1,000,000		1,070,684
Wyeth, 6.50%, 2/1/34	1,000,000		1,055,806

			12,331,920

Pipelines (0.4%)
Centerpoint Energy Resources, Series B, 7.875%, 4/1/13	1,000,000		1,157,506

Plastics Foam Products (0.4%)
Sealed Air Corp., 5.375%, 4/15/08,(b)	1,000,000		1,070,635

Continued

Intermediate Corporate Bond Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Corporate Bonds, continued
Racetracks (0.4%)
International Speedway Corp., 7.875%, 10/15/04	$ 1,000,000	$	1,031,246

Refuse Systems (1.2%)
Republic Services, Inc., 6.75%, 8/15/11	2,775,000		3,186,446

Retail (4.1%)
Autozone, Inc., 5.875%, 10/15/12	1,000,000		1,075,214
Gap, Inc., 6.90%, 9/15/07	1,000,000		1,110,000
Kroger Co., 7.625%, 9/15/06	1,000,000		1,119,864
Limited Brands, 6.125%, 12/1/12	1,000,000		1,110,066
Limited Brands, 6.95%, 3/1/33	1,000,000		1,125,096
Office Depot, Inc., 6.25%, 8/15/13	1,500,000		1,630,514
Tricon Global, 8.50%, 4/15/06	1,000,000		1,113,750
Wal-Mart Stores, Inc., 4.125%, 2/15/11	1,000,000		1,015,388
Wendy’s International, 6.25%, 11/15/11	1,000,000		1,129,713
Woolworth Corp., 8.50%, 1/15/22	345,000		386,831

			10,816,436

Single-Family Housing Construction (0.4%)
MDC Holdings, Inc., 5.50%, 5/15/13	1,000,000		1,027,334

Surgical & Medical Instruments (0.8%)
Guidant Corp., 6.15%, 2/15/06	2,000,000		2,148,106

Telecommunications (8.6%)
AT&T Corp., 8.05%, 11/15/11*	1,000,000		1,169,024
AT&T Wireless Services, Inc., 7.875%, 3/1/11	1,500,000		1,788,807
British Telecom, 8.375%, 12/15/10	1,000,000		1,235,753
Deutsche Telekom, 8.50%, 6/15/10	1,000,000		1,227,703
Deutsche Telekom, 5.25%, 7/22/13	500,000		520,523
France Telecom, 8.45%, 3/1/06*	1,000,000		1,105,097
Koninklijke KPN NV, 8.00%, 10/1/10	1,000,000		1,218,000
News America, Inc., 4.75%, 3/15/10	1,000,000		1,035,631
SBC Communications, Inc., 6.125%, 2/15/08	1,000,000		1,108,046
Sprint Capital Corp., 7.625%, 1/30/11	2,000,000		2,335,347
Telecom Italia Capital Corp., 5.25%, 11/15/13,(b)	1,000,000		1,031,238
Univision Comm, Inc., 3.875%, 10/15/08	1,000,000		1,016,407
USA Interactive, 7.00%, 1/15/13	1,000,000		1,137,550
Verizon Maryland, Inc., 6.125%, 3/1/12	2,000,000		2,208,638
Verizon Virginia, Inc., 4.625%, 3/15/13	1,000,000		991,740
Verizon Wireless, Inc., 5.375%, 12/15/06	2,000,000		2,154,166
Vodafone Airtouch PLC, 7.75%, 2/15/10,(b)	1,000,000		1,204,740

			22,488,410


	Shares of Principal Amount	Fair Value

Corporate Bonds, continued
Toiletries (0.8%)
Alberto-Culver Company, 8.25%, 11/1/05	$2,000,000	$	2,170,900

Utilities (3.1%)
Alabama Power Co., 5.375%, 10/1/08	2,000,000		2,173,480
Appalachian Power Co., 4.80%, 6/15/05	2,650,000		2,745,167
Carolina Power & Light, 6.125%, 9/15/33	1,000,000		1,056,273
Constellation Energy Group, 6.35%, 4/1/07	1,000,000		1,102,405
National Rural Utilities, 4.75%, 3/1/14	1,000,000		1,013,455

			8,090,780

Total Corporate Bonds			246,034,492


Exchange Traded Funds (0.4%)
iShares GS Investop Index Fund	9,000		1,024,470


Real Estate Investment Trust (0.9%)
Spieker Properties, LP, 7.25%, 5/1/09	2,000,000		2,356,158


U.S. Government Agencies (2.3%)
Federal National Mortgage Assoc. (1.1%) 4.625%, 5/1/13	3,000,000		3,033,144

Student Loan Marketing Association (1.2%)
Series MTN, 1.29%, 4/25/06*	2,000,000		2,004,606
Series MTNA, 4.00%, 1/15/09	1,000,000		1,028,125

			3,032,731

Total U.S. Government Agencies			6,065,875


Investment Companies (2.1%)
Federated High Yield Fund	322,056		1,948,439
Federated Prime Cash Obligations Fund	3,557,151		3,557,151

Total Investment Companies			5,505,590

Securities Held as Collateral for Securities on Loan (10.8%)
Pool of various securities for BB&T Funds — Note 3 — Security Loans	$28,532,676		28,532,676

Total Investments (Cost $275,214,567)(a) — 109.8%			289,519,261
Other assets (liabilities) — (9.8)%			(25,895,062	)

Net Assets — 100.0%		$	263,624,199

(a)

Represents cost for financial reporting purposes, is substantially the same for federal income tax purposes, and differs from value by net unrealized appreciation of securities as follows:


Unrealized appreciation	$	14,504,354
Unrealized depreciation		(199,660	)

Net unrealized appreciation	$	14,304,694

(b)

Rule 144A, Section 4(2) or other security which is restricted as to resale to institutional investors. The Investment Advisor,using Board approved procedures, has deemed these securities to be liquid.

See accompanying notes to the financial statements.

Kentucky Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Municipal Bonds (97.3%)
Kentucky (96.6%)
Commission Bonds (38.8%)
Kentucky State Property & Buildings Commission, Project # 71, 4.20%, 8/1/10	$300,000	$	323,958
Kentucky State Property & Buildings Commission, Project # 68, 5.50%, 10/1/06	100,000		109,598
Kentucky State Property & Buildings Commission, Project # 69, Series C, 5.50%, 8/1/07	200,000		223,398
Kentucky State Property & Buildings Commission, Project # 55, 6.25%, 9/1/07	100,000		114,191
Kentucky State Property & Buildings Commission, Project # 73, 5.25%, 11/1/08	390,000		440,002
Kentucky State Property & Buildings Commission, Project # 74, 5.375%, 2/1/09	350,000		396,386
Kentucky State Property & Buildings Commission, Project # 74, 5.375%, 8/1/09	150,000		171,378
Kentucky State Property & Buildings Commission, Project # 74, 5.375%, 2/1/10	305,000		348,237
Kentucky State Property & Buildings Commission, Project # 69, Series A, 5.50%, 8/1/11	540,000		627,555
Kentucky State Property & Buildings Commission, Project # 71, 4.40%, 8/1/12	395,000		426,774
Kentucky State Property & Buildings Commission, Project # 68, 5.75%, 10/1/12, Callable 10/1/10 @ 100	500,000		585,479
Kentucky State Property & Buildings Commission, Project # 64, 5.375%, 5/1/13, Callable 11/1/09 @ 100	500,000		572,865
Kentucky State Property & Buildings Commission, Project # 67, 5.00%, 9/1/13, Callable 9/1/10 @ 100	405,000		456,127
Kentucky State Property & Buildings Commission, Project # 67, 5.625%, 9/1/13, Callable 9/1/10 @ 100	300,000		348,801
Kentucky State Property & Buildings Commission, Project # 74, 5.375%, 2/1/14, Callable 2/1/12 @ 100	500,000		573,570
Kentucky State Property & Buildings Commission, Project # 81, 5.00%, 11/1/16, Callable 11/1/13 @ 100, AMBAC	500,000		549,490
Kentucky State Property & Buildings Commission, Project # 73, 5.50%, Second Series, 11/1/16, Callable 11/1/12 @ 100	400,000		455,032

			6,722,841

Education Bonds (20.8%)
Allen County, Kentucky, School District, 5.25%, 4/1/10, Callable 4/1/07 @ 102	455,000		504,445
Bullitt County, Kentucky, School District, Second Series, 3.90%, 5/1/07	100,000		106,341
Fayette County, Kentucky, School District, Series A, 5.35%, 1/1/12, Callable 1/1/07 @ 102	200,000		220,368
Floyd County, Kentucky, School District, 4.10%, 4/1/10	220,000		237,906
Jefferson County, Kentucky, School District, Series A, 5.25%, 1/1/11, Callable 7/1/09 @ 101 FSA	200,000		223,930


	Principal Amount	Fair Value

Municipal Bonds, continued
Kentucky, continued
Education Bonds, continued
Jefferson County, Kentucky, School District, Series A, 5.00%, 2/1/11, Callable 2/1/06 @ 102, MBIA	$290,000	$	311,898
Jessamine County, Kentucky, School District, 5.00%, 6/1/05	110,000		114,945
Louisville & Jefferson County, Kentucky, 5.00%, 5/15/10	500,000		562,854
Pulaski County, Kentucky, School District, Series C, 4.20%, 7/1/09, Callable 7/1/08 @ 102	560,000		607,985
University of Kentucky, Series M, 4.55%, 5/1/09 Callable 5/1/08 @ 101	150,000		163,176
University of Kentucky, Series Q, 5.00%, 5/1/10	250,000		281,068
University of Louisville, Series M, 4.00%, 5/1/10, AMBAC	250,000		267,305

			3,602,221

General Obligations (3.8%)
Boone County, Kentucky, 3.75%, 4/1/07	250,000		263,950
Hopkins County, Kentucky, Detention Facilities, 5.375%, 2/1/09, FGIC	350,000		396,386

			660,336

Health Care — Hospitals (3.3%)
Kentucky Economic Development Financial Authority, Catholic Health Initiatives, Series A, 5.75%, 12/1/15, Callable 6/1/10 @ 101	500,000		566,100

Housing Bonds (0.6%)
Kentucky Housing Corporation, Series D, 5.20%, 7/1/07, Callable 7/1/06 @ 102, FHA	100,000		107,809

Pollution Control Bonds (2.1%)
Boone County, Kentucky, Pollution Control, Dayton Power & Lighting Company, Series A, 6.50%, 11/15/22, Callable 11/15/04 @ 101	350,000		356,895

Transportation Bonds (6.7%)
Kentucky State Turnpike Authority, Revitalization Projects, 5.50%, 7/1/09, AMBAC	200,000		229,552
Kentucky State Turnpike Authority, Revitalization Projects, Series A, 5.50%, 7/1/12, AMBAC	500,000		581,205
Kentucky State Turnpike Authority, Revitalization Projects, Series A, 5.50%, 7/1/15, AMBAC	300,000		349,608

			1,160,365

Urban & Community Development (6.0%)
Bell County, Kentucky, Judicial Center Project, 5.40%, 9/1/13, Callable 3/1/11 @ 102	160,000		182,318
Daviess County, Kentucky, Court Facilities Project, Series A, 5.60%, 10/1/06, Callable 10/1/04 @ 102	245,000		254,293
Jefferson County, Kentucky, Capital Projects, 5.20%, 6/1/08, Callable 6/1/07 @ 102, MBIA	295,000		326,654
Kenton County, Kentucky, Series A, 5.35%, 12/1/08, Callable 12/1/06 @ 101	250,000		270,710

			1,033,975

Continued

Kentucky Intermediate Tax-Free Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Municipal Bonds, continued
Kentucky, continued
Utility Bonds (14.5%)
Bardstown, Kentucky, Combined Utilities, 4.375%, 12/1/11, Callable 12/1/10 @ 101, MBIA	$200,000	$	217,606
Campbell & Kenton Counties, Kentucky, Sanitation District, Series A, 4.50%, 8/1/05, FSA	200,000		208,826
Kentucky Infrastructure Authority, Series A, 4.00%, 6/1/08	300,000		321,504
Kentucky Rural Water Finance, Series A, 4.00%, 2/1/07	205,000		217,183
Lexington-Fayette Urban County, Kentucky, Sewer Systems, 5.50%, 7/1/11	450,000		522,792
Louisville, Kentucky, Louisville Water Company, 4.70%, 11/15/14, Callable 11/15/10 @ 100	550,000		587,686
Northern Kentucky, Water Distribution, 4.50%, 2/1/08, FGIC	250,000		271,433
Owensboro Kentucky Electric & Power, Series B, 2.36%, 1/1/06, AMBAC*	60,000		58,411


	Shares or Principal Amount	Fair Value

Municipal Bonds, continued
Kentucky, continued
Utility Bonds, continued
Owensboro Kentucky Electric & Power, Series B, 2.73%, 1/1/09, AMBAC*	$ 45,000	$	39,395
Owensboro Kentucky Electric & Power, Series B, 2.89%, 1/1/10, AMBAC*	75,000		62,628

			2,507,464

Total Kentucky			16,718,006

Puerto Rico (0.7%)
General Obligations (0.7%)
Puerto Rico Commonwealth, 6.50%, 7/1/14, MBIA	100,000		126,633

Total Municipal Bonds			16,844,639


Investment Company (1.7%)
Federated Tax Exempt Money Market Fund	286,923		286,923

Total Investments (Cost $16,555,187)(a) — 99.0%			17,131,562
Other assets (liabilities) — 1.0%			179,499

Net Assets — 100.0%		$	17,311,061

(a)


Unrealized appreciation	$	582,800
Unrealized depreciation		(6,425	)

Net unrealized appreciation	$	576,375

Discount note. Rate disclosed represents the effective yield at March 31, 2004.

AMBAC — Insured by AMBAC Indemnity Corporation.

FGIC — Insured by the Financial Guarantee Insurance Corporation.

FHA — Insured by Federal Housing Administration.

FSA — Insured by Financial Security Assurance.

MBIA — Insured by the Municipal Bond Insurance Association.

See accompanying notes to the financial statements.

Maryland Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Municipal Bonds (96.7%)
Maryland (93.7%)
Education Bonds (12.7%)
Maryland State Authority For American Physics, 5.25%, 12/15/13, Callable 12/15/11 @ 100, GTY AGMT	$150,000	$	168,572
Maryland State Health & Higher Education, 4.625%, 7/1/10	100,000		107,980
Maryland State Health & Higher Education, 5.125%, 7/1/10, AMBAC	100,000		113,303
Maryland State Health & Higher Education, 5.00%, 5/15/13, Callable 5/15/11 @ 100	175,000		190,930
Maryland State Health & Higher Education, Series A, 5.75%, 1/1/15, Callable 1/1/13 @ 101	100,000		108,344
Maryland State Health & Higher Education, 5.25%, 7/1/19, Callable 4/16/04 @ 100, AMBAC	50,000		50,132
Maryland State Health & Higher Education, 5.00%, 7/1/27, AMBAC	200,000		213,114
Maryland State Health & Higher Education, 6.00%, 7/1/39, Callable 7/1/09 @ 101	80,000		94,438

			1,046,813

General Obligations (60.2%)
Allegany County, Maryland, 4.50%, 8/1/11, Callable 8/1/08 @ 101, AMBAC	50,000		53,532
Anne Arundel County, Maryland, 5.00%, 5/15/10, Callable 5/15/09 @ 101	100,000		111,833
Anne Arundel County, Maryland, 5.25%, 3/1/11	200,000		228,908
Baltimore County, Maryland, 5.00%, 7/1/08	100,000		111,729
Baltimore County, Maryland, 7.00%, 10/15/09, MBIA	100,000		122,803
Baltimore County, Maryland, 5.00%, 8/1/11	200,000		227,304
Baltimore County, Maryland, 5.25%, 8/1/11	340,000		391,988
Baltimore County, Maryland, 5.50%, 6/1/12, Callable 6/1/11 @ 101	100,000		116,740
Calvert County, Maryland, 5.00%, 7/15/11	100,000		113,254
Carroll County, Maryland, 5.00%, 11/1/09	100,000		113,023
Frederick County, Maryland, Public Facilities, 5.00%, 12/1/04	250,000		256,558
Harford County, Maryland, 5.00%, 12/1/09	200,000		226,778
Harford County, Maryland, 4.25%, 1/15/11	100,000		108,492
Maryland State & Local Facilities, Series 2, 5.00%, 8/1/07	250,000		276,165
Maryland State & Local Facilities, Capital Improvements, Series A, 5.50%, 3/1/10	125,000		144,469
Maryland State & Local Facilities, Series 2, 5.00%, 8/1/16, Callable 8/1/13 @ 100	250,000		276,065
Maryland State, Series B, 5.00%, 7/15/08	100,000		111,805
Maryland State, 5.25%, 3/1/09	100,000		113,389
Montgomery County, Maryland, Certificates of Participation, 4.50%, 6/1/06	100,000		106,414
Montgomery County, Maryland, Series A, 5.00%, 7/1/10	150,000		169,898
Montgomery County, Maryland, Series A, 5.30%, 1/1/13, Callable 1/1/10 @ 101	100,000		114,614
Montgomery County, Maryland, 5.25%, 10/1/14, Callable 10/1/11 @ 101	100,000		113,478


	Principal Amount	Fair Value

Municipal Bonds, continued
Maryland, continued
General Obligations, continued
Montgomery County, Maryland, Series 4, 4.875%, 5/1/18, Callable 5/1/08 @ 101	$100,000	$	106,132
Prince Georges County, Maryland, Series A, 5.00%, 10/1/07	250,000		276,839
Prince Georges County, Maryland, 5.125%, 10/1/08	100,000		112,512
Prince Georges County, Maryland, 5.50%, 10/1/08, FSA	55,000		62,761
Prince Georges County, Maryland, Series A, 5.00%, 10/1/11	200,000		227,190
Prince Georges County, Maryland, 5.50%, 5/15/12	100,000		116,434
Saint Mary’s County, Maryland, 5.00%, 7/1/05	100,000		104,891
Washington Suburban Sanitation District, Maryland, 5.00%, 6/1/06	100,000		107,677
Washington Suburban Sanitation District, Maryland, Sewage Disposal, 5.25%, 6/1/08	150,000		168,836
Washington Suburban Sanitation District, Maryland, 5.50%, 6/1/12, Prerefunded 6/1/04 @ 102	65,000		66,781

			4,959,292

Housing Bonds (9.3%)
Maryland State, Community Development Administration, Series A, 4.25%, 5/15/09	80,000		86,020
Maryland State, Community Development Administration, Series E, 4.35%, 9/1/09	150,000		162,730
Maryland State, Community Development Administration, Single Family Program, Series 1, 4.50%, 4/1/11, Callable 10/1/10 @ 100	150,000		161,682
Maryland State, Community Development Administration, Series A, 4.50%, 5/15/11	105,000		113,823
Maryland State, Community Development Administration, Series A, 4.65%, 9/1/12, Callable 9/1/10 @ 100	150,000		160,563
Montgomery County, Maryland, Community Housing Opportunities, Series A, 4.50%, 7/1/09, Callable 7/1/08 @ 101	75,000		81,100

			765,918

Pollution Control Bonds (5.6%)
Baltimore, Maryland, Wastewater Project, Series A, 5.625%, 7/1/30, Callable 7/1/10 @ 100, FSA	300,000		348,456
Montgomery County Solid Waste Systems, 5.00%, 6/1/13, AMBAC	100,000		113,002

			461,458

Transportation Bonds (5.9%)
Maryland State Transit Department, 4.375%, 6/15/04	160,000		161,093
Montgomery County, Maryland, Metrorail Garage Projects, 4.25%, 6/1/12	200,000		214,950
Washington, D.C., Metro Area Transportation Authority, Series B, 5.00%, 7/1/10, MBIA	100,000		113,142

			489,185

Total Maryland			7,722,666

Continued

Maryland Intermediate Tax-Free Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Municipal Bonds, continued
Puerto Rico (3.0%)
General Obligations (3.0%)
Puerto Rico Commonwealth, 6.50%, 7/1/14, MBIA	100,000	$	126,633
Puerto Rico Commonwealth, 5.50%, 7/1/17, XLCA	100,000		116,766

Total Puerto Rico			243,399

Total Municipal Bonds			7,966,065


	Shares	Fair Value

Investment Company (2.1%)
Federated Maryland Municipal Cash Trust	176,140	$	176,140

Total Investments (Cost $8,025,226)(a) — 98.8%			8,142,205
Other assets (liabilities) — 1.2%			96,396

Net Assets — 100.0%		$	8,238,601

(a)


Unrealized appreciation	$	126,231
Unrealized depreciation		(9,252	)

Net unrealized appreciation	$	116,979

AMBAC — Insured by AMBAC Indemnity Corporation.

FSA — Insured by Financial Security Assurance.

GTY AGMT — Insured by Guarantor Agreement.

MBIA — Insured by the Municipal Bond Insurance Association.

XLCA — Insured by XL Capital Assurance.

See accompanying notes to the financial statements.

North Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Municipal Bonds (98.1%)
North Carolina (97.6%)
Correctional Institutions (4.4%)
North Carolina Infrastructure Financial Corp., 5.00%, 10/1/11	$3,000,000	$	3,386,340
North Carolina Infrastructure Financial Corp., Series A, Certificate of Participation, 5.00%, 2/1/13	1,000,000		1,123,270
North Carolina Infrastructure Financial Corp., 5.00%, 10/1/17, Callable 10/1/13 @ 100	1,000,000		1,087,460

			5,597,070

Education Bonds (6.9%)
Appalachian State University, North Carolina, Series A, 5.125%, 5/1/17, Callable 5/1/13 @ 100, FGIC	1,000,000		1,097,880
Appalachian State University, North Carolina, Series A, 5.125%, 5/1/19 Callable 5/1/13 @ 100, FGIC	1,000,000		1,087,490
Johnston County, North Carolina, School & Museum Project, 5.50%, 8/1/10, Callable 8/1/09 @ 101, FSA	1,000,000		1,144,730
Lee County, North Carolina, Certificate of Participation, 5.00%, 4/1/16, Callable 4/1/14 @ 100, FSA	1,615,000		1,769,346
North Carolina Capital Facilities Finance Agency, 5.25%, 5/1/15, Callable 5/1/06 @ 102 (b)	2,520,862		2,564,245
North Carolina State University, Series A, 5.00%, 10/1/13	1,000,000		1,136,190

			8,799,881

General Obligation Bonds (49.7%)
Bladen County, North Carolina, 5.60%, 5/1/13, Callable 5/1/10 @ 101.5, FSA	1,150,000		1,331,355
Buncombe County, North Carolina, 5.10%, 3/1/07	1,000,000		1,095,650
Buncombe County, North Carolina, Certificate of Participation, 5.00%, 12/1/05, AMBAC	1,000,000		1,061,130
Burlington, North Carolina, Public Improvement, 5.20%, 2/1/13, Callable 2/1/10 @ 101.5, AMBAC	1,650,000		1,853,874
Burlington, North Carolina, Public Improvement, 5.20%, 2/1/16, Callable 2/1/10 @ 102, AMBAC	1,700,000		1,882,257
Cabarrus County, North Carolina, 5.30%, 2/1/11, Callable 2/1/07 @ 102, MBIA	1,000,000		1,115,920
Cabarrus County, North Carolina, Certificate of Participation, 5.25%, 2/1/12, AMBAC	1,285,000		1,459,709
Cary, North Carolina, 5.00%, 3/1/19, Callable 3/1/11 @ 102	1,500,000		1,620,195
Cary, North Carolina, Public Improvement Project, Certificate of Participation, Series A, 5.00%, 12/1/16, Callable 12/1/12 @ 100	1,550,000		1,684,974
Charlotte, North Carolina, 5.50%, 6/1/09	1,460,000		1,682,241
Charlotte, North Carolina, Certificate of Participation, Series G, 5.00%, 6/1/16, Callable 6/1/13 @ 100	1,000,000		1,087,260
Charlotte, North Carolina, Series C, 5.00%, 4/1/13	1,000,000		1,136,280


	Principal Amount	Fair Value

Municipal Bonds, continued
North Carolina, continued
General Obligation Bonds, continued
Craven County, North Carolina, 5.00%, 5/1/18, Callable 5/1/12 @ 101, AMBAC	$1,230,000	$	1,334,673
Craven County, North Carolina, 5.00%, 5/1/19, Callable 5/1/12 @ 101, AMBAC	1,000,000		1,079,310
Cumberland County, North Carolina, 5.50%, 3/1/09	1,055,000		1,206,857
Currituck County, North Carolina, 5.00%, 6/1/11, AMBAC	1,050,000		1,189,472
Durham, North Carolina, 4.00%, 2/1/10	1,220,000		1,311,171
Forsyth County, North Carolina, Certificate of Participation, 5.00%, 10/1/06	1,000,000		1,083,510
Gaston County, North Carolina, 5.00%, 5/1/13, FSA	1,395,000		1,586,115
Gaston County, North Carolina, 5.00%, 5/1/14, FSA	1,000,000		1,132,850
Guilford County, North Carolina, Series B, 5.25%, 10/1/15, Callable 10/1/10 @ 102	2,000,000		2,240,420
Guilford County, North Carolina, Series C, 4.00%, 10/1/20	3,000,000		3,199,949
Guilford County, North Carolina, Public Improvement, Series B, 5.00%, 10/1/09	2,500,000		2,833,049
High Point, North Carolina, Public Improvement, Series B, 5.40%, 6/1/07	1,350,000		1,501,430
High Point, North Carolina, Public Improvement, Series B, 5.40%, 6/1/08	1,350,000		1,526,985
Iredell County, North Carolina, Certificate of Participation, 5.00%, 10/1/12, AMBAC	1,000,000		1,122,350
Iredell County, North Carolina, Certificate of Participation, 5.00%, 10/1/14, Callable 10/1/13 @ 100, AMBAC	1,000,000		1,112,650
Johnston County, North Carolina, 5.50%, 3/1/12, Callable 3/1/10 @ 101, FGIC	1,000,000		1,143,460
Mecklenburg County, North Carolina, 5.00%, 4/1/07	1,500,000		1,644,180
New Hanover County, North Carolina, Public Improvement, 5.30%, 11/1/08	1,500,000		1,703,970
North Carolina State, 5.10%, 6/1/08, Callable 6/1/06 @ 101	2,000,000		2,160,920
North Carolina State, 5.10%, 6/1/09, Callable 6/1/06 @ 101.5	1,000,000		1,084,820
North Carolina State, Public Improvement, Series A, 5.25%, 3/1/12	2,000,000		2,300,359
North Carolina State, Public Improvement, Series A, 4.75%, 3/1/11	1,000,000		1,118,090
Orange County, North Carolina, Public Improvement, 5.25%, 4/1/08	1,300,000		1,457,911
Raleigh, North Carolina, Public Improvement, Series A, 4.00%, 4/1/10	1,670,000		1,796,219
Raleigh, North Carolina, Public Improvement, Series A, 4.00%, 4/1/11	1,420,000		1,521,573
Randolph County, North Carolina, Certificate of Participation, 5.20%, 6/1/09, FSA	1,050,000		1,184,243
Randolph County, North Carolina, Certificate of Participation, 5.30%, 6/1/13, Callable 6/1/09 @ 101, FSA	1,750,000		2,003,838
Randolph County, North Carolina, Certificate of Participation, 5.75%, 6/1/22, Callable 6/1/09 @ 101	1,000,000		1,166,740

Continued

North Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Municipal Bonds, continued
North Carolina, continued
General Obligation Bonds, continued
Wake County, North Carolina, 5.30%, 2/1/11, Callable 2/1/10 @ 100.5	$1,000,000	$	1,133,840
Wake County, North Carolina, Series B, 4.50%, 2/1/08	1,000,000		1,090,240

			62,982,039

Health Care Bonds (21.6%)
Charlotte-Mecklenberg Hospital Authority, North Carolina, Health Care System. Series A, 5.50%, 1/15/08, Callable 1/15/06 @ 102	1,720,000		1,857,686
Charlotte-Mecklenberg Hospital Authority, North Carolina, Health Care System, Series A, 5.00%, 1/15/13, Callable 1/15/07 @102	2,300,000		2,493,361
Charlotte-Mecklenberg Hospital Authority, North Carolina, Health Care System, Series A, 5.00%, 1/15/14, Callable 1/15/07 @ 102	1,190,000		1,281,535
Cumberland County, North Carolina, Hosptial Facilities, 5.25%, 10/1/10, Callable 10/1/09 @ 101	1,035,000		1,152,245
New Hanover County, North Carolina, Regional Medical Center Project, 5.25%, 10/1/12, Callable 10/1/09 @ 101	1,000,000		1,105,630
North Carolina Medical Care Community Hospital, Northeast Medical Center Project, 5.75%, 11/1/06, AMBAC	1,150,000		1,271,302
North Carolina Medical Care Community Health Care, Carolina Medicorp Project, 5.25%, 5/1/09, Callable 5/1/07 @ 100	1,325,000		1,432,577
North Carolina Medical Care Community Health Care, Deerfield Episcopal Retirement Project, Series A, 2.00%, 11/1/05	500,000		499,580
North Carolina Medical Care Community Health Care, Stanley Memorial Hospital, 5.45%, 10/1/08 Callable 10/1/06 @ 102, AMBAC	750,000		825,120
North Carolina Medical Care Community Hospital, 5.00%, 6/1/17, Callable 6/1/08 @ 101	250,000		265,628
North Carolina Medical Care Community Hospital, Gaston Memorial Hospital Project, 5.40%, 2/15/11, Callable 2/15/06 @ 102	525,000		565,210
North Carolina Medical Care Community Hospital, Gaston Health Care, 4.625%, 2/15/07	1,100,000		1,174,459
North Carolina Medical Care Community Hospital, Gaston Memorial Hospital Project, 5.50%, 2/15/15, Callable 2/15/06 @ 102	1,980,000		2,120,184
North Carolina Medical Care Community Hospital, Halifax Regional Medical Center, 4.60%, 8/15/07	1,795,000		1,893,671
North Carolina Medical Care Community Hospital, Pitt County Memorial Hospital, Series A, 5.00%, 12/1/07	1,625,000		1,797,461


	Principal Amount	Fair Value

Municipal Bonds, continued
North Carolina, continued
Health Care Bonds, continued
North Carolina Medical Care Community Hospital, Pitt County Memorial Hospital, Series A, 5.25%, 12/1/10, Callable 12/1/08 @ 101	$1,220,000	$	1,352,992
Pitt County, North Carolina, Memorial Hospital, 5.50%, 12/1/15, Callable 12/1/05 @ 102	3,090,000		3,359,911
Wake County, North Carolina, Hospital, 5.125%, 10/1/13	2,630,000		2,977,923

			27,426,475

Transportation Bonds (1.3%)
Piedmont, North Carolina, Triad Airport Authority, Series A, 6.375%, 7/1/16, Callable 7/1/09 @ 101, FSA	1,385,000		1,627,430

Utility Bonds (13.6%)
Durham, North Carolina, Water & Sewer Utility Systems, 5.00%, 6/1/12, Callable 6/1/11 @ 101	1,000,000		1,118,840
Gastonia, North Carolina Utilities System, 5.00%, 5/1/10, MBIA	1,000,000		1,125,230
Greenville, North Carolina, Enterprise Systems, 5.50%, 9/1/10, FSA	1,455,000		1,685,152
Greenville, North Carolina, Utilities Commision, Series A, 5.60%, 9/1/20, Callable 3/1/09 @ 101, MBIA	150,000		167,769
North Carolina Eastern Municipal Power, Series A, 6.00%, 1/1/26, Callable 1/1/22 @ 100	590,000		711,947
North Carolina Municipal Power Agency, Series A, 3.00%, 1/1/05	3,000,000		3,033,390
North Carolina, Eastern Municipal Power, Series A, 5.00%, 1/1/17	580,000		644,055
North Carolina, Eastern Municipal Power, 6.40%, 1/1/21	2,265,000		2,830,072
North Carolina, Municipal Power Agency, No. 1, Catawba Electric, 5.50%, 1/1/13, AMBAC	1,610,000		1,864,106
North Carolina, Municipal Power Agency, No. 1, Catawba Electric, 5.50%, 1/1/13	1,000,000		1,157,830
Raleigh, North Carolina, Enteprise System, Series A, 5.25%, 3/1/14, Callable 3/1/07 @ 102	2,620,000		2,898,951

			17,237,342

Total North Carolina			123,670,237

Puerto Rico (0.5%)
General Obligation (0.5%)
Puerto Rico Commonwealth, Public Improvement, Series A, 5.50%, 7/1/17, XLCA	500,000		583,830

Total Municipal Bonds			124,254,067

Continued

North Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Shares	Fair Value

Investment Company (3.2%)
PNC North Carolina Blackrock Fund	4,117,413	$	4,117,413

Total Investments (Cost $121,791,242)(a) — 101.3%			128,371,480
Other assets (liabilities) — (1.3)%			(1,650,488	)

Net Assets — 100.0%		$	126,720,992

(a)

Represents cost for financial reporting purposes, is substantially the same for federal tax purposes, and differs from fair value by net unrealized appreciation/depreciation of securities as follows:


Unrealized appreciation	$	6,661,309
Unrealized depreciation		(81,071	)

Net unrealized appreciation	$	6,580,238

(b)

Rule 144A, Section 4(2) or other security which is restricted as to resale to institutional investors. The Investment Advisor, using Board approved procedures has deemed these securities to be illiquid. Represents 2.0% of net assets.

AMBAC — Insured by AMBAC Indemnity Corporation.

FGIC — Insured by the Financial Guarantee Insurance Corporation.

FSA — Insured by Financial Security Assurance.

MBIA — Insured by the Municipal Bond Insurance Association.

XLCA — Insured by XL Capitol Assurance.

See accompanying notes to the financial statements.

South Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Municipal Bonds (97.7%)
General Obligation Bonds (43.8%)
Beaufort County, South Carolina, School District, Series C, 5.00%, 3/1/09	$500,000	$	558,465
Berkeley County, South Carolina, School District, 5.375%, 4/1/09, Callable 4/1/08 @ 102, SCSDE	750,000		845,175
Berkeley County, South Carolina, School District, 5.375%, 4/1/10, Callable 4/1/08 @ 102, SCSDE	500,000		563,040
Charleston County, South Carolina, School District, 5.00%, 2/1/11	500,000		563,355
Georgetown County, South Carolina, School District, 5.50%, 3/1/08, SCSDE	500,000		562,725
Horry County, South Carolina, School District, Series A, 5.00%, 3/1/11, SCSDE	500,000		563,495
Kershaw County, South Carolina, School District, 6.125%, 2/1/16, Callable 2/1/10 @ 100, SCSDE	500,000		582,905
Lancaster County, South Carolina, School District, 5.00%, 3/1/11, Callable 3/1/10 @ 101 SCSDE	500,000		559,295
Lexington County, South Carolina, 5.00% 2/1/14, Callable 2/1/12 @ 100, FGIC	500,000		549,255
Lexington County, South Carolina, School District, 5.125%, 3/1/23, Callable 3/1/17 @ 100 SCSDE	500,000		543,750
Richland County, South Carolina, School District, Series B, 5.125%, 3/1/11, Callable 3/1/05 @ 101, MBIA	1,000,000		1,042,979
Richland County, South Carolina, School District, 4.75%, 3/1/13, FSA, SCSDE	500,000		553,235
South Carolina Educational Facilities Authority, 2.50%, 3/1/05	190,000		190,973
South Carolina, State School Facilities, Series A 5.75%, 1/1/10, State Aid Withholding	500,000		583,010
Spartanburg County, South Carolina, School District, 5.25%, 5/1/10, SCSDE	500,000		572,280
York County, South Carolina, School District, Series A, 5.00%, 3/1/11, Callable 3/1/09 @ 101, SCSDE	500,000		555,795
York County, South Carolina, School District, Series A, 5.80%, 3/1/13, Callable 3/1/09 @ 101, SCSDE, FSA	500,000		574,215

			9,963,947

Health Care Bonds (16.6%)
Florence County, South Carolina, Regional Medical Center Project, Series A, 5.25%, 11/1/11, Callable 11/1/08 @ 102, MBIA	500,000		552,215
Greenville, South Carolina, Hospital Systems, Series A, 5.25%, 5/1/06, GTY AGMT	500,000		535,005
Lexington County, South Carolina, Health Services District, 4.75%, 11/1/09	500,000		544,580
Medical University of South Carolina Facilities, 6.00%, 8/15/12	500,000		569,570
Medical University of South Carolina Facilities, 6.00%, 7/1/14, Callable 7/1/09 @ 101	200,000		235,122


	Principal Amount	Fair Value

Municipal Bonds, continued
Health Care Bonds, continued
South Carolina Jobs Economic Development Authority Hospital Facilities, Palmetto Health Alliances, Series C, 6.00%, 8/1/12	$ 250,000	$	275,748
South Carolina Jobs Economic Development Authority Hospital Facilities, Anderson Area Medical Center, 5.50%, 2/1/11, Callable 2/1/09 @ 101, FSA	500,000		558,350
South Carolina Jobs Economic Development Authority Hospital Facilities, Series A, 2.75%, 4/1/05	500,000		503,075

			3,773,665

Pollution Control Bonds (3.9%)
Darlington County, South Carolina, Pollution Control, 6.60%, 11/1/10, Callable 11/1/04 @ 102, MBIA	500,000		514,610
Georgetown County, South Carolina, Pollution Control, Series A, 5.125%, 2/1/12	350,000		380,405

			895,015

Transportation Bonds (6.1%)
South Carolina, Transportation Infrastructure, 5.25%, 10/1/08, AMBAC	700,000		789,075
South Carolina, Transportation Infrastructure Series A, 5.375%, 10/1/24, Callable 10/1/09 @ 101	550,000		592,466

			1,381,541

Utility Bonds (27.3%)
Charleston, South Carolina, Waterworks & Sewer, 5.125%, 1/1/12	375,000		424,733
Charleston, South Carolina, Waterworks & Sewer, 5.25%, 1/1/14	600,000		672,378
Florence, South Carolina Waterworks & Sewer, 7.50%, 3/1/11, Callable 3/1/10 @ 101 AMBAC	590,000		741,541
Piedmont, South Carolina, Municipal Power Agency, 5.40%, 1/1/07, MBIA	500,000		548,495
Piedmont, South Carolina, Municipal Power Agency, Series A, 4.50%, 1/1/09, Callable 1/1/05 @ 100, FGIC	500,000		510,910
Rock Hill South Carolina Utility System Series A, 5.375%, 1/1/19, Callable 1/1/13 @ 100, FSA	500,000		553,810
South Carolina State Public Service Authority, Series A, 5.50%, 1/1/09, MBIA	500,000		568,210
South Carolina State Public Service Authority, Series B, 5.00%, 1/1/18, Callable 1/1/09 @ 101, MBIA	1,000,000		1,064,529
Spartanburg, South Carolina, Water Works 5.25%, 6/1/11, FSA	500,000		572,005
Western Carolina, Sewer Authority, 5.25%, 3/1/10, FSA	500,000		568,135

			6,224,746

Total Municipal Bonds			22,238,914

Continued

South Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Shares	Fair Value

Investment Company (1.5%)
Federated Tax Exempt Money Market Fund	334,301	$	334,301
Total Investments (Cost $21,115,793)(a) — 99.2%			22,573,215
Other assets (liabilities) — 0.8%			180,059

Net Assets — 100.0%		$	22,753,274

(a)

Represents cost for financial reporting purposes, is substantially the same for federal tax purposes, and differs from fair value by net unrealized appreciation/depreciation of securities as follows:


Unrealized appreciation	$	1,457,422
Unrealized depreciation		—

Net unrealized appreciation	$	1,457,422

AMBAC — Insured by AMBAC Indemnity Corporation.

FGIC — Insured by the Financial Guarantee Insurance Corporation.

FSA — Insured by Financial Security Assurance.

GTY AGMT — Insured by Guaranty Agreement.

MBIA — Insured by the Municipal Bond Insurance Association.

SCSDE — Insured by South Carolina School District Enhancement.

See accompanying notes to the financial statements.

Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Municipal Bonds (98.9%)
Virginia (96.8%)
Correctional Institutions (1.3%)
Riverside, Virginia, Regulation Jail Authority, 5.00%, 7/1/11, MBIA	$1,000,000	$	1,125,240

Education Bonds (7.9%)
Virginia College Building Authority, 5.50%, 4/1/10	1,000,000		1,142,240
Virginia College Building Authority, Series A, 5.125%, 9/1/16, Callable 9/1/10 @ 100	750,000		824,198
Virginia State Public School Authority, Series B, 5.25%, 8/1/10, Callable 8/1/09 @ 101	1,000,000		1,144,860
Virginia State Public School Authority, Series I, 5.25%, 8/1/10	2,050,000		2,344,154
Virginia State Public School Authority, Series I, 5.00%, 8/1/11, Callable 8/1/07 @ 101	1,125,000		1,235,374

			6,690,826

General Obligation Bonds (44.0%)
Alexandria, Virginia, Public Improvement, 5.00%, 6/15/08	1,000,000		1,116,420
Arlington County, Virginia, 5.125%, 6/1/11, Callable 6/1/09 @ 100	1,000,000		1,116,540
Chesapeake, Virginia, 5.50%, 5/1/09, Callable 5/1/05 @ 102	1,950,000		2,080,436
Chesapeake, Virginia, 5.00%, 6/1/13	1,235,000		1,397,662
Danville, Virginia, 4.20%, 8/1/11, FSA	1,495,000		1,612,462
Fairfax County, Virginia, Series B, 5.50%, 12/1/07	1,000,000		1,129,020
Fairfax County, Virginia, Public Improvement, Series A, 5.00%, 6/1/09, Callable 6/1/08 @ 102	2,000,000		2,240,920
Loudoun County, Virginia, Public Improvement, Series A, 5.75%, 12/1/17, Callable 12/1/09 @ 101	2,000,000		2,350,160
Loudoun County, Virginia, Public Improvement, Series A, 5.00%, 11/1/18, Callable 11/1/12 @ 100	1,000,000		1,078,600
Manassas, Virginia, 5.25%, 1/1/11, Callable 1/1/08 @ 102	1,200,000		1,339,704
Newport News, Virginia, 5.00%, 3/1/11	2,000,000		2,225,800
Newport News, Virginia, Series A, 5.50%, 5/1/13, Callable 5/1/10 @ 102	1,845,000		2,157,967
Newport News, Virginia, Series A, 5.00%, 7/15/15, Callable 7/15/14 @ 101	850,000		954,287
Newport News, Virginia, Series B, 5.25%, 7/1/16, State Aid Withholding	2,010,000		2,301,711
Newport News, Virginia, Series B, 5.00%, 11/1/18, State Aid Withholding	1,000,000		1,087,220
Pittsylvania County, Virginia, 5.625%, 3/1/15	1,315,000		1,505,991
Richmond, Virginia, 5.25%, 1/15/09	1,500,000		1,693,335
Richmond, Virginia, Public Improvement, Series A, 5.45%, 1/15/08	1,500,000		1,679,550
Spotsylvania County, Virginia, 5.50%, 7/15/12, FSA	2,925,000		3,421,927
Virginia Beach, Virginia, Public Improvement, 5.25%, 3/1/08	1,000,000		1,117,430
Virginia Beach, Virginia, Public Improvement, 5.25%, 3/1/11, Callable 3/1/10 @ 101	3,205,000		3,618,380

			37,225,522


	Principal Amount	Fair Value

Municipal Bonds, continued
Virginia, continued
Health Care Bonds (10.8%)
Danville, Virginia, Industrial Development Authority, Regional Medical Center, 5.00%, 10/1/07, AMBAC	$1,160,000	$	1,275,826
Fredericksburg, Virginia, Industrial Development Authority, Hospital Facilities Revenue, Medicorp Health Systems, 5.00%, 8/15/08	1,430,000		1,564,492
Norfolk, Virginia, Industrial Development Authority, Daughters Charity Hospital, 6.50%, 12/1/07, Callable 6/1/04 @ 101	800,000		814,696
Virginia Beach, Virginia, Industrial Development Authority, Sentara Health Systems, 5.25%, 11/1/09, Callable 11/1/08 @ 101, MBIA	1,000,000		1,118,660
Virginia Biotechnology Research Authority Lease Revenue, Biotech Two Project, 5.15%, 9/1/10	1,100,000		1,194,897
Virginia Biotechnology Research Authority Lease Revenue, Biotech Two Project, 5.25%, 9/1/12, Callable 9/1/06 @ 101	1,500,000		1,632,930
Winchester, Virginia, Industrial Development Authority, Winchester Medical Center, 5.25%, 1/1/06, Callable 5/10/04 @ 102, AMBAC	1,500,000		1,534,485

			9,135,986

Housing Bonds (7.2%)
Suffolk, Virginia Redevelopment & Housing Authority, 4.85%, 7/1/31	1,000,000		1,099,170
Virginia State Public Building Authority, Series A, 5.00%, 8/1/15, Callable 8/1/12 @100	1,415,000		1,552,184
Virginia State Public Building Authority, Series A, 5.00%, 8/1/20, Callable 8/1/11 @ 100	1,000,000		1,056,150
Virginia State Residential Authority Infrastructure, Virginia Pooled Financing Project, 5.00%, 11/1/15, Callable 11/1/13 @ 100	2,145,000		2,379,170

			6,086,674

Transportation Bonds (15.2%)
Chesapeake Bay Bridge & Tunnel, Virginia, 5.50%, 7/1/06, Callable 7/1/05 @ 102, FGIC	2,400,000		2,563,608
Chesapeake Bay Bridge & Tunnel, Virginia, 5.25%, 7/1/19, Callable 7/1/05 @ 102, MBIA	1,075,000		1,139,199
Fairfax County, Virginia, Economic Development Authority, 1st Series, 5.25%, 9/1/10, Callable 9/1/09 @ 102	1,000,000		1,138,440
Northern Virginia Community Commuter Rail, 5.375%, 7/1/14	1,000,000		1,132,320
Virginia Commonwealth Transportation Board, 5.75% 5/15/09	1,035,000		1,197,371
Virginia Commonwealth Transportation Board, 5.00%, 9/27/12	2,000,000		2,257,200
Virginia Commonwealth Transportation Board, 5.50%, 5/15/15, Callable 5/15/09 @101	1,185,000		1,337,415
Virginia State Transportation Board, Transportation Contract Revenue, Series A, 5.125%, 5/15/12, Callable 5/15/06 @ 101	2,000,000		2,154,880

			12,920,433

Continued

Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Municipal Bonds, continued
Virginia, continued
Urban and Community Development (2.8%)
Hampton Virginia, Museum Project, 5.00%, 1/1/13	$ 250,000	$	273,895
Loudoun County, Virginia, Industrial Development Authority, Government Center Project 5.00%, 3/1/19, Callable 3/1/13 @ 100	1,000,000		1,072,020
Virginia Gateway Community Development Authority, 6.375%, 3/1/30, Callable 3/1/13 @ 102(b)	1,000,000		1,010,500

			2,356,415

Utility Bonds (7.6%)
Chesterfield County, Virginia, Pollution Control Authority, 5.50%, 10/1/09, Callable 11/8/06 @ 101	2,500,000		2,684,950
Henrico County, Virginia, Water & Sewer, 5.25%, 5/1/11, Callable 5/1/09 @ 102	1,310,000		1,471,903
Loudoun County, Virginia, Water & Sewer, 5.75%, 1/1/11, FSA	1,000,000		1,168,190
Norfolk, Virginia, Water Revenue, 5.125%, 11/1/11, Callable 11/1/08 @ 101, FSA	1,030,000		1,150,489

			6,475,532

Total Virginia			82,016,628


	Shares or Principal Amount	Fair Value

Municipal Bonds, continued
Washington DC (2.1%)
Transportation Bonds (2.1%)
Washington DC, Metropolitan Transportation Authority, 6.00%, 7/1/09, FGIC	$1,500,000	$	1,763,190

Total Municipal Bonds			83,779,818


Investment Company (0.9%)
PNC Virginia Blackrock Fund	726,688		726,688

Total Investments (Cost $79,116,383)(a) — 99.8%			84,506,506
Other assets (liabilities) — 0.2%			195,690

Net Assets — 100.0%		$	84,702,196

(a)


Unrealized appreciation	$	5,413,084
Unrealized depreciation		(22,961	)

Net unrealized appreciation	$	5,390,123

(b)

AMBAC — Insured by AMBAC Indemnity Corporation.

FGIC — Insured by the Financial Guarantee Insurance Corporation.

FSA — Insured by Financial Security Assurance.

MBIA — Insured by the Municipal Bond Insurance Association.

See accompanying notes to the financial statements.

West Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Municipal Bonds (97.8%)
Commission Bonds (7.4%)
Harrison County, West Virginia, Building Commission, 5.15%, 4/1/18, Callable 4/1/08 @ 102, AMBAC	$1,000,000	$	1,053,980
West Virginia State Building Commission, Series A, 5.25%, 7/1/09, Callable 7/1/07 @ 102, MBIA	1,000,000		1,113,420
West Virginia State Building Commission, Series A, 5.25%, 7/1/10, AMBAC	2,000,000		2,274,160
Wood County, West Virginia, Building Commission, 6.875%, 1/1/08, Callable 7/1/04 @ 100	1,280,000		1,492,198

			5,933,758

Education Bonds (17.2%)
West Virginia Higher Education, Series A, 5.00%, 4/1/10, MBIA	500,000		561,540
West Virginia Higher Education, Series A, 5.00%, 4/1/11, MBIA	2,000,000		2,251,539
West Virginia Higher Education, Series A, 5.00%, 4/1/12, MBIA	2,000,000		2,247,060
West Virginia School Building Authority, 6.00%, 7/1/08, Callable 7/1/07 @ 102, AMBAC	500,000		569,425
West Virginia School Building Authority, 5.30%, 7/1/09, Callable 7/1/07 @ 102, AMBAC	1,000,000		1,114,980
West Virginia School Building Authority, 5.40%, 7/1/10, Callable 7/1/07 @ 102, AMBAC	750,000		838,568
West Virginia University, 5.75%, 4/1/16, Callable 4/1/06 @ 101, AMBAC	1,000,000		1,082,980
West Virginia University, Series A, 5.00%, 4/1/08, MBIA	500,000		553,530
West Virginia University, Series A, 5.50%, 4/1/10, MBIA	1,405,000		1,616,537
West Virginia University, Series A, 5.50%, 4/1/11, MBIA	1,485,000		1,718,338
West Virginia University, Series A, 5.25%, 4/1/13, Callable 4/1/08 @ 102, AMBAC	1,125,000		1,261,069

			13,815,566

General Obligation Bonds (17.7%)
Kanawha County, West Virginia, Board of Education, 4.70%, 5/1/08, MBIA	2,020,000		2,217,819
Ohio County, West Virginia, Board of Education, 5.00%, 6/1/13, Callable 6/1/08 @ 102, MBIA	800,000		881,688
West Virginia State, 5.50%, 6/1/09, FSA	3,000,000		3,437,790
West Virginia State, 5.50%, 6/1/10, FSA	1,500,000		1,731,900
West Virginia State, 5.25%, 6/1/12, Callable 6/1/08 @ 101, FGIC	800,000		892,280
West Virginia State, Series D, 5.25%, 11/1/12, Callable 11/1/06 @ 102, FGIC	1,495,000		1,647,355
West Virginia State, 5.75%, 6/1/14, Callable 6/1/09 @ 101	2,000,000		2,297,860
West Virginia State, 5.75%, 6/1/15, Callable 6/1/09 @ 101	1,000,000		1,140,220

			14,246,912


	Principal Amount	Fair Value

Municipal Bonds, continued
Health Care Bonds (14.1%)
Logan County, West Virginia, Logan County Health, 8.00%, 12/1/16	$ 690,000	$	948,778
South Charleston, West Virginia, 5.50%, 10/1/09, Callable 10/1/04 @ 100, MBIA	520,000		521,607
Weirton, West Virginia, Municipal Hospital Building, Series A, 5.25%, 12/1/11	2,580,000		2,747,854
West Virginia State Hospital Finance Authority, 5.60%, 1/1/05, AMBAC	200,000		204,740
West Virginia State Hospital Finance Authority, 5.90%, 1/1/06, Callable 1/1/05 @ 100, MBIA	680,000		682,326
West Virginia State Hospital Finance Authority, 5.00%, 6/1/09, FSA	1,655,000		1,843,024
West Virginia State Hospital Finance Authority, 5.00%, 8/1/09, Callable 8/1/07 @ 100, FSA	800,000		863,024
West Virginia State Hospital Finance Authority, 6.00%, 9/1/12, Callable 9/1/10 @ 101	590,000		668,736
West Virginia State Hospital Finance Authority, Series A, 6.50%, 9/1/16	455,000		573,623
West Virginia State Hospital Finance Authority, 6.10%, 1/1/18, Callable 1/1/05 @100, MBIA	1,300,000		1,304,628
West Virginia State Hospital Finance Authority, 5.50%, 3/1/22, Callable 3/1/14 @ 100	970,000		1,001,389

			11,359,729

Housing Bonds (4.0%)
Cabell, Putnam & Wayne Counties, West Virginia, Single Family Residential Mortgage, 7.375%, 4/1/11, FGIC	580,000		725,626
Webster County, West Virginia, Housing Development Corporate Mortgage, 6.50%, 4/1/18, Callable 10/1/04 @ 101, FHA	1,010,000		1,031,543
West Virginia State Housing Development Fund, Series E, 3.25%, 5/1/06	440,000		454,384
West Virginia State Housing Development Fund, Series A, 5.60%, 5/1/16, Callable 5/1/06 @ 102	985,000		1,031,837

			3,243,390

Pollution Control Bonds (6.5%)
Marshall County, West Virginia, Pollution Control, 5.45%, 7/1/14, Callable 1/1/05 @ 101, MBIA	950,000		972,031
Monongalia County, West Virginia, Pollution Control, 5.95%, 4/1/13, Callable 4/1/04 @ 101, MBIA	2,000,000		2,027,400
Pleasants County, West Virginia, Pollution Control, Series C, 6.15%, 5/1/15, Callable 5/1/05 @ 102, AMBAC	1,100,000		1,176,439
Pleasants County, West Virginia, Pollution Control, Series C, 6.15%, 5/1/15, Callable 5/1/05 @ 102, AMBAC, MBIA	1,000,000		1,069,490

			5,245,360

Transportation Bonds (22.0%)
Charleston, West Virginia, Series A, 7.00%, 6/1/16, Callable 12/1/04 @ 102, LOC — Bank One West Virginia	580,000		613,199

Continued

West Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal Amount	Fair Value

Municipal Bonds, continued
Transportation Bonds, continued
Charleston, West Virginia, Urban Renewal Authority, 5.25%, 12/15/18, Callable 12/15/09 @ 103, FSA	$1,060,000	$	1,160,350
West Virgina Economic Development Authority, Series A, 5.50%, 6/1/14, Callable 6/1/12 @ 101, MBIA	1,000,000		1,145,840
West Virginia Economic Development Authority, Series A, 5.50%, 6/1/12, MBIA	2,000,000		2,320,100
West Virginia Economic Development Authority, Series A, 5.50%, 6/1/15, Callable 6/1/12 @ 101, MBIA	1,000,000		1,137,020
West Virginia Economic Development Authority, Series A, 5.00%, 10/1/15, Callable 10/1/11 @ 101	1,250,000		1,359,938
West Virginia Economic Development Authority, Series A, 5.50%, 6/1/18, Callable 6/1/12 @ 101, MBIA	1,000,000		1,124,200
West Virginia Economic Development, Department of Environmental Protection, 4.75%, 11/1/10	750,000		823,635
West Virginia Economic Development, Department of Environmental Protection, 4.75%, 11/1/11	785,000		858,586
West Virginia Economic Development, Department of Environmental Protection, 4.75%, 11/1/12	815,000		887,168
West Virginia State Parkways Economic Development and Tourism Authority, 5.00%, 5/15/09, FGIC	560,000		627,189
West Virginia State Parkways Economic Development and Tourism Authority, 5.00%, 5/15/10, FGIC	2,055,000		2,310,868


	Shares or Principal Amount	Fair Value

Municipal Bonds, continued
Transportation Bonds, continued
West Virginia State Parkways Economic Development and Tourism Authority, 5.25%, 5/15/12, FGIC	$1,000,000	$	1,141,960
West Virginia State Parkways Economic Development and Tourism Authority, 5.25%, 5/15/19, FGIC	2,000,000		2,266,900

			17,776,953

Utility Bonds (8.9%)
Farimont, West Virginia, Waterworks, 5.375%, 7/1/13, Callable 7/1/07 @ 102, MBIA	680,000		759,771
Harrison County, West Virginia, County Commission Solid Waste Disposal, 6.30%, 5/1/23, Callable 5/1/03 @ 102, AMBAC	860,000		880,330
Parkersburg, West Virginia, Waterworks & Sewer Systems, 5.80%, 9/1/19, Callable 9/1/06 @ 102, FSA	2,660,000		2,946,615
West Virginia State Water Development Authority, Series A, 5.50%, 11/1/18, Callable 11/1/09 @ 102, AMBAC	1,000,000		1,120,880
West Virginia State Water Development Authority, Series B, 5.00%, 11/1/12, AMBAC	1,275,000		1,436,441

			7,144,037

Total Municipal Bonds			78,765,705


Investment Company (0.8%)
Federated Tax Exempt Money Market Fund	649,287		649,287

Total Investments (Cost $74,966,033)(a) — 98.6%			79,414,992
Other assets (liabilities) — 1.4%			1,121,459

Net Assets — 100.0%		$	80,536,451

(a)

Represents cost for financial reporting purposes, is substantially the same for federal tax income purposes, and differs from fair value by net unrealized appreciation/depreciation of securities as follows:


Unrealized appreciation	$	4,448,959
Unrealized depreciation		—

Net unrealized appreciation	$	4,448,959

AMBAC — Insured by AMBAC Indemnity Corporation.

FGIC — Insured by the Financial Guarantee Insurance Corporation.

FHA — Insured by the Federal Housing Administration.

FSA — Insured by Financial Security Assurance.

MBIA — Insured by the Municipal Bond Insurance Association.

LOC — Line of Credit.

See accompanying notes to the financial statements.

Prime Money Market Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Principal Amount	Amortized Cost

Certificates of Deposit (10.4%)
Banking (10.4%)
Bayerische Hypotheken-und Vereinsbank, 1.08%, 4/12/04	$ 5,000,000	$	5,000,000
BNP Paribas, 1.14%, 7/26/04,	5,000,000		4,999,801
Credit Agricole Indosuez, 1.33%, 4/26/04	2,000,000		1,999,986
Credit Agricole Indosuez, 1.24%, 8/4/04	5,000,000		4,999,829
Credit Agricole Indosuez, 1.225%, 12/31/04	2,000,000		2,001,563
Deutsche Bank AG, 1.25%, 12/29/04	6,500,000		6,502,035
Mercantile Safe Deposit & Trust Co., 1.25%, 6/1/04	10,000,000		10,000,000
Regions Bank, Alabama, 1.23%, 7/29/04	3,200,000		3,200,000
Regions Bank, Alabama, 1.16%, 10/15/04	4,000,000		4,000,000
Royal Bank Of Canada, Montreal, 1.40%, 2/8/05	12,000,000		12,000,000
Svenska Handelsbanken, Stockholm, 1.25%, 4/13/04	5,000,000		4,999,984
U.S. Bank NA, Minneapolis, 1.28%, 1.28%, 2/23/05	5,000,000		4,999,328
Washington Mutual Bank, 1.06%, 5/10/04	25,000,000		24,999,729
Washington Mutual Bank, 1.07%, 5/11/04	10,000,000		10,000,000
Washington Mutual Bank, 1.06%, 6/7/04	8,000,000		8,000,000

Total Certificates of Deposit			107,702,255


Commercial Paper (24.1%)
Banking (10.3%)
Bank Of Ireland, 1.16%, 10/22/04**(b)	4,900,000		4,867,791
Bavaria TRR, (SWP Bayerische Hypotheken-und), 1.05%, 4/12/04**(b)	10,000,000		9,996,792
Bavaria TRR (SWP Bayerische Hypotheken-und), 1.07%, 4/15/04**(b)	24,000,000		23,990,012
Blue Spice LLC, (SWP Deutsche Bank AG) 1.05%, 6/17/04**(b)	4,000,000		3,991,017
Citicorp, 1.05%, 4/26/04**	10,000,000		9,992,708
Citicorp, 1.05%, 4/29/04**	5,000,000		4,995,917
Citicorp, 1.05%, 5/6/04**	11,000,000		10,988,770
Danske Corporation, Inc., 1.12%, 7/22/04**	10,450,000		10,413,588
Depfa Bank PLC, 1.13%, 4/5/04**	2,000,000		1,999,749
Depfa Bank PLC, 1.05%, 6/18/04**	2,000,000		1,995,428
Depfa Bank PLC, 1.15%, 6/22/04**	5,000,000		4,986,903
Fountain Square Commercial Funding Corp., (SA Fifth Third Bank) 1.06%, 8/9/04**(b)	2,000,000		1,992,344
Huntington National Bank, 1.20%, 4/30/04**	1,000,000		999,033
KBC Financial Products International Ltd., (KBC Bank NV) 1.07%, 7/19/04**	10,000,000		9,967,451
Westdeutsche Landesbank Girozentrale, 1.06%, 5/3/04**	5,000,000		4,995,311

			106,172,814

Financial Services Auto (2.1%)
Daimler Chrysler NA Holding Corp., 1.31%, 4/5/04**	500,000		499,927
Daimler Chrysler NA Holding Corp., 1.28%, 4/12/04**	7,000,000		6,997,262
Daimler Chrysler NA Holding Corp., 1.19%, 6/4/04**	3,000,000		2,993,653


	Principal Amount	Amortized Cost

Commercial Paper, continued
Financial Services Auto, continued
FCAR Auto Loan Trust, 1.05%, 5/4/04**(b)	$10,000,000	$	9,990,376
GMAC Residential Holding Corp., 1.70%, 7/1/04**	1,000,000		1,000,000

			21,481,218

Financial Services — Commercial (5.1%)
CIT Group, Inc., 1.05%, 4/13/04**	5,000,000		4,998,250
CIT Group, Inc., 1.05%, 4/14/04**	5,000,000		4,998,104
CIT Group, Inc., 1.5%, 4/21/04**	7,000,000		6,995,917
CIT Group, Inc., 1.06%, 4/28/04**	5,000,000		4,996,025
Paradigm Funding, 1.05%, 4/23/04**(b)	20,000,000		19,987,167
Paradigm Funding, 1.05%, 10/28/04(b)	10,000,000		10,000,000

			51,975,463

Financial Services — Equipment (1.0%)
John Deere Credit, Ltd., (GTD John Deere Capital Corp.) 1.11%, 5/21/04**	10,000,000		9,984,583

Financial Securities (3.7%)
Georgetown Funding LLC, 1.06%, 4/6/04**(b)	22,000,000		21,996,761
Grampian Funding LLC, 1.06%, 9/7/04**(b)	5,000,000		4,976,592
K2 (USA) LLC, (GTD K2 Corp.) 1.16%, 5/17/04**(b)	2,000,000		1,997,036
Lake Constance Funding LLC, 1.05%, 6/14/04**(b)	10,000,000		9,978,417

			38,948,806

Food and Beverage (1.9%)
General Mills, Inc., 1.12%, 4/23/04**	1,000,000		999,316
General Mills, Inc., 1.09%, 5/17/04**	9,000,000		8,987,465
Safeway, Inc., 1.09%, 6/3/04**(b)	10,000,000		9,980,925

			19,967,706

Total Commercial Paper			248,530,590


U.S. Government Agencies (2.2%)
Federal Home Loan Bank (0.5%)
1.47%, 2/28/05, Callable 8/5/04 @ 100	3,000,000		3,000,000
1.36%, 4/1/05, Callable 9/8/04 @ 100	2,000,000		2,000,000

			5,000,000

Federal Home Loan Mortgage Corp. (1.1%)
1.405%, 11/15/04	5,000,000		5,000,000
1.45%, 11/16/04	2,000,000		2,000,000
3.875%, 2/15/05	4,000,000		4,088,339

			11,088,339


Federal National Mortgage Assoc. (0.6%) 1.50%, 11/16/04, Callable 4/22/04 @ 100	6,000,000		6,000,000

Total U.S. Government Agencies			22,088,339


Corporate Bonds (10.0%)
Asset Backed Securities (0.5%)
Daimler Chrysler Auto Trust, 2003-B A1, 1.14%, 12/8/04	2,022,253		2,022,253
WFS Financial Owner Trust 2003-4 A1, 1.14%, 11/22/04	3,253,935		3,253,935

			5,276,188

Continued

Prime Money Market Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal Amount	Amortized Cost

Corporate Bonds, continued
Banking (1.2%)
Bank of America, 6.625%, 6/15/04	$ 7,335,000	$	7,417,350
U.S. Bank NA, Cincinnati, 1.20%, 12/30/04	4,600,000		4,600,000

			12,017,350

Chemicals (1.5%)
Dupont Teijin Films U.K. Limited, (GTD DuPont de nemours & Co.) 1.22%, 5/28/04	15,000,000		15,000,000

Financial Services — Auto (0.9%)
General Motors Acceptance Corp., (GTD General Motors Acceptance Corp.) 1.65%, 4/1/04**	9,700,000		9,700,000

Financial Securities (4.9%)
Beta Finance, Inc., (GTD Beta Finance Corp.) 1.43%, 8/16/04(b)	5,000,000		5,000,000
Beta Finance, Inc., (GTD Beta Finance Corp.) 1.30%, 10/25/04(b)	13,800,000		13,800,000
Beta Finance, Inc., (GTD Beta Finance Corp.) 1.43%, 10/27/04(b)	3,500,000		3,499,600
Beta Finance, Inc., (GTD Beta Finance Corp.) 1.295%, 1/24/05(b)	4,500,000		4,499,817
K2 (USA) LLC, 1.08%, 4/11/05(b)	8,000,000		8,003,304
Paradigm Funding LLC, 1.05%, 9/1/04(b)	8,000,000		8,000,000
Paradigm Funding, LLC, 1.05%, 10/22/04(b)	8,000,000		8,000,000

			50,802,721

Pharmaceuticals (0.3%)
Merek & Co., 4.48%, 2/22/05(b)	3,000,000		3,085,352

Restaurants (0.2%)
McDonald’s Corp., 4.545%, 3/7/05(b)	2,000,000		2,057,352

Telecommunications (0.5%)
SBC Communications, Inc., 4.18%, 6/5/04	5,000,000		5,025,938

Total Corporate Bonds			102,964,901


Variable Rate Notes (34.4%)*
Banking & Financial Services (21.4%)
Anchor Holdings LLC, Series 2000, (LCD U.S. Bank NA) 1.14%, 4/1/04	1,875,000		1,875,000
Bartlett, Illinois, Series 2000, 1.16%, 4/7/04	5,000,000		5,000,000
Becker, Minnesota Pollution Control, (SWP Bank of New York) 1.22%, 4/7/04	8,700,000		8,700,000
Blue Heron Funding Ltd., Class A2, (GTD WestLB AG) 1.10%, 4/21/04(c)	5,000,000		5,000,000
Blue Heron Funding Ltd., Series 3A, (GTD WestLB AG) 1.10%, 4/29/04(c)	30,000,000		30,000,000
Christian Life Assembly of the Assemblies of God, Series 2003, (LCD Fulton Bank) 1.24%, 4/1/04	3,400,000		3,400,000


	Principal Amount	Amortized Cost

Variable Rate Notes, continued
Banking & Financial Services, continued
Gainesville & Hall Counties, Georgia Development Authority, (LCD Suntrust Bank) 1.12%, 4/7/04	$ 6,400,000	$	6,400,000
Guilford Capital, LLC, Series 2002-A, (LCD Regions Bank, Alabama) 1.292%, 4/1/04	1,725,000		1,725,000
H.C. Equities, (LCD Wachovia Bank NA) 1.09%, 4/1/04	4,965,000		4,965,000
HBOS Treasury Services, PLC, 1.09%, 4/2/04	25,000,000		25,000,000
HBOS Treasury Services, PLC, 1.10%, 6/24/04	10,000,000		10,000,000
HBOS Treasury Services, PLC, 1.13%, 4/19/04(b)	4,500,000		4,500,948
HBOS Treasury Services, PLC, 1.14%, 5/20/04	8,000,000		8,000,000
Holmes Financing PLC, 1.05%, 4/15/04	1,250,000		1,250,000
Indian Hills Country Club, (LCD Amsouth Bank NA, Birmingham) 1.19%, 4/1/04	3,540,000		3,540,000
JW Harris Company, Inc., (LCD Fifth Third Bank, Cincinnati), 1.12%, 4/1/04	3,960,000		3,960,000
Maryland State Economic Development Corp., (LCD Manufacturers & Traders Trust Co.) 1.24%, 4/6/04	7,000,000		7,000,000
Monet Trust, 2000-1, (SWP Dresdner Bank AG) 1.18%, 6/28/04(c)	25,000,000		25,000,000
Monet Trust, 2000-1, (SWP Dresdner Bank AG) 1.24%, 6/28/04(c)	5,000,000		5,000,000
New Keibler Thompson Co., Series 2000, (LCD Manufacturers & Traders Trust Co.) 1.24%, 4/2/04	9,570,000		9,570,000
Quality Synthetic Rubber Co., Series 2000, (LCD U.S. Bank NA) 1.14%, 4/1/04	1,000,000		1,000,000
Seven Hills School, Series 2000, (LCD Fifth Third Bank, Cincinnati) 1.12%, 4/1/04	1,225,000		1,225,000
Societe Generale, 1.03%, 4/12/04	5,000,000		4,998,779
Spira Millenium LLC, Series 2001, (LCD Fleet National Bank) 1.15%, 4/1/04	3,900,000		3,900,000
Spira Millenium LLC, Series 2001, (LCD Fleet National Bank) 1.19%, 4/1/04	6,900,000		6,900,000
Stone Creek LLC, Series 2001, (LCD Columbus Bank and Trust Co.) 1.10%, 4/1/04	14,485,000		14,485,000
Vestavia Hills Baptist, 1.19%, 4/1/04	3,200,000		3,200,000
Wells Fargo & Co., 1.12%, 4/2/04	6,000,000		6,000,000
Wells Fargo & Co., 1.16%, 4/14/04	3,000,000		3,000,000
World Wildlife Fund, Inc., Series 2000 B, (INS AMBAC Financial Group, Inc.) 1.11%, 4/1/04	4,935,000		4,935,000
YSR LLC, 1.19%, 4/1/04	2,139,000		2,139,000

			221,668,727

Continued

Prime Money Market Fund

Schedule of Portfolio Investments, continued

March 31, 2004

(Unaudited)


	Principal Amount	Amortized Cost

Variable Rate Notes, continued
Broker (3.4%)
Merrill Lynch & Company, Inc., 1.10%, 4/6/04	$10,000,000	$	10,000,000
Merrill Lynch & Company, Inc., 1.215%, 4/12/04(b)	12,000,000		12,000,000
Morgan Stanley, 1.10%, 4/6/04	8,000,000		8,000,000
Morgan Stanley, 1.10%, 4/27/04	5,000,000		5,000,000

			35,000,000

Federal Home Loan Mortgage Corp. (2.6%) 1.085%, 6/9/04	27,000,000		27,000,000

Financial Services Commercial (1.4%)
General Electric Capital Corp., 1.18%, 4/12/04(b)	7,000,000		7,000,000
General Electric Capital Corp., 1.23%, 4/17/04(b)	7,000,000		7,000,000

			14,000,000

Financial Securities (3.2%)
Beta Finance Inc., 1.065%, 4/13/04(b)	2,000,000		1,999,994
Beta Finance Inc., 1.055%, 4/5/04(b)	4,000,000		3,999,932
K2 (USA) LLC,, 1.065%, 5/10/04(b)	5,000,000		5,000,000
K2 (USA) LLC, 1.06%, 4/2/04(b)	5,000,000		4,999,747
K2 (USA) LLC, 1.055%, 4/5/04(b)	10,000,000		9,998,732
Sigma Finance, Inc., (GTD Sigma Finance Corp.) 1.05%, 4/19/04(b)	7,000,000		6,999,949

			32,998,354

Insurance (2.4%)
Allstate Life Insurance Co., 1.32%, 6/2/04(c)	2,000,000		2,000,000
General Electric Capital Assurance Co., 1.25%, 5/10/04(c)	5,000,000		5,000,000
Jackson National Life Insurance Co., 1.18%, 4/22/04(c)	3,000,000		3,000,000
Metropolitan Life Insurance Co., 1.39%, 5/3/04(c)	5,000,000		5,000,000
New York Life Insurance Co., 1.22%, 5/27/04(c)	5,000,000		5,000,000
Travelers Insurance Co., 1.27%, 1.27%, 5/20/04(c)	5,000,000		5,000,000

			25,000,000

Total Variable Rate Notes			355,667,081


	Principal Amount	Amortized Cost

Collateralized Loan Agreements (14.5%)
Bear Stearns Companies, Inc., 1.21%, dated 3/31/04 maturing 4/1/04, with maturity value of $25,000,842 (collateralized fully by various U.S. Government Agencies)	$25,000,000	$	25,000,000
Goldman Sachs Group, Inc., 1.21%, dated 3/31/04 maturing 4/1/04, with maturity value of $15,000,505 (collateralized fully by various U.S. Government Agencies)	15,000,000		15,000,000
Greenwhich Capital Marketing, 1.19%, dated 3/31/04 maturing 4/1/04, with maturity value of $25,000,827 (collateralized fully by various U.S. Government Agencies)	25,000,000		25,000,000
HSBC, 1.16%, dated 3/31/04 maturing 4/1/04, with maturity value of $40,001,289, (collateralized fully by various U.S. Government Agencies)	40,000,000		40,000,000
Lehman Brothers Holdings, Inc, 1.21%, dated 3/31/04 maturing 4/1/04, with maturity value of $20,000,674 (collateralized fully by various U.S. Government Agencies)	20,000,000		20,000,000
Merrill Lynch, 1.21%, dated 3/31/04 maturing 4/1/04, with maturity value of $25,000,842 (collateralized fully by various U.S. Government Agencies)	25,000,000		25,000,000

Total Collateralized Loan Agreements			150,000,000


Repurchase Agreements (4.4%)
Countrywide Securities, 1.09%, dated 3/31/04 maturing 4/1/04, with maturity value of $45,986,392 (collateralized fully by various U.S. Government Agencies)	45,985,000		45,985,000

Total Repurchase Agreements			45,985,000

Total Investments (Amortized Cost $1,032,938,166)(a) — 100.0%			1,032,938,166
Other assets (liabilities) — 0.0%			484,404

Net Assets — 100.0%		$	1,033,422,570

(a)

Cost and value for federal income tax and financial reporting purposes are the same.

(b)

(c)

The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The reflected rate is the rate in effect as of March 31, 2004. The maturity date reflected is the next reset date.

Discount note. Rate disclosed represents the effective yield at March 31, 2004.

GTD — Guaranteed

INS — Insurance

LCD — Letter of Credit

LIQ — Liquidity Agreement

PLC — Public Limited Company

SA — Support Agreement

SWP — Swap

LLC — Limited Liability Company.

See accompanying notes to the financial statements.

U.S. Treasury Money Market Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Principal Amount	Amortized Cost

*U.S. Treasury Bills (25.0%)**
0.97%, 4/1/04	$ 50,000,000	$	50,000,000
0.94%, 4/22/04	50,000,000		49,972,693
0.95%, 6/10/04	50,000,000		49,907,211
0.95%, 7/22/04	50,000,000		49,852,036
0.98%, 8/12/04	50,000,000		49,819,526
0.97%, 9/9/04	50,000,000		49,783,231

Total U.S. Treasury Bills			299,334,697


U.S. Treasury Notes (23.1%)
3.375%, 4/30/04	50,000,000		50,092,322
3.25%, 5/31/04	50,000,000		50,178,155
2.875%, 6/30/04	50,000,000		50,218,861
2.25%, 7/31/04	50,000,000		50,179,859
2.125%, 8/31/04	50,000,000		50,219,741
1.875%, 9/30/04	25,000,000		25,106,835

Total U.S. Treasury Notes			275,995,773


	Principal Amount	Amortized Cost

Repurchase Agreements (51.8%)
Bank of America, 0.93%, dated 3/31/04, maturing 4/1/04, with maturity value of $165,004,263 (Collateralized fully by U.S. Treasury Bills)	$165,000,000	$	165,000,000
First Boston, 1.00%, dated 3/31/04, maturing 4/1/04, with maturity value of $178,729,211 (Collateralized fully by U.S. Treasury Bills)	178,724,246		178,724,246
Goldman Sachs, 0.98%, dated 3/31/04, maturing 4/1/04, with maturity value of $125,003,403 (Collateralized fully by U.S. Treasury Notes)	125,000,000		125,000,000
Lehman Brothers, 0.99%, dated 3/31/04, maturing 4/1/04, with maturity value of $100,002,750 (Collateralized fully by U.S. Treasury Bills)	100,000,000		100,000,000
Merrill Lynch, 0.92%, dated 3/31/04, maturing 4/1/04, with maturity value of $50,001,278 (Collateralized fully by U.S. Treasury Notes)	50,000,000		50,000,000

Total Repurchase Agreements			618,724,246

Total Investments (Amortized Cost $1,194,054,716)(a) — 99.9%			1,194,054,716
Other assets (liabilities) — 0.1%			989,267

Net Assets — 100.0%		$	1,195,043,983

(a)

Cost and value for federal income tax and financial reporting purposes are the same.

Discount note. Rate disclosed represents the effective yield at March 31, 2004.

See accompanying notes to the financial statements.

Capital Manager Conservative Growth Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Investment Companies (100.3%)
BB&T Intermediate Corporate Bond Fund — Institutional Class	1,100,372	$	11,906,020
BB&T Intermediate U.S. Government Fund — Institutional Class	2,077,192		21,768,973
BB&T International Equity Fund — Institutional Class	616,872		5,107,700
BB&T Large Company Growth Fund — Institutional Class(b)	1,023,693		8,895,895
BB&T Large Company Value Fund — Institutional Class	770,224		13,163,136
BB&T Mid Cap Growth Fund — Institutional Class(b)	138,708		1,614,562
BB&T Mid Cap Value Fund — Institutional Class	160,279		2,447,466


	Shares	Fair Value

Investment Companies, continued
BB&T Short U.S. Government Fund — Institutional Class	599,736	$	5,925,392
BB&T Small Company Growth Fund — Institutional Class(b)	78,607		1,032,116
BB&T Small Company Value Fund — Institutional Class	117,253		1,584,090
BB&T U.S. Treasury Money Market Fund — Institutional Class	3,511,124		3,511,124

Total Investment Companies			76,956,474

Total Investments in Affiliates (Cost $73,447,504)(a) — 100.3%			76,956,474
Other assets (liabilities) — (0.3)%			(202,006	)

Net Assets — 100.0%		$	76,754,468

(a)

Represents cost for financial reporting purposes, is substantially the same for federal tax purposes, and differs from fair value by net unrealized appreciation/depreciation of securities as follows:


Unrealized appreciation	$	3,508,970
Unrealized depreciation		—

Net unrealized appreciation	$	3,508,970

(b)

Represents non-income producing securities.

See accompanying notes to the financial statements.

Capital Manager Moderate Growth Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Investment Companies (100.1%)
BB&T Intermediate Corporate Bond Fund — Institutional Class	493,151	$	5,335,894
BB&T Intermediate U.S. Government Fund — Institutional Class	930,861		9,755,418
BB&T International Equity Fund — Institutional Class	827,151		6,848,810
BB&T Large Company Growth Fund — Institutional Class(b)	1,373,520		11,935,888
BB&T Large Company Value Fund — Institutional Class	1,033,442		17,661,523
BB&T Mid Cap Growth Fund — Institutional Class(b)	186,035		2,165,446
BB&T Mid Cap Value Fund — Institutional Class	215,062		3,284,004


	Shares	Fair Value

Investment Companies, continued
BB&T Short U.S. Government Fund — Institutional Class	268,713	$	2,654,886
BB&T Small Company Growth Fund — Institutional Class(b)	105,360		1,383,377
BB&T Small Company Value Fund — Institutional Class	157,318		2,125,370
BB&T U.S. Treasury Money Market Fund — Institutional Class	4,174,621		4,174,621

Total Investment Companies			67,325,237

Total Investments In Affiliates (Cost $66,620,725)(a) — 100.1%			67,325,237
Other assets (liabilities) — (0.1)%			(23,570	)

Net Assets — 100.0%		$	67,301,667

(a)

Represents cost for financial reporting purposes, is substantially the same for federal tax purposes, and differs from fair value by net unrealized appreciation/depreciation of securities as follows:


Unrealized appreciation	$	1,936,842
Unrealized depreciation		(1,232,330	)

Net unrealized appreciation	$	704,512

(b)

Represents non-income producing securities.

See accompanying notes to the financial statements.

Capital Manager Growth Fund

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Investment Companies (99.9%)
BB&T Intermediate Corporate Bond Fund — Institutional Class	158,664	$	1,716,739
BB&T Intermediate U.S. Government Fund — Institutional Class	299,453		3,138,264
BB&T International Equity Fund — Institutional Class	727,584		6,024,397
BB&T Large Company Growth Fund — Institutional Class(b)	1,207,832		10,496,061
BB&T Large Company Value Fund — Institutional Class	908,695		15,529,592
BB&T Mid Cap Growth Fund — Institutional Class(b)	163,556		1,903,796
BB&T Mid Cap Value Fund — Institutional Class	189,117		2,887,820


	Shares	Fair Value

Investment Companies, continued
BB&T Short U.S. Government Fund — Institutional Class	86,518	$	854,795
BB&T Small Company Growth Fund — Institutional Class(b)	92,688		1,216,996
BB&T Small Company Value Fund — Institutional Class	138,316		1,868,654
BB&T U.S. Treasury Money Market Fund — Institutional Class	2,781,276		2,781,276

Total Investment Companies			48,418,390

Total Investments In Affiliates (Cost $49,911,664)(a) — 99.9%			48,418,390
Other assets (liabilities) — 0.1%			5,617

Net Assets — 100.0%		$	48,424,007

(a)

Represents cost for financial reporting purposes, is substantially the same for federal tax purposes, and differs from fair value by net unrealized appreciation/depreciation of securities as follows:


Unrealized appreciation	$	866,806
Unrealized depreciation		(2,360,080	)

Net unrealized depreciation	$	(1,493,274	)

(b)

Represents non-income producing securities.

See accompanying notes to the financial statements.

Capital Manager Equity Fund(*)

Schedule of Portfolio Investments

March 31, 2004

(Unaudited)


	Shares	Fair Value

Investment Companies (99.9%)
BB&T International Equity Fund — Institutional Class	449,939	$	3,725,491
BB&T Large Company Growth Fund — Institutional Class(b)	746,909		6,490,637
BB&T Large Company Value Fund — Institutional Class	561,901		9,602,889
BB&T Mid Cap Growth Fund — Institutional Class(b)	101,126		1,177,111
BB&T Mid Cap Value Fund — Institutional Class	116,917		1,785,324
BB&T Small Company Growth Fund — Institutional Class(b)	57,274		752,003


	Shares	Fair Value

Investment Companies, continued
BB&T Small Company Value Fund — Institutional Class	85,529	$	1,155,500
BB&T U.S. Treasury Money Market Fund — Institutional Class	1,517,493		1,517,493

Total Investment Companies			26,206,448

Total Investments In Affiliates (Cost $25,401,084)(a) — 99.9%			26,206,448
Other assets (liabilities) — 0.1%			14,905

Net Assets — 100.0%		$	26,221,353

(*)

Formerly known as Capital Manager Aggressive Growth Fund.

(a)

Represents cost for financial reporting purposes, is substantially the same for federal tax purposes, and differs from fair value by net unrealized appreciation/depreciation of securities as follows:


Unrealized appreciation	$	1,101,987
Unrealized depreciation		(296,623	)

Net unrealized appreciation	$	805,364

(b)

Represents non-income producing securities.

See accompanying notes to the financial statements.

[THIS PAGE IS INTENTIONALLY LEFT BLANK]

BB&T Funds

Statements of Assets and Liabilities

(Unaudited)

March 31, 2004


	Balanced Fund			Large Company Value Fund
Assets:
Investments, at cost	$	27,176,424		$	670,770,213
Unrealized appreciation (depreciation)		7,158,319			127,091,429

Investments, at value*		34,334,743			797,861,842
Interest and dividends receivable		109,199			1,438,546
Receivable for capital shares issued		—			—
Receivable for investments sold		—			345,003
Prepaid expenses		14,583			5,675

Total Assets		34,458,525			799,650,866

Liabilities:
Dividends payable		28,044			945,985
Payable for investments purchased		—			—
Payable for capital shares redeemed		—			—
Payable for collateral received on loaned securities		—			125,280,306
Accrued expenses and other payables:
Investment advisory fees		14,389			359,370
Administration, transfer agent and fund accounting fees		1,297			25,112
Distribution fees		—			31,219
Other		1,290			47,282

Total Liabilities		45,020			126,689,274

Net Assets:
Capital		36,665,506			551,597,904
Undistributed net investment income (loss)		73,276			(185,746	)
Net realized gains (losses) from investment transactions		(9,483,596	)		(5,541,995	)
Net unrealized appreciation (depreciation) of investments		7,158,319			127,091,429

Net Assets	$	34,413,505		$	672,961,592

Net Assets
Class A Shares	$	1,602,879		$	28,119,614
Class B Shares		1,139,482			29,327,991
Class C Shares		6,698			146,132
Institutional Shares		31,664,446			615,367,855

Total	$	34,413,505		$	672,961,592

Outstanding Units of Beneficial Interest (Shares)
Class A Shares		136,494			1,648,716
Class B Shares		97,684			1,733,245
Class C Shares		575			8,651
Institutional Shares		2,702,864			36,013,851

Total		2,937,617			39,404,463

Net Asset Value
Class A Shares — redemption price per share	$	11.74		$	17.06

Class B Shares — offering price per share**	$	11.66		$	16.92

Class C Shares — offering price per share**	$	11.65		$	16.89

Institutional Shares — offering and redemption price per share	$	11.72		$	17.09

Maximum Sales Charge — Class A Shares		5.75	%		5.75	%

Maximum Offering Price (100%/100% — Maximum Sales Charge) of net asset value adjusted to the nearest cent) per share — Class A Shares	$	12.46		$	18.10

*	The Large Company Value Fund, Large Company Growth Fund, Mid Cap Value Fund, Mid Cap Growth Fund, Small Company Value Fund, and Small Company Growth Fund include securities on loan of $121,194,878; $163,358,665; $48,828,117; $62,293,996; $10,309,689; and $23,491,632, respectively.

**	Redemption price per share varies by length of time shares are held.

See accompanying notes to the financial statements.


Large Company Growth Fund			Mid Cap Value Fund			Mid Cap Growth Fund			Small Company Value Fund			Small Company Growth Fund			Special Opportunities Equity Fund

$	483,137,709		$	193,353,594		$	163,346,220		$	57,552,823		$	122,840,471		$	52,240,795
	71,061,534			48,725,127			29,771,883			11,798,200			13,245,949			9,647,456

	554,199,243			242,078,721			193,118,103			69,351,023			136,086,420			61,888,251
	214,751			384,241			23,227			66,237			21,540			26,745
	50			3,556			—			—			1,000			337,265
	—			—			1,716,420			—			2,470,345			1,686,541
	2,887			1,699			1,386			544			1,646			6,242

	554,416,931			242,468,217			194,859,136			69,417,804			138,580,951			63,945,044


	—			324,303			—			—			—			—
	—			—			637,823			461,221			2,036,741			—
	150			5,958			—			—			120			—
	168,286,383			50,511,604			64,290,114			10,605,378			24,433,290			—

	200,277			107,490			72,633			39,066			80,017			41,760
	14,361			7,123			4,798			1,394			4,150			1,583
	14,838			4,832			3,380			118			7,949			16,987
	45,929			11,104			11,490			14,529			17,011			418

	168,561,938			50,972,414			65,020,238			11,121,706			26,579,278			60,748


	378,040,815			149,926,776			102,959,216			45,893,896			178,501,588			53,284,125
	(290,424	)		9			(473,257	)		(15,768	)		(747,630	)		(189,453	)
	(62,956,932	)		(7,156,109	)		(2,418,944	)		619,770			(78,998,234	)		1,142,168
	71,061,534			48,725,127			29,771,883			11,798,200			13,245,949			9,647,456

$	385,854,993		$	191,495,803		$	129,838,898		$	58,296,098		$	112,001,673		$	63,884,296


$	8,459,268		$	8,582,446		$	7,986,723		$	259,626		$	6,310,763		$	13,836,203
	15,440,212			3,188,222			1,854,372			79,637			7,735,855			8,683,210
	27,135			547,008			216,198			1,352			35,813			8,965,972
	361,928,378			179,178,127			119,781,605			57,955,483			97,919,242			32,398,911

$	385,854,993		$	191,495,803		$	129,838,898		$	58,296,098		$	112,001,673		$	63,884,296


	987,069			562,358			713,574			19,238			496,307			1,098,224
	1,890,633			210,197			168,994			5,945			657,241			693,736
	3,318			36,055			19,700			101			3,040			715,934
	41,634,530			11,732,933			10,291,277			4,291,131			7,457,690			2,566,598

	44,515,550			12,541,543			11,193,545			4,316,415			8,614,278			5,074,492


$	8.57		$	15.26		$	11.19		$	13.50		$	12.72		$	12.60

$	8.17		$	15.17		$	10.97		$	13.40		$	11.77		$	12.52

$	8.18		$	15.17		$	10.97		$	13.39		$	11.78		$	12.52

$	8.69		$	15.27		$	11.64		$	13.51		$	13.13		$	12.62

	5.75	%		5.75	%		5.75	%		5.75	%		5.75	%		5.75	%

$	9.09		$	16.19		$	11.87		$	14.32		$	13.50		$	13.37

See accompanying notes to the financial statements.

BB&T Funds

Statements of Assets and Liabilities, continued

(Unaudited)

March 31, 2004


	International Equity Fund			Short U.S Government Fund(a)
Assets:
Investments, at cost	$	191,026,127		$	318,308,227
Unrealized appreciation (depreciation)		44,140,631			2,394,652

Investments, at value*		235,166,758			320,702,879
Foreign currency, at value**		3,632,202			—
Interest and dividends receivable		1,280,524			1,527,844
Receivable for capital shares issued		—			—
Receivable for investments sold		639,528			—
Reclaims receivable		147,885			—
Prepaid expenses		2,161			2,261

Total Assets		240,869,058			322,232,984

Liabilities:
Dividends payable		515,547			505,259
Payable for forward foreign currency contracts		608,469			—
Payable for collateral received on loaned securities		—			102,958,875
Payable for investments purchased		580,419			3,000,000
Accrued expenses and other payables:
Investment advisory fees		181,332			81,621
Administration, transfer agent and fund accounting fees		8,901			8,112
Distribution fees		2,244			1,833
Other		48,205			20,669

Total Liabilities		1,945,117			106,576,369

Net Assets:
Capital		251,950,008			215,659,756
Undistributed net investment income (loss)		306,496			(900,540	)
Net realized gains (losses) from investment and foreign currrency transactions		(56,902,602	)		(1,497,253	)
Net unrealized appreciation (depreciation) of investments and translation of assets and liabilities in foreign currency		43,570,039			2,394,652

Net Assets	$	238,923,941		$	215,656,615

Net Assets
Class A Shares	$	1,684,408		$	8,642,336
Class B Shares		2,213,818			—
Class C Shares		778			—
Institutional Shares		235,024,937			207,014,279

Total	$	238,923,941		$	215,656,615

Outstanding Units of Beneficial Interest (Shares)
Class A Shares		206,203			876,001
Class B Shares		284,464			—
Class C Shares		100			—
Institutional Shares		28,374,678			20,958,285

Total		28,865,445			21,834,286

Net Asset Value
Class A Shares — redemption price per share	$	8.17		$	9.87

Class B Shares — offering price per share***	$	7.78		$	—

Class C Shares — offering price per share***	$	7.78		$	—

Institutional Shares — offering and redemption price per share	$	8.28		$	9.88

Maximum Sales Charge — Class A Shares		5.75	%		3.00	%

Maximum Offering Price (100%/100% — Maximum Sales Charge) of net asset value adjusted to the nearest cent) per share — Class A Shares	$	8.67		$	10.18

(a)	Formerly known as Short U.S. Government Income Fund.

(b)	Formerly known as Intermediate U.S. Government Bond Fund.

*	The Short U.S. Government Fund, Intermediate U.S. Government Fund, and Intermediate Corporate Bond Fund include securities on loan of $100,784,638; $240,102,091; and $27,749,757, respectively.

**	The International Equity Fund includes foreign currency at cost of $3,619,186.

***	Redemption price per share varies by length of time shares are held.

See accompanying notes to the financial statements.


Intermediate U.S. Government Fund(b)			Intermediate Corporate Bond Fund			Kentucky Intermediate Tax-Free Fund			Maryland Intermediate Tax-Free Fund			North Carolina Intermediate Tax-Free Fund			South Carolina Intermediate Tax-Free Fund

$	779,897,653		$	275,214,567		$	16,555,187		$	8,025,226		$	121,791,242		$	21,115,793
	14,279,133			14,304,694			576,375			116,979			6,580,238			1,457,422

	794,176,786			289,519,261			17,131,562			8,142,205			128,371,480			22,573,215
	—			—			—			—			—			—
	3,733,157			3,792,291			225,114			109,264			1,637,009			257,567
	—			—			—			—			—			—
	—			—			—			—			1,653,066			—
	—			—			—			—			—			—
	4,844			2,445			176			4,587			1,237			252

	797,914,787			293,313,997			17,356,852			8,256,056			131,662,792			22,831,034


	1,468,418			1,011,510			37,925			15,229			338,640			62,659
	—			—			—			—			—			—
	245,269,855			28,532,676			—			—			—			—
	—			—			—			—			4,528,055			—

	215,113			110,726			4,551			92			48,421			8,704
	20,817			9,924			651			306			4,776			858
	9,853			6,878			328			79			3,301			596
	48,477			18,084			2,336			1,749			18,607			4,943

	247,032,533			29,689,798			45,791			17,455			4,941,800			77,760


	532,850,639			249,263,279			16,766,418			8,133,255			118,869,850			21,086,166
	(705,148	)		(469,679	)		2,194			414			55,071			14,272
	4,457,630			525,905			(33,926	)		(12,047	)		1,215,833			195,414
	14,279,133			14,304,694			576,375			116,979			6,580,238			1,457,422

$	550,882,254		$	263,624,199		$	17,311,061		$	8,238,601		$	126,720,992		$	22,753,274


$	11,271,809		$	4,910,489		$	2,517,938		$	614,118		$	25,751,206		$	4,753,119
	7,912,499			6,692,226			—			—			—			—
	787,641			247,944			—			—			—			—
	530,910,305			251,773,540			14,793,123			7,624,483			100,969,786			18,000,155

$	550,882,254		$	263,624,199		$	17,311,061		$	8,238,601		$	126,720,992		$	22,753,274


	1,076,358			454,089			244,462			60,070			2,388,807			435,896
	758,326			618,357			—			—			—			—
	75,476			22,907			—			—			—			—
	50,653,725			23,266,792			1,437,987			744,935			9,368,453			1,661,368

	52,563,885			24,362,145			1,682,449			805,005			11,757,260			2,097,264


$	10.47		$	10.81		$	10.30		$	10.22		$	10.78		$	10.90

$	10.43		$	10.82		$	—		$	—		$	—		$	—

$	10.44		$	10.82		$	—		$	—		$	—		$	—

$	10.48		$	10.82		$	10.29		$	10.24		$	10.78		$	10.83

	5.75	%		5.75	%		3.00	%		3.00	%		3.00	%		3.00	%

$	11.11		$	11.47		$	10.62		$	10.54		$	11.11		$	11.24

See accompanying notes to the financial statements.

BB&T Funds

Statements of Assets and Liabilities, continued

(Unaudited)

March 31, 2004


	Virginia Intermediate Tax-Free Fund			West Virginia Intermediate Tax-Free Fund
Assets:
Investments:
Unaffiliated investments, at cost	$	79,116,383		$	74,966,033
Investment in affiliates, at cost		—			—

Total investments, at cost		79,116,383			74,966,033
Unrealized appreciation (depreciation)		5,390,123			4,448,959

Investments, at value		84,506,506			79,414,992
Repurchase agreements, at cost		—			—
Collateralized loan agreements, at cost		—			—
Cash		—			—
Interest and dividends receivable		992,498			1,399,031
Receivable for capital shares issued		—			—
Receivable for investments sold		1,553,401			—
Prepaid expenses		873			1,244

Total Assets		87,053,278			80,815,267

Liabilities
Dividends payable		234,647			231,673
Payable for investments purchased		2,071,774			—
Accrued expenses and other payables:
Investment advisory fees		32,472			30,989
Administration, transfer agent and fund accounting fees		3,191			3,036
Distribution fees		1,060			2,426
Other		7,938			10,692

Total Liabilities		2,351,082			278,816

Net Assets
Capital		78,660,785			75,672,741
Undistributed net investment income (loss)		36,150			(12,641	)
Net realized gains (losses) from investment transactions		615,138			427,392
Net unrealized appreciation (depreciation) of investments		5,390,123			4,448,959

Net Assets	$	84,702,196		$	80,536,451

Net Assets
Class A Shares	$	8,685,061		$	11,356,945
Class B Shares		—			—
Class C Shares		—			—
Institutional Shares		76,017,135			69,179,506

Total	$	84,702,196		$	80,536,451

Outstanding Units of Beneficial Interest (Shares)
Class A Shares		731,023			1,115,640
Class B Shares		—			—
Class C Shares		—			—
Institutional Shares		6,401,930			6,789,157

Total		7,132,953			7,904,797

Net Asset Value
Class A Shares — redemption price per share	$	11.88		$	10.18

Class B Shares — offering price per share*	$	—		$	—

Class C Shares — offering price per share*	$	—		$	—

Institutional Shares — offering and redemption price per share	$	11.87		$	10.19

Maximum Sales Charge — Class A Shares		3.00	%		3.00	%

Maximum Offering Price (100%/100% — Maximum Sales Charge) of net asset value adjusted to the nearest cent) per share — Class A Shares	$	12.25		$	10.49

(a)	Formerly known as Capital Manager Aggressive Growth Fund.

*	Redemption price per share varies by length of time shares are held.

See accompanying notes to the financial statements.


Prime Money Market Fund		U.S. Treasury Money Market Fund		Capital Manager Conservative Growth Fund			Capital Manager Moderate Growth Fund			Capital Manager Growth Fund			Capital Manager Equity Fund(a)


$	836,953,166	$	575,330,470	$	—		$	—		$	—		$	—
	—		—		73,447,504			66,620,725			49,911,664			25,401,084

	836,953,166		575,330,470		73,447,504			66,620,725			49,911,664			25,401,084
	—		—		3,508,970			704,512			(1,493,274	)		805,364

	836,953,166		575,330,470		76,956,474			67,325,237			48,418,390			26,206,448
	45,985,000		618,724,246		—			—			—			—
	150,000,000		—		—			—			—			—
	768		—		—			—			—			—
	1,415,491		1,921,500		159,226			102,777			59,282			25,628
	—		—		—			20,000			5,013			—
	—		—		—			—			—			—
	11,764		10,914		667			2,886			1,255			913

	1,034,366,189		1,195,987,130		77,116,367			67,450,900			48,483,940			26,232,989


	414,592		420,424		339,012			118,771			40,315			5,394
	—		—		—			—			—			—

	268,917		284,306		10,223			8,776			4,736			656
	43,548		49,779		1,674			1,470			1,051			566
	117,257		25,726		4,917			19,507			13,302			4,252
	99,305		162,912		6,073			709			529			768

	943,619		943,147		361,899			149,233			59,933			11,636


	1,033,416,568		1,195,043,737		76,255,692			68,320,174			51,932,219			25,602,310
	6,002		246		—			—			—			(1	)
	—		—		(3,010,194	)		(1,723,019	)		(2,014,938	)		(186,320	)
	—		—		3,508,970			704,512			(1,493,274	)		805,364

$	1,033,422,570	$	1,195,043,983	$	76,754,468		$	67,301,667		$	48,424,007		$	26,221,353


$	450,104,941	$	133,570,410	$	4,093,537		$	17,885,814		$	9,790,586		$	2,030,610
	2,383,394		881,416		4,426,735			18,080,217			12,833,306			4,580,995
	529,191		8,035		205,235			295,272			69,182			85,151
	580,405,044		1,060,584,122		68,028,961			31,040,364			25,730,933			19,524,597

$	1,033,422,570	$	1,195,043,983	$	76,754,468		$	67,301,667		$	48,424,007		$	26,221,353


	450,103,346		133,570,652		434,308			1,967,993			1,117,866			210,789
	2,383,375		881,414		469,552			2,021,089			1,488,153			486,004
	529,189		8,035		21,845			32,875			8,021			9,055
	580,416,091		1,060,583,910		7,168,429			3,404,833			2,935,972			2,016,778

	1,033,432,001		1,195,044,011		8,094,134			7,426,790			5,550,012			2,722,626


$	1.00	$	1.00	$	9.43		$	9.09		$	8.76		$	9.63

$	1.00	$	1.00	$	9.43		$	8.95		$	8.62		$	9.43

$	1.00	$	1.00	$	9.40		$	8.98		$	8.63		$	9.40

$	1.00	$	1.00	$	9.49		$	9.12		$	8.76		$	9.68

	NA		NA		5.75	%		5.75	%		5.75	%		5.75	%

$	NA	$	NA	$	10.01		$	9.64		$	9.29		$	10.22

See accompanying notes to the financial statements.

BB&T Funds

Statements of Operations

(Unaudited)

For the Six Months Ended March 31, 2004


	Balanced Fund			Large Company Value Fund
Investment Income:
Interest income	$	370,912		$	—
Dividend income		457,692			7,408,544
Income from securities lending		—			—

Total Investment Income		828,604			7,408,544

Expenses:
Investment advisory fees		245,516			2,190,195
Administration, transfer agency and fund accounting fees		122,058			827,261
Distribution fees — Class A Shares		22,290			68,600
Distribution fees — Class B Shares		41,062			143,476
Distribution fees — Class C Shares		723			635
Custodian fees		5,412			58,073
Other fees		15,030			54,771

Total expenses before waivers		452,091			3,343,011
Less expenses waived by the Investment Advisor		(66,312	)		(342,671	)
Less expenses waived by the Administrator and its affiliates		(66,672	)		(65,057	)

Net Expenses		319,107			2,935,283

Net Investment Income (Loss)		509,497			4,473,261

Realized/Unrealized Gains (Losses) on Investments:
Net realized gains (losses) from investment transactions		9,038,666			2,474,510
Change in unrealized appreciation/depreciation of investments		(2,813,571	)		75,946,690

Net realized/unrealized gains (losses) on investments		6,225,095			78,421,200

Change in net assets from operations	$	6,734,592		$	82,894,461

See accompanying notes to the financial statements.


Large Company Growth Fund			Mid Cap Value Fund			Mid Cap Growth Fund			Small Company Value Fund			Small Company Growth Fund			Special Opportunities Equity Fund

$	—		$	—		$	—		$	—		$	1,153		$	10,693
	1,338,468			2,288,206			132,320			349,372			136,789			137,068
	30,856			—			15,126			4,231			58,547			—

	1,369,324			2,288,206			147,446			353,603			196,489			147,761


	1,217,034			649,047			456,108			262,142			672,778			209,320
	491,476			265,848			197,982			110,641			235,881			120,479
	19,522			9,734			9,301			432			15,861			23,508
	76,165			13,047			7,326			261			39,772			32,025
	144			2,609			962			6			245			33,222
	34,920			18,997			12,671			7,346			11,563			8,167
	37,831			24,095			14,309			5,133			9,264			18,702

	1,877,092			983,377			698,659		��	385,961			985,364			445,423
	(190,614	)		(101,220	)		(71,626	)		(18,592	)		(27,321	)		(93,561	)
	(26,730	)		(9,213	)		(6,330	)		(2,998	)		(13,924	)		(14,648	)

	1,659,748			872,944			620,703			364,371			944,119			337,214

	(290,424	)		1,415,262			(473,257	)		(10,768	)		(747,630	)		(189,453	)


	14,574,476			1,011,254			9,099,163			677,440			24,918,759			1,303,522
	20,978,711			26,518,058			6,314,034			8,218,089			(7,300,867	)		8,245,702

	35,553,187			27,529,312			15,413,197			8,895,529			17,617,892			9,549,224

$	35,262,763		$	28,944,574		$	14,939,940		$	8,884,761		$	16,870,262		$	9,359,771

See accompanying notes to the financial statements.

BB&T Funds

Statements of Operations, continued

(Unaudited)

For the Six Months Ended March 31, 2004


	International Equity Fund			Short U.S. Government Fund(a)
Investment Income:
Interest income	$	30,014		$	2,912,869
Dividend income		2,355,261			22,500
Foreign tax withholding		(276,175	)		—
Income from securities lending		—			20,262

Total Investment Income:		2,109,100			2,955,631

Expenses:
Investment advisory fees		1,093,916			622,758
Administration, transfer agency and fund accounting fees		334,454			277,753
Distribution fees — Class A Shares		4,536			22,441
Distribution fees — Class B Shares		10,938			—
Distribution fees — Class C Shares		11			—
Custodian fees		110,150			20,672
Other fees		40,058			17,722

Total expenses before waivers		1,594,063			961,346
Less expenses waived by the Investment Advisor		(58,124	)		(121,100	)
Less expenses waived by the Administrator and its affiliates		(13,775	)		(52,739	)

Net Expenses		1,522,164			787,507

Net Investment Income (Loss)		586,936			2,168,124

Realized/Unrealized Gains (Losses) on Investments:
Net realized gains (losses) from investment transactions and foreign currency transactions		10,838,910			119,968
Change in unrealized appreciation/depreciation of investments and translation of assets and liabilities in foreign currency		24,972,351			264,853

Net realized/unrealized gains (losses) on investments		35,811,261			384,821

Change in net assets from operations	$	36,398,197		$	2,552,945

(a)	Formerly known as Short U.S. Government Income Fund.

(b)	Formerly known as Intermediate U.S. Government Bond Fund.

See accompanying notes to the financial statements.


Intermediate U.S. Government Fund(b)			Intermediate Corporate Bond Fund			Kentucky Intermediate Tax-Free Fund			Maryland Intermediate Tax-Free Fund			North Carolina Intermediate Tax-Free Fund			South Carolina Intermediate Tax-Free Fund

$	9,522,498		$	5,700,531		$	282,187		$	99,574		$	2,473,220		$	462,433
	55,760			419,328			1,682			580			11,075			1,383
	—			—			—			—			—			—
	32,007			11,416			—			—			—			—

	9,610,265			6,131,275			283,869			100,154			2,484,295			463,816


	1,440,077			723,826			50,320			19,746			369,105			68,669
	668,741			348,888			35,945			23,045			172,971			33,011
	26,102			10,981			5,716			1,426			63,479			11,879
	40,605			32,093			—			—			—			—
	3,803			1,260			—			—			—			—
	50,648			25,588			1,936			705			12,617			2,696
	55,307			30,426			3,186			658			13,037			1,843

	2,285,283			1,173,062			97,103			45,580			631,209			118,098
	(239,972	)		(120,618	)		(41,764	)		(24,187	)		(71,825	)		(17,167	)
	(37,266	)		(17,987	)		(10,148	)		(3,254	)		(69,012	)		(12,915	)

	2,008,045			1,034,457			45,191			18,139			490,372			88,016

	7,602,220			5,096,818			238,678			82,015			1,993,923			375,800


	5,073,431			1,986,010			18,565			6,296			1,186,169			194,869

	(2,978,480	)		1,097,845			85,448			42,195			(1,109,135	)		(105,113	)

	2,094,951			3,083,855			104,013			48,491			77,034			89,756

$	9,697,171		$	8,180,673		$	342,691		$	130,506		$	2,070,957		$	465,556

See accompanying notes to the financial statements.

BB&T Funds

Statements of Operations, continued

(Unaudited)

For the Six Months Ended March 31, 2004


	Virginia Intermediate Tax-Free Fund			West Virginia Intermediate Tax-Free Fund
Investment Income
Interest income	$	1,695,358		$	1,741,222
Dividend income		5,503			6,275
Dividend income from affiliates		—			—
Income from securities lending		—			—

Total Investment Income:		1,700,861			1,747,497

Expenses:
Investment advisory fees		249,782			187,480
Administration, transfer agency and fund accounting fees		117,877			121,607
Distribution fees — Class A Shares		19,463			14,251
Distribution fees — Class B Shares		—			—
Distribution fees — Class C Shares		—			—
Custodian fees		7,332			8,230
Other		5,775			5,284

Total expenses before waivers		400,229			336,852
Less expenses waived by the Investment Advisor		(48,567	)		—
Less expenses waived by the Administrator and its affiliates		(30,391	)		(4,050	)

Net Expenses		321,271			332,802

Net Investment Income (Loss)		1,379,590			1,414,695

Realized/Unrealized Gains (Losses) on Investments:
Net realized gains (losses) from investment transactions		668,092			454,786
Net realized gain distributions from underlying funds		—			—
Change in unrealized appreciation/depreciation from investments		(700,502	)		(386,209	)

Net realized/unrealized gains and losses on investments		(32,410	)		68,577

Change in net assets resulting from operations	$	1,347,180		$	1,483,272

(a)	Formerly known as Capital Manager Aggressive Growth Fund.

See accompanying notes to the financial statements.


Prime Money Market Fund			U.S. Treasury Money Market Fund			Capital Manager Conservative Growth Fund			Capital Manager Moderate Growth Fund			Capital Manager Growth Fund			Capital Manager Equity Fund(a)

$	6,381,100		$	6,045,868		$	—		$	—		$	—		$	—
	—			—			—			—			—			—
	—			—			842,066			455,106			257,674			103,344
	—			23,778			—			—			—			—

	6,381,100			6,069,646			842,066			455,106			257,674			103,344


	2,168,045			2,437,225			89,456			69,820			52,728			29,376
	1,414,453			1,598,938			119,480			105,377			88,174			59,358
	1,141,081			345,798			8,432			33,639			17,348			4,211
	12,244			4,761			18,720			65,355			55,463			18,055
	2,620			40			894			1,139			309			347
	71,113			130,501			8,170			6,507			4,829			2,839
	87,074			164,793			11,090			9,516			7,176			4,141

	4,896,630			4,682,056			256,242			291,353			226,027			118,327
	(541,941	)		(649,503	)		(35,779	)		(27,925	)		(24,162	)		(16,755	)
	(513,008	)		(252,452	)		(41,235	)		(45,715	)		(30,524	)		(14,262	)

	3,841,681			3,780,101			179,228			217,713			171,341			87,310

	2,539,419			2,289,545			662,838			237,393			86,333			16,034


	—			—			(429,780	)		(1	)		(29,891	)		(73,307	)
	—			—			243,148			93,661			31,778			—
	—			—			4,405,819			4,610,789			4,467,679			2,945,399

	—			—			4,219,187			4,704,449			4,469,566			2,872,092

$	2,539,419		$	2,289,545		$	4,882,025		$	4,941,842		$	4,555,899		$	2,888,126

See accompanying notes to the financial statements.

BB&T Funds

Statements of Changes in Net Assets


	Balanced Fund						Large Company Value Fund
	For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003
	(Unaudited)						(Unaudited)
From Investment Activities
Operations:
Net investment income (loss)	$	509,497		$	1,895,816		$	4,473,261		$	7,958,472
Net realized gains (losses) from investment transactions		9,038,666			(7,668,552	)		2,474,510			(4,530,796	)
Change in unrealized appreciation/depreciation of investments		(2,813,571	)		20,213,250			75,946,690			66,469,069

Change in net assets from operations		6,734,592			14,440,514			82,894,461			69,896,745

Dividends to Class A Shareholders:
Net investment income		(76,803	)		(233,300	)		(184,531	)		(395,381	)
Net realized gains from investment transactions		—			—			—			—
Dividends to Class B Shareholders:
Net investment income		(71,818	)		(117,990	)		(89,584	)		(234,495	)
Net realized gains from investment transactions		—			—			—			—
Dividends to Class C Shareholders:
Net investment income		(1,172	)		(2,526	)		(417	)		(719	)
Net realized gains from investment transactions		—			—			—			—
Dividends to Institutional Class Shareholders:
Net investment income		(375,536	)		(1,702,407	)		(4,334,245	)		(7,377,663	)
Net realized gains from investment transactions		—			—			—			—

Change in net assets from shareholder dividends		(525,329	)		(2,056,223	)		(4,608,777	)		(8,008,258	)

Capital Transactions:
Change in net assets from capital transactions		(82,309,499	)		(21,089,389	)		67,652,505			98,041,490

Change in net assets		(76,100,236	)		(8,705,098	)		145,938,189			159,929,977
Net Assets:
Beginning of period		110,513,741			119,218,839			527,023,403			367,093,426

End of period	$	34,413,505		$	110,513,741		$	672,961,592		$	527,023,403

Undistributed net investment income (loss)	$	73,276		$	89,108		$	(185,746	)	$	(50,230	)

(a)	Period from commencement of operations.

See accompanying notes to the financial statements.


Large Company Growth Fund						Mid Cap Value Fund						Mid Cap Growth Fund						Small Company Value Fund
For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Period May 19, 2003 through September 30, 2003(a)
(Unaudited)						(Unaudited)						(Unaudited)						(Unaudited)


$	(290,424	)	$	(393,818	)	$	1,415,262		$	1,898,342		$	(473,257	)	$	(654,730	)	$	(10,768	)	$	(23,108	)
	14,574,476			(12,100,245	)		1,011,254			(3,245,571	)		9,099,163			(1,658,602	)		677,440			468,751
	20,978,711			47,065,553			26,518,058			25,313,731			6,314,034			21,876,296			8,218,089			3,580,111

	35,262,763			34,571,490			28,944,574			23,966,502			14,939,940			19,562,964			8,884,761			4,025,754


	—			—			(56,447	)		(75,198	)		—			—			—			—
	—			—			—			—			—			—			(1,480	)		—

	—			—			(12,833	)		(11,787	)		—			—			—			—
	—			—			—			—			—			—			(468	)		—

	—			—			(2,409	)		(2,747	)		—			—			—			—
	—			—			—			—			—			—			(12	)		—

	—			—			(1,343,564	)		(1,807,190	)		—			—			(5,000	)		(8,175	)
	—			—			—			—			—			—			(493,765	)		—

	—			—			(1,415,253	)		(1,896,922	)		—			—			(500,725	)		(8,175	)


	56,339,752			79,430,346			12,290,313			38,065,412			6,991,496			12,185,805			6,308,026			39,586,457

	91,602,515			114,001,836			39,819,634			60,134,992			21,931,436			31,748,769			14,692,062			43,604,036

	294,252,478			180,250,642			151,676,169			91,541,177			107,907,462			76,158,693			43,604,036			—

$	385,854,993		$	294,252,478		$	191,495,803		$	151,676,169		$	129,838,898		$	107,907,462		$	58,296,098		$	43,604,036

$	(290,424	)	$	—		$	9		$	—		$	(473,257	)	$	—		$	(15,768	)	$	—

See accompanying notes to the financial statements.

BB&T Funds

Statements of Changes in Net Assets, continued


	Balanced Fund						Large Company Value Fund
	For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003
	(Unaudited)						(Unaudited)
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	171,103		$	1,370,013		$	1,992,809		$	4,803,034
Dividends reinvested		89,166			220,313			165,504			377,384
Cost of shares redeemed		(13,360,409	)		(3,232,222	)		(3,099,721	)		(5,457,503	)

Change in net assets from Class A Share transactions		(13,100,140	)		(1,641,896	)		(941,408	)		(277,085	)
Class B Shares:
Proceeds from shares issued		143,076			929,668			1,737,818			1,920,190
Dividends reinvested		77,609			118,658			76,852			233,253
Cost of shares redeemed		(12,677,460	)		(2,421,086	)		(2,515,659	)		(4,451,704	)

Change in net assets from Class B Share transactions		(12,456,775	)		(1,372,760	)		(700,989	)		(2,298,261	)
Class C Shares:
Proceeds from shares issued		29,878			66,045			40,036			78,799
Dividends reinvested		1,511			2,647			352			731
Cost of shares redeemed		(259,768	)		(156,386	)		(31,860	)		(17,716	)

Change in net assets from Class C Share transactions		(228,379	)		(87,694	)		8,528			61,814
Institutional Shares:
Proceeds from shares issued		716,613			18,150,474			39,571,415			167,017,338
Proceeds from shares issued in conversion		—			—			63,782,610			46,561,908
Dividends reinvested		453,324			1,433,202			2,042,235			3,398,813
Cost of shares redeemed		(57,694,142	)		(37,570,715	)		(36,109,886	)		(116,423,037	)

Change in net assets from Institutional Share transactions		(56,524,205	)		(17,987,039	)		69,286,374			100,555,022

Change in net assets from capital transactions	$	(82,309,499	)	$	(21,089,389	)	$	67,652,505		$	98,041,490

Share Transactions:
Class A Shares:
Issued		15,070			130,819			120,183			335,063
Reinvested		7,959			21,428			10,185			26,906
Redeemed		(1,151,249	)		(311,310	)		(189,500	)		(384,295	)

Change in Class A Shares		(1,128,220	)		(159,063	)		(59,132	)		(22,326	)
Class B Shares:
Issued		12,523			90,163			104,375			136,747
Reinvested		6,956			11,610			4,760			16,683
Redeemed		(1,094,734	)		(237,480	)		(152,781	)		(325,204	)

Change in Class B Shares		(1,075,255	)		(135,707	)		(43,646	)		(171,774	)
Class C Shares:
Issued		2,607			6,445			2,357			5,466
Reinvested		135			260			22			52
Redeemed		(22,276	)		(15,715	)		(2,004	)		(1,303	)

Change in Class C Shares		(19,534	)		(9,010	)		375			4,215
Institutional Shares:
Issued		63,264			1,772,615			2,398,995			11,843,335
Issued in conversion		—			—			3,756,814			3,126,165
Reinvested		40,562			139,575			125,072			241,471
Redeemed		(5,081,581	)		(3,670,719	)		(2,173,081	)		(8,167,879	)

Change in Institutional Shares		(4,977,755	)		(1,758,529	)		4,107,800			7,043,092

Change in Shares		(7,200,764	)		(2,062,309	)		4,005,397			6,853,207

(a)	Period from commencement of operations.

See accompanying notes to the financial statements.


Large Company Growth Fund						Mid Cap Value Fund						Mid Cap Growth Fund						Small Company Value Fund
For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Period May 19, 2003 Through September 30, 2003(a)
(Unaudited)						(Unaudited)						(Unaudited)						(Unaudited)


$	1,555,116		$	1,517,399			1,031,096		$	1,625,215		$	1,057,789		$	699,239		$	156,218		$	113,973
	—			—			54,169			71,871			—			—			1,480			—
	(946,163	)		(1,728,442	)		(564,544	)		(907,058	)		(461,867	)		(872,144	)		(36,729	)		—

	608,953			(211,043	)		520,721			790,028			595,922			(172,905	)		120,969			113,973

	1,105,343			1,111,934			834,407			838,577			723,842			456,754			42,847			28,548
	—			—			12,080			11,135			—			—			468			—
	(1,433,887	)		(1,874,763	)		(127,182	)		(209,954	)		(45,642	)		(83,058	)		—			—

	(328,544	)		(762,829	)		719,305			639,758			678,200			373,696			43,315			28,548

	4,267			14,408			65,363			209,376			45,040			21,338			—			1,000
	—			—			2,201			2,508			—			—			12			—
	(11,636	)		24,891			(86,436	)		(91,167	)		(14,437	)		(30,120	)		—			—

	(7,369	)		(10,483	)		(18,872	)		120,717			30,603			(8,782	)		12			1,000

	34,165,555			114,951,958			23,818,227			58,120,095			25,130,531			41,087,531			8,063,448			40,351,862
	42,521,740			31,041,272			—			—			—			—			—			—
	—			—			498,875			591,861			—			—			361,425			6,898
	(20,620,583	)		(65,578,529	)		(13,247,943	)		(22,197,047	)		(19,443,760	)		29,093,735			(2,281,143	)		(915,824	)

	56,066,712			80,414,701			11,069,159			36,514,909			5,686,771			11,993,796			6,143,730			39,442,936

$	56,339,752		$	79,430,346		$	12,290,313		$	38,065,412		$	6,991,496		$	12,185,805		$	6,308,026		$	39,586,457



	184,652			206,187			71,102			136,905			96,676			79,843			12,122			9,800
	—			—			3,818			6,222			—			—			119			—
	(113,558	)		(235,995	)		(39,795	)		(79,703	)		(42,021	)		(106,587	)		(2,803	)		—

	71,094			(29,808	)		35,125			63,424			54,655			(26,744	)		9,438			9,800

	137,142			161,634			57,826			71,054			66,873			52,778			3,365			2,542
	—			—			853			968			—			—			38			—
	(179,507	)		278,511			(8,868	)		(17,919	)		(4,272	)		(9,815	)		—			—

	(42,365	)		(116,877	)		49,811			54,103			62,601			42,963			3,403			2,542

	537			2,016			4,605			17,755			4,135			2,575			—			100
	—			—			156			219			—			—			1			—
	(1,476	)		(3,577	)		(6,151	)		(8,048	)		(1,394	)		(3,465	)		—			—

	(939	)		(1,561	)		(1,390	)		9,926			2,741			(890	)		1			100

	4,016,120			15,803,468			1,648,920			5,039,767			2,224,491			4,637,332			640,429			3,881,504
	5,005,398			3,972,894			—			—			—			—			—			—
	—			—			35,123			50,888			—			—			29,048			642
	(2,434,277	)		(8,855,868	)		(912,789	)		(1,906,323	)		(1,737,271	)		(3,206,388	)		(177,708	)		(82,784	)

	6,587,241			10,920,494			771,254			3,184,332			487,220			1,430,944			491,769			3,799,362

	6,615,031			10,772,248			854,800			3,311,785			607,217			1,446,273			504,611			3,811,804

See accompanying notes to the financial statements.

BB&T Funds

Statements of Changes in Net Assets


	Small Company Growth Fund						Special Opportunities Equity Fund
	For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Period June 2, 2003 through September 30, 2003(a)
	(Unaudited)						(Unaudited)
From Investment Activities:
Operations:
Net investment income (loss)	$	(747,630	)	$	(1,227,350	)	$	(189,453	)	$	(29,356	)
Net realized gains (losses) from investment transactions and foreign currency transactions		24,918,759			3,341,323			1,303,522			191,332
Change in unrealized appreciation/depreciation of investments and translation of assets and liabilities in foreign currency		(7,300,867	)		23,890,382			8,245,702			1,401,754

Change in net assets from operations		16,870,262			26,004,355			9,359,771			1,563,730

Dividends to Class A Shareholders:
Net investment income		—			—			—			—
Net realized gains from investment transactions		—			—			(54,699	)		—
Dividends to Class B Shareholders:
Net investment income		—			—			—			—
Net realized gains from investment transactions		—			—			(37,967	)		—
Dividends to Class C Shareholders:
Net investment income		—			—			—			—
Net realized gains from investment transactions		—			—			(40,629	)		—
Dividends to Institutional Class Shareholders:
Net investment income		—			—			—			(1,758	)
Net realized gains from investment transactions		—			—			(197,041	)		—

Change in net assets from shareholder dividends		—			—			(330,336	)		(1,758	)

Capital Transactions:
Change in net assets from capital transactions		(48,405,001	)		11,735,791			14,623,487			38,669,402

Change in net assets		(31,534,739	)		37,740,146			23,652,922			40,231,374
Net Assets:
Beginning of period		143,536,412			105,796,266			40,231,374			—

End of period	$	112,001,673		$	143,536,412		$	63,884,296		$	40,231,374

Undistributed net investment income (loss)	$	(747,630	)	$	—		$	(189,453	)	$	—

(a)	Period from commencement of operations.

(b)	Formerly known as Short U.S. Government Income Fund.

(c)	Formerly known as Intermediate U.S. Government Bond Fund.

See accompanying notes to the financial statements.


International Equity Fund						Short U.S. Government Fund(b)						Intermediate U.S. Government Fund(c)						Intermediate Corporate Bond Fund
For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003
(Unaudited)						(Unaudited)						(Unaudited)						(Unaudited)


$	586,936		$	1,309,849		$	2,168,124		$	5,320,247		$	7,602,220		$	13,882,703		$	5,096,818		$	8,554,890

	10,838,910			(22,362,508	)		119,968			1,193,020			5,073,431			9,283,305			1,986,010			2,351,694

	24,972,351			42,728,385			264,853			(3,210,112	)		(2,978,480	)		(11,153,865	)		1,097,845			5,266,169

	36,398,197			21,675,726			2,552,945			3,303,155			9,697,171			12,012,143			8,180,673			16,172,753


	(2,696	)		(29,705	)		(119,707	)		(299,881	)		(167,519	)		(307,837	)		(97,925	)		(133,729	)
	—			—			—			—			(123,200	)		(57,869	)		—			—

	—			(6,877	)		—			—			(99,958	)		(206,626	)		(118,960	)		(210,685	)
	—			—			—			—			(103,252	)		(52,140	)		—			—

	—			(7	)		—			—			(9,387	)		(35,115	)		(4,665	)		(10,428	)
	—			—			—			—			(8,796	)		(11,170	)		—			—

	(512,851	)		(1,373,843	)		(2,893,610	)		(6,607,223	)		(7,957,936	)		(15,144,049	)		(5,422,413	)		(8,686,640	)
	—			—			—			—			(5,651,229	)		(2,797,661	)		—			—

	(515,547	)		(1,410,432	)		(3,013,317	)		(6,907,104	)		(14,121,277	)		(18,612,467	)		(5,643,963	)		(9,041,482	)


	11,551,387			44,419,662			6,518,245			26,119,601			89,289,546			118,639,193			35,139,454			69,482,655

	47,434,037			64,684,956			6,057,873			22,515,652			84,865,440			112,038,869			37,676,164			76,613,926

	191,489,904			126,804,948			209,598,742			187,083,090			466,016,814			353,977,945			225,948,035			149,334,109

$	238,923,941		$	191,489,904		$	215,656,615		$	209,598,742		$	550,882,254		$	466,016,814		$	263,624,199		$	225,948,035

$	306,496		$	235,107		$	(900,540	)	$	(55,347	)	$	(705,148	)	$	(72,568	)	$	(469,679	)	$	77,466

See accompanying notes to the financial statements.

BB&T Funds

Statements of Changes in Net Assets, continued


	Small Company Growth Fund						Special Opportunities Equity Fund
	For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Period June 2, 2003 Through September 30, 2003(a)
	(Unaudited)						(Unaudited)
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	739,437		$	662,373		$	7,225,714		$	5,380,995
Dividends reinvested		—			—			54,594			—
Cost of shares redeemed		(1,053,174	)		(862,321	)		(472,917	)		(9,520	)

Change in net assets from Class A Share transactions		(313,737	)		(199,948	)		6,807,391			5,371,475
Class B Shares:
Proceeds from shares issued		321,895			534,878			3,246,424			4,289,785
Dividends reinvested		—			—			36,319			—
Cost of shares redeemed		(861,663	)		(1,050,295	)		(22,922	)		(12,863	)

Change in net assets from Class B Share transactions		(539,768	)		(515,417	)		3,259,821			4,276,922
Class C Shares:
Proceeds from shares issued		6,723			17,045			3,858,015			3,996,847
Dividends reinvested		—			—			40,343			—
Cost of shares redeemed		(26,442	)		(6,173	)		(73,181	)		—

Change in net assets from Class C Share transactions		(19,719	)		10,872			3,825,177			3,996,847
Institutional Shares:
Proceeds from shares issued		22,938,930			57,253,384			548,785			25,022,400
Proceeds from shares issued in conversion					—			—			—
Dividends reinvested		—			—			197,041			1,758
Cost of shares redeemed		(70,470,707	)		(44,813,100	)		(14,728	)		—

Change in net assets from Institutional Share transactions		(47,531,777	)		12,440,284			731,098			25,024,158

Change in net assets from capital transactions	$	(48,405,001	)	$	11,735,791		$	14,623,487		$	38,669,402

Share Transactions:
Class A Shares:
Issued		57,938			63,814			614,419			519,441
Reinvested		—			—			4,756			—
Redeemed		(84,115	)		(89,691	)		(39,492	)		(900	)

Change in Class A Shares		(26,177	)		(25,877	)		579,683			518,541
Class B Shares:
Issued		27,332			57,045			277,079			416,587
Reinvested		—			—			3,178			—
Redeemed		(74,038	)		(116,464	)		(1,879	)		(1,229	)

Change in Class B Shares		(46,706	)		(59,419	)		278,378			415,358
Class C Shares:
Issued		579			1,865			332,796			385,871
Reinvested		—			—			3,526			—
Redeemed		(2,204	)		(728	)		(6,259	)		—

Change in Class C Shares		(1,625	)		1,137			330,063			385,871
Institutional Shares:
Issued		1,770,778			5,603,935			48,385			2,502,086
Issued in conversion		—			—			—			—
Reinvested		—			—			17,149			176
Redeemed		(5,275,292	)		(4,377,960	)		(1,198	)		—

Change in Institutional Shares		(3,504,514	)		1,225,975			64,336			2,502,262

Change in Shares		(3,579,022	)		1,141,816			1,252,460			3,822,032

(a)	Period from commencement of operations.

(b)	Formerly known as Short U.S. Government Income Fund.

(c)	Formerly known as Intermediate U.S. Government Bond Fund.

See accompanying notes to the financial statements.


International Equity Fund						Short U.S. Government Fund(a)						Intermediate U.S. Government Fund(b)						Intermediate Corporate Bond Fund
For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003
(Unaudited)						(Unaudited)						(Unaudited)						(Unaudited)


$	3,242,252		$	165,798,828		$	566,991		$	59,681,049		$	3,669,391		$	16,712,428		$	1,135,460		$	2,787,383
	—			18,801			97,521			211,564			261,918			317,747			65,982			106,388
	(4,058,940	)		(167,259,736	)		(1,617,974	)		(55,372,833	)		(2,216,593	)		(13,726,227	)		(642,350	)		(707,688	)

	(816,688	)		(1,262,107	)		(953,462	)		4,519,780			1,714,716			3,303,948			559,092			2,186,083

	106,124			109,250			—			—			966,116			3,208,464			892,595			2,427,474
	—			6,849			—			—			189,444			238,909			104,975			181,234
	(262,965	)		(314,613	)		—			—			(1,040,155	)		(1,423,013	)		(726,081	)		(910,901	)

	(156,841	)		(198,514	)		—			—			115,405			2,024,360			271,489			1,697,807

	—			99,793			—			—			180,400			509,821			35,076			114,696
	—			10			—			—			15,597			46,524			3,937			10,179
	(1,722	)		(104,516	)		—			—			(237,467	)		(1,014,518	)		(74,842	)		(166,830	)

	(1,722	)		(4,713	)		—			—			(41,470	)		(458,173	)		(35,829	)		(41,955	)

	38,504,464			368,472,114			27,764,137			131,967,870			59,960,178			257,450,874			46,286,596			96,149,703
	—			—			—			—			62,847,783			23,999,684			—			—
	113,748			545,409			699,415			1,777,466			6,855,860			8,948,523			1,779,253			3,003,207
	(26,091,574	)		(323,132,527	)		(20,991,845	)		(112,145,515	)		(42,162,926	)		(176,630,023	)		(13,721,147	)		(33,512,190	)

	12,526,638			45,884,996			7,471,707			21,599,821			87,500,895			113,769,058			34,344,702			65,640,720

$	11,551,387		$	44,419,662		$	6,518,245		$	26,119,601		$	89,289,546		$	118,639,193		$	35,139,454		$	69,482,655



	450,071			26,150,880			57,571			5,967,951			351,304			1,583,843			106,249			261,906
	—			2,879			9,909			21,161			25,253			29,992			6,198			10,151
	(557,931	)		(26,063,526	)		(164,282	)		(5,540,847	)		(212,697	)		(1,300,703	)		(60,382	)		(67,810	)

	(107,860	)		90,233			(96,802	)		448,265			163,860			313,132			52,065			204,247

	13,952			17,868			—			—			92,987			302,737			83,558			230,859
	—			1,096			—			—			18,355			22,621			9,849			17,281
	(35,476	)		(51,685	)		—			—			(100,132	)		(135,434	)		(67,948	)		(87,069	)

	(21,524	)		(32,721	)		—			—			11,210			189,924			25,459			161,071

	—			17,711			—						17,380			48,248			3,274			10,743
	—			2			—			—			1,510			4,399			370			972
	(221	)		(18,555	)		—			—			(22,792	)		(95,592	)		(7,030	)		(16,207	)

	(221	)		(842	)		—			—			(3,902	)		(42,945	)		(3,386	)		(4,492	)

	4,823,278			57,732,721			2,815,706			13,219,464			5,736,780			24,290,586			4,331,992			9,169,728
	—			—			—			—			5,988,154			2,273,958			—			—
	16,296			82,339			70,971			177,557			660,686			843,184			167,049			286,130
	(3,311,770	)		(50,196,708	)		(2,129,889	)		(11,218,314	)		(4,043,903	)		(16,660,182	)		(1,284,088	)		(3,194,346	)

	1,527,804			7,618,352			756,788			2,178,707			8,341,717			10,747,546			3,214,953			6,261,512

	1,398,199			7,675,022			659,986			2,626,972			8,512,885			11,207,657			3,289,091			6,622,338

See accompanying notes to the financial statements.

BB&T Funds

Statements of Changes in Net Assets


	Kentucky Intermediate Tax-Free Fund						Maryland Intermediate Tax-Free Fund
	For the Six Months Ended March 31, 2004			For the Period February 24, 2003 through September 30, 2003(a)			For the Six Months Ended March 31, 2004			For the Period February 24, 2003 through September 30, 2003(a)
	(Unaudited)						(Unaudited)
From Investment Activities:
Operations:
Net investment income (loss)	$	238,678		$	182,917		$	82,015		$	58,786
Net realized gains (losses) from investment transactions		18,565			(52,491	)		6,296			(18,344	)
Change in unrealized appreciation/depreciation of investments		85,448			27,863			42,195			74,784

Change in net assets from operations		342,691			158,289			130,506			115,226

Dividends to Class A Shareholders:
Net investment income		(30,828	)		(12,300	)		(6,763	)		(4,066	)
Net realized gains from investment transactions		—			—			—			—
Dividends to Institutional Class Shareholders:
Net investment income		(207,609	)		(168,861	)		(75,293	)		(54,476	)
Net realized gains from investment transactions		—			—			—			—

Change in net assets from shareholder dividends		(238,437	)		(181,161	)		(82,056	)		(58,542	)

Capital Transactions:
Change in net assets from capital transactions		570,005			16,659,674			2,811,010			5,322,457

Change in net assets		674,259			16,636,802			2,859,460			5,379,141
Net Assets:
Beginning of period		16,636,802			—			5,379,141			—

End of period	$	17,311,061		$	16,636,802		$	8,238,601		$	5,379,141

Undistributed net investment income (loss)	$	2,194		$	1,953		$	414		$	455

(a)	Period from commencement of operations.

See accompanying notes to the financial statements.


North Carolina Intermediate Tax-Free Fund						South Carolina Intermediate Tax-Free Fund						Virginia Intermediate Tax-Free Fund						West Virginia Intermediate Tax-Free Fund
For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003
(Unaudited)						(Unaudited)						(Unaudited)						(Unaudited)


$	1,993,923		$	3,871,182		$	375,800		$	757,071		$	1,379,590		$	2,735,659		$	1,414,695		$	3,020,066
	1,186,169			435,136			194,869			97,299			668,092			614,561			454,786			418,773
	(1,109,135	)		(673,661	)		(105,113	)		(64,254	)		(700,502	)		(596,321	)		(386,209	)		(225,664	)

	2,070,957			3,632,657			465,556			790,116			1,347,180			2,753,899			1,483,272			3,213,175


	(395,044	)		(800,765	)		(74,685	)		(140,645	)		(123,434	)		(172,729	)		(181,245	)		(337,731	)
	(91,123	)		(86,776	)		(6,420	)		—			(50,046	)		(11,117	)		(47,292	)		(161,014	)

	(1,593,268	)		(3,058,242	)		(300,931	)		(616,122	)		(1,254,790	)		(2,561,530	)		(1,231,470	)		(2,677,779	)
	(344,009	)		(325,838	)		(24,355	)		—			(498,539	)		(246,961	)		(291,906	)		(1,216,422	)

	(2,423,444	)		(4,271,621	)		(406,391	)		(756,767	)		(1,926,809	)		(2,992,337	)		(1,751,913	)		(4,392,946	)


	6,137,429			3,890,400			(283,347	)		856,780			257,280			538,914			(10,096,419	)		3,882,054

	5,784,942			3,251,436			(224,182	)		890,129			(322,349	)		300,476			(10,365,060	)		2,702,283

	120,936,050			117,684,614			22,977,456			22,087,327			85,024,545			84,724,069			90,901,511			88,199,228

$	126,720,992		$	120,936,050		$	22,753,274		$	22,977,456		$	84,702,196		$	85,024,545		$	80,536,451		$	90,901,511

$	55,071		$	49,460		$	14,272		$	14,088		$	36,150		$	34,784		$	(12,641	)	$	(14,621	)

See accompanying notes to the financial statements.

BB&T Funds

Statements of Changes in Net Assets, continued


	Kentucky Intermediate Tax-Free Fund						Maryland Intermediate Tax-Free Fund
	For the Six Months Ended March 31, 2004			For the Period February 24, 2003 through September 30, 2003(a)			For the Six Months Ended March 31, 2004			For the Period February 24, 2003 through September 30, 2003(a)
	(Unaudited)						(Unaudited)
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	1,214,404		$	2,093,145		$	148,280		$	569,512
Dividends reinvested		22,652			5,351			4,862			2,620
Cost of shares redeemed		(614,941	)		(231,028	)		(25,522	)		(89,868	)

Change in net assets from Class A Share transactions		622,115			1,867,468			127,620			482,264
Institutional Shares:
Proceeds from shares issued		2,663,601			10,042,199			3,351,370			5,218,530
Proceeds from shares issued in conversion		—			7,798,122			—			—
Dividends reinvested		—			236			666			50
Cost of shares redeemed		(2,715,711	)		(3,048,351	)		(668,646	)		(378,387	)

Change in net assets from Institutional Share transactions		(52,110	)		14,792,206			2,683,390			4,840,193

Change in net assets from capital transactions	$	570,005		$	16,659,674		$	2,811,010		$	5,322,457

Share Transactions:
Class A Shares:
Issued		118,399			205,729			14,588			56,126
Reinvested		2,211			532			478			262
Redeemed		(59,621	)		(22,788	)		(2,473	)		(8,911	)

Change in Class A Shares		60,989			183,473			12,593			47,477
Institutional Shares:
Issued		259,679			993,183			328,684			519,861
Issued in conversion		—			752,950			—			—
Reinvested		—			23			65			5
Redeemed		(265,902	)		(301,946	)		(65,725	)		(37,955	)

Change in Institutional Shares		(6,223	)		1,444,210			263,024			481,911

Change in Shares		54,766			1,627,683			275,617			529,388

(a)	Period from commencement of operations.

See accompanying notes to the financial statements.


North Carolina Intermediate Tax-Free Fund						South Carolina Intermediate Tax-Free Fund						Virginia Intermediate Tax-Free Fund						West Virginia Intermediate Tax-Free Fund
For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003
(Unaudited)						(Unaudited)						(Unaudited)						(Unaudited)


$	1,755,965		$	6,272,803			510,770		$	1,516,905		$	1,880,930		$	4,989,491		$	540,526		$	3,872,714
	382,789			683,843			68,187			123,418			114,815			112,394			154,341			325,192
	(1,637,725	)		(5,332,328	)		(518,953	)		(1,091,369	)		(706,319	)		(707,752	)		(848,390	)		(2,550,651	)

	501,029			1,624,318			60,004			548,954			1,289,426			4,394,133			(153,523	)		1,647,255

	16,254,890			16,979,329			404,182			4,039,879			8,777,081			8,978,249			3,995,035			10,321,787
	—			—			—			—			—			—			—			—
	1,796			3,054			29			11			16,542			2,015			4,687			6,057
	(10,620,286	)		(14,716,301	)		(747,562	)		(3,732,064	)		(9,825,769	)		(12,835,483	)		(13,942,618	)		(8,093,045	)

	5,636,400			2,266,082			(343,351	)		307,826			(1,032,146	)		(3,855,219	)		(9,942,896	)		2,234,799

$	6,137,429		$	3,890,400		$	(283,347	)	$	856,780		$	257,280		$	538,914		$	(10,096,419	)	$	3,882,054



	162,613			583,343			46,822			140,424			157,787			418,968			52,951			379,623
	35,602			63,724			6,279			11,435			9,683			9,474			15,202			32,181
	(152,727	)		(498,545	)		(47,422	)		(101,195	)		(59,250	)		(59,265	)		(83,482	)		(249,953	)

	45,488			148,522			5,679			50,664			108,220			369,177			(15,329	)		161,851

	1,508,243			1,577,188			37,521			379,329			738,124			759,063			392,742			1,018,365
	—			—			—			—			—			—			—			—
	167			285			3			1			1,398			172			457			599
	(986,114	)		(1,375,261	)		(68,929	)		(348,700	)		(828,472	)		(1,081,350	)		(1,374,474	)		(797,898	)

	522,296			202,212			(31,405	)		30,630			(88,950	)		(322,115	)		(981,275	)		221,066

	567,784			350,734			(25,726	)		81,294			19,270			47,062			(996,604	)		382,917

See accompanying notes to the financial statements.

BB&T Funds

Statements of Changes in Net Assets

(Unaudited)


	Prime Money Market Fund						U.S. Treasury Money Market Fund
	For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003
	(Unaudited)						(Unaudited)
From Investment Activities:
Operations:
Net investment income (loss)	$	2,539,419		$	6,915,376		$	2,289,545		$	6,615,706
Net realized gains (losses) from investment transactions		—			—			—			—
Net realized distributions from underlying funds		—			—			—			—
Change in unrealized appreciation/depreciation of investments		—			—			—			—

Change in net assets from operations		2,539,419			6,915,376			2,289,545			6,615,706

Dividends to Class A Shareholders:
Net investment income		(676,452	)		(2,074,611	)		(124,869	)		(506,047	)
Net realized gains from investment transactions		—			—			—			—
Dividends to Class B Shareholders:
Net investment income		(606	)		(4,355	)		(237	)		(1,907	)
Net realized gains from investment transactions		—			—			—			—
Dividends to Class C Shareholders:
Net investment income		(130	)		(621	)		(1	)		(18	)
Net realized gains from investment transactions		—			—			—			—
Dividends to Institutional Class Shareholders:
Net investment income		(1,862,231	)		(4,835,789	)		(2,164,438	)		(6,107,734	)
Net realized gains from investment transactions		—			—			—			—

Change in net assets from shareholder dividends		(2,539,419	)		(6,915,376	)		(2,289,545	)		(6,615,706	)

Capital Transactions:
Change in net assets from capital transactions		(96,584,803	)		177,715,936			220,828,446			(139,758,717	)

Change in net assets		(96,584,803	)		177,715,936			220,828,446			(139,758,717	)
Net Assets:
Beginning of period		1,130,007,373			952,291,437			974,215,537			1,113,974,254

End of period	$	1,033,422,570		$	1,130,007,373		$	1,195,043,983		$	974,215,537

Undistributed net investment income (loss)	$	6,002		$	6,002		$	246		$	246

(a)	Formerly known as Capital Manager Aggressive Growth Fund.

See accompanying notes to the financial statements.


Capital Manager Conservative Growth fund						Capital Manager Moderate Growth Fund						Capital Manager Growth Fund						Capital Manager Equity Fund(a)
For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003
(Unaudited)						(Unaudited)						(Unaudited)						(Unaudited)


$	662,838		$	660,544		$	237,393		$	398,785		$	86,333		$	166,302		$	16,034		$	28,080
	(429,780	)		(2,763,861	)		(1	)		(1,662,195	)		(29,891	)		(1,880,674	)		(73,307	)		(113,013	)
	243,148			39,836			93,661			24,499			31,778			9,222			—			—
	4,405,819			5,055,638			4,610,789			5,254,630			4,467,679			5,642,636			2,945,399			2,472,894

	4,882,025			2,992,157			4,941,842			4,015,719			4,555,899			3,937,486			2,888,126			2,387,961


	(29,809	)		(36,478	)		(63,477	)		(64,755	)		(13,508	)		(18,379	)		(165	)		(741	)
	—			(6,453	)		—			(5,016	)		—			—			—			(4,879	)

	(19,745	)		(27,914	)		(14,290	)		(84,827	)		—			(5,747	)		—			—
	—			(8,408	)		—			(5,198	)		—			—			—			(8,971	)

	(849	)		(1,295	)		(189	)		(1,659	)		—			(45	)		—			—
	—			(297	)		—			(359	)		—			—			—			(5	)

	(610,426	)		(594,858	)		(155,789	)		(247,545	)		(67,738	)		(142,132	)		(15,869	)		(27,340	)
	—			(124,086	)		—			(22,201	)		—			—			—			(79,280	)

	(660,829	)		(799,789	)		(233,745	)		(431,560	)		(81,246	)		(166,303	)		(16,034	)		(121,216	)


	34,908,587			6,142,386			19,260,758			10,886,904			8,612,317			5,161,203			3,545,135			4,237,424

	39,129,783			8,334,754			23,968,855			14,471,063			13,086,970			(8,932,386	)		6,417,227			6,504,169

	37,624,685			29,289,931			43,332,812			28,861,749			35,337,037			26,404,651			19,804,126			13,299,957

$	76,754,468		$	37,624,685		$	67,301,667		$	43,332,812		$	48,424,007		$	35,337,037		$	26,221,353		$	19,804,126

$	—		$	(2,009	)	$	—		$	(3,648	)	$	—		$	(5,087	)	$	(1	)	$	(1	)

See accompanying notes to the financial statements.

BB&T Funds

Statements of Changes in Net Assets, continued


	Prime Money Market Fund						U.S. Treasury Money Market Fund
	For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003
	(Unaudited)						(Unaudited)
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	263,764,581		$	589,581,110		$	74,704,730		$	148,259,819
Dividends reinvested		669,238			2,291,903			117,752			605,871
Cost of shares redeemed		(273,704,100	)		(549,280,266	)		(76,311,113	)		(211,636,359	)

Change in net assets from Class A Share transactions		(9,270,281	)		42,592,747			(1,488,631	)		(62,770,669	)
Class B Shares:
Proceeds from shares issued		615,623			1,452,053			165,864			692,662
Dividends reinvested		616			5,074			235			1,949
Cost of shares redeemed		(775,854	)		(1,644,033	)		(411,177	)		(689,166	)

Change in net assets from Class B Share transactions		(159,615	)		(186,906	)		(245,078	)		5,445
Class C Shares:
Proceeds from shares issued		123,887			513,778			—			6,483
Dividends reinvested		128			685			1			19
Cost of shares redeemed		(150,196	)		(273,476	)		—			(8,485	)

Change in net assets from Class C Share transactions		(26,181	)		240,987			1			(1,983	)
Institutional Shares:
Proceeds from shares issued		584,161,186			1,190,383,065			800,582,636			1,471,766,366
Dividends reinvested		135,498			272,801			339,607			1,027,743
Cost of shares redeemed		(671,425,410	)		(1,055,586,758	)		(578,360,089	)		(1,549,785,619	)

Change in net assets from Institutional Share transactions		(87,128,726	)		135,069,108			222,562,154			(76,991,510	)

Change in net assets from capital transactions	$	(96,584,803	)	$	177,715,936		$	220,828,446		$	(139,758,717	)

Share Transactions:
Class A Shares:
Issued		263,764,581			589,581,110			74,704,730			148,259,994
Reinvested		669,238			2,291,903			117,752			605,871
Redeemed		(273,704,100	)		(549,280,266	)		(76,311,113	)		(211,636,359	)

Change in Class A Shares		(9,270,281	)		42,592,747			(1,488,631	)		(62,770,494	)
Class B Shares:
Issued		615,623			1,452,053			165,864			692,662
Reinvested		616			5,074			235			1,949
Redeemed		(775,854	)		(1,644,033	)		(411,177	)		(689,166	)

Change in Class B Shares		(159,615	)		(186,906	)		(245,078	)		5,445
Class C Shares:
Issued		123,887			513,778			—			6,483
Reinvested		128			685			1			19
Redeemed		(150,196	)		(273,476	)		—			(8,485	)

Change in Class C Shares		(26,181	)		240,987			1			(1,983	)
Institutional Shares:
Issued		584,161,186			1,190,383,065			800,582,636			1,471,766,366
Reinvested		135,498			272,801			339,607			1,027,743
Redeemed		(671,425,410	)		(1,055,586,733	)		(578,360,089	)		(1,549,785,619	)

Change in Institutional Shares		(87,128,726	)		135,069,133			222,562,154			(76,991,510	)

Change in Shares		(96,584,803	)		177,715,961			220,828,446			(139,758,542	)

(a)	Formerly known as Capital Manager Aggressive Growth Fund.

See accompanying notes to the financial statements.


Capital Manager Conservative Growth Fund						Capital Manager Moderate Growth Fund						Capital Manager Growth Fund						Capital Manager Equity Fund(a)
For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003			For the Six Months Ended March 31, 2004			For the Year Ended September 30, 2003
(Unaudited)						(Unaudited)						(Unaudited)						(Unaudited)


$	1,514,057		$	2,845,223			9,661,787		$	5,526,075		$	5,091,380		$	2,075,569		$	820,671		$	589,031
	23,355			35,236			53,566			54,786			15,202			10,270			728			5,021
	(216,338	)		(1,618,794	)		(926,471	)		(1,190,812	)		(620,579	)		(548,649	)		(209,718	)		(143,655	)

	1,321,074			1,261,665			8,788,882			4,390,049			4,486,003			1,537,190			611,681			450,397

	1,344,478			1,812,680			8,866,330			4,832,465			3,414,963			3,347,863			1,867,396			1,082,357
	18,094			33,109			51,538			51,352			5,683			—			—			8,955
	(313,136	)		(545,717	)		(773,098	)		(967,788	)		(886,452	)		(781,806	)		(157,659	)		(150,991	)

	1,049,436			1,300,072			8,144,770			3,916,029			2,534,194			2,566,057			1,709,737			940,321

	64,557			93,873			99,751			159,853			11,112			40,219			50,150			24,081
	811			1,428			1,019			1,883			45			—			—			5
	(18,242	)		(19,259	)		(5,956	)		(309,259	)		—			(4,866	)		—			—

	47,126			76,042			94,814			(147,523	)		11,157			35,353			50,150			24,086

	34,453,428			5,369,994			3,269,681			3,639,246			2,567,211			2,652,882			2,359,893			3,454,968
	456,852			706,281			143,452			284,608			97,733			105,982			27,322			88,889
	(2,419,329	)		(2,571,668	)		(1,180,841	)		(1,195,505	)		(1,083,981	)		(1,736,261	)		(1,213,648	)		(721,237	)

	32,490,951			3,504,607			2,232,292			2,728,349			1,580,963			1,022,603			1,173,567			2,822,620

$	34,908,587		$	6,142,386		$	19,260,758		$	10,886,904		$	8,612,317		$	5,161,203		$	3,545,135		$	4,237,424



	163,388			331,500			1,093,161			694,668			592,239			279,076			87,358			74,235
	2,577			4,174			6,224			7,123			1,899			1,433			84			658
	(23,233	)		(188,711	)		(104,603	)		(156,364	)		(72,937	)		(76,971	)		(21,656	)		(17,486	)

	142,732			146,963			994,782			545,427			521,201			203,538			65,786			57,407

	145,681			213,090			1,008,344			624,335			406,329			458,927			205,094			137,799
	1,997			3,927			6,259			6,554			738			—			—			1,171
	(34,045	)		(64,023	)		(88,927	)		(127,145	)		(105,538	)		(112,243	)		(17,285	)		(19,669	)

	113,633			152,994			925,676			503,744			301,529			346,684			187,809			119,301

	6,985			11,277			11,177			21,259			1,312			5,608			5,711			3,243
	90			170			124			244			6			—			—			1
	(1,987	)		(2,191	)		(665	)		(40,601	)		—			(728	)		—			—

	5,088			9,256			10,636			(19,098	)		1,318			4,880			5,711			3,244

	3,812,720			618,079			370,516			456,686			302,647			346,915			250,808			433,952
	49,812			83,419			16,611			37,351			12,094			14,887			3,094			11,478
	(260,305	)		(296,854	)		(135,104	)		(149,186	)		(129,162	)		(228,937	)		(131,210	)		(88,233	)

	3,602,227			404,644			252,023			344,851			185,579			132,865			122,692			357,197

	3,863,680			713,857			2,183,117			1,374,924			1,009,627			687,967			381,998			537,149

See accompanying notes to the financial statements.

BB&T Funds

Financial Highlights, Class A Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments		Total from Investment Activities		Net investment income		Net realized gains on investments		Total Dividends
Balanced Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.93	0.09		0.80		0.89		(0.08	)	—		(0.08	)
Year Ended September 30, 2003	$	9.80	0.16		1.14		1.30		(0.17	)	—		(0.17	)
Year Ended September 30, 2002	$	11.28	0.18	(e)	(1.48	)(e)	(1.30	)	(0.18	)	—		(0.18	)
Year Ended September 30, 2001	$	13.15	0.24		(1.32	)	(1.08	)	(0.25	)	(0.54	)	(0.79	)
Year Ended September 30, 2000	$	13.83	0.34		(0.10	)	0.24		(0.34	)	(0.58	)	(0.92	)
Year Ended September 30, 1999	$	13.82	0.35		0.74		1.09		(0.35	)	(0.73	)	(1.08	)
Large Company Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	14.87	0.13		2.18		2.31		(0.12	)	—		(0.12	)
Year Ended September 30, 2003	$	12.84	0.23		2.03		2.26		(0.23	)	—		(0.23	)
Year Ended September 30, 2002	$	16.79	0.18		(3.47	)	(3.29	)	(0.18	)	(0.48	)	(0.66	)
Year Ended September 30, 2001	$	18.57	0.22		(0.89	)	(0.67	)	(0.22	)	(0.89	)	(1.11	)
Year Ended September 30, 2000	$	19.60	0.49		0.56		1.05		(0.49	)	(1.59	)	(2.08	)
Year Ended September 30, 1999	$	18.48	0.25		1.93		2.18		(0.25	)	(0.81	)	(1.06	)
Large Company Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	7.69	(0.01	)	0.89		0.88		—		—		—
Year Ended September 30, 2003	$	6.60	(0.02	)	1.11		1.09		—		—		—
Year Ended September 30, 2002	$	8.16	(0.06	)	(1.50	)	(1.56	)	—		—		—
Year Ended September 30, 2001	$	14.75	(0.05	)	(5.56	)	(5.61	)	—		(0.98	)	(0.98	)
Year Ended September 30, 2000	$	11.96	(0.06	)	3.59		3.53		—		(0.74	)	(0.74	)
Year Ended September 30, 1999	$	9.62	(0.04	)	2.94		2.90		—		(0.56	)	(0.56	)
Mid Cap Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	12.98	0.10		2.28		2.38		(0.10	)	—		(0.10	)
Year Ended September 30, 2003	$	10.93	0.16	(c)	2.04		2.20		(0.15	)	—		(0.15	)
Year Ended September 30, 2002	$	13.12	0.17	(c)	(1.04	)	(0.87	)	(0.17	)	(1.15	)	(1.32	)
February 1, 2001 to September 30, 2001(a)	$	14.26	0.15		(1.15	)	(1.00	)	(0.14	)	—		(0.14	)
Year Ended January 31, 2001	$	14.10	0.22		0.94		1.16		(0.21	)	(0.79	)	(1.00	)
Year Ended January 31, 2000	$	13.44	0.24		0.89		1.13		(0.19	)	(0.28	)	(0.47	)
Year Ended January 31, 1999	$	12.62	0.22		1.54		1.76		(0.24	)	(0.70	)	(0.94	)
Mid Cap Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	9.84	(0.04	)	1.39		1.35		—		—		—
Year Ended September 30, 2003	$	8.07	(0.09	)	1.86		1.77		—		—		—
Year Ended September 30, 2002	$	9.80	(0.08	)(c)	(1.02	)	(1.10	)	—		(0.63	)	(0.63	)
February 1, 2001 to September 30, 2001(a)	$	14.42	(0.07	)	(4.55	)	(4.62	)	—		—		—
Year Ended January 31, 2001	$	20.36	(0.13	)	(1.99	)	(2.12	)	—		(3.82	)	(3.82	)
Year Ended January 31, 2000	$	17.61	(0.17	)	5.01		4.84		—		(2.09	)	(2.09	)
Year Ended January 31, 1999	$	13.89	(0.01	)	5.39		5.38		—		(1.66	)	(1.66	)
Small Company Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	11.44	(0.01	)	2.19		2.18		—		(0.12	)	(0.12	)
May 19, 2003 to September 30, 2003(b)	$	10.00	0.01	(c)	1.43		1.44		—	(d)	—		—	(d)
Small Company Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	11.50	(0.08	)	1.30		1.22		—		—		—
Year Ended September 30, 2003	$	9.38	(0.14	)	2.26		2.12		—		—		—
Year Ended September 30, 2002	$	12.13	(0.17	)(c)	(2.58	)	(2.75	)	—		—		—
Year Ended September 30, 2001	$	34.87	(0.20	)	(16.20	)	(16.40	)	—		(6.34	)	(6.34	)
Year Ended September 30, 2000	$	24.92	(0.25	)	13.20		12.95		—		(3.00	)	(3.00	)
Year Ended September 30, 1999	$	17.50	(0.28	)	7.70		7.42		—		—		—
Special Opportunities Equity Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.53	(0.04	)	2.19		2.15		—		(0.08	)	(0.08	)
June 2, 2003 to September 30, 2003(b)	$	10.00	(0.01	)	0.54		0.53		—		—		—

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)

For the period from February 1, 2001 to September 30, 2001. Upon reorganizing as Funds of the BB&T Funds, the Mid Cap Value Fund and Mid Cap Growth Fund changed their fiscal year end from January 31 to September 30, 2001. The Financial Highlights for the periods prior to February 1, 2001 represent the OVB Equity Income Portfolio and OVB Capital Appreciation Portfolio, respectively.

(b)	Period from commencement of operations.

(c)	Per share net investment income (loss) has been calculated using the average daily shares method.

(d)	Amount is less than $0.005.

(e)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and net investment income ratio would have been: $0.19, $(1.49), and 1.73%, respectively.

(f)	Not annualized for periods less than one year.

(g)	Annualized for periods less than one year.

See accompanying notes to the financial statements.


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(f)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(g)		Ratio of net investment income (loss) to average net assets(g)		Ratio of expenses to average net assets*(g)		Portfolio turnover**

$	11.74	8.20	%	$	1,603	0.96	%	1.62	%	1.65	%	57.92	%
$	10.93	13.40	%	$	13,827	1.22	%	1.52	%	1.61	%	84.27	%
$	9.80	(11.68	)%	$	13,954	1.28	%	1.66	%(e)	1.67	%	64.29	%
$	11.28	(8.72	)%	$	13,688	1.30	%	2.03	%	1.69	%	116.03	%
$	13.15	1.74	%	$	17,726	1.22	%	2.54	%	1.65	%	57.95	%
$	13.83	7.72	%	$	21,207	1.15	%	2.43	%	1.64	%	35.98	%

$	17.06	15.50	%	$	28,120	1.18	%	1.37	%	1.56	%	8.44	%
$	14.87	17.73	%	$	25,397	1.17	%	1.67	%	1.55	%	18.89	%
$	12.84	(20.57	)%	$	22,222	1.23	%	1.11	%	1.62	%	23.02	%
$	16.79	(3.77	)%	$	29,942	1.24	%	1.23	%	1.63	%	24.20	%
$	18.57	5.69	%	$	33,004	1.17	%	2.62	%	1.60	%	23.85	%
$	19.60	11.64	%	$	38,604	1.10	%	1.22	%	1.59	%	13.52	%

$	8.57	11.44	%	$	8,459	1.21	%	(0.36	)%	1.58	%	65.12	%
$	7.69	16.52	%	$	7,042	1.18	%	(0.35	)%	1.57	%	91.73	%
$	6.60	(19.12	)%	$	6,240	1.28	%	(0.57	)%	1.67	%	100.46	%
$	8.16	(40.36	)%	$	8,146	1.30	%	(0.48	)%	1.69	%	96.41	%
$	14.75	30.08	%	$	13,156	1.24	%	(0.43	)%	1.66	%	76.76	%
$	11.96	30.93	%	$	5,912	1.22	%	(0.34	)%	1.71	%	67.59	%

$	15.26	18.40	%	$	8,582	1.22	%	1.39	%	1.34	%	4.12	%
$	12.98	20.31	%	$	6,841	1.20	%	1.33	%	1.35	%	18.28	%
$	10.93	(8.24	)%	$	5,070	1.15	%	1.29	%	1.38	%	18.20	%
$	13.12	(7.09	)%	$	4,554	1.20	%	1.45	%	1.37	%	27.04	%
$	14.26	8.76	%	$	5,691	1.21	%	1.54	%	1.36	%	59.00	%
$	14.10	8.23	%	$	5,965	1.21	%	1.39	%	1.32	%	15.00	%
$	13.44	14.43	%	$	6,206	1.21	%	1.72	%	1.34	%	47.00	%

$	11.19	13.72	%	$	7,987	1.23	%	(0.99	)%	1.36	%	59.55	%
$	9.84	21.93	%	$	6,486	1.19	%	(0.96	)%	1.36	%	125.97	%
$	8.07	(12.54	)%	$	5,533	1.17	%	(0.88	)%	1.44	%	117.06	%
$	9.80	(32.04	)%	$	7,386	1.25	%	(0.52	)%	1.47	%	90.11	%
$	14.42	(10.84	)%	$	12,285	1.27	%	(0.37	)%	1.48	%	63.00	%
$	20.36	28.47	%	$	23,668	1.27	%	(0.59	)%	1.55	%	54.00	%
$	17.61	42.34	%	$	17,872	1.27	%	(0.28	)%	1.53	%	74.00	%

$	13.50	19.18	%	$	260	1.61	%	(0.21	)%	1.97	%	5.79	%
$	11.44	14.43	%	$	112	2.04	%	0.35	%	2.29	%	48.84	%

$	12.72	10.61	%	$	6,311	1.58	%	(1.29	)%	1.88	%	93.17	%
$	11.50	22.60	%	$	6,007	1.62	%	(1.20	)%	1.87	%	197.85	%
$	9.38	(22.67	)%	$	5,145	1.73	%	(1.43	)%	1.98	%	292.94	%
$	12.13	(54.95	)%	$	8,333	1.72	%	(0.86	)%	1.97	%	286.49	%
$	34.87	54.34	%	$	28,936	1.66	%	(0.74	)%	1.91	%	206.16	%
$	24.92	42.32	%	$	11,336	1.80	%	(1.23	)%	2.05	%	184.39	%

$	12.60	20.47	%	$	13,836	1.28	%	(0.71	)%	1.86	%	18.38	%
$	10.53	5.30	%	$	5,460	1.06	%	(0.42	)%	2.02	%	13.24	%

See accompanying notes to the financial statements.

BB&T Funds

Financial Highlights, Class A Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments and foreign currencies		Total from Investment Activities		Net investment income		Net realized gains on investments and foreign currencies		Total Dividends
International Equity Fund
Six Months Ended March 31, 2004 (Unaudited)	$	6.88	—	(d)	1.30		1.30		(0.01	)	—		(0.01	)
Year Ended September 30, 2003	$	6.31	0.06	(e)	0.54		0.60		(0.03	)	—		(0.03	)
Year Ended September 30, 2002	$	7.43	(0.02	)(e)	(1.10	)	(1.12	)	—		—		—
Year Ended September 30, 2001	$	12.49	(0.05	)	(2.99	)	(3.04	)	—		(2.02	)	(2.02	)
Year Ended September 30, 2000	$	12.48	(0.04	)	0.68		0.64		—		(0.63	)	(0.63	)
Year Ended September 30, 1999	$	9.91	(0.01	)	2.78		2.77		(0.03	)	(0.17	)	(0.20	)
Short U.S. Government Fund(a)
Six Months Ended March 31, 2004 (Unaudited)	$	9.89	0.09		0.02		0.11		(0.13	)	—		(0.13	)
Year Ended September 30, 2003	$	10.08	0.27		(0.11	)	0.16		(0.35	)	—		(0.35	)
Year Ended September 30, 2002	$	10.04	0.43	(f)	0.06	(f)	0.49		(0.45	)	—		(0.45	)
Year Ended September 30, 2001	$	9.63	0.51		0.41		0.92		(0.51	)	—		(0.51	)
Year Ended September 30, 2000	$	9.65	0.50		(0.01	)	0.49		(0.51	)	—		(0.51	)
Year Ended September 30, 1999	$	10.06	0.50		(0.41	)	0.09		(0.50	)	—		(0.50	)
Intermediate U.S. Government Fund(b)
Six Months Ended March 31, 2004 (Unaudited)	$	10.57	0.15		0.05		0.20		(0.17	)	(0.13	)	(0.30	)
Year Ended September 30, 2003	$	10.77	0.35		(0.07	)	0.28		(0.39	)	(0.09	)	(0.48	)
Year Ended September 30, 2002	$	10.38	0.47	(g)	0.42	(g)	0.89		(0.50	)	—		(0.50	)
Year Ended September 30, 2001	$	9.71	0.51		0.68		1.19		(0.52	)	—		(0.52	)
Year Ended September 30, 2000	$	9.70	0.52		0.05		0.57		(0.53	)	(0.03	)	(0.56	)
Year Ended September 30, 1999	$	10.57	0.50		(0.76	)	(0.26	)	(0.50	)	(0.11	)	(0.61	)
Intermediate Corporate Bond Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.72	0.21		0.12		0.33		(0.24	)	—		(0.24	)
Year Ended September 30, 2003	$	10.33	0.47		0.41		0.88		(0.49	)	—		(0.49	)
Year Ended September 30, 2002	$	10.56	0.53	(h)	(0.04	)(h)	0.49		(0.55	)	(0.17	)	(0.72	)
Year Ended September 30, 2001	$	9.98	0.60		0.58		1.18		(0.60	)	—		(0.60	)
December 2, 1999 to September 30, 2000(c)	$	10.00	0.50		(0.02	)	0.48		(0.50	)	—		(0.50	)

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)	Formerly known as Short U.S. Government Income Fund.

(b)	Formerly known as Intermediate U.S. Government Bond Fund.

(c)	Period from commencement of operations.

(d)	Amount is less than $0.005.

(e)	Per share net investment income (loss) has been calculated using the average daily shares method.

(f)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.47, $0.02, and 4.38%, respectively.

(g)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.49, $0.40, and 4.74%, respectively.

(h)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.54, $(0.05), and 5.23%, respectively.

(i)	Not annualized for periods less than one year.

(j)	Annualized for periods less than one year.

See accompanying notes to the financial statements.


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(i)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(j)		Ratio of net investment income (loss) to average net assets(j)		Ratio of expenses to average net assets*(j)		Portfolio turnover **

$	8.17	18.94	%	$	1,684	1.63	%	0.12	%	1.94	%	22.33	%
$	6.88	9.58	%	$	2,162	1.63	%	0.95	%	1.90	%	199.78	%
$	6.31	(15.07	)%	$	1,412	1.68	%	(0.24	)%	1.93	%	95.86	%
$	7.43	(28.52	)%	$	2,557	1.74	%	(0.33	)%	1.99	%	144.35	%
$	12.49	4.75	%	$	2,681	1.76	%	(0.26	)%	2.01	%	179.44	%
$	12.48	28.33	%	$	1,906	1.81	%	(0.07	)%	2.06	%	82.00	%

$	9.87	1.14	%	$	8,642	0.99	%	1.85	%	1.40	%	24.20	%
$	9.89	1.56	%	$	9,619	1.00	%	2.48	%	1.40	%	93.86	%
$	10.08	5.03	%	$	5,286	1.03	%	4.03	%(f)	1.43	%	73.93	%
$	10.04	9.73	%	$	3,530	1.03	%	5.12	%	1.43	%	101.28	%
$	9.63	5.24	%	$	3,270	1.01	%	5.27	%	1.41	%	101.07	%
$	9.65	0.95	%	$	4,626	1.02	%	5.04	%	1.42	%	99.99	%

$	10.47	1.92	%	$	11,272	1.06	%	2.91	%	1.41	%	57.94	%
$	10.57	2.62	%	$	9,646	1.07	%	3.13	%	1.42	%	209.07	%
$	10.77	8.85	%	$	6,453	1.10	%	4.56	%(g)	1.45	%	79.36	%
$	10.38	12.53	%	$	4,450	1.11	%	5.12	%	1.46	%	84.76	%
$	9.71	6.09	%	$	2,579	1.08	%	5.46	%	1.43	%	103.41	%
$	9.70	(2.49	)%	$	3,308	1.08	%	5.00	%	1.43	%	73.46	%

$	10.81	3.11	%	$	4,910	1.07	%	3.97	%	1.43	%	20.29	%
$	10.72	8.69	%	$	4,308	1.08	%	4.34	%	1.44	%	43.98	%
$	10.33	4.98	%	$	2,042	1.11	%	5.11	%(h)	1.50	%	69.15	%
$	10.56	12.10	%	$	426	1.06	%	5.76	%	1.45	%	142.35	%
$	9.98	4.97	%	$	236	1.03	%	6.06	%	1.59	%	186.79	%

See accompanying notes to the financial statements.

BB&T Funds

Financial Highlights, Class A Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments		Total from Investment Activities		Net investment income		Net realized gains on investments		Total Dividends
Kentucky Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.23	0.13		0.08		0.21		(0.14	)	—		(0.14	)
February 24, 2003 to September 30, 2003(a)	$	10.00	0.15	(c)	0.35		0.50		(0.27	)	—		(0.27	)
Maryland Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.15	0.12		0.07		0.19		(0.12	)	—		(0.12	)
February 24, 2003 to September 30, 2003(a)	$	10.00	0.18		0.15		0.33		(0.18	)	—		(0.18	)
North Carolina Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.81	0.17		0.01		0.18		(0.17	)	(0.04	)	(0.21	)
Year Ended September 30, 2003	$	10.86	0.33		(0.01	)	0.32		(0.33	)	(0.04	)	(0.37	)
Year Ended September 30, 2002	$	10.54	0.36		0.40		0.76		(0.36	)	(0.08	)	(0.44	)
Year Ended September 30, 2001	$	9.97	0.38		0.57		0.95		(0.38	)	—		(0.38	)
Year Ended September 30, 2000	$	9.89	0.40		0.08		0.48		(0.40	)	—		(0.40	)
Year Ended September 30, 1999	$	10.52	0.40		(0.56	)	(0.16	)	(0.40	)	(0.07	)	(0.47	)
South Carolina Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.88	0.17		0.03		0.20		(0.17	)	(0.01	)	(0.18	)
Year Ended September 30, 2003	$	10.87	0.34		0.01		0.35		(0.34	)	—		(0.34	)
Year Ended September 30, 2002	$	10.46	0.37		0.41		0.78		(0.37	)	—		(0.37	)
Year Ended September 30, 2001	$	9.90	0.38		0.56		0.94		(0.38	)	—		(0.38	)
Year Ended September 30, 2000	$	9.80	0.39		0.10		0.49		(0.39	)	—		(0.39	)
Year Ended September 30, 1999	$	10.47	0.38		(0.59	)	(0.21	)	(0.38	)	(0.08	)	(0.46	)
Virginia Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	11.96	0.19		—	(d)	0.19		(0.19	)	(0.08	)	(0.27	)
Year Ended September 30, 2003	$	11.99	0.37		0.01		0.38		(0.37	)	(0.04	)	(0.41	)
Year Ended September 30, 2002	$	11.57	0.41		0.42		0.83		(0.41	)	—		(0.41	)
Year Ended September 30, 2001	$	10.96	0.42		0.61		1.03		(0.42	)	—		(0.42	)
Year Ended September 30, 2000	$	10.86	0.45		0.10		0.55		(0.45	)	—		(0.45	)
May 17, 1999 to September 30, 1999(a)	$	11.24	0.30		(0.38	)	(0.08	)	(0.30	)	—		(0.30	)
West Virginia Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.20	0.15		0.03		0.18		(0.16	)	(0.04	)	(0.20	)
Year Ended September 30, 2003	$	10.35	0.33	(c)	0.01		0.34		(0.33	)	(0.16	)	(0.49	)
Year Ended September 30, 2002	$	10.01	0.43		0.31		0.74		(0.38	)	(0.02	)	(0.40	)
February 1, 2001 to September 30, 2001(b)	$	9.92	0.29		0.09		0.38		(0.29	)	—		(0.29	)
Year Ended January 31, 2001	$	9.18	0.46		0.74		1.20		(0.46	)	—		(0.46	)
Year Ended January 31, 2000	$	10.26	0.44		(0.98	)	(0.54	)	(0.49	)	(0.05	)	(0.54	)
Year Ended January 31, 1999	$	10.32	0.47		0.05		0.52		(0.47	)	(0.11	)	(0.58	)

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)	Period from commencement of operations.

(b)

For the period from February 1, 2001 to September 30, 2001. Upon reorganizing as a Fund of the BB&T Funds, the West Virginina Intermediate Tax-Free Fund changed its fiscal year end from January 31 to September 30, 2001. The Financial Highlights for the periods prior to February 1, 2001 represent the OVB West Virginia Tax-Exempt Income Portfolio.

(c)	Per share net investment income (loss) has been calculated using the average daily shares method.

(d)	Not annualized for periods less than one year.

(e)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

100


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(d)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(e)		Ratio of net investment income (loss) to average net assets(e)		Ratio of expenses to average *net assets(e)**		Portfolio turnover**

$	10.30	2.06	%	$	2,518	0.66	%	2.73	%	1.58	%	8.44	%
$	10.23	5.09	%	$	1,877	0.62	%	2.50	%	1.65	%	42.87	%

$	10.22	1.90	%	$	614	0.68	%	2.37	%	1.84	%	18.66	%
$	10.15	3.32	%	$	482	0.72	%	2.22	%	2.24	%	40.16	%

$	10.78	1.65	%	$	25,751	0.91	%	3.12	%	1.42	%	23.76	%
$	10.81	3.04	%	$	25,323	0.92	%	3.11	%	1.42	%	44.56	%
$	10.86	7.46	%	$	23,828	0.93	%	3.41	%	1.43	%	20.39	%
$	10.54	9.69	%	$	18,718	0.93	%	3.66	%	1.43	%	47.35	%
$	9.97	5.04	%	$	11,403	0.95	%	4.12	%	1.46	%	80.33	%
$	9.89	(1.53	)%	$	13,677	0.95	%	3.95	%	1.47	%	39.70	%

$	10.90	1.91	%	$	4,753	0.88	%	3.15	%	1.42	%	11.70	%
$	10.88	3.29	%	$	4,680	0.86	%	3.14	%	1.43	%	32.04	%
$	10.87	7.67	%	$	4,128	0.83	%	3.52	%	1.48	%	21.81	%
$	10.46	9.67	%	$	2,143	0.87	%	3.73	%	1.52	%	36.67	%
$	9.90	5.10	%	$	1,251	0.90	%	3.97	%	1.72	%	84.20	%
$	9.80	(2.09	)%	$	1,160	0.97	%	3.72	%	1.91	%	71.96	%

$	11.88	1.60	%	$	8,685	0.91	%	3.17	%	1.41	%	8.35	%
$	11.96	3.24	%	$	7,447	0.92	%	3.14	%	1.42	%	34.17	%
$	11.99	7.36	%	$	3,041	0.96	%	3.45	%	1.46	%	13.12	%
$	11.57	9.58	%	$	714	0.90	%	3.71	%	1.40	%	31.28	%
$	10.96	5.22	%	$	180	0.93	%	4.15	%	1.40	%	64.45	%
$	10.86	(0.66	)%	$	74	1.00	%	4.05	%	1.51	%	27.05	%

$	10.18	1.83	%	$	11,357	1.01	%	3.18	%	1.02	%	4.20	%
$	10.20	3.41	%	$	11,541	0.98	%	3.23	%	1.01	%	25.59	%
$	10.35	7.61	%	$	10,029	0.97	%	3.78	%	1.13	%	61.44	%
$	10.01	3.67	%	$	7,992	0.88	%	4.40	%	1.05	%	15.75	%
$	9.92	13.42	%	$	9,235	0.97	%	4.86	%	1.08	%	7.00	%
$	9.18	(5.39	)%	$	8,790	0.97	%	4.65	%	1.02	%	10.00	%
$	10.26	5.11	%	$	9,477	0.97	%	4.52	%	1.04	%	14.00	%

See accompanying notes to the financial statements.

101

BB&T Funds

Financial Highlights, Class A Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments		Total from Investment Activities		Net investment income		Net realized gains on investments		Total Dividends
Prime Money Market Fund
Six Months Ended March 31, 2004 (Unaudited)	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2003	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2002	$	1.00	0.01		—	(d)	0.01		(0.01	)	—		(0.01	)
Year Ended September 30, 2001	$	1.00	0.04		—		0.04		(0.04	)	—		(0.04	)
Year Ended September 30, 2000	$	1.00	0.05		—		0.05		(0.05	)	—		(0.05	)
Year Ended September 30, 1999	$	1.00	0.04		—		0.04		(0.04	)	—		(0.04	)
U.S. Treasury Money Market Fund
Six Months Ended March 31, 2004 (Unaudited)	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2003	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2002	$	1.00	0.01		—		0.01		(0.01	)	—		(0.01	)
Year Ended September 30, 2001	$	1.00	0.04		—		0.04		(0.04	)	—		(0.04	)
Year Ended September 30, 2000	$	1.00	0.05		—		0.05		(0.05	)	—		(0.05	)
Year Ended September 30, 1999	$	1.00	0.04		—		0.04		(0.04	)	—		(0.04	)
Capital Manager Conservative Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	8.84	0.08		0.59		0.67		(0.08	)	—		(0.08	)
Year Ended September 30, 2003	$	8.29	0.18		0.57		0.75		(0.16	)	(0.04	)	(0.20	)
Year Ended September 30, 2002	$	9.12	0.23		(0.68	)	(0.45	)	(0.20	)	(0.18	)	(0.38	)
Year Ended September 30, 2001	$	10.71	0.28		(0.99	)	(0.71	)	(0.30	)	(0.58	)	(0.88	)
Year Ended September 30, 2000	$	10.39	0.38		0.54		0.92		(0.38	)	(0.22	)	(0.60	)
Year Ended September 30, 1999	$	10.05	0.30		0.52		0.82		(0.31	)	(0.17	)	(0.48	)
Capital Manager Moderate Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	8.28	0.04		0.81		0.85		(0.04	)	—		(0.04	)
Year Ended September 30, 2003	$	7.47	0.08		0.82		0.90		(0.08	)	(0.01	)	(0.09	)
Year Ended September 30, 2002	$	8.82	0.12		(0.99	)	(0.87	)	(0.11	)	(0.37	)	(0.48	)
Year Ended September 30, 2001	$	11.25	0.23		(1.70	)	(1.47	)	(0.24	)	(0.72	)	(0.96	)
Year Ended September 30, 2000	$	10.65	0.31		0.89		1.20		(0.31	)	(0.29	)	(0.60	)
Year Ended September 30, 1999	$	9.85	0.22		1.06		1.28		(0.23	)	(0.25	)	(0.48	)
Capital Manager Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	7.81	0.01		0.95		0.96		(0.01	)	—		(0.01	)
Year Ended September 30, 2003	$	6.87	0.04		0.94		0.98		(0.04	)	—		(0.04	)
Year Ended September 30, 2002	$	8.46	0.03		(1.20	)	(1.17	)	(0.02	)	(0.40	)	(0.42	)
Year Ended September 30, 2001	$	11.66	0.16		(2.43	)	(2.27	)	(0.16	)	(0.77	)	(0.93	)
Year Ended September 30, 2000	$	10.79	0.25		1.24		1.49		(0.26	)	(0.36	)	(0.62	)
Year Ended September 30, 1999	$	9.67	0.15		1.46		1.61		(0.17	)	(0.32	)	(0.49	)
Capital Manager Equity Fund(a)
Six Months Ended March 31, 2004 (Unaudited)	$	8.45	0.01		1.17		1.18		—		—		—
Year Ended September 30, 2003	$	7.36	—	(c)(d)	1.15		1.15		(0.01	)	(0.05	)	(0.06	)
Year Ended September 30, 2002	$	8.96	(0.02	)	(1.58	)	(1.60	)	—		—		—
March 19, 2001 to September 30, 2001(b)	$	10.00	—	(d)	(1.03	)	(1.03	)	(0.01	)	—		(0.01	)

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)	Formerly known as Capital Manager Aggressive Growth Fund.

(b)	Period from commencement of operations.

(c)	Per share net investment income (loss) has been calculated using the average daily shares method.

(d)	Amount is less than $0.005.

(e)	Not annualized for periods less than one year.

(f)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

102


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(e)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(f)		Ratio of net investment income (loss) to average net assets(f)		Ratio of expenses to average net assets*(f)		Portfolio turnover**

$	1.00	0.15	%	$	450,105	0.88	%	0.30	%	1.19	%	—
$	1.00	0.48	%	$	459,375	0.98	%	0.47	%	1.19	%	—
$	1.00	1.21	%	$	416,782	1.05	%	1.20	%	1.23	%	—
$	1.00	4.42	%	$	396,119	1.01	%	4.22	%	1.24	%	—
$	1.00	5.35	%	$	277,219	1.00	%	5.68	%	1.25	%	—
$	1.00	4.42	%	$	5,395	0.80	%	4.34	%	1.39	%	—

$	1.00	0.09	%	$	133,570	0.82	%	0.18	%	1.22	%	—
$	1.00	0.30	%	$	135,059	0.99	%	0.32	%	1.20	%	—
$	1.00	1.01	%	$	197,830	1.05	%	1.01	%	1.24	%	—
$	1.00	4.20	%	$	208,914	1.03	%	4.08	%	1.23	%	—
$	1.00	4.98	%	$	170,380	1.00	%	5.11	%	1.23	%	—
$	1.00	4.08	%	$	42,241	0.84	%	4.00	%	1.23	%	—

$	9.43	7.54	%	$	4,094	0.68	%	1.67	%	1.13	%	1.97	%
$	8.84	9.09	%	$	2,579	0.78	%	1.86	%	1.23	%	33.03	%
$	8.29	(5.18	)%	$	1,198	0.79	%	2.25	%	1.24	%	6.29	%
$	9.12	(7.10	)%	$	555	0.78	%	2.87	%	1.23	%	35.75	%
$	10.71	9.08	%	$	293	0.66	%	3.55	%	1.10	%	38.27	%
$	10.39	8.19	%	$	532	0.62	%	2.95	%	1.07	%	16.45	%

$	9.09	10.23	%	$	17,886	0.73	%	0.88	%	1.18	%	—
$	8.28	12.13	%	$	8,054	0.75	%	1.11	%	1.20	%	21.46	%
$	7.47	(10.76	)%	$	3,194	0.81	%	1.26	%	1.26	%	14.56	%
$	8.82	(14.00	)%	$	2,206	0.78	%	2.14	%	1.23	%	24.24	%
$	11.25	11.35	%	$	1,318	0.74	%	2.67	%	1.19	%	46.69	%
$	10.65	13.07	%	$	1,635	0.68	%	1.93	%	1.13	%	17.33	%

$	8.76	12.34	%	$	9,791	0.76	%	0.46	%	1.18	%	0.21	%
$	7.81	14.22	%	$	4,660	0.80	%	0.59	%	1.25	%	17.80	%
$	6.87	(14.82	)%	$	2,700	0.87	%	0.39	%	1.32	%	8.38	%
$	8.46	(20.86	)%	$	2,511	0.84	%	1.35	%	1.29	%	27.33	%
$	11.66	14.02	%	$	1,606	0.70	%	2.24	%	1.14	%	43.28	%
$	10.79	16.81	%	$	990	0.69	%	1.24	%	1.14	%	17.93	%

$	9.63	13.98	%	$	2,031	0.81	%	0.05	%	1.31	%	3.41	%
$	8.45	15.61	%	$	1,225	0.95	%	0.05	%	1.40	%	8.30	%
$	7.36	(17.86	)%	$	645	0.90	%	(0.15	)%	1.35	%	5.75	%
$	8.96	(10.35	)%	$	185	1.12	%	(0.28	)%	1.57	%	10.10	%

See accompanying notes to the financial statements.

103

BB&T Funds

Financial Highlights, Class B Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends

	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments		Total from Investment Activities		Net investment income		Net realized gains on investments		Total Dividends
Balanced Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.86	0.09		0.79		0.88		(0.08	)	—		(0.08	)
Year Ended September 30, 2003	$	9.73	0.08		1.15		1.23		(0.10	)	—		(0.10	)
Year Ended September 30, 2002	$	11.20	0.09	(c)	(1.46	)(c)	(1.37	)	(0.10	)	—		(0.10	)
Year Ended September 30, 2001	$	13.06	0.18		(1.34	)	(1.16	)	(0.16	)	(0.54	)	(0.70	)
Year Ended September 30, 2000	$	13.75	0.24		(0.11	)	0.13		(0.24	)	(0.58	)	(0.82	)
Year Ended September 30, 1999	$	13.76	0.26		0.71		0.97		(0.25	)	(0.73	)	(0.98	)
Large Company Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	14.75	0.05		2.17		2.22		(0.05	)	—		(0.05	)
Year Ended September 30, 2003	$	12.75	0.12		2.01		2.13		(0.13	)	—		(0.13	)
Year Ended September 30, 2002	$	16.68	0.06		(3.44	)	(3.38	)	(0.07	)	(0.48	)	(0.55	)
Year Ended September 30, 2001	$	18.47	0.09		(0.89	)	(0.80	)	(0.10	)	(0.89	)	(0.99	)
Year Ended September 30, 2000	$	19.51	0.35		0.56		0.91		(0.36	)	(1.59	)	(1.95	)
Year Ended September 30, 1999	$	18.42	0.11		1.90		2.01		(0.11	)	(0.81	)	(0.92	)
Large Company Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	7.36	(0.05	)	0.86		0.81		—		—		—
Year Ended September 30, 2003	$	6.36	(0.08	)(b)	1.08		1.00		—		—		—
Year Ended September 30, 2002	$	7.93	(0.12	)	(1.45	)	(1.57	)	—		—		—
Year Ended September 30, 2001	$	14.47	(0.11	)	(5.45	)	(5.56	)	—		(0.98	)	(0.98	)
Year Ended September 30, 2000	$	11.82	(0.17	)	3.56		3.39		—		(0.74	)	(0.74	)
Year Ended September 30, 1999	$	9.58	(0.12	)	2.92		2.80		—		(0.56	)	(0.56	)
Mid Cap Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	12.91	0.05		2.28		2.33		(0.07	)	—		(0.07	)
Year Ended September 30, 2003	$	10.90	0.07	(b)	2.03		2.10		(0.09	)	—		(0.09	)
Year Ended September 30, 2002	$	13.10	0.08		(1.03	)	(0.95	)	(0.10	)	(1.15	)	(1.25	)
July 25, 2001 to September 30, 2001(a)	$	14.14	0.03		(1.02	)	(0.99	)	(0.05	)	—		(0.05	)
Mid Cap Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	9.68	(0.07	)	1.36		1.29		—		—		—
Year Ended September 30, 2003	$	8.00	(0.13	)	1.81		1.68		—		—		—
Year Ended September 30, 2002	$	9.79	(0.14	)(b)	(1.02	)	(1.16	)	—		(0.63	)	(0.63	)
July 25, 2001 to September 30, 2001(a)	$	11.20	(0.01	)	(1.40	)	(1.41	)	—		—		—
Small Company Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	11.40	(0.06	)	2.18		2.12		—		(0.12	)	(0.12	)
May 19, 2003 to September 30, 2003(a)	$	10.00	(0.04	)(b)	1.44		1.40		—		—		—
Small Company Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.68	(0.12	)	1.21		1.09		—		—		—
Year Ended September 30, 2003	$	8.78	(0.18	)(b)	2.08		1.90		—		—		—
Year Ended September 30, 2002	$	11.43	(0.25	)(b)	(2.40	)	(2.65	)	—		—		—
Year Ended September 30, 2001	$	33.53	(0.31	)	(15.45	)	(15.76	)	—		(6.34	)	(6.34	)
Year Ended September 30, 2000	$	24.21	(0.49	)	12.81		12.32		—		(3.00	)	(3.00	)
Year Ended September 30, 1999	$	17.13	(0.41	)	7.49		7.08		—		—		—
Special Opportunities Equity Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.50	(0.08	)	2.18		2.10		—		(0.08	)	(0.08	)
June 2, 2003 to September 30, 2003(a)	$	10.00	(0.02	)	0.52		0.50		—		—		—

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)	Period from commencement of operations.

(b)	Per share net investment income (loss) has been calculated using the average daily shares method.

(c)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been; $0.10, $(1.47), and 0.97%, respectively.

(d)	Not annualized for periods less than one year.

(e)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

104


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(d)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(e)		Ratio of net investment income (loss) to average net assets(e)		Ratio of expenses to average net assets*(e)		Portfolio turnover**

$	11.66	8.16	%	$	1,139	0.96	%	1.63	%	2.15	%	57.92	%
$	10.86	12.65	%	$	12,735	1.97	%	0.77	%	2.11	%	84.27	%
$	9.73	(12.33	)%	$	12,737	2.04	%	0.90	%(c)	2.18	%	64.29	%
$	11.20	(9.38	)%	$	15,712	2.05	%	1.28	%	2.19	%	116.03	%
$	13.06	0.92	%	$	18,859	1.97	%	1.79	%	2.15	%	57.95	%
$	13.75	6.82	%	$	21,610	1.90	%	1.70	%	2.14	%	35.98	%

$	16.92	15.07	%	$	29,328	1.93	%	0.62	%	2.06	%	8.44	%
$	14.75	16.74	%	$	26,215	1.91	%	0.92	%	2.05	%	18.89	%
$	12.75	(21.14	)%	$	24,849	1.98	%	0.36	%	2.12	%	23.02	%
$	16.68	(4.51	)%	$	33,489	1.99	%	0.48	%	2.13	%	24.20	%
$	18.47	4.88	%	$	36,078	1.92	%	1.90	%	2.10	%	23.85	%
$	19.51	10.73	%	$	38,590	1.84	%	0.47	%	2.08	%	13.52	%

$	8.17	11.01	%	$	15,440	1.96	%	(1.11	)%	2.08	%	65.12	%
$	7.36	15.72	%	$	14,217	1.93	%	(1.10	)%	2.07	%	91.73	%
$	6.36	(19.80	)%	$	13,040	2.03	%	(1.32	)%	2.17	%	100.46	%
$	7.93	(40.82	)%	$	17,089	2.05	%	(1.24	)%	2.19	%	96.41	%
$	14.47	29.22	%	$	27,172	1.99	%	(1.18	)%	2.16	%	76.76	%
$	11.82	29.97	%	$	12,289	1.97	%	(1.08	)%	2.21	%	67.59	%

$	15.17	18.06	%	$	3,188	1.97	%	0.64	%	2.09	%	4.12	%
$	12.91	19.31	%	$	2,071	1.95	%	0.58	%	2.10	%	18.28	%
$	10.90	(8.80	)%	$	1,158	1.91	%	0.63	%	2.12	%	18.20	%
$	13.10	(6.56	)%	$	99	1.87	%	2.22	%	2.21	%	27.04	%

$	10.97	13.33	%	$	1,854	1.98	%	(1.74	)%	2.11	%	59.55	%
$	9.68	21.00	%	$	1,030	1.95	%	(1.73	)%	2.11	%	125.97	%
$	8.00	(13.20	)%	$	507	1.76	%	(1.52	)%	2.07	%	117.06	%
$	9.79	(12.59	)%	$	48	2.11	%	(1.91	)%	2.33	%	90.11	%

$	13.40	18.71	%	$	80	2.36	%	(0.96	)%	2.47	%	5.79	%
$	11.40	14.00	%	$	29	2.69	%	(0.93	)%	2.69	%	48.84	%

$	11.77	10.21	%	$	7,736	2.33	%	(2.04	)%	2.38	%	93.17	%
$	10.68	21.64	%	$	7,520	2.37	%	(1.95	)%	2.37	%	197.85	%
$	8.78	(23.18	)%	$	6,703	2.48	%	(2.18	)%	2.48	%	292.94	%
$	11.43	(55.33	)%	$	9,356	2.48	%	(1.62	)%	2.48	%	286.49	%
$	33.53	53.29	%	$	20,707	2.41	%	(1.49	)%	2.41	%	206.16	%
$	24.21	41.25	%	$	11,054	2.55	%	(1.98	)%	2.55	%	184.39	%

$	12.52	20.05	%	$	8,683	2.01	%	(1.45	)%	2.36	%	18.38	%
$	10.50	5.00	%	$	4,360	1.80	%	(1.16	)%	2.50	%	13.24	%

See accompanying notes to the financial statements.

105

BB&T Funds

Financial Highlights, Class B Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments and foreign currencies		Total from Investment Activities		Net investment income		Net realized gains on investments and foreign currencies		Total Dividends
International Equity Fund
Six Months Ended March 31, 2004 (Unaudited)	$	6.57	(0.02	)	1.23		1.21		—		—		—
Year Ended September 30, 2003	$	6.07	(0.02	)(c)	0.54		0.52		(0.02	)	—		(0.02	)
Year Ended September 30, 2002	$	7.19	(0.07	)(c)	(1.05	)	(1.12	)	—		—		—
Year Ended September 30, 2001	$	12.24	(0.07	)	(2.96	)	(3.03	)	—		(2.02	)	(2.02	)
Year Ended September 30, 2000	$	12.34	(0.15	)	0.68		0.53		—		(0.63	)	(0.63	)
Year Ended September 30, 1999	$	9.85	(0.10	)	2.77		2.67		(0.01	)	(0.17	)	(0.18	)
Intermediate U.S. Government Fund(a)
Six Months Ended March 31, 2004 (Unaudited)	$	10.53	0.11		0.05		0.16		(0.13	)	(0.13	)	(0.26	)
Year Ended September 30, 2003	$	10.73	0.27		(0.07	)	0.20		(0.31	)	(0.09	)	(0.40	)
Year Ended September 30, 2002	$	10.35	0.39	(d)	0.41	(d)	0.80		(0.42	)	—		(0.42	)
Year Ended September 30, 2001	$	9.69	0.45		0.65		1.10		(0.44	)	—		(0.44	)
Year Ended September 30, 2000	$	9.68	0.45		0.04		0.49		(0.45	)	(0.03	)	(0.48	)
Year Ended September 30, 1999	$	10.54	0.43		(0.75	)	(0.32	)	(0.43	)	(0.11	)	(0.54	)
Intermediate Corporate Bond Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.72	0.17		0.13		0.30		(0.20	)	—		(0.20	)
Year Ended September 30, 2003	$	10.34	0.39		0.40		0.79		(0.41	)	—		(0.41	)
Year Ended September 30, 2002	$	10.57	0.45	(e)	(0.04	)(e)	0.41		(0.47	)	(0.17	)	(0.64	)
Year Ended September 30, 2001	$	9.98	0.52		0.59		1.11		(0.52	)	—		(0.52	)
December 2, 1999 to September 30, 2000(b)	$	10.00	0.44		(0.02	)	0.42		(0.44	)	—		(0.44	)

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)	Formerly known as Intermediate U.S. Government Bond Fund.

(b)	Period from commencement of operations.

(c)	Per share net investment income (loss) has been calculated using the average daily shares method.

(d)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.41, $0.39, and 3.99%, respectively.

(e)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.46, $(0.05), and 4.51%, respectively.

(f)	Not annualized for periods less than one year.

(g)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

106


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(f)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(g)		Ratio of net investment income (loss) to average net assets(g)		Ratio of expenses to average net assets*(g)		Portfolio turnover**

$	7.78	18.42	%	$	2,214	2.38	%	(0.52	)%	2.44	%	22.33	%
$	6.57	8.63	%	$	2,012	2.40	%	(0.37	)%	2.41	%	199.78	%
$	6.07	(15.58	)%	$	2,056	2.43	%	(1.01	)%	2.43	%	95.86	%
$	7.19	(29.11	)%	$	2,680	2.49	%	(1.19	)%	2.49	%	144.35	%
$	12.24	3.88	%	$	3,861	2.51	%	(0.99	)%	2.51	%	179.44	%
$	12.34	27.46	%	$	2,378	2.56	%	(0.84	)%	2.56	%	82.00	%

$	10.43	1.54	%	$	7,912	1.81	%	2.16	%	1.91	%	57.94	%
$	10.53	1.86	%	$	7,869	1.82	%	2.42	%	1.92	%	209.97	%
$	10.73	7.96	%	$	5,981	1.85	%	3.81	%(d)	1.95	%	79.36	%
$	10.35	11.61	%	$	4,310	1.86	%	4.38	%	1.96	%	84.76	%
$	9.69	5.31	%	$	2,329	1.83	%	4.71	%	1.93	%	103.41	%
$	9.68	(3.13	)%	$	2,679	1.83	%	4.28	%	1.93	%	73.46	%

$	10.82	2.82	%	$	6,692	1.82	%	3.22	%	1.93	%	20.29	%
$	10.72	7.77	%	$	6,358	1.83	%	3.61	%	1.94	%	43.98	%
$	10.34	4.18	%	$	4,465	1.84	%	4.39	%(e)	1.99	%	69.15	%
$	10.57	11.41	%	$	1,976	1.73	%	4.95	%	1.90	%	142.35	%
$	9.98	4.41	%	$	70	1.75	%	5.34	%	2.03	%	186.79	%

See accompanying notes to the financial statements.

107

BB&T Funds

Financial Highlights, Class B Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments		Total from Investment Activities		Net investment income		Net realized gains on investments		Total Dividends
Prime Money Market Fund
Six Months Ended March 31, 2004 (Unaudited)	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2003	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2002	$	1.00	0.01		—		0.01		(0.01	)	—		(0.01	)
Year Ended September 30, 2001	$	1.00	0.04		—		0.04		(0.04	)	—		(0.04	)
Year Ended September 30, 2000	$	1.00	0.05		—		0.05		(0.05	)	—		(0.05	)
Year Ended September 30, 1999	$	1.00	0.04		—		0.04		(0.04	)	—		(0.04	)
U.S. Treasury Money Market Fund
Six Months Ended March 31, 2004 (Unaudited)	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2003	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2002	$	1.00	0.01		—		0.01		(0.01	)	—		(0.01	)
Year Ended September 30, 2001	$	1.00	0.04		—		0.04		(0.04	)	—		(0.04	)
Year Ended September 30, 2000	$	1.00	0.04		—		0.04		(0.04	)	—		(0.04	)
Year Ended September 30, 1999	$	1.00	0.03		—		0.03		(0.03	)	—		(0.03	)
Capital Manager Conservative Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	8.85	0.04		0.58		0.62		(0.04	)	—		(0.04	)
Year Ended September 30, 2003	$	8.29	0.11		0.59		0.70		(0.10	)	(0.04	)	(0.14	)
Year Ended September 30, 2002	$	9.13	0.15		(0.67	)	(0.52	)	(0.14	)	(0.18	)	(0.32	)
Year Ended September 30, 2001	$	10.71	0.22		(0.98	)	(0.76	)	(0.24	)	(0.58	)	(0.82	)
Year Ended September 30, 2000	$	10.39	0.29		0.56		0.85		(0.31	)	(0.22	)	(0.53	)
January 29, 1999 to September 30, 1999(b)	$	10.54	0.21		(0.15	)	0.06		(0.21	)	—		(0.21	)
Capital Manager Moderate Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	8.15	0.04		0.77		0.81		(0.01	)	—		(0.01	)
Year Ended September 30, 2003	$	7.41	0.04		0.80		0.84		(0.09	)	(0.01	)	(0.10	)
Year Ended September 30, 2002	$	8.75	0.05		(0.97	)	(0.92	)	(0.05	)	(0.37	)	(0.42	)
Year Ended September 30, 2001	$	11.21	0.19		(1.74	)	(1.55	)	(0.19	)	(0.72	)	(0.91	)
Year Ended September 30, 2000	$	10.64	0.22		0.88		1.10		(0.24	)	(0.29	)	(0.53	)
January 29, 1999 to September 30, 1999(b)	$	10.64	0.14		—		0.14		(0.14	)	—		(0.14	)
Capital Manager Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	7.70	(0.01	)	0.93		0.92		—		—		—
Year Ended September 30, 2003	$	6.80	(0.01	)	0.91		0.90		—	(d)	—		—	(d)
Year Ended September 30, 2002	$	8.42	(0.01	)	(1.21	)	(1.22	)	—		(0.40	)	(0.40	)
Year Ended September 30, 2001	$	11.64	0.09		(2.42	)	(2.33	)	(0.12	)	(0.77	)	(0.89	)
Year Ended September 30, 2000	$	10.79	0.17		1.24		1.41		(0.20	)	(0.36	)	(0.56	)
January 29, 1999 to September 30, 1999(b)	$	10.69	0.10		0.10		0.20		(0.10	)	—		(0.10	)
Capital Manager Equity Fund(a)
Six Months Ended March 31, 2004 (Unaudited)	$	8.30	—	(d)	1.13		1.13		—		—		—
Year Ended September 30, 2003	$	7.28	(0.05	)(c)	1.12		1.07		—		(0.05	)	(0.05	)
Year Ended September 30, 2002	$	8.93	(0.04	)	(1.61	)	(1.65	)	—		—		—
March 19,2001 to September 30, 2001(b)	$	10.00	(0.02	)	(1.05	)	(1.07	)	—		—		—

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)	Formerly known as Capital Manager Aggressive Growth Fund.

(b)	Period from commencement of operations.

(c)	Per share net investment income (loss) has been calculated using the average daily shares method.

(d)	Amount is less than $0.005.

(e)	Not annualized for periods less than one year.

(f)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

108


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(e)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(f)		Ratio of net investment income (loss) to average net assets(f)		Ratio of expenses to average net assets*(f)		Portfolio turnover**

$	1.00	0.02	%	$	2,383	1.13	%	0.05	%	1.69	%	—
$	1.00	0.15	%	$	2,543	1.32	%	0.16	%	1.69	%	—
$	1.00	0.60	%	$	2,730	1.67	%	0.70	%	1.77	%	—
$	1.00	3.80	%	$	84,446	1.61	%	3.58	%	1.74	%	—
$	1.00	4.65	%	$	41,644	1.63	%	4.76	%	1.80	%	—
$	1.00	3.64	%	$	9,391	1.56	%	3.58	%	1.89	%	—

$	1.00	0.02	%	$	881	0.95	%	0.05	%	1.72	%	—
$	1.00	0.16	%	$	1,126	1.12	%	0.15	%	1.70	%	—
$	1.00	0.39	%	$	1,121	1.69	%	0.48	%	1.77	%	—
$	1.00	3.56	%	$	18,449	1.63	%	3.36	%	1.73	%	—
$	1.00	4.28	%	$	10,425	1.63	%	4.43	%	1.73	%	—
$	1.00	3.31	%	$	2,264	1.59	%	3.25	%	1.73	%	—

$	9.43	7.06	%	$	4,427	1.43	%	0.92	%	1.63	%	1.97	%
$	8.85	8.45	%	$	3,150	1.53	%	1.07	%	1.73	%	33.03	%
$	8.29	(5.94	)%	$	1,682	1.53	%	1.49	%	1.73	%	6.29	%
$	9.13	(7.50	)%	$	916	1.58	%	1.85	%	1.78	%	35.75	%
$	10.71	8.31	%	$	150	1.41	%	2.75	%	1.60	%	38.27	%
$	10.39	0.59	%	$	110	1.35	%	3.92	%	1.75	%	16.45	%

$	8.95	9.92	%	$	18,080	1.48	%	0.13	%	1.68	%	—
$	8.15	11.29	%	$	8,929	1.50	%	0.35	%	1.70	%	21.46	%
$	7.41	(11.35	)%	$	4,384	1.56	%	0.52	%	1.76	%	14.56	%
$	8.75	(14.82	)%	$	3,096	1.55	%	1.05	%	1.75	%	24.24	%
$	11.21	10.45	%	$	542	1.54	%	1.94	%	1.69	%	46.69	%
$	10.64	1.29	%	$	197	1.47	%	2.54	%	1.78	%	17.33	%

$	8.62	11.95	%	$	12,833	1.51	%	(0.29	)%	1.68	%	0.21	%
$	7.70	13.31	%	$	9,142	1.55	%	(0.16	)%	1.75	%	17.80	%
$	6.80	(15.53	)%	$	5,712	1.62	%	(0.35	)%	1.82	%	8.38	%
$	8.42	(21.44	)%	$	4,720	1.60	%	0.45	%	1.80	%	27.33	%
$	11.64	13.23	%	$	1,993	1.45	%	1.49	%	1.64	%	43.28	%
$	10.79	1.87	%	$	163	1.94	%	1.16	%	2.14	%	17.93	%

$	9.43	13.61	%	$	4,581	1.56	%	(0.70	)%	1.81	%	3.41	%
$	8.30	14.74	%	$	2,475	1.70	%	(0.69	)%	1.90	%	8.30	%
$	7.28	(18.48	)%	$	1,302	1.67	%	(0.94	)%	1.87	%	5.75	%
$	8.93	(10.70	)%	$	754	1.93	%	(1.05	)%	2.13	%	10.10	%

See accompanying notes to the financial statements.

109

BB&T Funds

Financial Highlights, Class C Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments		Total from Investment Activities		Net investment income		Net realized gains on investments		Total Dividends
Balanced Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.85	0.10		0.78		0.88		(0.08	)	—		(0.08	)
Year Ended September 30, 2003	$	9.73	0.09		1.13		1.22		(0.10	)	—		(0.10	)
Year Ended September 30, 2002	$	11.19	0.11	(b)(c)	(1.47	)(c)	(1.36	)	(0.10	)	—		(0.10	)
February 1, 2001 to September 30, 2001(a)	$	12.67	0.18		(1.48	)	(1.30	)	(0.18	)	—		(0.18	)
Large Company Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	14.73	0.05		2.17		2.22		(0.06	)	—		(0.06	)
Year Ended September 30, 2003	$	12.74	0.13		1.99		2.12		(0.13	)	—		(0.13	)
Year Ended September 30, 2002	$	16.67	0.08		(3.45	)	(3.37	)	(0.08	)	(0.48	)	(0.56	)
February 1, 2001 to September 30, 2001(a)	$	18.15	0.06		(1.47	)	(1.41	)	(0.07	)	—		(0.07	)
Large Company Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	7.37	(0.07	)	0.88		0.81		—		—		—
Year Ended September 30, 2003	$	6.37	(0.08	)(b)	1.08		1.00		—		—		—
Year Ended September 30, 2002	$	7.94	(0.10	)(b)	(1.47	)	(1.57	)	—		—		—
February 1, 2001 to September 30, 2001(a)	$	11.75	(0.06	)	(3.75	)	(3.81	)	—		—		—
Mid Cap Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	12.92	0.05		2.27		2.32		(0.07	)	—		(0.07	)
Year Ended September 30, 2003	$	10.90	0.07	(b)	2.04		2.11		(0.09	)	—		(0.09	)
Year Ended September 30, 2002	$	13.11	0.08		(1.04	)	(0.96	)	(0.10	)	(1.15	)	(1.25	)
July 25, 2001 to September 30, 2001(a)	$	14.14	0.03		(1.03	)	(1.00	)	(0.03	)	—		(0.03	)
Mid Cap Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	9.69	(0.07	)	1.35		1.28		—		—		—
Year Ended September 30, 2003	$	8.00	(0.15	)	1.84		1.69		—		—		—
Year Ended September 30, 2002	$	9.79	(0.15	)(b)	(1.01	)	(1.16	)	—		(0.63	)	(0.63	)
July 25, 2001 to September 30, 2001(a)	$	11.20	(0.01	)	(1.40	)	(1.41	)	—		—		—
Small Company Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	11.40	(0.07	)	2.18		2.11		—		(0.12	)	(0.12	)
May 19, 2003 to September 30, 2003(a)	$	10.00	(0.05	)(b)	1.45		1.40		—		—		—
Small Company Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.70	(0.12	)	1.20		1.08		—		—		—
Year Ended September 30, 2003	$	8.79	(0.18	)(b)	2.09		1.91		—		—		—
Year Ended September 30, 2002	$	11.45	(0.23	)(b)	(2.43	)	(2.66	)	—		—		—
February 1, 2001 to September 30, 2001(a)	$	19.98	(0.08	)	(8.45	)	(8.53	)	—		—		—
Special Opportunities Equity Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.50	(0.09	)	2.19		2.10		—		(0.08	)	(0.08	)
June 2, 2003 to September 30, 2003(a)	$	10.00	(0.02	)	0.52		0.50		—		—		—

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)	Period from commencement of operations.

(b)	Per share net investment income (loss) has been calculated using the average daily shares method.

(c)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.12, $(1.48), and 1.05%, respectively.

(d)	Not annualized for periods less than one year.

(e)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

110


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(d)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(e)		Ratio of net investment income (loss) to average net assets(e)		Ratio of expenses to average net assets*(e)		Portfolio turnover**

$	11.65	8.17	%	$	7	0.96	%	1.69	%	2.15	%	57.92	%
$	10.85	12.54	%	$	218	1.98	%	0.80	%	2.12	%	84.27	%
$	9.73	(12.24	)%	$	283	1.99	%	0.98	%(c)	2.12	%	64.29	%
$	11.19	(11.01	)%	$	2	2.27	%	1.02	%	2.42	%	116.03	%

$	16.89	15.03	%	$	146	1.93	%	0.62	%	2.06	%	8.44	%
$	14.73	16.72	%	$	122	1.92	%	0.90	%	2.06	%	18.89	%
$	12.74	(21.10	)%	$	52	1.94	%	0.41	%	2.08	%	23.02	%
$	16.67	(7.80	)%	$	13	2.03	%	0.36	%	2.16	%	24.20	%

$	8.18	10.99	%	$	27	1.96	%	(1.11	)%	2.08	%	65.12	%
$	7.37	15.70	%	$	31	1.93	%	(1.10	)%	2.06	%	91.73	%
$	6.37	(19.77	)%	$	37	1.98	%	(1.23	)%	2.12	%	100.46	%
$	7.94	(32.43	)%	$	8	2.04	%	(1.34	)%	2.18	%	96.41	%

$	15.17	17.96	%	$	547	1.97	%	0.64	%	2.09	%	4.12	%
$	12.92	19.40	%	$	484	1.95	%	0.61	%	2.10	%	18.28	%
$	10.90	(8.86	)%	$	300	1.91	%	0.65	%	2.12	%	18.20	%
$	13.11	(7.07	)%	$	1	2.15	%	1.08	%	2.52	%	27.04	%

$	10.97	13.21	%	$	216	1.98	%	(1.74	)%	2.11	%	59.55	%
$	9.69	21.13	%	$	164	1.95	%	(1.71	)%	2.11	%	125.97	%
$	8.00	(13.20	)%	$	143	1.81	%	(1.58	)%	2.13	%	117.06	%
$	9.79	(13.13	)%	$	1	2.19	%	(1.91	)%	2.49	%	90.11	%

$	13.39	18.62	%	$	1	2.35	%	(1.04	)%	2.47	%	5.79	%
$	11.40	14.00	%	$	1	2.64	%	(1.15	)%	2.64	%	48.84	%

$	11.78	10.09	%	$	36	2.33	%	(2.04	)%	2.38	%	93.17	%
$	10.70	21.73	%	$	50	2.37	%	(1.95	)%	2.37	%	197.85	%
$	8.79	(23.23	)%	$	31	2.47	%	(2.11	)%	2.47	%	292.94	%
$	11.45	(42.69	)%	$	8	2.42	%	(1.99	)%	2.42	%	286.49	%

$	12.52	20.05	%	$	8,966	2.02	%	(1.45	)%	2.36	%	18.38	%
$	10.50	5.00	%	$	4,052	1.80	%	(1.17	)%	2.52	%	13.24	%

See accompanying notes to the financial statements.

111

BB&T Funds

Financial Highlights, Class C Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments and foreign currencies		Total from Investment Activities		Net investment income		Net realized gains on investments and foreign currencies		Total Dividends
International Equity Fund
Six Months Ended March 31, 2004 (Unaudited)	$	6.58	(0.04	)	1.24		1.20		—		—		—
Year Ended September 30, 2003	$	6.07	(0.07	)(c)	0.60		0.53		(0.02	)	—		(0.02	)
Year Ended September 30, 2002	$	7.20	(0.07	)	(1.06	)	(1.13	)	—		—		—
February 1, 2001 to September 30, 2001(b)	$	10.03	(0.02	)	(2.81	)	(2.83	)	—		—		—
Intermediate U.S. Government Fund(a)
Six Months Ended March 31, 2004 (Unaudited)	$	10.53	0.11		0.06		0.17		(0.13	)	(0.13	)	(0.26	)
Year Ended September 30, 2003	$	10.74	0.26		(0.07	)	0.19		(0.31	)	(0.09	)	(0.40	)
Year Ended September 30, 2002	$	10.35	0.38	(d)	0.43	(d)	0.81		(0.42	)	—		(0.42	)
February 1, 2001 to September 30, 2001(b)	$	10.10	0.35		0.25		0.60		(0.35	)	—		(0.35	)
Intermediate Corporate Bond Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.72	0.17		0.13		0.30		(0.20	)	—		(0.20	)
Year Ended September 30, 2003	$	10.33	0.39		0.41		0.80		(0.41	)	—		(0.41	)
Year Ended September 30, 2002	$	10.56	0.43	(c)(e)	—	(e)	0.43		(0.49	)	(0.17	)	(0.66	)
February 1, 2001 to September 30, 2001(b)	$	10.39	0.35		0.17		0.52		(0.35	)	—		(0.35	)

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)	Formerly known as Intermediate U.S. Government Bond Fund.

(b)	Period from commencement of operations.

(c)	Per share net investment income (loss) has been calculated using the average daily shares method.

(d)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.40, $0.41, and 3.99%, respectively.

(e)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.44, $(0.01), and 4.40%, respectively.

(f)	Not annualized for periods less than one year.

(g)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

112


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(f)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(g)		Ratio of net investment income (loss) to average net assets(g)		Ratio of expenses to average net assets*(g)		Portfolio turnover**

$	7.78	18.24	%	$	1	2.38	%	(1.09	)%	2.44	%	22.33	%
$	6.58	8.80	%	$	2	2.40	%	(1.06	)%	2.40	%	199.78	%
$	6.07	(15.69	)%	$	7	2.43	%	(0.98	)%	2.43	%	95.86	%
$	7.20	(28.22	)%	$	6	2.40	%	(1.35	)%	2.40	%	144.35	%

$	10.44	1.64	%	$	788	1.80	%	2.16	%	1.91	%	57.94	%
$	10.53	1.77	%	$	836	1.82	%	2.57	%	1.92	%	209.07	%
$	10.74	8.05	%	$	1,313	1.79	%	3.81	%(d)	1.89	%	79.36	%
$	10.35	6.01	%	$	40	1.98	%	4.26	%	2.05	%	84.76	%

$	10.82	2.82	%	$	248	1.82	%	3.22	%	1.93	%	20.29	%
$	10.72	7.86	%	$	282	1.83	%	3.61	%	1.94	%	43.98	%
$	10.33	4.37	%	$	318	1.89	%	4.28	%(e)	2.03	%	69.15	%
$	10.56	5.07	%	$	11	1.71	%	4.94	%	1.85	%	142.35	%

See accompanying notes to the financial statements.

113

BB&T Funds

Financial Highlights, Class C Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments		Total from Investment Activities		Net investment income		Net realized gains on investments		Total Dividends
Prime Money Market Fund
Six Months Ended March 31, 2004 (Unaudited)	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2003	$	1.00	—	(d)	—	(d)	—	(d)	—	(d)	—		—	(d)
January 30, 2002 to September 30, 2002(b)	$	1.00	0.01		—	(d)	0.01		(0.01	)	—		(0.01	)
U.S. Treasury Money Market Fund
Six Months Ended March 31, 2004 (Unaudited)	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2003	$	1.00	—	(d)	—	(d)	—	(d)	—	(d)	—		—	(d)
January 30, 2002 to September 30, 2002(b)	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Capital Manager Conservative Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	8.82	0.06		0.56		0.62		(0.04	)	—		(0.04	)
Year Ended September 30, 2003	$	8.26	0.09		0.61		0.70		(0.10	)	(0.04	)	(0.14	)
Year Ended September 30, 2002	$	9.10	0.17		(0.69	)	(0.52	)	(0.14	)	(0.18	)	(0.32	)
February 1, 2001 to September 30, 2001(b)	$	10.06	0.10		(0.93	)	(0.83	)	(0.13	)	—		(0.13	)
Capital Manager Moderate Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	8.18	0.03		0.78		0.81		(0.01	)	—		(0.01	)
Year Ended September 30, 2003	$	7.42	0.03		0.82		0.85		(0.08	)	(0.01	)	(0.09	)
Year Ended September 30, 2002	$	8.77	0.04		(0.97	)	(0.93	)	(0.05	)	(0.37	)	(0.42	)
February 1, 2001 to September 30, 2001(b)	$	10.23	0.05		(1.45	)	(1.40	)	(0.06	)	—		(0.06	)
Capital Manager Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	7.71	(0.01	)	0.93		0.92		—		—		—
Year Ended September 30, 2003	$	6.80	(0.01	)(c)	0.93		0.92		(0.01	)	—		(0.01	)
Year Ended September 30, 2002	$	8.41	(0.02	)	(1.19	)	(1.21	)	—		(0.40	)	(0.40	)
February 1, 2001 to September 30, 2001(b)	$	10.41	(0.01	)	(1.98	)	(1.99	)	(0.01	)	—		(0.01	)
Capital Manager Equity Fund(a)
Six Months Ended March 31, 2004 (Unaudited)	$	8.28	(0.01	)	1.13		1.12		—		—		—
Year Ended September 30, 2003	$	7.26	(0.05	)(c)	1.12		1.07		—	(d)	(0.05	)	(0.05	)
Year Ended September 30, 2002	$	8.92	(0.12	)	(1.54	)	(1.66	)	—		—		—
March 19, 2001 to September 30, 2001(b)	$	10.00	(0.06	)	(1.02	)	(1.08	)	—		—		—

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)	Formerly known as Capital Manager Aggressive Growth Fund.

(b)	Period from commencement of operations.

(c)	Per share net investment income (loss) has been calculated using the average daily shares method.

(d)	Amount is less than $0.005.

(e)	Not annualized for periods less than one year.

(f)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

114


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(e)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(f)		Ratio of net investment income (loss) to average net assets(f)		Ratio of expenses to average net assets*(f)		Portfolio turnover**

$	1.00	0.02	%	$	529	1.13	%	0.05	%	1.69	%	—
$	1.00	0.15	%	$	555	1.30	%	0.14	%	1.69	%	—
$	1.00	0.28	%	$	314	1.60	%	0.40	%	1.65	%	—

$	1.00	0.02	%	$	8	0.95	%	0.05	%	1.72	%	—
$	1.00	0.16	%	$	8	1.12	%	0.17	%	1.70	%	—
$	1.00	0.18	%	$	10	1.60	%	0.27	%	1.64	%	—

$	9.40	6.95	%	$	205	1.43	%	0.92	%	1.63	%	1.97	%
$	8.82	8.50	%	$	148	1.53	%	1.05	%	1.73	%	33.03	%
$	8.26	(5.98	)%	$	62	1.52	%	1.45	%	1.72	%	6.29	%
$	9.10	(8.30	)%	$	2	1.71	%	1.58	%	1.73	%	35.75	%

$	8.98	9.86	%	$	295	1.48	%	0.13	%	1.68	%	—
$	8.18	11.39	%	$	182	1.51	%	0.40	%	1.71	%	21.46	%
$	7.42	(11.40	)%	$	307	1.58	%	0.53	%	1.78	%	14.56	%
$	8.77	13.75	%	$	178	1.55	%	0.74	%	1.75	%	24.24	%

$	8.63	11.93	%	$	69	1.51	%	(0.29	)%	1.72	%	0.21	%
$	7.71	13.48	%	$	52	1.54	%	(0.14	)%	1.74	%	17.80	%
$	6.80	(15.43	)%	$	12	1.61	%	(0.34	)%	1.81	%	8.38	%
$	8.41	(19.16	)%	$	8	1.68	%	(0.30	)%	1.86	%	27.33	%

$	9.40	13.53	%	$	85	1.56	%	(0.75	)%	1.81	%	3.41	%
$	8.28	14.78	%	$	28	1.73	%	(0.66	)%	1.92	%	8.30	%
$	7.26	(18.61	)%	$	1	1.94	%	(1.31	)%	1.94	%	5.75	%
$	8.92	(10.80	)%	$	1	1.87	%	(1.12	)%	1.87	%	10.10	%

See accompanying notes to the financial statements.

115

BB&T Funds

Financial Highlights, Institutional Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments		Total from Investment Activities		Net investment income		Net realized gains on investments		Total Dividends
Balanced Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.90	0.09		0.81		0.90		(0.08	)	—		(0.08	)
Year Ended September 30, 2003	$	9.77	0.19		1.14		1.33		(0.20	)	—		(0.20	)
Year Ended September 30, 2002	$	11.24	0.20	(e)	(1.46	)(e)	(1.26	)	(0.21	)	—		(0.21	)
Year Ended September 30, 2001	$	13.11	0.27		(1.32	)	(1.05	)	(0.28	)	(0.54	)	(0.82	)
Year Ended September 30, 2000	$	13.80	0.37		(0.11	)	0.26		(0.37	)	(0.58	)	(0.95	)
Year Ended September 30, 1999	$	13.79	0.39		0.74		1.13		(0.39	)	(0.73	)	(1.12	)
Large Company Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	14.90	0.15		2.19		2.34		(0.15	)	—		(0.15	)
Year Ended September 30, 2003	$	12.87	0.27		2.03		2.30		(0.27	)	—		(0.27	)
Year Ended September 30, 2002	$	16.82	0.22		(3.47	)	(3.25	)	(0.22	)	(0.48	)	(0.70	)
Year Ended September 30, 2001	$	18.60	0.26		(0.89	)	(0.63	)	(0.26	)	(0.89	)	(1.15	)
Year Ended September 30, 2000	$	19.64	0.54		0.55		1.09		(0.54	)	(1.59	)	(2.13	)
Year Ended September 30, 1999	$	18.52	0.30		1.93		2.23		(0.30	)	(0.81	)	(1.11	)
Large Company Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	7.79	—		0.90		0.90		—		—		—
Year Ended September 30, 2003	$	6.67	(0.01	)(c)	1.13		1.12		—		—		—
Year Ended September 30, 2002	$	8.23	(0.03	)	(1.53	)	(1.56	)	—		—		—
Year Ended September 30, 2001	$	14.84	(0.03	)	(5.60	)	(5.63	)	—		(0.98	)	(0.98	)
Year Ended September 30, 2000	$	11.99	(0.03	)	3.62		3.59		—		(0.74	)	(0.74	)
Year Ended September 30, 1999	$	9.63	(0.01	)	2.93		2.92		—		(0.56	)	(0.56	)
Mid Cap Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	12.98	0.12		2.29		2.41		(0.12	)	—		(0.12	)
Year Ended September 30, 2003	$	10.93	0.19	(c)	2.04		2.23		(0.18	)	—		(0.18	)
Year Ended September 30, 2002	$	13.12	0.20		(1.04	)	(0.84	)	(0.20	)	(1.15	)	(1.35	)
February 1, 2001 to September 30, 2001(a)	$	14.26	0.15		(1.13	)	(0.98	)	(0.16	)	—		(0.16	)
Year Ended January 31, 2001	$	14.10	0.25		0.95		1.20		(0.25	)	(0.79	)	(1.04	)
Year Ended January 31, 2000	$	13.44	0.23		0.93		1.16		(0.22	)	(0.28	)	(0.50	)
Year Ended January 31, 1999	$	12.62	0.27		1.52		1.79		(0.27	)	(0.70	)	(0.97	)
Mid Cap Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.22	(0.04	)	1.46		1.42		—		—		—
Year Ended September 30, 2003	$	8.36	(0.06	)	1.92		1.86		—		—		—
Year Ended September 30, 2002	$	10.10	(0.06	)	(1.05	)	(1.11	)	—		(0.63	)	(0.63	)
February 1, 2001 to September 30, 2001(a)	$	14.84	(0.02	)	(4.72	)	(4.74	)	—		—		—
Year Ended January 31, 2001	$	20.78	(0.04	)	(2.08	)	(2.12	)	—		(3.82	)	(3.82	)
Year Ended January 31, 2000	$	17.89	(0.06	)	5.04		4.98		—		(2.09	)	(2.09	)
Year Ended January 31, 1999	$	14.05	(0.02	)	5.52		5.50		—		(1.66	)	(1.66	)
Small Company Value Fund
Six Months Ended March 31, 2004 (Unaudited)	$	11.44	—		2.19		2.19		—		(0.12	)	(0.12	)
May 19, 2003 to September 30, 2003(b)	$	10.00	(0.01	)(c)	1.45		1.44		—	(d)	—		—	(d)
Small Company Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	11.86	(0.07	)	1.34		1.27		—		—		—
Year Ended September 30, 2003	$	9.65	(0.11	)	2.32		2.21		—		—		—
Year Ended September 30, 2002	$	12.44	(0.14	)	(2.65	)	(2.79	)	—		—		—
Year Ended September 30, 2001	$	35.49	(0.15	)	(16.56	)	(16.71	)	—		(6.34	)	(6.34	)
Year Ended September 30, 2000	$	25.25	(0.17	)	13.41		13.24		—		(3.00	)	(3.00	)
Year Ended September 30, 1999	$	17.69	(0.22	)	7.78		7.56		—		—		—
Special Opportunities Equity Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.53	(0.02	)	2.19		2.17		—		(0.08	)	(0.08	)
June 2, 2003 to September 30, 2003(b)	$	10.00	—	(d)	0.53		0.53		—	(d)	—		—	(d)

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)

(b)	Period from commencement of operations.

(c)	Per share net investment income (loss) has been calculated using the average daily shares method.

(d)	Amount is less than $0.005.

(e)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.21, $(1.47), and 1.99%, respectively.

(f)	Not annualized for periods less than one year.

(g)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

116


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return(f)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(g)		Ratio of net investment income (loss) to average net assets(g)		Ratio of expenses to average net assets*(g)		Portfolio turnover**

$	11.72	8.31	%	$	31,664	0.96	%	1.50	%	1.15	%	57.92	%
$	10.90	13.71	%	$	83,734	0.97	%	1.78	%	1.11	%	84.27	%
$	9.77	(11.42	)%	$	92,245	1.03	%	1.92	%(e)	1.17	%	64.29	%
$	11.24	(8.52	)%	$	84,933	1.05	%	2.28	%	1.19	%	116.03	%
$	13.11	1.92	%	$	99,403	0.97	%	2.79	%	1.15	%	57.95	%
$	13.80	8.01	%	$	12,278	0.90	%	2.69	%	1.14	%	35.98	%

$	17.09	15.61	%	$	615,368	0.93	%	1.62	%	1.06	%	8.44	%
$	14.90	17.98	%	$	475,289	0.92	%	1.90	%	1.06	%	18.89	%
$	12.87	(20.33	)%	$	319,971	0.98	%	1.37	%	1.12	%	23.02	%
$	16.82	(3.53	)%	$	360,847	0.99	%	1.48	%	1.13	%	24.20	%
$	18.60	5.89	%	$	333,567	0.92	%	2.90	%	1.10	%	23.85	%
$	19.64	11.89	%	$	379,321	0.84	%	1.47	%	1.09	%	13.52	%

$	8.69	11.55	%	$	361,928	0.96	%	(0.11	)%	1.08	%	65.12	%
$	7.79	16.79	%	$	272,961	0.93	%	(0.11	)%	1.07	%	91.73	%
$	6.67	(18.96	)%	$	160,933	1.02	%	(0.30	)%	1.16	%	100.46	%
$	8.23	(40.24	)%	$	151,601	1.05	%	(0.25	)%	1.19	%	96.41	%
$	14.84	30.52	%	$	145,538	0.99	%	(0.18	)%	1.16	%	76.76	%
$	11.99	31.15	%	$	90,635	0.98	%	(0.08	)%	1.22	%	67.59	%

$	15.27	18.58	%	$	179,178	0.97	%	1.64	%	1.09	%	4.12	%
$	12.98	20.60	%	$	142,280	0.95	%	1.57	%	1.10	%	18.28	%
$	10.93	(8.01	)%	$	85,013	0.90	%	1.54	%	1.13	%	18.20	%
$	13.12	(6.93	)%	$	74,070	0.94	%	1.75	%	1.12	%	27.04	%
$	14.26	9.03	%	$	64,423	0.96	%	1.79	%	1.11	%	59.00	%
$	14.10	8.49	%	$	62,863	0.96	%	1.63	%	1.07	%	15.00	%
$	13.44	14.69	%	$	52,095	0.96	%	1.97	%	1.09	%	47.00	%

$	11.64	13.89	%	$	119,782	0.98	%	(0.74	)%	1.11	%	59.55	%
$	10.22	22.25	%	$	100,226	0.95	%	(0.72	)%	1.12	%	125.97	%
$	8.36	(12.26	)%	$	69,975	0.89	%	(0.62	)%	1.17	%	117.06	%
$	10.10	(31.94	)%	$	90,424	1.02	%	(0.32	)%	1.25	%	90.11	%
$	14.84	(10.61	)%	$	129,433	1.02	%	(0.16	)%	1.23	%	63.00	%
$	20.78	28.81	%	$	154,385	1.02	%	(0.34	)%	1.30	%	54.00	%
$	17.89	42.72	%	$	138,624	1.02	%	(0.05	)%	1.28	%	74.00	%

$	13.51	19.27	%	$	57,955	1.39	%	(0.04	)%	1.47	%	5.79	%
$	11.44	14.43	%	$	43,462	1.69	%	(0.17	)%	1.69	%	48.84	%

$	13.13	10.71	%	$	97,919	1.33	%	(1.04	)%	1.38	%	93.17	%
$	11.86	22.90	%	$	129,960	1.37	%	(0.94	)%	1.37	%	197.85	%
$	9.65	(22.43	)%	$	93,918	1.48	%	(1.17	)%	1.48	%	292.94	%
$	12.44	(54.85	)%	$	102,260	1.47	%	(0.64	)%	1.41	%	286.49	%
$	35.49	54.82	%	$	197,795	1.41	%	(0.49	)%	1.41	%	206.16	%
$	25.25	42.66	%	$	105,725	1.54	%	(0.98	)%	1.55	%	184.39	%

$	12.62	20.66	%	$	32,399	0.97	%	(0.41	)%	1.37	%	18.38	%
$	10.53	5.31	%	$	26,360	0.82	%	(0.11	)%	1.64	%	13.24	%

See accompanying notes to the financial statements.

117

BB&T Funds

Financial Highlights, Institutional Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments and foreign currencies		Total from Investment Activities		Net investment income		Net realized gains on investments and foreign currencies		Total Dividends
International Equity Fund
Six Months Ended March 31, 2004 (Unaudited)	$	6.98	0.02		1.30		1.32		(0.02	)	—		(0.02	)
Year Ended September 30, 2003	$	6.41	0.05	(d)	0.57		0.62		(0.05	)	—		(0.05	)
Year Ended September 30, 2002	$	7.53	—	(h)	(1.12	)	(1.12	)	—	(h)	—		—	(h)
Year Ended September 30, 2001	$	12.60	(0.05	)	(3.00	)	(3.05	)	—		(2.02	)	(2.02	)
Year Ended September 30, 2000	$	12.56	(0.01	)	0.68		0.67		—		(0.63	)	(0.63	)
Year Ended September 30, 1999	$	9.95	0.02		2.80		2.82		(0.04	)	(0.17	)	(0.21	)
Short U.S. Government Fund(a)
Six Months Ended March 31, 2004 (Unaudited)	$	9.90	0.10		0.02		0.12		(0.14	)	—		(0.14	)
Year Ended September 30, 2003	$	10.09	0.29		(0.11	)	0.18		(0.37	)	—		(0.37	)
Year Ended September 30, 2002	$	10.05	0.45	(e)	0.06	(e)	0.51		(0.47	)	—		(0.47	)
Year Ended September 30, 2001	$	9.64	0.53		0.41		0.94		(0.53	)	—		(0.53	)
Year Ended September 30, 2000	$	9.65	0.52		—		0.52		(0.53	)	—		(0.53	)
Year Ended September 30, 1999	$	10.07	0.53		(0.42	)	0.11		(0.53	)	—		(0.53	)
Intermediate U.S. Government Fund(b)
Six Months Ended March 31, 2004 (Unaudited)	$	10.58	0.16		0.05		0.21		(0.18	)	(0.13	)	(0.31	)
Year Ended September 30, 2003	$	10.78	0.37		(0.07	)	0.30		(0.41	)	(0.09	)	(0.50	)
Year Ended September 30, 2002	$	10.39	0.49	(f)	0.42	(f)	0.91		(0.52	)	—		(0.52	)
Year Ended September 30, 2001	$	9.73	0.54		0.66		1.20		(0.54	)	—		(0.54	)
Year Ended September 30, 2000	$	9.72	0.55		0.04		0.59		(0.55	)	(0.03	)	(0.58	)
Year Ended September 30, 1999	$	10.59	0.53		(0.76	)	(0.23	)	(0.53	)	(0.11	)	(0.64	)
Intermediate Corporate Bond Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.72	0.23		0.12		0.35		(0.25	)	—		(0.25	)
Year Ended September 30, 2003	$	10.33	0.49		0.41		0.90		(0.51	)	—		(0.51	)
Year Ended September 30, 2002	$	10.56	0.55	(g)	(0.04	)(g)	0.51		(0.57	)	(0.17	)	(0.74	)
Year Ended September 30, 2001	$	9.98	0.62		0.58		1.20		(0.62	)	—		(0.62	)
December 2, 1999 to September 30, 2000(c)	$	10.00	0.51		(0.02	)	0.49		(0.51	)	—		(0.51	)

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(c)	Period from commencement of operations.

(d)	Per share net investment income (loss) has been calculated using the average daily shares method.

(e)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.49, $0.02, and 4.65%, respectively.

(f)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.51, $0.40, and 4.99%, respectively.

(g)

Without the adoption of the change in amortization method as required by the November 2000 revised version of the AICPA Audit and Accounting Guide for Investment Companies, the amounts for net investment income, net realized/unrealized gains (losses), and the net investment income ratio would have been: $0.56, $(0.05), and 5.54%, respectively.

(h)	Amount is less than $0.005.

(i)	Not annualized for periods less than one year.

(j)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

118


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return(i)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(j)		Ratio of net investment income (loss) to average net assets(j)		Ratio of expenses to average net assets*(j)		Portfolio turnover**

$	8.28	18.88	%	$	235,025	1.38	%	0.55	%	1.44	%	22.33	%
$	6.98	9.72	%	$	187,315	1.40	%	0.78	%	1.41	%	199.78	%
$	6.41	(14.85	)%	$	123,330	1.43	%	0.03	%	1.43	%	95.86	%
$	7.53	(28.33	)%	$	115,405	1.48	%	(0.14	)%	1.48	%	144.35	%
$	12.60	4.96	%	$	119,326	1.51	%	(0.04	)%	1.51	%	179.44	%
$	12.56	28.70	%	$	97,447	1.56	%	0.18	%	1.56	%	82.00	%

$	9.88	1.26	%	$	207,014	0.74	%	2.10	%	0.90	%	24.20	%
$	9.90	1.78	%	$	199,980	0.76	%	2.81	%	0.91	%	93.86	%
$	10.09	5.27	%	$	181,797	0.78	%	4.30	%(e)	0.93	%	73.93	%
$	10.05	9.99	%	$	169,839	0.78	%	5.38	%	0.93	%	101.28	%
$	9.64	5.62	%	$	170,362	0.76	%	5.52	%	0.91	%	101.07	%
$	9.65	1.10	%	$	167,285	0.77	%	5.29	%	0.92	%	99.99	%

$	10.48	2.04	%	$	530,910	0.81	%	3.16	%	0.91	%	57.94	%
$	10.58	2.88	%	$	447,665	0.82	%	3.43	%	0.92	%	209.07	%
$	10.78	9.11	%	$	340,231	0.85	%	4.81	%(f)	0.95	%	79.36	%
$	10.39	12.68	%	$	279,046	0.85	%	5.38	%	0.95	%	84.76	%
$	9.73	6.36	%	$	182,899	0.83	%	5.71	%	0.93	%	103.41	%
$	9.72	(2.23	)%	$	213,417	0.83	%	5.26	%	0.93	%	73.46	%

$	10.82	3.33	%	$	251,774	0.82	%	4.22	%	0.93	%	20.29	%
$	10.72	8.95	%	$	215,000	0.83	%	4.61	%	0.94	%	43.98	%
$	10.33	5.19	%	$	142,509	0.83	%	5.42	%(g)	0.98	%	69.15	%
$	10.56	12.34	%	$	120,361	0.81	%	6.03	%	0.96	%	142.35	%
$	9.98	5.13	%	$	89,101	0.75	%	6.30	%	1.09	%	186.79	%

See accompanying notes to the financial statements.

119

BB&T Funds

Financial Highlights, Institutional Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments		Total from Investment Activities		Net investment income		Net realized gains on investments		Total Dividends
Kentucky Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.22	0.13		0.07		0.20		(0.13	)	—		(0.13	)
February 24, 2003 to September 30, 2003(a)	$	10.00	0.16	(c)	0.20		0.36		(0.14	)	—		(0.14	)
Maryland Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.16	0.13		0.08		0.21		(0.13	)	—		(0.13	)
February 24, 2003 to September 30, 2003(a)	$	10.00	0.13		0.16		0.29		(0.13	)	—		(0.13	)
North Carolina Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.81	0.18		0.01		0.19		(0.18	)	(0.04	)	(0.22	)
Year Ended September 30, 2003	$	10.86	0.35		(0.01	)	0.34		(0.35	)	(0.04	)	(0.39	)
Year Ended September 30, 2002	$	10.54	0.38		0.39		0.77		(0.37	)	(0.08	)	(0.45	)
Year Ended September 30, 2001	$	9.98	0.40		0.56		0.96		(0.40	)	—		(0.40	)
Year Ended September 30, 2000	$	9.89	0.42		0.09		0.51		(0.42	)	—		(0.42	)
Year Ended September 30, 1999	$	10.53	0.42		(0.57	)	(0.15	)	(0.42	)	(0.07	)	(0.49	)
South Carolina Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.81	0.18		0.03		0.21		(0.18	)	(0.01	)	(0.19	)
Year Ended September 30, 2003	$	10.81	0.35		—	(d)	0.35		(0.35	)	—		(0.35	)
Year Ended September 30, 2002	$	10.39	0.39		0.41		0.80		(0.38	)	—		(0.38	)
Year Ended September 30, 2001	$	9.84	0.40		0.55		0.95		(0.40	)	—		(0.40	)
Year Ended September 30, 2000	$	9.74	0.40		0.10		0.50		(0.40	)	—		(0.40	)
Year Ended September 30, 1999	$	10.41	0.39		(0.59	)	(0.20	)	(0.39	)	(0.08	)	(0.47	)
Virginia Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	11.95	0.20		—	(d)	0.20		(0.20	)	(0.08	)	(0.28	)
Year Ended September 30, 2003	$	11.99	0.39		—	(d)	0.39		(0.39	)	(0.04	)	(0.43	)
Year Ended September 30, 2002	$	11.57	0.43		0.41		0.84		(0.42	)	—		(0.42	)
Year Ended September 30, 2001	$	10.96	0.44		0.61		1.05		(0.44	)	—		(0.44	)
Year Ended September 30, 2000	$	10.86	0.46		0.10		0.56		(0.46	)	—		(0.46	)
May 17, 1999 to September 30, 1999(a)	$	11.24	0.17		(0.38	)	(0.21	)	(0.17	)	—		(0.17	)
West Virginia Intermediate Tax-Free Fund
Six Months Ended March 31, 2004 (Unaudited)	$	10.21	0.18		0.01		0.19		(0.17	)	(0.04	)	(0.21	)
Year Ended September 30, 2003	$	10.35	0.35		0.02		0.37		(0.35	)	(0.16	)	(0.51	)
Year Ended September 30, 2002	$	10.02	0.41		0.34		0.75		(0.40	)	(0.02	)	(0.42	)
February 1, 2001 to September 30, 2001(b)	$	9.93	0.30		0.09		0.39		(0.30	)	—		(0.30	)
Year Ended January 31, 2001	$	9.20	0.49		0.73		1.22		(0.49	)	—		(0.49	)
Year Ended January 31, 2000	$	10.27	0.48		(0.98	)	(0.50	)	(0.52	)	(0.05	)	(0.57	)
Year Ended January 31, 1999	$	10.32	0.49		0.06		0.55		(0.49	)	(0.11	)	(0.60	)

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)	Period from commencement of operations.

(b)

For the period from February 1, 2001 to September 30, 2001. Upon reorganizing as a Fund of the BB&T Funds, the West Virginia Intermediate Tax-Free Fund changed its fiscal year end from January 31 to September 30, 2001. The Financial Highlights for the periods prior to February 1, 2001 represent the OVB West Virginia Tax-Exempt Income Portfolio.

(c)	Per share net investment income (loss) has been calculated using the average daily shares method.

(d)	Amount is less than $0.005.

(e)	Not annualized for periods less than one year.

(f)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

120


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return(e)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(f)		Ratio of net investment income (loss) to average net assets(f)		Ratio of expenses to average net assets*(f)		Portfolio turnover**

$	10.29	2.14	%	$	14,793	0.52	%	2.87	%	1.09	%	8.44	%
$	10.22	3.63	%	$	14,759	0.53	%	2.56	%	1.23	%	42.87	%

$	10.24	2.07	%	$	7,624	0.54	%	2.51	%	1.35	%	18.66	%
$	10.16	2.93	%	$	4,897	0.61	%	2.27	%	1.65	%	40.16	%

$	10.78	1.73	%	$	100,970	0.76	%	3.27	%	0.92	%	23.76	%
$	10.81	3.19	%	$	95,613	0.77	%	3.26	%	0.92	%	44.56	%
$	10.86	7.62	%	$	93,856	0.78	%	3.57	%	0.93	%	20.39	%
$	10.54	9.73	%	$	90,679	0.79	%	3.84	%	0.93	%	47.35	%
$	9.98	5.31	%	$	81,510	0.80	%	4.27	%	0.96	%	80.33	%
$	9.89	(1.47	)%	$	70,430	0.80	%	4.09	%	0.98	%	39.70	%

$	10.83	2.00	%	$	18,000	0.74	%	3.29	%	0.93	%	11.70	%
$	10.81	3.35	%	$	18,297	0.72	%	3.31	%	0.93	%	32.04	%
$	10.81	7.94	%	$	17,960	0.67	%	3.70	%	0.97	%	21.81	%
$	10.39	9.76	%	$	15,411	0.73	%	3.89	%	1.03	%	36.67	%
$	9.84	5.27	%	$	14,386	0.75	%	4.11	%	1.22	%	84.20	%
$	9.74	(1.98	)%	$	16,295	0.82	%	3.86	%	1.41	%	71.96	%

$	11.87	1.68	%	$	76,017	0.76	%	3.33	%	0.91	%	8.35	%
$	11.95	3.31	%	$	77,577	0.78	%	3.28	%	0.92	%	34.17	%
$	11.99	7.48	%	$	81,683	0.78	%	3.66	%	0.93	%	13.12	%
$	11.57	9.72	%	$	76,284	0.78	%	3.87	%	0.93	%	31.28	%
$	10.96	5.35	%	$	77,727	0.78	%	4.30	%	0.90	%	64.45	%
$	10.86	(1.77	)%	$	79,353	0.88	%	4.18	%	0.99	%	27.05	%

$	10.19	1.95	%	$	69,180	0.76	%	3.43	%	0.77	%	4.20	%
$	10.21	3.77	%	$	79,361	0.73	%	3.48	%	0.76	%	25.59	%
$	10.35	7.78	%	$	78,170	0.72	%	4.04	%	0.82	%	61.44	%
$	10.02	4.03	%	$	75,332	0.62	%	4.60	%	0.79	%	15.75	%
$	9.93	13.57	%	$	72,553	0.72	%	5.11	%	0.83	%	7.00	%
$	9.20	(5.04	)%	$	74,709	0.72	%	4.90	%	0.77	%	10.00	%
$	10.27	5.47	%	$	90,228	0.72	%	4.77	%	0.79	%	14.00	%

See accompanying notes to the financial statements.

121

BB&T Funds

Financial Highlights, Institutional Shares

Selected data for a share of beneficial interest outstanding throughout the periods indicated.


			Investment Activities						Dividends
	Net Asset Value, Beginning of Period		Net investment income (loss)		Net realized/ unrealized gains (losses) on investments		Total from Investment Activities		Net investment income		Net realized gains on investments		Total Dividends
Prime Money Market Fund
Six Months Ended March 31, 2004 (Unaudited)	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2003	$	1.00	0.01		—		0.01		(0.01	)	—		(0.01	)
Year Ended September 30, 2002	$	1.00	0.02		—	(d)	0.02		(0.02	)	—		(0.02	)
Year Ended September 30, 2001	$	1.00	0.05		—		0.05		(0.05	)	—		(0.05	)
Year Ended September 30, 2000	$	1.00	0.06		—		0.06		(0.06	)	—		(0.06	)
Year Ended September 30, 1999	$	1.00	0.05		—		0.05		(0.05	)	—		(0.05	)
U.S. Treasury Money Market Fund
Six Months Ended March 31, 2004 (Unaudited)	$	1.00	—	(d)	—		—	(d)	—	(d)	—		—	(d)
Year Ended September 30, 2003	$	1.00	0.01		—		0.01		(0.01	)	—		(0.01	)
Year Ended September 30, 2002	$	1.00	0.02		—		0.02		(0.02	)	—		(0.02	)
Year Ended September 30, 2001	$	1.00	0.05		—		0.05		(0.05	)	—		(0.05	)
Year Ended September 30, 2000	$	1.00	0.05		—		0.05		(0.05	)	—		(0.05	)
Year Ended September 30, 1999	$	1.00	0.04		—		0.04		(0.04	)	—		(0.04	)
Capital Manager Conservative Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	8.90	0.09		0.59		0.68		(0.09	)	—		(0.09	)
Year Ended September 30, 2003	$	8.33	0.18		0.61		0.79		(0.18	)	(0.04	)	(0.22	)
Year Ended September 30, 2002	$	9.17	0.22		(0.66	)	(0.44	)	(0.22	)	(0.18	)	(0.40	)
Year Ended September 30, 2001	$	10.75	0.32		(1.00	)	(0.68	)	(0.32	)	(0.58	)	(0.90	)
Year Ended September 30, 2000	$	10.43	0.40		0.55		0.95		(0.41	)	(0.22	)	(0.63	)
Year Ended September 30, 1999	$	10.08	0.32		0.53		0.85		(0.33	)	(0.17	)	(0.50	)
Capital Manager Moderate Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	8.30	0.05		0.82		0.87		(0.05	)	—		(0.05	)
Year Ended September 30, 2003	$	7.47	0.10		0.82		0.92		(0.08	)	(0.01	)	(0.09	)
Year Ended September 30, 2002	$	8.82	0.14		(0.99	)	(0.85	)	(0.13	)	(0.37	)	(0.50	)
Year Ended September 30, 2001	$	11.25	0.26		(1.71	)	(1.45	)	(0.26	)	(0.72	)	(0.98	)
Year Ended September 30, 2000	$	10.65	0.34		0.89		1.23		(0.34	)	(0.29	)	(0.63	)
Year Ended September 30, 1999	$	9.85	0.25		1.05		1.30		(0.25	)	(0.25	)	(0.50	)
Capital Manager Growth Fund
Six Months Ended March 31, 2004 (Unaudited)	$	7.81	0.02		0.95		0.97		(0.02	)	—		(0.02	)
Year Ended September 30, 2003	$	6.87	0.06	(c)	0.93		0.99		(0.05	)	—		(0.05	)
Year Ended September 30, 2002	$	8.46	0.05		(1.20	)	(1.15	)	(0.04	)	(0.40	)	(0.44	)
Year Ended September 30, 2001	$	11.66	0.18		(2.43	)	(2.25	)	(0.18	)	(0.77	)	(0.95	)
Year Ended September 30, 2000	$	10.79	0.29		1.23		1.52		(0.29	)	(0.36	)	(0.65	)
Year Ended September 30, 1999	$	9.68	0.17		1.45		1.62		(0.19	)	(0.32	)	(0.51	)
Capital Manager Equity Fund(a)
Six Months Ended March 31, 2004 (Unaudited)	$	8.49	0.02		1.18		1.20		(0.01	)	—		(0.01	)
Year Ended September 30, 2003	$	7.39	0.02	(c)	1.15		1.17		(0.02	)	(0.05	)	(0.07	)
Year Ended September 30, 2002	$	8.97	(0.01	)	(1.57	)	(1.58	)	—		—		—
March 19,2001 to September 30, 2001(b)	$	10.00	0.01		(1.03	)	(1.02	)	(0.01	)	—	(d)	(0.01	)

*	During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated.

**	Portfolio Turnover is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a)	Formerly known as Capital Manager Aggressive Growth Fund.

(b)	Period from commencement of operations.

(c)	Per share net investment income (loss) has been calculated using the average daily shares method.

(d)	Amount is less than $0.005.

(e)	Not annualized for periods less than one year.

(f)	Annualized for periods less than one year.

See accompanying notes to the financial statements.

122


				Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return(e)		Net Assets, End of Period (000)		Ratio of expenses to average net assets(f)		Ratio of net investment income (loss) to average net assets(f)		Ratio of expenses to average net assets*(f)		Portfolio turnover **

$	1.00	0.30	%	$	580,405	0.58	%	0.60	%	0.69	%	—
$	1.00	0.87	%	$	667,534	0.60	%	0.86	%	0.69	%	—
$	1.00	1.61	%	$	532,465	0.64	%	1.54	%	0.71	%	—
$	1.00	4.84	%	$	265,472	0.61	%	4.34	%	0.75	%	—
$	1.00	5.70	%	$	78,331	0.63	%	5.62	%	0.80	%	—
$	1.00	4.69	%	$	56,492	0.54	%	4.57	%	0.88	%	—

$	1.00	0.20	%	$	1,060,584	0.60	%	0.40	%	0.72	%	—
$	1.00	0.67	%	$	838,022	0.61	%	0.67	%	0.70	%	—
$	1.00	1.40	%	$	915,013	0.65	%	1.35	%	0.72	%	—
$	1.00	4.59	%	$	494,773	0.63	%	4.46	%	0.73	%	—
$	1.00	5.33	%	$	395,617	0.63	%	5.24	%	0.73	%	—
$	1.00	4.34	%	$	282,585	0.59	%	4.26	%	0.73	%	—

$	9.49	7.61	%	$	68,029	0.43	%	1.92	%	0.63	%	1.97	%
$	8.90	9.55	%	$	31,748	0.53	%	2.09	%	0.73	%	33.03	%
$	8.33	(5.05	)%	$	26,347	0.54	%	2.47	%	0.74	%	6.29	%
$	9.17	(6.77	)%	$	27,691	0.51	%	3.26	%	0.71	%	35.75	%
$	10.75	9.31	%	$	31,808	0.41	%	3.75	%	0.60	%	38.27	%
$	10.43	8.47	%	$	32,590	0.38	%	3.15	%	0.58	%	16.45	%

$	9.12	10.45	%	$	31,040	0.48	%	1.13	%	0.68	%	—
$	8.30	12.40	%	$	26,168	0.50	%	1.35	%	0.70	%	21.46	%
$	7.47	(10.55	)%	$	20,977	0.58	%	1.48	%	0.78	%	14.56	%
$	8.82	(13.81	)%	$	25,040	0.51	%	2.67	%	0.71	%	24.24	%
$	11.25	11.63	%	$	26,616	0.49	%	2.98	%	0.69	%	46.69	%
$	10.65	13.34	%	$	26,800	0.43	%	2.17	%	0.63	%	17.33	%

$	8.76	12.47	%	$	25,731	0.51	%	0.71	%	0.72	%	0.21	%
$	7.81	14.49	%	$	21,484	0.56	%	0.82	%	0.76	%	17.80	%
$	6.87	(14.61	)%	$	17,981	0.62	%	0.63	%	0.82	%	8.38	%
$	8.46	(20.68	)%	$	20,855	0.57	%	1.93	%	0.77	%	27.33	%
$	11.66	14.28	%	$	26,538	0.45	%	2.49	%	0.64	%	43.28	%
$	10.79	16.96	%	$	24,063	0.46	%	1.43	%	0.66	%	17.93	%

$	9.68	14.12	%	$	19,525	0.56	%	0.30	%	0.81	%	3.41	%
$	8.49	15.82	%	$	16,077	0.70	%	0.29	%	0.90	%	8.30	%
$	7.39	(17.61	)%	$	11,352	0.83	%	(0.15	)%	1.03	%	5.75	%
$	8.97	(10.22	)%	$	13,464	0.72	%	0.08	%	0.92	%	10.10	%

See accompanying notes to the financial statements.

123

BB&T Funds

Notes to Financial Statements

(Unaudited)

March 31, 2004

1.	Organization:

The BB&T Funds commenced operations on October 5, 1992 and are registered under the Investment Company Act of 1940, as amended (“the 1940 Act”), as a diversified, open-end investment company established as a Massachusetts business trust.

The BB&T Funds offer shares of the Large Company Value Fund, the Large Company Growth Fund, the Mid Cap Value Fund, the Mid Cap Growth Fund, the Small Company Value Fund, the Small Company Growth Fund, the Special Opportunities Equity Fund, the International Equity Fund, the Short U.S. Government Fund, the Intermediate U.S. Government Fund, the Intermediate Corporate Bond Fund, the Kentucky Intermediate Tax-Free Fund, the Maryland Intermediate Tax-Free Fund, the North Carolina Intermediate Tax-Free Fund, the South Carolina Intermediate Tax-Free Fund, the Virginia Intermediate Tax-Free Fund, the West Virginia Intermediate Tax-Free Fund, the Prime Money Market Fund, the U.S. Treasury Money Market Fund, the Capital Manager Conservative Growth Fund, the Capital Manager Moderate Growth Fund, the Capital Manager Growth Fund and the Capital Manager Equity Fund (referred to individually as a “Fund” and collectively as the “Funds”). As of October 24, 2003 the Balanced Fund was closed to new investors. The Kentucky Intermediate Tax-Free Fund, the Maryland Intermediate Tax-Free Fund, the North Carolina Intermediate Tax-Free Fund, the South Carolina Intermediate Tax-Free Fund, the Virginia Intermediate Tax-Free Fund and the West Virginia Intermediate Tax-Free Fund are referred to as the “Tax-Free Funds”. The Prime Money Market Fund and the U.S. Treasury Money Market Fund are referred to as the “Money Market Funds”. The Capital Manager Conservative Growth Fund, the Capital Manager Moderate Growth Fund, the Capital Manager Growth Fund and the Capital Manager Equity Fund are referred to as the “Funds of Funds”. The Funds, excluding the Money Market Funds and the Funds of Funds, are referred to as the “Variable Net Asset Value Funds”.

The BB&T Funds are authorized to issue an unlimited amount of shares without par value. The Funds offer up to four classes of shares: Class A Shares, Class B Shares, Class C Shares and Institutional Shares. As of March 31, 2004, Class B Shares and Class C Shares of the Short U.S. Government Fund and the Tax-Free Funds were not yet being offered.

Each class of shares has identical rights and privileges except with respect to the fees paid under the distribution plan, voting rights on matters affecting a single class of shares and the exchange privilege of each class of shares.

Under the Fund’s organizational documents, its’ Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with their vendors and others that provide for general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.

2.	Conversion of Common Trust Funds

On March 19, 2004, net assets of certain common trust funds managed by BB&T Asset Management, Inc. (“BB&T”) were exchanged in a tax-free conversion for Institutional shares of the corresponding BB&T Funds. The transaction was accounted for by a method followed for tax purposes in a tax-free business combination. The following is a summary of shares issued, net assets converted, net asset value per share issued and unrealized appreciation/depreciation of assets acquired as of the conversion date:


March 19, 2004	Issued Shares	Net Assets Converted		Net Asset Value Per Share Issued		Unrealized Appreciation
Large Company Value Fund	3,756,814	$	63,782,610	$	16.98	$	9,973,178
Large Company Growth Fund	5,005,398		42,521,740		8.50		17,320,901
Intermediate U.S. Government Fund	5,988,154		62,847,783		10.50		3,072,834

3.	Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of

Continued

124

BB&T Funds

Notes to Financial Statements, continued

(Unaudited)

March 31, 2004

assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.

Securities Valuation:

Investments of the Money Market Funds are valued in accordance with Rule 2a-7 of the 1940 Act, at amortized cost, which approximates fair value. Under the amortized cost method, discount or premium is amortized on a constant basis to the maturity of the security.

Investments in common stocks, commercial paper, corporate bonds, municipal securities, U.S. Government securities, and U.S. Government agency securities of the Variable Net Asset Value Funds, the principal market for which is a securities exchange or an over-the-counter market, are valued at their latest available sale price (except for those securities that are traded on NASDAQ, which will be valued at the NASDAQ official closing price) or in the absence of such a price, by reference to the latest available bid and ask quotations in the principal market in which such securities are normally traded. The Variable Net Asset Value Funds may also use an independent pricing service approved by the Board of Trustees to value certain securities. Such prices reflect fair values which may be established through the use of electronic and matrix techniques. Short-term obligations that mature in 60 days or less are valued at either amortized cost or original cost plus interest, which approximates current value. Investments in open-end investment companies, including the Fund of Funds, are valued at their respective net asset values as reported by such companies. Investments in closed-end investment companies are valued at their market values based upon the latest available bid and asked prices in the principal market in which such securities are normally traded. The differences between cost and fair values of investments are reflected as either unrealized appreciation or depreciation. Securities for which market quotations are not readily available will be valued at fair value using methods determined in good faith by the Pricing Committee under the supervision of the Board of Trustees.

Foreign Currency Translation:

The accounting records of the International Equity Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the fair value of investments, assets and liabilities. Purchases and sales of securities, and income and expenses are translated at the prevailing rate of exchange on the respective dates of such transactions. The International Equity Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.

Risks Associated with Foreign Securities and Currencies:

Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of domestic issuers. Such risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability or diplomatic developments which could adversely affect investments in those countries.

Forward Foreign Currency Exchange Contracts:

The International Equity Fund may enter into forward foreign currency exchange contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of Fund securities denominated in a particular currency. The Fund could be exposed to risks if the counter-parties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. The forward foreign currency exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.

Futures Contracts:

The Variable Net Asset Value Funds may invest in financial futures contracts for the purpose of hedging their existing securities or securities it intends to purchase against fluctuations in fair value caused by changes in prevailing markets. Upon

Continued

125

BB&T Funds

Notes to Financial Statements, continued

(Unaudited)

March 31, 2004

entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the fair value of the underlying security. The Fund recognizes a gain or loss equal to the daily variation margin. Should market conditions move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts and the underlying hedged assets. The Funds held no financial futures contracts as of March 31, 2004.

Securities Transactions and Related Income:

Securities transactions are accounted for no later than one day after trade date. However, for financial reporting purposes Security Transactions are accounted for on trade date. Interest income is recognized on the accrual basis and includes, where applicable, the pro rata amortization/accretion of premium or discount. Dividend income is recorded on the ex-dividend date. Gains or losses realized from sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.

When-Issued and Forward Commitments:

The Funds, with the exception of the U.S. Treasury Money Market Fund, may purchase securities on a “when-issued” basis. The Balanced Fund, the Large Company Value Fund, the Large Company Growth Fund, the Mid Cap Value Fund, the Mid Cap Growth Fund, the Small Company Value Fund, the Small Company Growth Fund, the Special Opportunites Equity Fund, the International Equity Fund and the Prime Money Market Fund may also purchase or sell securities on a forward commitment basis. The Funds record when-issued securities on the trade date and pledge assets with a value equal to the purchase commitment for payment of the securities purchased. The value of the securities underlying when-issued or forward commitments to purchase securities, and any subsequent fluctuation in their value, is taken into account when determining the net asset value of the Funds commencing with the date the Funds agree to purchase the securities. The Funds do not accrue interest or dividends on “when-issued” securities until the underlying securities are received. The Funds held no when-issued securities as of March 31, 2004.

Repurchase Agreements:

The Funds may enter into repurchase agreements with member banks of the Federal Deposit Insurance Corporation and with registered broker/dealers that BB&T deems creditworthy under guidelines approved by the Board of Trustees, subject to the seller’s agreement to repurchase such securities at a mutually agreed-upon date and price. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying Fund securities. The seller, under a repurchase agreement, is required to maintain the value of collateral held pursuant to the agreement at not less than the repurchase price (including accrued interest). Securities subject to repurchase agreements are held by the Funds’ custodian, another qualified custodian, or in the Federal Reserve/Treasury book-entry system. In the event of counterparty default, the Fund has the right to use the collateral to offset losses incurred. There is potential for loss to the Fund in the event the Fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of a possible decline in the fair value of the underlying securities during the period while the Fund seeks to assert its rights.

Security Loans:

To generate additional income, the Funds may lend up to 33¹/3% of their respective assets pursuant to agreements requiring that the loan be continuously secured by any combination of cash, U.S. government or U.S. government agency securities, equal at all times to at least 100% of the fair value. The cash collateral received by the Funds was pooled and at March 31, 2004 was invested in Commercial Paper, Corporate Bonds, Mutual Funds, and Repurchase Agreements (with interest rates ranging from 0.38% to 1.08% and maturity dates ranging from April 2004 through March 2005. The Funds receive payments from borrowers equivalent to the dividends and interest that would have been earned on securities lent while simultaneously seeking to earn income on the investment of collateral. Collateral is marked to market daily to provide a level of collateral at least equal to the fair value of securities lent. There may be risks of delay in recovery of the securities or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans will be made only to borrowers, such as broker-dealers, banks or institutional

Continued

126

BB&T Funds

Notes to Financial Statements, continued

(Unaudited)

March 31, 2004

borrowers of securities, deemed by BB&T to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in the judgement of BB&T, the consideration which can be earned currently from such securities loans justifies the attendant risks. Loans are subject to termination by the Funds or the borrower at any time and are, therefore, not considered to be illiquid investments. As of March 31, 2004, the following Funds had loans outstanding:


	Value of Collateral		Value of Loaned Securities		Average Value on Loan
Large Company Value Fund	$	125,280,306	$	121,194,878	$	121,194,878	(1)
Large Company Growth Fund		168,286,383		163,358,665		152,799,057
Mid Cap Value Fund		50,511,604		48,828,117		48,828,117	(1)
Mid Cap Growth Fund		64,290,114		62,293,996		58,579,613
Small Company Value Fund		10,605,378		10,309,689		7,569,840
Small Company Growth Fund		24,433,290		23,491,632		34,793,471
Short U.S. Government Fund		102,958,875		100,784,638		95,851,821
Intermediate U.S. Government Fund		245,269,855		240,102,091		218,162,326
Intermediate Corporate Bond Fund		28,532,676		27,749,757		35,659,174

(1)

Large Company Value Fund and Mid Cap Value Fund began loaning securities in March 2004. The average disclosed is for the time period that securities were lent.

Expense Allocation:

Expenses directly attributable to a Fund are charged to that Fund. Expenses not directly attributable to a Fund are allocated proportionately among all Funds daily in relation to the net assets of each Fund or on another reasonable basis. Each class of shares bears its pro-rata portion of expenses attributable to its series, except that each class separately bears expenses related specifically to that class, such as distribution fees.

Dividends to Shareholders:

Dividends from net investment income are declared daily and paid monthly for the Short U.S. Government Fund, the Intermediate U.S. Government Fund, the Intermediate Corporate Bond Fund, the Tax-Free Funds and the Money Market Funds. Dividends from net investment income are declared and paid monthly for the Balanced Fund, the Large Company Value Fund, the Mid Cap Value Fund and the Small Company Value Fund. Dividends from net investment income are declared and paid quarterly for the Large Company Growth Fund, the Mid Cap Growth Fund, the Small Company Growth Fund, the Special Opportunities Equity Fund, the International Equity Fund, and the Funds of Funds. Distributable net realized gains, if any, are declared and distributed at least annually.

The character of income and gains distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (i.e. reclass of market discounts, gain/loss, paydowns, and distributions), such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require reclassification. Dividends to shareholders which exceed net investment income and net realized gains for tax purposes are reported as distributions of capital.

Continued

127

BB&T Funds

Notes to Financial Statements, continued

(Unaudited)

March 31, 2004

4.	Purchases and Sales of Securities:

Purchases and sales of securities (excluding short-term securities) for the period ended March 31, 2004 are as follows:


	Purchases		Sales
Balanced Fund	$	37,925,402	$	106,053,229
Large Company Value Fund		51,636,487		48,162,223
Large Company Growth Fund		231,346,720		212,367,143
Mid Cap Value Fund		21,833,858		6,905,872
Mid Cap Growth Fund		79,950,908		71,335,950
Small Company Value Fund		8,653,637		2,884,744
Small Company Growth Fund		118,346,903		167,525,171
Special Opportunities Equity Fund		20,874,648		8,676,206
International Equity Fund		54,167,201		47,551,473
Short U.S. Government Fund		69,512,435		45,936,673
Intermediate U.S. Government Fund		275,358,959		267,041,549
Intermediate Corporate Bond Fund		81,659,459		45,857,909
Kentucky Intermediate Tax-Free Fund		2,101,159		1,375,257
Maryland Intermediate Tax-Free Fund		3,802,388		1,164,543
North Carolina Intermediate Tax-Free Fund		36,301,707		28,417,300
South Carolina Intermediate Tax-Free Fund		2,611,139		2,860,452
Virginia Intermediate Tax-Free Fund		15,544,865		14,339,628
West Virginia Intermediate Tax-Free Fund		3,445,873		15,582,057
Capital Manager Conservative Growth Fund		34,264,504		1,282,500
Capital Manager Moderate Growth Fund		16,802,755		—
Capital Manager Growth Fund		7,133,236		84,000
Capital Manager Equity Fund		3,522,661		755,862

Continued

128

BB&T Funds

Notes to Financial Statements, continued

(Unaudited)

March 31, 2004

5.	Related Party Transactions:

Investment advisory services are provided to the Funds by BB&T. Under the terms of the Investment Advisory Agreement, BB&T is entitled to receive fees based on a percentage of the average daily net assets of each of the Funds.

Information regarding these transactions is as follows for the period March 31, 2004:


	Annual Fee Rate
Balanced Fund	0.74	%
Large Company Value Fund	0.74	%
Large Company Growth Fund	0.74	%
Mid Cap Value Fund	0.74	%
Mid Cap Growth Fund	0.74	%
Small Company Value Fund	1.00	%
Small Company Growth Fund	1.00	%
Special Opportunities Equity Fund	0.80	%
International Equity Fund	1.00	%
Short U.S. Government Fund	0.60	%
Intermediate U.S. Government Fund	0.60	%
Intermediate Corporate Bond Fund	0.60	%
Kentucky Intermediate Tax-Free Fund	0.60	%
Maryland Intermediate Tax-Free Fund	0.60	%
North Carolina Intermediate Tax-Free Fund	0.60	%
South Carolina Intermediate Tax-Free Fund	0.60	%
Virginia Intermediate Tax-Free Fund	0.60	%
West Virginia Intermediate Tax-Free Fund	0.45	%
Prime Money Market Fund	0.40	%
U.S. Treasury Money Market Fund	0.40	%
Capital Manager Conservative Growth Fund	0.25	%
Capital Manager Moderate Growth Fund	0.25	%
Capital Manager Growth Fund	0.25	%
Capital Manager Equity Fund	0.25	%

Pursuant to a Sub-Advisory agreement with BB&T, UBS Global Asset Management (Americas), Inc. (“UBS”) serves as the Sub-Advisor to the International Equity Fund. Under the agreement, UBS manages the International Equity Fund subject to the general supervision of the Funds’ Board of Trustees and BB&T. Pursuant to a Sub-Advisory agreement with BB&T, Federated Investment Management Company (“Federated”) serves as the Sub-Advisor to the Prime Money Market Fund. Under the agreement, Federated manages the Prime Money Market Fund subject to the general supervision of the Funds’ Board of Trustees and BB&T. Pursuant to a Sub-Advisory agreement with BB&T, Scott & Stringfellow, Inc. serves as the Sub Advisor to the Special Opportunities Equity Fund. Under the agreement, Scott & Stringfellow, Inc. manages the Special Opportunities Equity Fund subject to the general supervision of the Funds’ Board of Trustees and BB&T. For their services, Sub-Advisors are entitled to a fee, payable by BB&T.

BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services (“BISYS”), an Ohio Limited Partnership, and BISYS Fund Services Ohio, Inc. (“BISYS Ohio”) are subsidiaries of the BISYS Group, Inc. BISYS, with whom certain officers of the Funds are affiliated, serves the Funds as administrator and distributor. Such officers are paid no fees directly by the Funds for serving as officers of the Funds. BISYS Ohio serves the Funds as fund accountant and transfer agent. BISYS and BISYS Ohio receive compensation for providing administration, fund accounting and transfer agency services at a rate of 0.25% of the average daily net assets of each Fund. The fee is accrued daily and payable on a monthly basis. BISYS Ohio may use its fees to pay advertising and marketing expenses for the benefit of the Funds.

Continued

129

BB&T Funds

Notes to Financial Statements, continued

(Unaudited)

March 31, 2004

The Funds have adopted a Distribution and Shareholder Services Plan (the “Plan”) in accordance with Rule 12b-1 under the 1940 Act. The Plan provides for payments to the distributor of up to 0.50%, 1.00% and 1.00% of the average daily net assets of the Class A Shares, Class B Shares, and Class C Shares, respectively, with exception of the Mid Cap Value Fund, the Mid Cap Growth Fund and the West Virginia Intermediate Tax-Free Fund which receives payments of up to 0.25% of the average daily net assets per Class A Shares. The fees may be used by BISYS to pay banks, including the advisor, broker dealers and other institutions. As distributor, BISYS is entitled to receive commissions on sales of shares of the Variable Net Asset Value Funds. For the period ended March 31, 2004, BISYS received $1,528,153 from commissions earned on sales of shares of the Funds’ Variable Net Asset Value Funds, of which $1,297,848 was allowed to affiliated broker/dealers of the Funds.

6.	Concentration of Credit Risk:

The Tax-Free Funds invest primarily in debt instruments of municipal issuers in their respective states. The issuers’ abilities to meet their obligations may be affected by economic developments in a specific state or region.

7.	Subsequent Event:

On September 4, 2003, the Board of Trustees approved a proposal to liquidate the BB&T Balanced Fund. The Fund closed on April 29, 2004.

8.	Federal Income Tax Information:

It is the policy of the Funds to qualify or continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income tax is required.

As of the latest tax year end of September 30, 2003, the following Funds have net capital loss carryforwards to offset future net capital gains if any, to the extent provided by the Treasury regulations. To the extent that these carryforwards are used to offset future capital gains it is probable that the gains that are offset will not be distributed to shareholders.


	Amount		Expires
Balanced Fund	$	3,490,421	2010
Balanced Fund		9,198,461	2011
Large Company Value Fund		6,977,015	2011
Large Company Growth Fund		1,715,152	2009
Large Company Growth Fund		34,049,359	2010
Large Company Growth Fund		32,172,081	2011
Mid Cap Value Fund		935,073	2009
Mid Cap Value Fund		154,722	2010
Mid Cap Value Fund		7,077,568	2011
Mid Cap Growth Fund		262,726	2009
Mid Cap Growth Fund		11,232,165	2011
Small Company Growth Fund		4,380,353	2009
Small Company Growth Fund		65,524,230	2010
Small Company Growth Fund		33,735,633	2011
International Equity Fund		920,127	2009
International Equity Fund		27,869,450	2010
International Equity Fund		18,261,749	2011
Short U.S. Government Fund		347,861	2008
Short U.S. Government Fund		498,342	2009
Intermediate Corporate Bond Fund		981,789	2011
Kentucky Intermediate Tax-Free Fund		50,858	2011
Maryland Intermediate Tax-Free Fund		18,343	2011
Capital Manager Growth Fund		64,089	2011

130

LOGO

Semi-Annual Report

To Shareholders

INVESTMENT ADVISER

BB&T Asset Management, Inc.

5th Floor

434 Fayetteville Street Mall

Raleigh, NC 27601

DISTRIBUTOR

BISYS Fund Services, L.P.

3435 Stelzer Road

Columbus, OH 43219

LEGAL COUNSEL

Ropes & Gray LLP

One Metro Center

700 12th Street, N.W.

Suite 900

Washington D. C. 20005

TRANSFER AGENT

BISYS Fund Services

3435 Stelzer Road

Columbus, OH 43219

AUDITORS

KPMG LLP

191 W. Nationwide Blvd.

Suite 500

Columbus, OH 43215

March 31, 2004

05/04

Item 2. Code of Ethics.

Disclose whether, as of the end of the period covered by the report, the registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, explain why it has not done so.

Not applicable - only for Annual reports.

The registrant must briefly describe the nature of any amendment, during the period covered by the report, to a provision of its code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item. The registrant must file a copy of any such amendment as an exhibit pursuant to Item 11(a)(1), unless the registrant has elected to satisfy paragraph (f) of this Item by posting its code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by undertaking to provide its code of ethics to any person without charge, upon request, pursuant to paragraph (f)(3) of this Item.

If the registrant has, during the period covered by the report, granted a waiver, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more items set forth in paragraph (b) of this Item, the registrant must briefly describe the nature of the waiver, the name of the person to whom the waiver was granted, and the date of the waiver.

During the period covered by the report, with respect to the registrant’s code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions; there have been no amendments to, nor any waivers granted from, a provision that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item 2.

Item 3. Audit Committee Financial Expert.

(a) (1) Disclose that the registrant’s board of directors has determined that the registrant either:

(i) Has at least one audit committee financial expert serving on its audit committee; or

(ii) Does not have an audit committee financial expert serving on its audit committee.

(2) If the registrant provides the disclosure required by paragraph (a)(1)(i) of this Item, it must disclose the name of the audit committee financial expert and whether that person is “independent.” In order to be considered “independent” for purposes of this Item, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee:

(i) Accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer; or

(ii) Be an “interested person” of the investment company as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a-

2(a)(19)).

(3) If the registrant provides the disclosure required by paragraph (a)(1)(ii) of this Item, it must explain why it does not have an audit committee financial expert.

Not applicable - only for Annual reports.

Item 4. Principal Accountant Fees and Services.

(a) Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.

(b) Disclose, under the caption Audit-Related Fees, the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category.

(c) Disclose, under the caption Tax Fees, the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. Registrants shall describe the nature of the services comprising the fees disclosed under this category.

(d) Disclose, under the caption All Other Fees, the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category.

(e) (1) Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.

(2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.

(g) Disclose the aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant.

(h) Disclose whether the registrant’s audit committee of the board of directors has considered whether the provision of nonaudit services that were rendered to the registrant’s investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Not applicable – only for annual reports.

Item 5. Audit Committee of Listed Registrants.

(a)

If the registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act (17CFR 240.10A-3), state whether or not the registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a committee, however designated, identify each committee member. If the entire board of directors is acting as the registrant’s audit committee as specified in Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)), so state.

(b)

If applicable, provide the disclosure required by Rule 10A-3(d) under the Exchange Act (17CFR 240.10A-3(d)) regarding an exemption from the listing standards for all audit committees.

Not applicable.

Item 6. Schedule of Investments.

File Schedule I – Investments in securities of unaffiliated issuers as of the close of the reporting period as set forth in § 210.12-12 of Regulation S-X, unless the schedule is included as part of the report to shareholders filed under Item 1 of this Form.

Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

A closed-end management investment company that is filing an annual report on this Form N-CSR must, unless it invests exclusively in non-voting securities, describe the policies and procedures that it uses to determine how to vote proxies relating to portfolio securities, including the procedures that the company uses when a vote presents a conflict between the interests of its shareholders, on the one hand, and those of the company’s investment adviser; principal underwriter; or any affiliated person (as defined in Section 2(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules thereunder) of the company, its investment adviser, or its principal underwriter, on the other. Include any policies and procedures of the company’s investment adviser, or any other third party, that the company uses, or that are used on the company’s behalf, to determine how to vote proxies relating to portfolio securities.

Not applicable.

Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

If the registrant is a closed-end management investment company, provide the information specified in paragraph (b) of this Item with respect to any purchase made by or on behalf of the registrant or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or other units of any class of the registrant’s equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781).

Not applicable.

Item 9. Submission of Matters to a Vote of Security Holders.

Describe any material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item.

During the period covered by the report, with respect to the procedures by which shareholders may recommend nominees to the registrant’s board of directors, there were no material changes that relate to any elements of Item7(d)(2)(ii)(G) of Schedule 14A or this Item 9.

Item 10. Controls and Procedures.

(a) Disclose the conclusions of the registrant’s principal executive and principal financial officers, or persons performing similar functions, regarding the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).

The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is (i) accumulated and communicated to the investment company’s management, including its certifying officers, to allow timely decisions regarding required disclosure; and (ii) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b) Disclose any change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s last fiscal half-year (the registrant’s second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

There were no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal half-year (the registrant’s second fiscal half-year in the case of an annual report) that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 11. Exhibits.

(a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.

(a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the

registrant intends to satisfy the Item 2 requirements through filing of an exhibit. Not applicable – only for annual reports.

(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2). Certifications pursuant to Rule 30a-2(a) are attached hereto.

(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.

(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by rule 30a-2(b) under the Act as an exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant incorporates it by reference. Certifications pursuant to Rule 30a-2(b) are furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



(Registrant)		BB&T Funds



By (Signature and Title)*		/s/ George O. Martinez George O. Martinez, President



Date		June 10, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



By (Signature and Title)*		/s/ George O. Martinez George O. Martinez, President



Date		June 10, 2004



By (Signature and Title)*		/s/ Troy A. Sheets Troy A. Sheets, Treasurer



Date		June 10, 2004

*Print the name and title of each signing officer under his or her signature.

Sterling Capital Equity Income Fund (BAEIX) N-CSRSCertified semi-annual shareholder report (management investment company)