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

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                

Sterling Capital Funds

(Exact name of registrant as specified in charter)

434 Fayetteville Street, 5th Floor

Raleigh, NC 27601-0575

(Address of principal executive offices) (Zip code)

James T. Gillespie, President

Sterling Capital Funds

434 Fayetteville Street, 5th Floor

Raleigh, NC 27601-0575

(Name and address of agent for service)

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

Date of fiscal year end: September 30

Date of reporting period: March 31, 2013

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, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.

Notice of Privacy Policy & Practices

Sterling Capital Funds recognizes and respects the privacy expectations of our customers.¹ We provide this notice to you so that you will know what kinds of information we collect about our customers and the circumstances in which that information may be disclosed to third parties who are not affiliated with the Sterling Capital Funds.

Collection of Customer Information

We collect nonpublic personal information about our customers from the following sources:

• Account Applications and other forms, which may include a customer’s name, address, social security number, and information about a customer’s investment goals and risk tolerance;

• Account History, including information about the transactions and balances in a customer’s accounts; and

• Correspondence, written, telephonic or electronic between a customer and the Sterling Capital Funds or service providers to the Sterling Capital Funds.

Disclosure of Customer Information

We may disclose all of the consumer information outlined above to third parties who are not affiliated with the Sterling Capital Funds:

• as permitted by law — for example with service providers who maintain or service shareholder accounts for the Sterling Capital Funds or to a shareholder’s broker or agent; and

• to perform marketing services on our behalf or pursuant to a joint marketing agreement with another financial institution.

Security of Customer Information

We require service providers to the Sterling Capital Funds:

• to maintain policies and procedures designed to assure only appropriate access to, and use of information about customers of the Sterling Capital Funds; and

• to maintain physical, electronic and procedural safeguards that comply with applicable legal standards to guard nonpublic personal information of customers of the Sterling Capital Funds.

We will adhere to the policies and practices described in this notice regardless of whether you are a current or former customer of the Sterling Capital Funds.

¹ For purposes of this notice, the terms “customer” or “customers” includes both individual shareholders of the Sterling Capital Funds and individuals who provide nonpublic personal information to the Sterling Capital Funds, but do not invest in Sterling Capital Funds shares.

    Sterling Capital Funds

Table of Contents
Letter from the President and the Investment Advisor	1
Summary of Portfolio Holdings	2
Expense Example	4
Schedules of Portfolio Investments
Sterling Capital Select Equity Fund	8
Sterling Capital Mid Value Fund	9
Sterling Capital Small Value Fund	10
Sterling Capital Special Opportunities Fund	11
Sterling Capital Equity Income Fund	12
Sterling Capital Ultra Short Bond Fund	13
Sterling Capital Short-Term Bond Fund	17
Sterling Capital Intermediate U.S. Government Fund	21
Sterling Capital Total Return Bond Fund	22
Sterling Capital Corporate Fund	28
Sterling Capital Securitized Opportunities Fund	31
Sterling Capital Kentucky Intermediate Tax-Free Fund	34
Sterling Capital Maryland Intermediate Tax-Free Fund	36
Sterling Capital North Carolina Intermediate Tax-Free Fund	38
Sterling Capital South Carolina Intermediate Tax-Free Fund	42
Sterling Capital Virginia Intermediate Tax-Free Fund	45
Sterling Capital West Virginia Intermediate Tax-Free Fund	48
Sterling Capital Strategic Allocation Conservative Fund	51
Sterling Capital Strategic Allocation Balanced Fund	52
Sterling Capital Strategic Allocation Growth Fund	53
Sterling Capital Strategic Allocation Equity Fund	54
Financial Statements	55
Notes to Financial Statements	115
Other Information	130

Letter from the President and the Investment Advisor

Dear Shareholders:

We are pleased to present this Sterling Capital Funds semiannual report covering the six months between October 1, 2012 and March 31, 2013. Equities posted strong gains during the period, as improvements in the housing market, monetary easing by the Fed and efforts to alleviate the eurozone debt crisis bolstered investor confidence. Fixed-income securities meanwhile experienced more modest returns.

The economy continued to expand during the six months under review, but the pace of growth remained slow. Many components of the U.S. economy, including business investment and industrial production, continued to show signs of weakness, which further increased the risk of recession. A politically charged debate over debt reduction and the fiscal cliff weighed on investor sentiment during the first half of the period. Meanwhile, tax hikes and spending cuts that took effect midway through the period dimmed prospects for economic growth during the second half of the period.

There were few clear signals from economic indicators throughout the period. Real income and the consumer savings rate remained weak during the period, while consumer confidence declined due to the economic uncertainty caused by government sequestration. Manufacturing and retail sales weakened, and business confidence ended the period where it started, despite a low point in November followed by a steady increase through February. The trend reflected the

relative health of corporate balance sheets. Revenue and earnings growth have been weak considering the past several quarters.

The housing market was one of the few positive indicators, showing significant signs of a self-sustaining recovery; data indicated robust improvements in both home prices and the number of sales.

The unemployment rate reached its lowest level since 2009, but year-over-year payroll growth dropped to a new one-year low. One reason for this was an uncertain economic and policy environment in Washington, D.C. that left many companies reluctant to add workers.

The U.S. gross domestic product (GDP) increased at an annualized rate of 0.4% during the first half of this semiannual period. According to preliminary figures, GDP grew at an annualized rate of 2.5% rate during the second half of the period. The Federal Reserve (Fed) maintained its aggressive stance toward monetary policy, keeping its short-term interest rate target between zero and 0.25% throughout the period. The Fed also continued its third round of quantitative easing, which is scheduled to run through 2014.

The European Central Bank’s efforts to reduce borrowing costs for peripheral European countries, such as Italy and Spain, provided respite from the eurozone crisis. Significant fiscal problems remain for much of continental Europe, but the worst of the liquidity crisis appears to have passed.

The S&P 500^® Index¹ reached an all-time high toward the end of the period, and gained 10.19% during the six

months under review. Small-cap stocks outperformed larger shares, with the Russell 2000 Index of small-cap stocks gaining 15.23%. Foreign stocks also performed well, though emerging markets lagged behind more developed markets. U.S. fixed-income investments performed poorly overall. Investors continued to move assets into riskier sectors, including spread assets and high-yield bonds, in pursuit of higher yield in the low interest rate environment. Foreign fixed income markets also struggled during the period.

We will continue to monitor the evolving economic and market climate, and will manage the Sterling Capital Funds accordingly. Thank you for your confidence in Sterling Capital Management. We look forward to serving your investment needs during the months and years ahead.

Sincerely,

James T. Gillespie

President

Sterling Capital Funds

Jeffrey J. Schappe, CFA

Managing Director-Chief
Market Strategist

Sterling Capital Management LLC

¹ “S&P 500^®” is a registered service mark of Standard & Poor’s Corporation, which does not sponsor and is in no way affiliated with the Sterling Capital Funds. The S&P 500^® Index 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. A 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.

Past performance does not guarantee future results. Mutual Fund Investing involves risk including the possible loss of principal.

This report is authorized for distribution only when preceded or accompanied by a prospectus. Please read the prospectus carefully before investing or sending money. Sterling Capital Management LLC (“Sterling Capital”) serves as investment advisor to the Sterling Capital Funds (each a “Fund” and collectively, the “Funds”) and is paid a fee for its services. Shares of the Funds are not deposits or obligations of, or guaranteed or endorsed by, Branch Banking and Trust Company or its affiliates. The Funds are not insured by the FDIC or any other government agency. The Funds currently are distributed by Sterling Capital Distributors, LLC. The distributor is not affiliated with Branch Banking and Trust Company or its affiliates.

The foregoing information and opinions are for general information only. Sterling Capital 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 as offering individual or personalized investment advice.

1

Sterling Capital Funds

Summary of Portfolio Holdings (Unaudited)

Sterling Capital Funds invested, as a percentage of net assets, in the following industry sectors, countries, states, funds or security types, as of March 31, 2013.

Sterling Capital Select Equity Fund	Percentage of net assets
Consumer Discretionary		9.7	%
Consumer Staples		8.5	%
Energy		11.2	%
Financials		15.4	%
Health Care		10.0	%
Industrials		15.3	%
Information Technology		20.3	%
Materials		3.8	%
Telecommunication Services		2.1	%
Exchange Traded Fund		1.3	%
Cash Equivalents		1.5	%
		99.1	%
Sterling Capital Mid Value Fund	Percentage of net assets
Consumer Discretionary		15.4	%
Energy		1.5	%
Financials		31.0	%
Health Care		18.6	%
Industrials		4.2	%
Information Technology		24.5	%
Cash Equivalents		4.2	%
		99.4	%
Sterling Capital Small Value Fund	Percentage of net assets
Consumer Discretionary		17.3	%
Consumer Staples		1.7	%
Energy		4.1	%
Financials		32.7	%
Health Care		3.5	%
Industrials		9.1	%
Information Technology		24.2	%
Telecommunication Services		1.3	%
Cash Equivalents		5.4	%
		99.3	%
Sterling Capital Special Opportunities Fund	Percentage of net assets
Consumer Discretionary		16.2	%
Consumer Staples		3.4	%
Energy		11.8	%
Financials		6.4	%
Health Care		18.3	%
Industrials		3.6	%
Information Technology		29.9	%
Materials		3.0	%
Cash Equivalents		7.6	%
		100.2	%
Sterling Capital Equity Income Fund	Percentage of net assets
Consumer Discretionary		12.8	%
Consumer Staples		11.4	%
Energy		21.2	%
Financials		9.2	%
Health Care		14.9	%
Industrials		5.0	%
Information Technology		8.3	%
Materials		2.1	%
Utilities		2.3	%
Cash Equivalents		12.8	%
		100.0	%

Sterling Capital Ultra Short Bond Fund	Percentage of net assets
Asset Backed Securities		10.7	%
Collateralized Mortgage Obligations		1.7	%
Commercial Mortgage-Backed Securities		5.9	%
Corporate Bonds		60.5	%
Municipal Bonds		20.3	%
Cash Equivalents		0.5	%
		99.6	%
Sterling Capital Short-Term Bond Fund	Percentage of net assets
Asset Backed Securities		4.8	%
Collateralized Mortgage Obligations		5.1	%
Commercial Mortgage-Backed Securities		20.9	%
Corporate Bonds		60.2	%
Mortgage-Backed Securities		0.1	%
Municipal Bonds		6.0	%
Preferred Stocks		1.9	%
Cash Equivalents		3.5	%
		102.5	%
Sterling Capital Intermediate U.S. Government Fund	Percentage of net assets
Collateralized Mortgage Obligations		8.4	%
Corporate Bonds		4.0	%
Mortgage-Backed Securities		18.7	%
Municipal Bonds		7.2	%
U.S. Government Agencies		25.1	%
U.S. Treasury Bonds		3.6	%
U.S. Treasury Notes		30.1	%
Cash Equivalents		1.6	%
		98.7	%
Sterling Capital Total Return Bond Fund	Percentage of net assets
Asset Backed Securities		5.0	%
Collateralized Mortgage Obligations		10.1	%
Commercial Mortgage-Backed Securities		19.3	%
Corporate Bonds		41.6	%
Mortgage-Backed Securities		14.5	%
Municipal Bonds		7.6	%
Preferred Stocks		2.3	%
U.S. Treasury Bonds		0.3	%
U.S. Treasury Notes		0.8	%
Cash Equivalents		2.9	%
		104.4	%
Sterling Capital Corporate Fund	Percentage of net assets
Corporate Bonds		93.4	%
Preferred Stocks		5.8	%
Cash Equivalents		0.3	%
		99.5	%
Sterling Capital Securitized Opportunities Fund	Percentage of net assets
Asset Backed Securities		8.9	%
Collateralized Mortgage Obligations		22.3	%
Commercial Mortgage-Backed Securities		34.5	%
Mortgage-Backed Securities		46.5	%
Cash Equivalents		1.1	%
		113.3	%

2

Sterling Capital Funds

Summary of Portfolio Holdings (Unaudited)

Sterling Capital Kentucky Intermediate Tax-Free Fund	Percentage of net assets
Kentucky Municipal Bonds		97.6	%
Cash Equivalents		1.8	%
		99.4	%
Sterling Capital Maryland Intermediate Tax-Free Fund	Percentage of net assets
Maryland Municipal Bonds		96.3	%
Cash Equivalents		2.9	%
		99.2	%
Sterling Capital North Carolina Intermediate Tax-Free Fund	Percentage of net assets
North Carolina Municipal Bonds		98.5	%
Cash Equivalents		3.2	%
		101.7	%
Sterling Capital South Carolina Intermediate Tax-Free Fund	Percentage of net assets
South Carolina Municipal Bonds		92.7	%
Cash Equivalents		5.9	%
		98.6	%
Sterling Capital Virginia Intermediate Tax-Free Fund	Percentage of net assets
District of Columbia Municipal Bonds		1.2	%
Virginia Municipal Bonds		95.7	%
Cash Equivalents		3.3	%
		100.2	%
Sterling Capital West Virginia Intermediate Tax-Free Fund	Percentage of net assets
West Virginia Municipal Bonds		96.9	%
Cash Equivalents		2.3	%
		99.2	%

Sterling Capital Strategic Allocation Conservative Fund	Percentage of net assets
Sterling Capital Total Return Bond Fund, Institutional Class		54.3	%
Sterling Capital Equity Income Fund, Institutional Class		21.5	%
Sterling Capital Special Opportunities Fund, Institutional Class		20.6	%
Non-Affiliated Investment Company		3.5	%
		99.9	%
Sterling Capital Strategic Allocation Balanced Fund	Percentage of net assets
Sterling Capital Total Return Bond Fund, Institutional Class		34.4	%
Sterling Capital Equity Income Fund, Institutional Class		32.6	%
Sterling Capital Special Opportunities Fund, Institutional Class		31.2	%
Non-Affiliated Investment Company		1.8	%
		100.0	%
Sterling Capital Strategic Allocation Growth Fund	Percentage of net assets
Sterling Capital Equity Income Fund, Institutional Class		40.1	%
Sterling Capital Special Opportunities Fund, Institutional Class		38.1	%
Sterling Capital Total Return Bond Fund, Institutional Class		18.6	%
Non-Affiliated Investment Company		2.9	%
		99.7	%
Sterling Capital Strategic Allocation Equity Fund	Percentage of net assets
Sterling Capital Select Equity Fund, Institutional Class		21.9	%
Sterling Capital Special Opportunities Fund, Institutional Class		13.4	%
Sterling Capital Mid Value Fund, Institutional Class		8.9	%
Sterling Capital Equity Income Fund, Institutional Class		5.5	%
Sterling Capital Small Value Fund, Institutional Class		2.1	%
Non-Affiliated Investment Companies		11.9	%
Exchange Traded Funds		36.8	%
		100.5	%

3

Sterling Capital Funds

Expense Example (Unaudited)

As a shareholder of the Sterling Capital Funds (each a “Fund” and collectively, the “Funds”), you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses.

These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from October 1, 2012 through March 31, 2013.

Actual Example

The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

	Beginning Account Value 10/1/12			Ending Account Value 3/31/13			Expenses Paid During Period* 10/1/12 - 3/31/13			Annualized Expense Ratio During Period 10/1/12 - 3/31/13
Sterling Capital Select Equity Fund
Class A Shares		$	1,000.00		$	1,049.23		$	5.52		1.08	%
Class B Shares			1,000.00			1,045.31			9.33		1.83	%
Class C Shares			1,000.00			1,045.96			9.33		1.83	%
Institutional Shares			1,000.00			1,050.24			4.24		0.83	%
Sterling Capital Mid Value Fund
Class A Shares			1,000.00			1,164.02			6.37		1.18	%
Class B Shares			1,000.00			1,159.54			10.39		1.93	%
Class C Shares			1,000.00			1,159.42			10.39		1.93	%
Institutional Shares			1,000.00			1,164.42			5.02		0.93	%
Class R Shares			1,000.00			1,161.47			7.65		1.42	%
Sterling Capital Small Value Fund
Class A Shares			1,000.00			1,159.00			7.00		1.30	%
Class B Shares			1,000.00			1,154.75			11.01		2.05	%
Class C Shares			1,000.00			1,154.87			11.01		2.05	%
Institutional Shares			1,000.00			1,160.13			5.65		1.05	%
Class R Shares			1,000.00			1,159.97			8.29		1.54	%
Sterling Capital Special Opportunities Fund
Class A Shares			1,000.00			1,111.24			6.68		1.27	%
Class B Shares			1,000.00			1,106.97			10.61		2.02	%
Class C Shares			1,000.00			1,106.91			10.61		2.02	%
Institutional Shares			1,000.00			1,112.42			5.37		1.02	%
Class R Shares			1,000.00			1,109.52			7.99		1.52	%
Sterling Capital Equity Income Fund
Class A Shares			1,000.00			1,113.92			6.27		1.19	%
Class B Shares			1,000.00			1,109.40			10.20		1.94	%
Class C Shares			1,000.00			1,110.26			10.21		1.94	%
Institutional Shares			1,000.00			1,115.64			4.96		0.94	%
Class R Shares			1,000.00			1,112.47			7.58		1.44	%
Sterling Capital Ultra Short Bond Fund
Class A Shares			1,000.00			1,001.99			3.54		0.71	%
Institutional Shares			1,000.00			1,003.14			2.35		0.47	%
Sterling Capital Short-Term Bond Fund
Class A Shares			1,000.00			1,007.44			3.95		0.79	%
Class C Shares			1,000.00			1,003.70			7.69		1.54	%
Institutional Shares			1,000.00			1,008.72			2.70		0.54	%
Sterling Capital Intermediate U.S. Government Fund
Class A Shares			1,000.00			996.21			4.78		0.96	%
Class B Shares			1,000.00			993.32			8.50		1.71	%
Class C Shares			1,000.00			993.36			8.50		1.71	%
Institutional Shares			1,000.00			998.39			3.54		0.71	%
Sterling Capital Total Return Bond Fund
Class A Shares			1,000.00			1,005.76			4.15		0.83	%
Class B Shares			1,000.00			1,002.02			7.89		1.58	%
Class C Shares			1,000.00			1,002.06			7.94		1.59	%
Institutional Shares			1,000.00			1,007.02			2.95		0.59	%
Class R Shares			1,000.00			1,004.13			5.45		1.09	%
Sterling Capital Corporate Fund
Class A Shares			1,000.00			1,015.15			4.22		0.84	%
Class C Shares			1,000.00			1,013.99			7.73		1.54	%
Institutional Shares			1,000.00			1,015.62			2.06		0.41	%

4

Sterling Capital Funds

Expense Example (Unaudited)

	Beginning Account Value 10/1/12			Ending Account Value 3/31/13			Expenses Paid During Period* 10/1/12 - 3/31/13			Annualized Expense Ratio During Period 10/1/12 - 3/31/13
Sterling Capital Securitized Opportunities Fund
Class A Shares		$	1,000.00		$	1,002.89		$	4.44		0.89	%
Class C Shares			1,000.00			1,001.92			7.94		1.59	%
Institutional Shares			1,000.00			1,003.25			2.10		0.42	%
Sterling Capital Kentucky Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,007.98			4.81		0.96	%
Class C Shares			1,000.00			1,005.14			8.55		1.71	%
Institutional Shares			1,000.00			1,009.25			3.56		0.71	%
Sterling Capital Maryland Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,002.90			4.79		0.96	%
Class C Shares			1,000.00			1,000.00			8.53		1.71	%
Institutional Shares			1,000.00			1,004.16			3.55		0.71	%
Sterling Capital North Carolina Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,000.37			4.59		0.92	%
Class C Shares			1,000.00			997.49			8.32		1.67	%
Institutional Shares			1,000.00			1,001.60			3.34		0.67	%
Sterling Capital South Carolina Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,005.50			4.70		0.94	%
Class C Shares			1,000.00			1,001.69			8.43		1.69	%
Institutional Shares			1,000.00			1,007.63			3.45		0.69	%
Sterling Capital Virginia Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,001.26			4.64		0.93	%
Class C Shares			1,000.00			998.33			8.37		1.68	%
Institutional Shares			1,000.00			1,003.30			3.40		0.68	%
Sterling Capital West Virginia Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,003.02			4.64		0.93	%
Class C Shares			1,000.00			999.26			8.37		1.68	%
Institutional Shares			1,000.00			1,004.26			3.40		0.68	%
Sterling Capital Strategic Allocation Conservative Fund
Class A Shares			1,000.00			1,037.59			3.30		0.65	%
Class B Shares			1,000.00			1,034.58			7.10		1.40	%
Class C Shares			1,000.00			1,033.27			7.05		1.39	%
Institutional Shares			1,000.00			1,038.40			2.03		0.40	%
Sterling Capital Strategic Allocation Balanced Fund
Class A Shares			1,000.00			1,056.27			3.18		0.62	%
Class B Shares			1,000.00			1,052.15			7.01		1.37	%
Class C Shares			1,000.00			1,051.09			7.01		1.37	%
Institutional Shares			1,000.00			1,058.29			1.95		0.38	%
Sterling Capital Strategic Allocation Growth Fund
Class A Shares			1,000.00			1,070.69			3.25		0.63	%
Class B Shares			1,000.00			1,067.06			7.16		1.39	%
Class C Shares			1,000.00			1,066.56			7.11		1.38	%
Institutional Shares			1,000.00			1,073.05			2.02		0.39	%
Sterling Capital Strategic Allocation Equity Fund
Class A Shares			1,000.00			1,086.05			4.78		0.92	%
Class B Shares			1,000.00			1,081.91			8.62		1.66	%
Class C Shares			1,000.00			1,082.46			8.57		1.65	%
Institutional Shares			1,000.00			1,086.98			3.38		0.65	%

* Expenses are equal to the average account value over the period multiplied by the Fund’s annualized expense ratio, multiplied by 182 days divided by 365 (to reflect the six month period) for all Classes except for Class A Shares and Institutional Shares of Sterling Capital Ultra Short Bond Fund, Class A Shares and Class C Shares of Sterling Capital Corporate Fund and Sterling Capital Securitized Opportunities Fund, which are multiplied by 121, 59 and 59 days (respectively) divided by 365 (to reflect the period from commencement of operations).

5

Sterling Capital Funds

Expense Example (Unaudited)

Hypothetical Example for Comparison Purposes

The table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the year. You may use this information to compare the ongoing costs of investing in a Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 10/1/12			Ending Account Value 3/31/13			Expenses Paid During Period* 10/1/12 - 3/31/13			Annualized Expense Ratio During Period 10/1/12 - 3/31/13
Sterling Capital Select Equity Fund
Class A Shares		$	1,000.00		$	1,019.55		$	5.44		1.08	%
Class B Shares			1,000.00			1,015.81			9.20		1.83	%
Class C Shares			1,000.00			1,015.81			9.20		1.83	%
Institutional Shares			1,000.00			1,020.79			4.18		0.83	%
Sterling Capital Mid Value Fund
Class A Shares			1,000.00			1,019.05			5.94		1.18	%
Class B Shares			1,000.00			1,015.31			9.70		1.93	%
Class C Shares			1,000.00			1,015.31			9.70		1.93	%
Institutional Shares			1,000.00			1,020.29			4.68		0.93	%
Class R Shares			1,000.00			1,017.85			7.14		1.42	%
Sterling Capital Small Value Fund
Class A Shares			1,000.00			1,018.45			6.54		1.30	%
Class B Shares			1,000.00			1,014.71			10.30		2.05	%
Class C Shares			1,000.00			1,014.71			10.30		2.05	%
Institutional Shares			1,000.00			1,019.70			5.29		1.05	%
Class R Shares			1,000.00			1,017.25			7.75		1.54	%
Sterling Capital Special Opportunities Fund
Class A Shares			1,000.00			1,018.60			6.39		1.27	%
Class B Shares			1,000.00			1,014.86			10.15		2.02	%
Class C Shares			1,000.00			1,014.86			10.15		2.02	%
Institutional Shares			1,000.00			1,019.85			5.14		1.02	%
Class R Shares			1,000.00			1,017.35			7.64		1.52	%
Sterling Capital Equity Income Fund
Class A Shares			1,000.00			1,019.00			5.99		1.19	%
Class B Shares			1,000.00			1,015.26			9.75		1.94	%
Class C Shares			1,000.00			1,015.26			9.75		1.94	%
Institutional Shares			1,000.00			1,020.24			4.73		0.94	%
Class R Shares			1,000.00			1,017.75			7.24		1.44	%
Sterling Capital Ultra Short Bond Fund
Class A Shares			1,000.00			1,021.39			3.58		0.71	%
Institutional Shares			1,000.00			1,022.59			2.37		0.47	%
Sterling Capital Short-Term Bond Fund
Class A Shares			1,000.00			1,020.99			3.98		0.79	%
Class C Shares			1,000.00			1,017.25			7.75		1.54	%
Institutional Shares			1,000.00			1,022.24			2.72		0.54	%
Sterling Capital Intermediate U.S. Government Fund
Class A Shares			1,000.00			1,020.14			4.84		0.96	%
Class B Shares			1,000.00			1,016.40			8.60		1.71	%
Class C Shares			1,000.00			1,016.40			8.60		1.71	%
Institutional Shares			1,000.00			1,021.39			3.58		0.71	%
Sterling Capital Total Return Bond Fund
Class A Shares			1,000.00			1,020.79			4.18		0.83	%
Class B Shares			1,000.00			1,017.05			7.95		1.58	%
Class C Shares			1,000.00			1,017.00			8.00		1.59	%
Institutional Shares			1,000.00			1,021.99			2.97		0.59	%
Class R Shares			1,000.00			1,019.50			5.49		1.09	%
Sterling Capital Corporate Fund
Class A Shares			1,000.00			1,020.74			4.23		0.84	%
Class C Shares			1,000.00			1,017.25			7.75		1.54	%
Institutional Shares			1,000.00			1,022.89			2.07		0.41	%

6

Sterling Capital Funds

Expense Example (Unaudited)

	Beginning Account Value 10/1/12			Ending Account Value 3/31/13			Expenses Paid During Period* 10/1/12 - 3/31/13			Annualized Expense Ratio During Period 10/1/12 - 3/31/13
Sterling Capital Securitized Opportunities Fund
Class A Shares		$	1,000.00		$	1,020.49		$	4.48		0.89	%
Class C Shares			1,000.00			1,017.00			8.00		1.59	%
Institutional Shares			1,000.00			1,022.84			2.12		0.42	%
Sterling Capital Kentucky Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.14			4.84		0.96	%
Class C Shares			1,000.00			1,016.40			8.60		1.71	%
Institutional Shares			1,000.00			1,021.39			3.58		0.71	%
Sterling Capital Maryland Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.14			4.84		0.96	%
Class C Shares			1,000.00			1,016.40			8.60		1.71	%
Institutional Shares			1,000.00			1,021.39			3.58		0.71	%
Sterling Capital North Carolina Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.34			4.63		0.92	%
Class C Shares			1,000.00			1,016.60			8.40		1.67	%
Institutional Shares			1,000.00			1,021.59			3.38		0.67	%
Sterling Capital South Carolina Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.24			4.73		0.94	%
Class C Shares			1,000.00			1,016.50			8.50		1.69	%
Institutional Shares			1,000.00			1,021.49			3.48		0.69	%
Sterling Capital Virginia Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.29			4.68		0.93	%
Class C Shares			1,000.00			1,016.55			8.45		1.68	%
Institutional Shares			1,000.00			1,021.54			3.43		0.68	%
Sterling Capital West Virginia Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.29			4.68		0.93	%
Class C Shares			1,000.00			1,016.55			8.45		1.68	%
Institutional Shares			1,000.00			1,021.54			3.43		0.68	%
Sterling Capital Strategic Allocation Conservative Fund
Class A Shares			1,000.00			1,021.69			3.28		0.65	%
Class B Shares			1,000.00			1,017.95			7.04		1.40	%
Class C Shares			1,000.00			1,018.00			6.99		1.39	%
Institutional Shares			1,000.00			1,022.94			2.02		0.40	%
Sterling Capital Strategic Allocation Balanced Fund
Class A Shares			1,000.00			1,021.84			3.13		0.62	%
Class B Shares			1,000.00			1,018.10			6.89		1.37	%
Class C Shares			1,000.00			1,018.10			6.89		1.37	%
Institutional Shares			1,000.00			1,023.04			1.92		0.38	%
Sterling Capital Strategic Allocation Growth Fund
Class A Shares			1,000.00			1,021.79			3.18		0.63	%
Class B Shares			1,000.00			1,018.00			6.99		1.39	%
Class C Shares			1,000.00			1,018.05			6.94		1.38	%
Institutional Shares			1,000.00			1,022.99			1.97		0.39	%
Sterling Capital Strategic Allocation Equity Fund
Class A Shares			1,000.00			1,020.34			4.63		0.92	%
Class B Shares			1,000.00			1,016.65			8.35		1.66	%
Class C Shares			1,000.00			1,016.70			8.30		1.65	%
Institutional Shares			1,000.00			1,021.69			3.28		0.65	%

* Expenses are equal to the average account value over the period multiplied by the Fund’s annualized expense ratio, multiplied by 182 days divided by 365 (to reflect the six month period) for all Classes except for Class A Shares and Institutional Shares of Sterling Capital Ultra Short Bond Fund, Class A Shares and Class C Shares of Sterling Capital Corporate Fund and Sterling Capital Securitized Opportunities Fund, which are multiplied by 121, 59 and 59 days (respectively) divided by 365 (to reflect the period from commencement of operations).

7

Sterling Capital Select Equity Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Shares			Fair Value
	COMMON STOCKS (96.3%)
		Consumer Discretionary (9.7%)
	41,030	Coach, Inc.	$	2,051,090
	87,000	Comcast Corp., Class A		3,654,870
	66,300	DIRECTV(a)		3,753,243
	65,700	Target Corp.		4,497,165
	32,747	Time Warner Cable, Inc.		3,145,677
	81,150	Walt Disney Co. (The)		4,609,320
				21,711,365
		Consumer Staples (8.5%)
	64,500	Coca-Cola Co. (The)		2,608,380
	80,430	CVS Caremark Corp.		4,422,846
	106,080	Mondelez International, Inc., Class A		3,247,109
	45,330	PepsiCo, Inc.		3,586,056
	34,350	Philip Morris International, Inc.		3,184,589
	23,300	Procter & Gamble Co. (The)		1,795,498
				18,844,478
		Energy (11.2%)
	49,200	Anadarko Petroleum Corp.		4,302,540
	64,900	Cenovus Energy, Inc.		2,011,251
	42,000	Chevron Corp.		4,990,440
	45,600	Exxon Mobil Corp.		4,109,016
	67,760	Schlumberger, Ltd.		5,074,546
	110,940	Suncor Energy, Inc.		3,329,309
	22,650	Valero Energy Corp.		1,030,349
				24,847,451
		Financials (15.4%)
	170,340	Bank of New York Mellon Corp. (The)		4,767,817
	43,400	Berkshire Hathaway, Inc., Class B(a)		4,522,280
	105,360	JPMorgan Chase & Co.		5,000,386
	168,000	MetLife, Inc.		6,387,360
	64,140	PNC Financial Services Group, Inc.		4,265,310
	130,590	Wells Fargo & Co.		4,830,524
	146,600	Weyerhaeuser Co., REIT		4,600,308
				34,373,985
		Health Care (10.0%)
	75,000	Express Scripts Holding Co.(a)		4,323,750
	37,050	Johnson & Johnson.		3,020,687
	119,400	Merck & Co., Inc.		5,281,062
	126,600	Pfizer, Inc.		3,653,676
	106,800	UnitedHealth Group, Inc.		6,110,028
				22,389,203
		Industrials (15.3%)
	51,900	ABB, Ltd., ADR(a)		1,181,244
	54,000	Boeing Co. (The)		4,635,900
	60,570	Caterpillar, Inc.		5,267,773
	28,500	FedEx Corp.		2,798,700
	73,197	Fluor Corp.		4,855,157
	319,200	General Electric Co.		7,379,904
	29,400	Honeywell International, Inc.		2,215,290
	98,000	Pentair, Ltd.		5,169,500

Shares			Fair Value
	COMMON STOCKS — (continued)
		Industrials — (continued)
	24,540	Xylem, Inc.	$	676,322
				34,179,790
		Information Technology (20.3%)
	19,800	Apple, Inc.		8,764,074
	163,500	Cisco Systems, Inc.		3,418,785
	202,560	EMC Corp.(a)		4,839,158
	4,470	Google, Inc., Class A(a)		3,549,314
	119,400	Intel Corp.		2,608,890
	18,990	International Business Machines Corp.		4,050,567
	246,300	Microsoft Corp.		7,046,643
	122,700	Oracle Corp.		3,968,118
	52,260	QUALCOMM, Inc.		3,498,807
	83,600	TE Connectivity, Ltd.		3,505,348
				45,249,704
		Materials (3.8%)
	150,000	Barrick Gold Corp.		4,410,000
	89,050	Nucor Corp.		4,109,657
				8,519,657
		Telecommunication Services (2.1%)
	117,060	AT&T, Inc.		4,294,931
	12,125	Vodafone Group PLC, ADR		344,471
				4,639,402
		Total Common Stocks (Cost $165,884,451)		214,755,035
	EXCHANGE TRADED FUND (1.3%)
	79,100	Market Vectors Gold Miners		2,993,935
		Total Exchange Traded Fund (Cost $3,158,653)		2,993,935
	INVESTMENT COMPANY (1.5%)
	3,332,606	Federated Treasury Obligations Fund, Institutional Shares		3,332,606
		Total Investment Company (Cost $3,332,606)		3,332,606
	Total Investments — 99.1% (Cost $172,375,710)			221,081,576
	Net Other Assets (Liabilities) — 0.9%			1,974,031
	NET ASSETS — 100.0%		$	223,055,607

(a) Represents non-income producing security.

ADR — American Depositary Receipt

REIT — Real Estate Investment Trust

See accompanying notes to the financial statements.

8

Sterling Capital Mid Value Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Shares			Fair Value
	COMMON STOCKS (95.2%)
		Consumer Discretionary (15.4%)
	483,182	Ascena Retail Group, Inc.(a)	$	8,963,026
	1,373,622	Interpublic Group of Cos., Inc. (The)		17,898,295
	322,020	Omnicom Group, Inc.		18,966,978
	208,326	Universal Technical Institute, Inc.		2,631,157
	281,683	Viacom, Inc., Class B		17,343,222
				65,802,678
		Energy (1.5%)
	506,726	Forest Oil Corp.(a)		2,665,379
	213,875	Rex Energy Corp.(a)		3,524,660
				6,190,039
		Financials (31.0%)
	121,404	Alexander & Baldwin, Inc.(a)		4,340,193
	419,000	Annaly Capital Management, Inc., REIT		6,657,910
	449,492	Aspen Insurance Holdings, Ltd.		17,341,401
	137,628	Assurant, Inc.		6,194,636
	332,503	Assured Guaranty, Ltd.		6,852,887
	979,000	E*TRADE Financial Corp.(a)		10,485,090
	330,085	Endurance Specialty Holdings, Ltd.		15,781,364
	55,400	Enstar Group, Ltd.(a)		6,885,666
	55,800	Granite REIT		2,131,002
	699,900	Leucadia National Corp.		19,198,257
	318,600	Lincoln National Corp.		10,389,546
	12,862	Markel Corp.(a)		6,476,017
	106,388	StanCorp Financial Group, Inc.		4,549,151
	387,184	Willis Group Holdings PLC		15,289,896
				132,573,016
		Health Care (18.6%)
	112,700	Becton Dickinson & Co.		10,775,247
	165,513	Covidien PLC		11,228,402
	113,828	Laboratory Corp. of America Holdings(a)		10,267,286
	209,800	Life Technologies Corp.(a)		13,559,374
	331,000	Omnicare, Inc.		13,478,320
	187,042	WellPoint, Inc.		12,387,792
	104,522	Zimmer Holdings, Inc.		7,862,145
				79,558,566
		Industrials (4.2%)
	180,650	AerCap Holdings NV(a)		2,791,043

Shares			Fair Value
	COMMON STOCKS — (continued)
		Industrials — (continued)
	111,070	General Dynamics Corp.	$	7,831,546
	520,100	UTi Worldwide, Inc.		7,531,048
				18,153,637
		Information Technology (24.5%)
	358,549	CA, Inc.		9,024,678
	605,300	Dice Holdings, Inc.(a)		6,131,689
	119,100	DST Systems, Inc.		8,488,257
	758,996	EarthLink, Inc.		4,113,758
	267,200	Fidelity National Information Services, Inc.		10,586,464
	268,700	Global Payments, Inc.		13,343,642
	402,375	Lender Processing Services, Inc.		10,244,468
	306,919	Lexmark International, Inc., Class A		8,102,661
	258,900	SAIC, Inc.		3,508,095
	391,000	Symantec Corp.(a)		9,649,880
	551,300	Western Union Co. (The)		8,291,552
	1,544,967	Xerox Corp.		13,286,716
				104,771,860
		Total Common Stocks (Cost $310,499,151)		407,049,796
	INVESTMENT COMPANY (4.2%)
	18,022,584	Federated Treasury Obligations Fund, Institutional Shares		18,022,584
		Total Investment Company (Cost $18,022,584)		18,022,584
	Total Investments — 99.4% (Cost $328,521,735)			425,072,380
	Net Other Assets (Liabilities) — 0.6%			2,538,720
	NET ASSETS — 100.0%		$	427,611,100

(a) Represents non-income producing security.

REIT — Real Estate Investment Trust

See accompanying notes to the financial statements.

9

Sterling Capital Small Value Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Shares			Fair Value
	COMMON STOCKS (93.9%)
		Consumer Discretionary (17.3%)
	14,400	American Public Education, Inc.(a)	$	502,416
	134,480	Ascena Retail Group, Inc.(a)		2,494,604
	120,558	Cambium Learning Group, Inc.(a)		124,175
	94,600	Crocs, Inc.(a)		1,401,972
	40,265	Harman International Industries, Inc.		1,797,027
	57,996	Kirkland’s, Inc.(a)		664,634
	93,600	Maidenform Brands, Inc.(a)		1,640,808
	85,050	Meredith Corp.		3,254,013
	90,598	Regis Corp.		1,647,978
	24,200	Signet Jewelers, Ltd.		1,621,400
	80,600	Universal Technical Institute, Inc.		1,017,978
				16,167,005
		Consumer Staples (1.7%)
	158,500	Cott Corp.		1,604,020
		Energy (4.1%)
	181,000	Forest Oil Corp.(a)		952,060
	106,685	Resolute Energy Corp.(a)		1,227,944
	97,500	Rex Energy Corp.(a)		1,606,800
				3,786,804
		Financials (32.7%)
	26,885	Alexander & Baldwin, Inc.(a)		961,139
	43,000	AMERISAFE, Inc.		1,528,220
	59,452	Aspen Insurance Holdings, Ltd.		2,293,658
	107,642	Assured Guaranty, Ltd.		2,218,502
	84,300	BancorpSouth, Inc.		1,374,090
	114,796	Campus Crest Communities, Inc., REIT		1,595,664
	227,700	E*TRADE Financial Corp.(a)		2,438,667
	69,281	Endurance Specialty Holdings, Ltd.		3,312,325
	50,000	First American Financial Corp.		1,278,500
	9,238	First Citizens BancShares, Inc., Class A		1,687,783
	12,475	Granite REIT		476,420
	148,900	Investment Technology Group, Inc.(a)		1,643,856
	65,599	PHH Corp.(a)		1,440,554
	79,040	Popular, Inc.(a)		2,182,294
	103,400	Ramco-Gershenson Properties Trust, REIT		1,737,120
	41,523	StanCorp Financial Group, Inc.		1,775,523
	101,570	Washington Federal, Inc.		1,777,475
	108,481	Westfield Financial, Inc.		843,982
				30,565,772
		Health Care (3.5%)
	112,400	Allscripts Healthcare Solutions, Inc.(a)		1,527,516
	74,900	VCA Antech, Inc.(a)		1,759,401
				3,286,917
		Industrials (9.1%)
	99,900	AerCap Holdings NV(a)		1,543,455
	22,863	Belden, Inc.		1,180,874
	165,066	EnergySolutions, Inc.(a)		618,997
	66,500	FTI Consulting, Inc.(a)		2,504,390

Shares			Fair Value
	COMMON STOCKS — (continued)
		Industrials — (continued)
	179,788	UTi Worldwide, Inc.	$	2,603,330
				8,451,046
		Information Technology (24.2%)
	76,400	Black Box Corp.		1,666,284
	91,700	Dice Holdings, Inc.(a)		928,921
	28,201	DST Systems, Inc.		2,009,885
	497,900	EarthLink, Inc.		2,698,618
	62,900	Itron, Inc.(a)		2,918,560
	112,075	Lender Processing Services, Inc.		2,853,430
	102,500	Lexmark International, Inc., Class A		2,706,000
	245,289	Lionbridge Technologies, Inc.(a)		949,268
	24,600	MTS Systems Corp.		1,430,490
	162,863	Orbotech, Ltd.(a)		1,641,659
	30,703	QuinStreet, Inc.(a)		183,297
	84,960	Sykes Enterprises, Inc.(a)		1,355,962
	59,300	TeleTech Holdings, Inc.(a)		1,257,753
				22,600,127
		Telecommunication Services (1.3%)
	23,481	Lumos Networks Corp.		316,524
	69,000	NTELOS Holdings Corp.		883,890
				1,200,414
		Total Common Stocks (Cost $74,657,221)		87,662,105
	RIGHTS (0.0%)
	79,600	Voyager Learning Co., Contingent Rights(b)		0
		Total Rights (Cost $0)		0
	INVESTMENT COMPANY (5.4%)
	5,100,325	Federated Treasury Obligations Fund, Institutional Shares		5,100,325
		Total Investment Company (Cost $5,100,325)		5,100,325
	Total Investments — 99.3% (Cost $79,757,546)			92,762,430
	Net Other Assets (Liabilities) — 0.7%			632,489
	NET ASSETS — 100.0%		$	93,394,919

(a) Represents non-income producing security.

(b) Security was fair valued under methods approved by the Board.

REIT — Real Estate Investment Trust

See accompanying notes to the financial statements.

10

Sterling Capital Special Opportunities Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Shares			Fair Value
	COMMON STOCKS (92.6%)
		Consumer Discretionary (16.2%)
	866,500	Comcast Corp., Class A	$	36,401,665
	529,000	DIRECTV(a)		29,946,690
	2,512,000	Ford Motor Co.		33,032,800
	191,000	Yum! Brands, Inc.(b)		13,740,540
				113,121,695
		Consumer Staples (3.4%)
	1,047,200	Dole Food Co., Inc.(a)		11,414,480
	400,000	Mondelez International, Inc., Class A		12,244,000
				23,658,480
		Energy (11.8%)
	360,000	Apache Corp.		27,777,600
	186,000	EOG Resources, Inc.(b)		23,821,020
	671,000	Halliburton Co.		27,115,110
	98,000	Williams Cos. Inc. (The)		3,671,080
				82,384,810
		Financials (6.4%)
	1,187,000	Charles Schwab Corp. (The)		20,998,030
	379,900	CME Group, Inc.		23,322,061
				44,320,091
		Health Care (18.3%)
	537,300	Agilent Technologies, Inc.		22,550,481
	600,000	Merck & Co., Inc.		26,538,000
	670,050	Myriad Genetics, Inc.(a)		17,019,270
	757,000	Teva Pharmaceutical Industries, Ltd., ADR		30,037,760
	557,000	UnitedHealth Group, Inc.		31,865,970
				128,011,481
		Industrials (3.6%)
	137,000	FedEx Corp.		13,453,400
	174,000	Ryder System, Inc.		10,396,500
	40,000	Xylem, Inc.		1,102,400
				24,952,300

Shares			Fair Value
	COMMON STOCKS — (continued)
		Information Technology (29.9%)
	1,106,000	Activision Blizzard, Inc.	$	16,114,420
	456,000	Akamai Technologies, Inc.(a)		16,092,240
	43,000	Apple, Inc.		19,033,090
	766,000	Broadcom Corp., Class A		26,557,220
	547,600	Check Point Software Technologies, Ltd.(a)		25,731,724
	1,480,000	Cisco Systems, Inc.		30,946,800
	502,000	eBay, Inc.(a)(b)		27,218,440
	408,000	Intuit, Inc.		26,785,200
	987,000	Nuance Communications, Inc.(a)		19,917,660
				208,396,794
		Materials (3.0%)
	1,364,000	Yamana Gold, Inc.(b)		20,937,400
		Total Common Stocks (Cost $496,207,284)		645,783,051
	INVESTMENT COMPANY (7.6%)
	53,371,779	Federated Treasury Obligations Fund, Institutional Shares		53,371,779
		Total Investment Company (Cost $53,371,779)		53,371,779
	Total Investments — 100.2% (Cost $549,579,063)			699,154,830
	Net Other Assets (Liabilities) — (0.2)%			(1,696,064)
	NET ASSETS — 100.0%		$	697,458,766

(a) Represents non-income producing security.

(b) Security held as collateral for written call option.

ADR — American Depositary Receipt

See accompanying notes to the financial statements.

11

Sterling Capital Equity Income Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Shares			Fair Value
	COMMON STOCKS (87.2%)
		Consumer Discretionary (12.8%)
	439,000	McDonald’s Corp.	$	43,763,910
	522,000	Omnicom Group, Inc.		30,745,800
	941,000	Pearson PLC, ADR		16,928,590
	650,000	Target Corp.		44,492,500
	604,500	Time Warner Cable, Inc.		58,068,270
				193,999,070
		Consumer Staples (11.4%)
	1,118,000	General Mills, Inc.		55,128,580
	561,000	PepsiCo, Inc.		44,380,710
	232,000	Philip Morris International, Inc.		21,508,720
	1,224,000	Unilever PLC, ADR		51,701,760
				172,719,770
		Energy (21.2%)
	355,000	Chevron Corp.		42,181,100
	713,900	Ensco PLC, Class A		42,834,000
	670,000	Kinder Morgan Management LLC(a)		58,859,500
	1,047,196	Natural Resource Partners LP		24,504,387
	692,000	Occidental Petroleum Corp.		54,232,040
	153,000	Royal Dutch Shell PLC, Class A, ADR		9,969,480
	314,000	Royal Dutch Shell PLC, Class B, ADR		20,981,480
	1,813,200	Spectra Energy Corp.		55,755,900
	275,000	Teekay LNG Partners LP		11,393,250
				320,711,137
		Financials (9.2%)
	153,600	BlackRock, Inc.		39,456,768
	1,258,000	MetLife, Inc.		47,829,160
	627,500	Travelers Cos., Inc. (The)		52,829,225
				140,115,153
		Health Care (14.9%)
	617,000	Abbott Laboratories		21,792,440
	580,000	AbbVie, Inc.		23,652,400
	769,000	Baxter International, Inc.		55,860,160
	702,000	Novartis AG, ADR		50,010,480
	1,248,000	Pfizer, Inc.		36,017,280
	575,005	WellPoint, Inc.		38,082,581
				225,415,341

Shares			Fair Value
	COMMON STOCKS — (continued)
		Industrials (5.0%)
	828,000	Emerson Electric Co.	$	46,260,360
	347,900	United Parcel Service, Inc., Class B		29,884,610
				76,144,970
		Information Technology (8.3%)
	1,983,000	Intel Corp.		43,328,550
	715,957	Maxim Integrated Products, Inc.		23,375,996
	1,528,000	Microsoft Corp.		43,716,080
	384,300	TE Connectivity, Ltd.(b)		16,113,699
				126,534,325
		Materials (2.1%)
	804,000	Potash Corp. of Saskatchewan, Inc.		31,557,000
		Utilities (2.3%)
	730,000	Southern Co. (The)		34,251,600
		Total Common Stocks (Cost $1,046,835,552)		1,321,448,366
	INVESTMENT COMPANY (12.8%)
	193,137,748	Federated Treasury Obligations Fund, Institutional Shares		193,137,748
		Total Investment Company (Cost $193,137,748)		193,137,748
	Total Investments — 100.0% (Cost $1,239,973,300)			1,514,586,114
	Net Other Assets (Liabilities) — (0.0%)			(48,388)
	NET ASSETS — 100.0%		$	1,514,537,726

(a) Represents non-income producing security.

(b) Security held as collateral for written call option.

ADR — American Depositary Receipt

See accompanying notes to the financial statements.

12

Sterling Capital Ultra Short Bond Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	ASSET BACKED SECURITIES (10.7%)
	$274,669	Ally Auto Receivables Trust, Series 2011-3, Class A3, 0.970%, 8/17/15	$	275,407
	500,000	Ally Auto Receivables Trust, Series 2011-2, Class A4, 1.980%, 4/15/16		509,815
	260,000	Avis Budget Rental Car Funding AESOP LLC, Series 2011-1A, Class A, 1.850%, 11/20/14(a)		261,800
	560,000	Avis Budget Rental Car Funding AESOP LLC, Series 2011-2A, Class A, 2.370%, 11/20/14(a)		571,939
	319,073	CarMax Auto Owner Trust, Series 2011-1, Class A3, 1.290%, 9/15/15		320,246
	500,000	Citibank Omni Master Trust, Series 2009-A17, Class A17, 4.900%, 11/15/18(a)		534,615
	136,371	Countrywide Asset-Backed Certificates, Series 2005-6, Class M1, 0.694%, 12/25/35(b)		135,572
	248,068	Honda Auto Receivables Owner Trust, Series 2011-2, Class A3, 0.940%, 3/18/15		248,868
	194,313	Option One Mortgage Loan Trust, Series 2005-4, Class A3, 0.464%, 11/25/35(b)		190,944
	259,343	Park Place Securities, Inc. Pass Through Certificates, Series 2005-WHQ1, Class M2, 0.704%, 3/25/35(b)		258,178
	378,000	Santander Drive Auto Receivables Trust, Series 2012-1, Class A3, 1.490%, 10/15/15		380,993
	415,000	Volkswagen Auto Loan Enhanced Trust, Series 2012-2, Class A2, 0.330%, 7/20/15		414,822
	378,630	World Omni Auto Receivables Trust, Series 2012-A, Class A2, 0.520%, 6/15/15		379,028
		Total Asset Backed Securities (Cost $4,483,225)		4,482,227
	COLLATERALIZED MORTGAGE OBLIGATIONS (1.7%)
	499,192	Freddie Mac, Series 3944, Class LB, 2.000%, 2/15/25		505,829
	198,468	Freddie Mac, Series 3128, Class BE, 5.000%, 5/15/33		203,381
		Total Collateralized Mortgage Obligations (Cost $708,646)		709,210
	COMMERCIAL MORTGAGE-BACKED SECURITIES (5.9%)
	200,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2004-2, Class B, 4.665%, 11/10/38(b)		206,744
	139,908	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2004-3, Class A5, 5.563%, 6/10/39(b)		145,601
	300,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-2, Class AJ, 4.953%, 7/10/43(b)		322,342
	325,000	Bear Stearns Commercial Mortgage Securities Trust, Series 2004-T16, Class A6, 4.750%, 2/13/46(b)		340,060
	150,000	Commercial Mortgage Trust, Series 2005-GG5, Class AM, 5.311%, 4/10/37(b)		163,159
	300,000	Extended Stay America Trust, Series 2013-ESFL, Class A2FL, 0.904%, 12/5/31(a)(b)		300,255

Principal Amount			Fair Value
	COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
	$200,000	GMAC Commercial Mortgage Securities, Inc., Series 2005-C1, Class AM, 4.754%, 5/10/43 .	$	214,547
	200,000	GS Mortgage Securities Corp. II, Series 2013-KYO, Class A, 1.052%, 11/8/29(a)(b)		200,454
	185,000	Merrill Lynch Mortgage Trust, Series 2005-MCP1, Class AM, 4.805%, 6/12/43(b)		199,526
	400,000	Wachovia Commercial Mortgage Securities, Inc. Pass Through Certificates, Series 2003-C8, Class E, 5.264%, 11/15/35(b)		407,517
		Total Commercial Mortgage-Backed Securities (Cost $2,508,570)		2,500,205
	CORPORATE BONDS (60.5%)
		Consumer Discretionary (5.4%)
	125,000	Cox Communications, Inc., 4.625%, 6/1/13		125,854
	415,000	Daimler Finance North America LLC, 1.875%, 9/15/14(a)		421,080
	300,000	DIRECTV Holdings, LLC/DIRECTV Financing Co., Inc., 4.750%, 10/1/14		317,356
	410,000	NBCUniversal Media, LLC, 2.100%, 4/1/14		415,679
	245,000	Nordstrom, Inc., 6.750%, 6/1/14		262,149
	200,000	Royal Caribbean Cruises, Ltd., 6.875%, 12/1/13		206,500
	295,000	Time Warner Cable, Inc., 8.250%, 2/14/14		313,809
	220,000	Volkswagen International Finance NV, 1.625%, 8/12/13(a)		220,937
				2,283,364
		Consumer Staples (3.7%)
	390,000	Altria Group, Inc., 8.500%, 11/10/13		408,607
	415,000	Anheuser-Busch InBev Worldwide, Inc., 1.500%, 7/14/14		419,777
	400,000	Mondelez International, Inc., 5.250%, 10/1/13		409,177
	310,000	SABMiller Holdings, Inc., 1.850%, 1/15/15(a)		314,998
				1,552,559
		Energy (6.9%)
	310,000	Cameron International Corp., 1.600%, 4/30/15		312,877
	320,000	Canadian Natural Resources, Ltd., 1.450%, 11/14/14		323,555
	295,000	EnCana Holdings Finance Corp., 5.800%, 5/1/14		310,316
	205,000	Energy Transfer Partners LP, 8.500%, 4/15/14		220,663
	330,000	Enterprise Products Operating LLC, Series G, 5.600%, 10/15/14		353,743
	400,000	Kinder Morgan Energy Partners LP, 5.000%, 12/15/13		412,427
	310,000	Petrobras International Finance Co. - PifCo, 2.875%, 2/6/15		316,436
	305,000	Spectra Energy Capital LLC, 5.900%, 9/15/13		312,041
	315,000	TransCanada PipeLines, Ltd., 0.875%, 3/2/15		316,370
				2,878,428
		Financials (26.6%)
	265,000	ABN AMRO Bank NV, 3.000%, 1/31/14(a)		269,130
	265,000	American Express Credit Corp., Series C, 7.300%, 8/20/13		271,783
	290,000	American International Group, Inc., 3.750%, 11/30/13(a)		295,917

Continued

13

Sterling Capital Ultra Short Bond Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	CORPORATE BONDS — (continued)
		Financials — (continued)
	$575,000	Bank of America Corp., MTN, 7.375%, 5/15/14	$	615,353
	310,000	Barclays Bank PLC, 2.375%, 1/13/14		314,150
	300,000	BNP Paribas SA, 3.250%, 3/11/15		311,069
	300,000	Capital One Financial Corp., 6.250%, 11/15/13		310,330
	600,000	Citigroup, Inc., 5.000%, 9/15/14		630,018
	200,000	CME Group, Inc., 5.750%, 2/15/14		208,661
	286,000	CNA Financial Corp., 5.850%, 12/15/14		307,924
	150,000	Colonial Realty LP, 6.250%, 6/15/14		158,445
	225,000	Commonwealth Bank of Australia, 1.010%, 3/17/14(a)(b)		226,568
	190,000	Credit Suisse USA, Inc., 5.125%, 1/15/14		196,836
	180,000	Duke Realty LP, REIT, 5.400%, 8/15/14		189,825
	155,000	Eksportfinans ASA, GMTN, 1.875%, 4/2/13		155,000
	250,000	Fixed Income Trust for Prudential Financial, Inc., 0.000%, 6/1/14		246,442
	295,000	Ford Motor Credit Co. LLC, 7.000%, 10/1/13		303,769
	350,000	General Electric Capital Corp., 5.900%, 5/13/14		370,849
	485,000	Goldman Sachs Group, Inc., (The) MTN, 6.000%, 5/1/14		511,218
	310,000	HCP, Inc., REIT, 2.700%, 2/1/14		314,858
	247,000	HSBC Finance Corp., 4.750%, 7/15/13		249,961
	410,000	ING Bank NV, 2.000%, 9/25/15(a)		416,560
	295,000	Jefferies Group LLC, 5.875%, 6/8/14		311,225
	595,000	JPMorgan Chase & Co., 5.125%, 9/15/14		631,166
	305,000	Keycorp, MTN, 6.500%, 5/14/13		307,097
	292,000	Macquarie Group, Ltd., 7.300%, 8/1/14(a)		312,849
	440,000	Morgan Stanley, 2.875%, 1/24/14		447,223
	75,000	Morgan Stanley, 2.875%, 7/28/14		76,653
	200,000	NYSE Euronext, 4.800%, 6/28/13		201,924
	305,000	PNC Funding Corp., 3.000%, 5/19/14		313,682
	247,000	Prudential Financial, Inc., MTN, Series B, 4.500%, 7/15/13		249,820
	415,000	UBS AG, 2.250%, 1/28/14		420,533
	210,000	Union Bank NA, 1.233%, 6/6/14(b)		211,565
	396,000	Wachovia Corp., 5.250%, 8/1/14		418,974
	210,000	WT Finance Aust Pty, Ltd./Westfield Capital/WEA Finance LLC, 5.125%, 11/15/14(a)		223,764
	162,000	XL Group PLC, 5.250%, 9/15/14		170,930
				11,172,071
		Health Care (2.8%)
	310,000	Agilent Technologies, Inc., 2.500%, 7/15/13		311,782
	190,000	DaVita HealthCare Partners, Inc., 6.375%, 11/1/18		202,113
	280,000	Mylan, Inc., 7.625%, 7/15/17(a)		311,262
	200,000	Valeant Pharmaceuticals International, 6.500%, 7/15/16(a)		208,750
	150,000	Zimmer Holdings, Inc., 1.400%, 11/30/14		151,043
				1,184,950
		Industrials (3.6%)
	135,000	Corrections Corp. of America, 7.750%, 6/1/17		141,750
	135,000	Iron Mountain, Inc., 8.000%, 6/15/20		141,413
	265,000	Penske Truck Leasing Co., LP/PTL Finance Corp., 2.500%, 7/11/14(a)		269,179
	305,000	Roper Industries, Inc., 6.625%, 8/15/13		311,477
	310,000	Tyco Electronics Group SA, 1.600%, 2/3/15		313,675
	285,000	Waste Management, Inc., 6.375%, 3/11/15		314,829
				1,492,323

Principal Amount			Fair Value
	CORPORATE BONDS — (continued)
		Information Technology (0.6%)
	$270,000	Hewlett-Packard Co., 1.250%, 9/13/13	$	270,530
		Materials (5.9%)
	280,000	Anglo American Capital PLC, 9.375%, 4/8/14(a)		302,282
	200,000	ArcelorMittal USA LLC, 6.500%, 4/15/14		209,189
	305,000	Barrick Gold Financeco LLC, GMTN, 6.125%, 9/15/13		312,321
	320,000	Ecolab, Inc., 2.375%, 12/8/14		328,688
	315,000	Freeport-McMoRan Copper & Gold, Inc., 1.400%, 2/13/15		317,282
	375,000	Rio Tinto Finance USA, Ltd., 8.950%, 5/1/14		407,959
	135,000	Sealed Air Corp., 7.875%, 6/15/17		142,425
	140,000	WMC Finance USA, Ltd., 5.125%, 5/15/13		140,774
	310,000	Xstrata Finance Canada, Ltd., 1.800%, 10/23/15(a)		313,523
				2,474,443
		Telecommunication Services (4.0%)
	210,000	America Movil SAB de CV, 5.500%, 3/1/14		218,400
	395,000	AT&T, Inc., 5.100%, 9/15/14		420,052
	305,000	Deutsche Telekom International Finance BV, 5.875%, 8/20/13		311,093
	280,000	Qwest Corp., 7.500%, 10/1/14		305,190
	220,000	Verizon New England, Inc., Series C, 4.750%, 10/1/13		224,631
	210,000	Vodafone Group PLC, 5.000%, 12/16/13		216,620
				1,695,986
		Utilities (1.0%)
	400,000	Duke Energy Corp., 6.300%, 2/1/14		418,452
		Total Corporate Bonds (Cost $25,435,561)		25,423,106
	MUNICIPAL BONDS (20.3%)
		Alaska (0.6%)
	100,000	Alaska Housing Finance Corp., State Capital Project, Refunding Revenue, Series A (NATL-RE), 4.000%, 12/1/13		102,509
	150,000	City of Valdez, AK, School Improvements, G.O., 2.000%, 6/30/13		150,678
				253,187
		Arizona (0.8%)
	165,000	Pima County Regional Transportation Authority, Regional Transportation Fund, Transit Improvements Revenue, 3.000%, 6/1/13		165,794
	150,000	University of Arizona, University of Arizona Projects, Refunding Certicates of Participation, Series A (AMBAC), 5.250%, 6/1/13		151,229
				317,023
		California (3.9%)
	100,000	California Infrastructure & Economic Development Bank, Salvation Army Western, Refunding Revenue (AMBAC), 4.000%, 9/1/13		101,528
	100,000	California State Department of Water Resources, Refunding Revenue, Series M, 5.000%, 5/1/13		100,442

Continued

14

Sterling Capital Ultra Short Bond Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		California — (continued)
	$100,000	California State Public Works Board, Department of Corrections & Rehab, Refunding Revenue, Series J (AMBAC), 4.000%, 1/1/14	$	102,808
	100,000	California State, Refunding, G.O. Taxable- Variable Purpose, 3.750%, 10/1/13		101,694
	150,000	City & County of San Francisco, CA, Clean & Safe Parks, Recreational Facilities Improvements, G.O., Series B, 5.000%, 6/15/13		151,563
	125,000	Los Angeles County, CA, Public Works Financing Authority, L.A. Regulatory Park and Open Space, Special Assessment, Refunding (AGM), 5.000%, 10/1/13		128,037
	100,000	Los Angeles Municipal Improvement Corp., Capital Equipment, Refunding Revenue, Series A, 3.500%, 9/1/13		101,331
	100,000	Los Angeles Unified School District, Refunding, G.O., (NATL-RE), 5.750%, 7/1/13		101,435
	100,000	Modesto Irrigation District, Certificates of Participation, Electric Light & Power Improvements, Refunding, Series A, Callable 7/1/13 @ 100 (NATL-RE), 5.000%, 7/1/22		101,220
	100,000	Orange County Public Financing Authority, Utility Improvements, Revenue (NATL-RE), 5.000%, 6/1/13		100,799
	300,000	Orange County, Pension Obligations, Refunding Revenue, Taxable, Series A, 0.680%, 2/1/14		300,132
	100,000	Sacramento Unified School District, Election 1999, School Improvements, G.O., Series D, Callable 7/1/13 @100 (AGM), 5.000%, 7/1/24		101,233
	150,000	Santa Rosa City Schools, High School District, Refunding, G.O. (AGM), 5.000%, 5/1/13		150,647
				1,642,869
		Connecticut (0.3%)
	100,000	City of Hartford, CT, Public School Improvements G.O., Series A (AMBAC), 5.000%, 8/15/13		101,728
		Florida (1.2%)
	300,000	City of Cape Coral, FL, Water & Sewer Refunding Revenue, Series A, (AGM), 3.000%, 10/1/13		303,756
	100,000	Florida Municipal Power Agency, All Requirements Power Supply, Electric Light & Power Improvements Revenue, Series A, OID (AGM), 3.750%, 10/1/13		101,699
	115,000	Reedy Creek Improvement District, Refunding G.O., Series B (AMBAC), 5.000%, 6/1/13		115,918
				521,373
		Georgia (0.2%)
	100,000	Cobb County Kennestone Hospital Authority, Wellstar Health System, Health Hospital Nursing Home Improvements, Refunding Revenue, 3.000%, 4/1/13		100,024

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Illinois (0.6%)
	$100,000	Chicago Board of Education, Dedicated Refunding Revenue, G.O., Series D, 4.000%, 12/1/13	$	102,557
	150,000	City of Chicago, IL, Wastewater Transmission Revenue, 2nd Lien, Sewer Improvements, 3.000%, 1/1/14		153,077
				255,634
		Iowa (0.2%)
	100,000	University of Iowa Facilities Corp., Medical Education & Biomedical Research, Refunding Revenue, 2.500%, 6/1/13		100,394
		Kansas (0.3%)
	100,000	Kansas Development Finance Authority, Department of Administration, Comprehensive Transit Improvements, Revenue, Series A (NATL-RE, FGIC), 5.000%, 11/1/13		102,798
		Kentucky (1.2%)
	250,000	Kentucky Asset/Liability Commission, First Series Project Notes, Revenue (NATL-RE), 5.000%, 5/1/13		251,063
	250,000	Louisville & Jefferson County Metropolitan Sewer District, Water Utility & Sewer Improvements, Series A (Assured Guaranty), 4.000%, 5/15/13		251,210
				502,273
		Massachusetts (0.3%)
	125,000	Commonwealth of Massachusetts, Conservation Line, Refunding Revenue, Series A, 5.500%, 6/1/13		126,164
		Michigan (0.5%)
	100,000	Michigan State Strategic Fund, Ltd., Dow Chemical Project, Refunding Revenue, Series A-2, Callable 4/29/13 @ 101, 5.500%, 12/1/28(b)		100,755
	100,000	South Lyon Community Schools, Refunding, G.O., (NATL-RE, FGIC), 4.000%, 5/1/13		100,312
				201,067
		Nevada (0.7%)
	200,000	Clark County School District, Refunding, G.O., Series A, (AMBAC), 4.500%, 6/15/13		201,856
	100,000	Clark County School District, Refunding, G.O., Series A, (NATL-RE, FGIC), 5.000%, 6/15/13		101,035
				302,891
		New Jersey (0.9%)
	200,000	New Jersey Educational Facilities Authority, Higher Education, Capital Improvement Refunding Revenue, Series A, (AGM), 5.000%, 9/1/13		204,036
	175,000	New Jersey Transportation Trust Fund Authority, Grant Anticipation Bonds, Transit Improvements Revenue, Series A (NATL-RE, FGIC), 5.000%, 6/15/13		176,799
				380,835

Continued

15

Sterling Capital Ultra Short Bond Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		New York (3.1%)
	$20,000	City of New York, NY, Prerefunded, Refunding G.O., Series G, 4.000%, 8/1/13	$	20,261
	80,000	City of New York, NY, Unrefunded, Refunding G.O., Series G, 4.000%, 8/1/13		81,051
	250,000	Dutchess County Industrial Development Agency, Bard College Civic Facilities, Refunding Revenue, Series A-1, 5.000%, 8/1/13		253,420
	150,000	Erie County, Industrial Development Agency (The), Buffalo City School District, School Improvements, Series A, 5.000%, 5/1/13		150,659
	160,000	Long Island Power Authority, Electric Light & Power Improvements Revenue, Series C, Callable 9/1/13 @100, OID, 5.000%, 9/1/22		163,270
	150,000	New York State Dormitory Authority, Economic Development & Housing Improvements, Revenue, Series A, OID, 5.500%, 12/15/13		155,521
	180,000	New York State Dormitory Authority, Mount Sinai School of Medicine, Refunding Revenue, Series A, 5.000%, 7/1/13		182,144
	300,000	Tobacco Settlement Financing Corp., Asset-Backed, Refunding Revenue, Series A, 4.000%, 6/1/13		302,010
				1,308,336
		North Carolina (1.1%)
	250,000	City of Wilmington, NC, Certificates of Participation, Public Improvements Refunding, Series A (AMBAC), 4.000%, 6/1/13		251,627
	100,000	City of Wilmington, NC, Refunding Revenue, 2.000%, 6/1/13		100,302
	100,000	Onslow County, NC, Refunding G.O. (XLCA), 4.000%, 5/1/13		100,347
				452,276
		Oregon (1.4%)
	280,000	Clackamas County Hospital Facility Authority, Legacy Health System, Health Hospital Nursing Home Improvements Revenue, Series A, 3.500%, 7/15/13		282,604
	170,000	Oregon Community College Districts, Pension Funding, Taxable, G.O. (AGM), 4.747%, 6/30/13		171,527
	125,000	Oregon State Health & Science University Refunding Revenue, Series A, 2.000%, 7/1/13		125,493
				579,624
		Pennsylvania (0.5%)
	200,000	State Public School Building Authority, Montgomery County Community College, University & College Improvements Revenue, OID (AGM), 3.000%, 5/1/13		200,484
		South Carolina (0.2%)
	100,000	South Carolina State Transportation Infrastructure Bank, Refunding Revenue, Series A, 3.000%, 10/1/13		101,422
		Tennessee (0.4%)
	150,000	Montgomery County, TN, School & Public Improvements, G.O., 2.000%, 4/1/13		150,023

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Texas (1.1%)
	$100,000	City of Houston, TX, Refunding Revenue, Series A, 5.000%, 9/1/13	$	102,026
	100,000	City of Houston, TX, Refunding Revenue, Series B, 5.000%, 9/1/13		102,026
	250,000	Lower Colorado River Authority, LCRA Transmission Services Corp, Refunding Revenue, Series A, 5.000%, 5/15/13		251,570
				455,622
		Virginia (0.2%)
	100,000	Fredericksburg Economic Development Authority, Medicorp Health System Obligations, Refunding Revenue, 5.000%, 6/15/13		100,972
		Wisconsin (0.6%)
	250,000	Wisconsin Public Power, Inc., Electric Light & Power Improvements, Refunding Revenue, Series A (AGM), 4.000%, 7/1/13		252,347
		Total Municipal Bonds (Cost $8,497,340)		8,509,366
Shares
	INVESTMENT COMPANY (0.5%)
	200,304	Federated Treasury Obligations Fund, Institutional Shares		200,304
		Total Investment Company (Cost $200,304)		200,304
	Total Investments — 99.6% (Cost $41,833,646)			41,824,418
	Net Other Assets (Liabilities) — 0.4%			152,563
	NET ASSETS — 100.0%		$	41,976,981

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

(b) 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 in effect as of March 31, 2013. The maturity date reflected is the final maturity date.

AGM — Assured Guaranty Municipal Corp.

AMBAC — American Municipal Bond Insurance Corp.

FGIC — Financial Guaranty Insurance Corp.

G.O. — General Obligation

GMTN — Global Medium Term Note

MTN — Medium Term Note

NATL — National

OID — Original Issue Discount

RE — Reinsurance

REIT — Real Estate Investment Trust

XLCA — XL Capital Assurance

See accompanying notes to the financial statements.

16

Sterling Capital Short-Term Bond Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	ASSET BACKED SECURITIES (4.8%)
	$486,517	Argent Securities, Inc. Pass Through Certificates, Series 2005-W4, Class A2C, 0.504%, 2/25/36(a)	$	479,896
	310,000	Avis Budget Rental Car Funding AESOP LLC, Series 2011-1A, Class A, 1.850%, 11/20/14(b)		312,146
	310,000	Avis Budget Rental Car Funding AESOP LLC, Series 2011-2A, Class A, 2.370%, 11/20/14(b)		316,609
	700,000	Avis Budget Rental Car Funding AESOP LLC, Series 2012-1A, Class A, 2.054%, 8/20/16(b)		715,788
	900,000	Citibank Omni Master Trust, Series 2009-A17, Class A17, 4.900%, 11/15/18(b)		962,306
	568,882	Park Place Securities, Inc. Pass Through Certificates, Series 2005-WHQ1, Class M2, 0.704%, 3/25/35(a)		566,326
		Total Asset Backed Securities (Cost $3,360,484)		3,353,071
	COLLATERALIZED MORTGAGE OBLIGATIONS (5.1%)
	237,060	Countrywide Alternative Loan Trust, Series 2004-22CB, Class 1A1, 6.000%, 10/25/34		245,842
	351,362	Countrywide Home Loan Mortgage Pass Through Trust, Series 2003-J7, Class 1A3, 5.250%, 8/25/33		361,688
	566,351	Fannie Mae, Series 2003-66, Class PA, 3.500%, 2/25/33		589,812
	449,245	Fannie Mae, Series 2012-121, Class NA, 3.000%, 11/25/42		472,223
	405,355	Freddie Mac, Series 2770, Class UE, 4.500%, 3/15/19		431,721
	350,824	Freddie Mac, Series 3414, Class A, 4.500%, 7/15/22		363,459
	158,299	Freddie Mac, Series 3591, Class A, 4.000%, 1/15/23		161,356
	282,568	PHHMC Trust, Series 2007-6, Class A1, 5.872%, 12/18/37(a)		298,530
	342,924	Structured Asset Securities Corp. Mortgage Pass Through Certificates, Series 2003-10, Class A, 6.000%, 4/25/33		363,900
	218,829	Wells Fargo Mortgage Backed Securities Trust, Series 2007-16, Class 1A1, 6.000%, 12/28/37		234,753
		Total Collateralized Mortgage Obligations (Cost $3,478,379)		3,523,284
	COMMERCIAL MORTGAGE-BACKED SECURITIES (20.9%)
	604,000	Banc of America Commercial Mortgage Trust, Series 2006-3, Class A4, 5.889%, 7/10/44(a)		680,230
	475,000	Banc of America Commercial Mortgage Trust, Series 2006-4, Class A4, 5.634%, 7/10/46		533,817
	475,000	Banc of America Commercial Mortgage Trust, Series 2006-5, Class A4, 5.414%, 9/10/47		533,644
	559,631	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2004-3, Class A5, 5.563%, 6/10/39(a)		582,402

Principal Amount			Fair Value
	COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
	$250,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-1, Class AJ, 5.196%, 11/10/42(a)	$	268,000
	300,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-3, Class AM, 4.727%, 7/10/43		320,320
	600,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-2, Class AJ, 4.953%, 7/10/43(a)		644,684
	299,736	Bear Stearns Commercial Mortgage Securities Trust, Series 2003-T12, Class A4, 4.680%, 8/13/39(a)		303,165
	500,000	Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR9, Class A4B, 4.943%, 9/11/42		542,937
	155,000	Bear Stearns Commercial Mortgage Securities Trust, Series 2004-T16, Class A6, 4.750%, 2/13/46(a)		162,182
	475,000	CD Commercial Mortgage Trust, Series 2007-CD4, Class A4, 5.322%, 12/11/49		539,924
	500,000	CD Mortgage Trust, Series 2006-CD2, Class A4, 5.305%, 1/15/46(a)		551,849
	515,000	CD Mortgage Trust, Series 2006-CD3, Class A5, 5.617%, 10/15/48		580,734
	475,000	Citigroup Commercial Mortgage Trust, Series 2006-C4, Class A3, 5.741%, 3/15/49(a)		534,413
	350,000	COMM Mortgage Trust, Series 2006-C7, Class A4, 5.748%, 6/10/46(a)		393,660
	396,000	Commercial Mortgage Trust, Series 2005-GG5, Class AM, 5.311%, 4/10/37(a)		430,740
	20,058	Credit Suisse First Boston Mortgage Securities Corp., Series 2002-CP5, Class C, 5.230%, 12/15/35		20,053
	195,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C1, Class A4, 5.014%, 2/15/38(a)		206,765
	603,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C1, Class AJ, 5.075%, 2/15/38(a)		631,922
	500,000	Extended Stay America Trust, Series 2013-ESFL, Class A2FL, 0.904%, 12/5/31(a)(b)		500,425
	200,000	GMAC Commercial Mortgage Securities, Inc., Series 2005-C1, Class AM, 4.754%, 5/10/43		214,547
	475,000	GMAC Commercial Mortgage Securities, Inc., Series 2006-C1, Class A4, 5.238%, 11/10/45(a)		515,943
	420,000	GS Mortgage Securities Corp. II, Series 2013-KYO, Class A, 1.052%, 11/8/29(a)(b)		420,954
	600,000	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP2, Class AM, 4.780%, 7/15/42		641,752
	434,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CB16, Class A4, 5.552%, 5/12/45		489,129
	500,000	LB-UBS Commercial Mortgage Trust, Series 2006-C3, Class A4, 5.661%, 3/15/39(a)		560,126
	500,000	Merrill Lynch Mortgage Trust, Series 2005-MKB2, Class AJ, 5.263%, 9/12/42(a)		526,788
	500,000	Morgan Stanley Capital I Trust, Series 2006-HQ9, Class A4, 5.731%, 7/12/44(a)		562,726

Continued

17

Sterling Capital Short-Term Bond Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
	$600,000	Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class AMFX, 5.179%, 7/15/42(a)	$	652,332
	427,332	Wachovia Bank Commercial Mortgage Trust, Series 2006-C27, Class A3, 5.765%, 7/15/45(a)		473,039
	500,000	Wachovia Commercial Mortgage Securities, Inc. Pass Through Certificates, Series 2003-C8, Class E, 5.264%, 11/15/35(a)		509,396
		Total Commercial Mortgage-Backed Securities (Cost $14,573,428)		14,528,598
	CORPORATE BONDS (60.2%)
		Consumer Discretionary (3.2%)
	205,000	Daimler Finance North America LLC, 2.625%, 9/15/16(b)		213,753
	250,000	DIRECTV Holdings LLC/DIRECTV Financing Co. Inc., 3.550%, 3/15/15		261,704
	280,000	Interpublic Group of Cos., Inc. (The), 10.000%, 7/15/17		300,300
	420,000	NBCUniversal Media LLC, 3.650%, 4/30/15		444,886
	230,000	Nordstrom, Inc., 6.750%, 6/1/14		246,100
	250,000	Royal Caribbean Cruises, Ltd., 6.875%, 12/1/13		258,125
	525,000	Volkswagen International Finance NV, 1.150%, 11/20/15(b)		527,158
				2,252,026
		Consumer Staples (1.7%)
	250,000	ConAgra Foods, Inc., 1.350%, 9/10/15		251,823
	425,000	Kraft Foods Group, Inc., 1.625%, 6/4/15		431,548
	280,000	Lorillard Tobacco Co., 3.500%, 8/4/16		296,237
	200,000	SABMiller Holdings, Inc., 1.850%, 1/15/15(b)		203,224
				1,182,832
		Energy (8.0%)
	410,000	BP Capital Markets PLC, 2.248%, 11/1/16		426,555
	280,000	Cameron International Corp., 1.600%, 4/30/15		282,598
	315,000	Chesapeake Energy Corp., 3.250%, 3/15/16(c)		318,544
	410,000	El Paso Natural Gas Co. LLC, 5.950%, 4/15/17		475,819
	345,000	Energy Transfer Partners LP, 8.500%, 4/15/14(d)		371,359
	320,000	Enterprise Products Operating LLC, Series G, 5.600%, 10/15/14(d)		343,024
	400,000	Hess Corp., 7.000%, 2/15/14		420,724
	250,000	Occidental Petroleum Corp., 4.125%, 6/1/16		275,696
	325,000	ONEOK Partners LP, 6.150%, 10/1/16		375,613
	429,000	Petrobras International Finance Co. - PifCo, 2.875%, 2/6/15		437,907
	300,000	Petrohawk Energy Corp., 7.875%, 6/1/15		310,339
	90,000	Phillips 66, 1.950%, 3/5/15		91,977
	250,000	Schlumberger Norge AS, 1.950%, 9/14/16(b)		257,993
	330,000	Spectra Energy Capital LLC, 5.900%, 9/15/13		337,618
	350,000	Texas Gas Transmission LLC, 4.600%, 6/1/15		375,338
	115,000	TransCanada PipeLines, Ltd., 0.875%, 3/2/15		115,500
	300,000	Transcontinental Gas Pipe Line Co. LLC, 6.400%, 4/15/16		344,355
				5,560,959

Principal Amount			Fair Value
	CORPORATE BONDS — (continued)
		Financials (32.4%)
	$500,000	ABN AMRO Bank NV, 1.375%, 1/22/16(b)	$	500,267
	210,000	ABN Amro North American Holding Preferred Capital Repackage Trust I, 3.388%, 12/29/49(a)(b)		210,000
	255,000	Aflac, Inc., 3.450%, 8/15/15		270,958
	400,000	American Express Credit Corp., MTN, 1.750%, 6/12/15(d)		408,712
	410,000	American Honda Finance Corp., 1.000%, 8/11/15(b)(d)		411,469
	450,000	American International Group, Inc., 3.000%, 3/20/15		466,868
	184,000	Associated Banc-Corp., 1.875%, 3/12/14		184,812
	1,000,000	Bank of America Corp., MTN, 3.625%, 3/17/16(d)		1,060,786
	350,000	Capital One Financial Corp., 1.000%, 11/6/15		348,698
	260,000	CIT Group, Inc., 4.750%, 2/15/15(b)		272,350
	1,000,000	Citigroup, Inc., 5.000%, 9/15/14(d)		1,050,030
	395,000	CNA Financial Corp., 6.500%, 8/15/16		454,616
	300,000	CNH Capital LLC, 3.875%, 11/1/15		307,500
	400,000	Colonial Realty LP, 6.150%, 4/15/13		400,662
	365,000	Commonwealth Bank of Australia, 1.950%, 3/16/15		373,646
	500,000	Cooperatieve Centrale Raiffeisen- Boerenleenbank BA, 2.125%, 10/13/15		514,943
	290,000	Duke Realty LP, REIT, 7.375%, 2/15/15		321,262
	250,000	Eksportfinans ASA, GMTN, 1.875%, 4/2/13		250,000
	550,000	Ford Motor Credit Co. LLC, 7.000%, 4/15/15(d)		606,893
	948,000	General Electric Capital Corp., MTN, 5.625%, 9/15/17		1,111,033
	1,080,000	Goldman Sachs Group, Inc. (The), 3.300%, 5/3/15(d)		1,125,928
	390,000	HCP, Inc., MTN, REIT, 6.300%, 9/15/16		451,652
	500,000	HSBC USA, Inc., 2.375%, 2/13/15		514,460
	325,000	ING Bank NV, 2.000%, 9/25/15(b)		330,200
	375,000	Jefferies Group LLC, 5.875%, 6/8/14		395,625
	285,000	John Deere Capital Corp., 0.950%, 6/29/15		287,622
	1,235,000	JPMorgan Chase & Co., 5.125%, 9/15/14		1,310,068
	280,000	KeyCorp., MTN, 3.750%, 8/13/15		298,355
	400,000	Kimco Realty Corp., REIT, MTN, 5.584%, 11/23/15		444,363
	390,000	Manulife Financial Corp., 3.400%, 9/17/15		410,252
	335,000	MetLife Institutional Funding II, 1.625%, 4/2/15(b)		340,492
	880,000	Morgan Stanley, 4.750%, 3/22/17		970,660
	425,000	National Australia Bank, Ltd., MTN, 2.000%, 3/9/15		435,624
	195,000	PACCAR Financial Corp., MTN, 1.050%, 6/5/15		197,077
	625,000	PNC Bank NA, 0.800%, 1/28/16		624,929
	500,000	Prudential Financial, Inc., MTN, 3.000%, 5/12/16		528,571
	250,000	Royal Bank of Canada, MTN, 2.625%, 12/15/15		262,532
	325,000	Simon Property Group LP, REIT, 5.750%, 12/1/15		362,920
	350,000	Sirius International Group, Ltd., 6.375%, 3/20/17(b)		393,763
	300,000	SunTrust Banks, Inc., 3.600%, 4/15/16		321,253
	250,000	Tanger Properties LP, REIT, 6.150%, 11/15/15		282,848
	325,000	Transatlantic Holdings, Inc., 5.750%, 12/14/15		360,039

Continued

18

Sterling Capital Short-Term Bond Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	CORPORATE BONDS — (continued)
		Financials — (continued)
	$280,000	Union Bank NA, BKNT, 3.000%, 6/6/16	$	295,168
	500,000	US Bank NA, 3.778%, 4/29/20(a)		526,786
	280,000	USAA Capital Corp., 1.050%, 9/30/14(b)		281,260
	800,000	Wachovia Corp., 5.625%, 10/15/16		913,027
	285,000	WT Finance Aust Pty, Ltd./Westfield Capital/WEA Finance LLC, 5.125%, 11/15/14(b)		303,679
				22,494,658
		Health Care (4.0%)
	425,000	AbbVie, Inc., 1.200%, 11/6/15(b)		428,302
	400,000	DaVita HealthCare Partners, Inc., 6.375%, 11/1/18(d)		425,500
	130,000	DENTSPLY International, Inc., 2.750%, 8/15/16		134,993
	400,000	Express Scripts Holding Co., 2.750%, 11/21/14 .		411,996
	250,000	Mylan, Inc., 7.875%, 7/15/20(b)		291,729
	255,000	Valeant Pharmaceuticals International, 6.500%, 7/15/16(b)		266,156
	310,000	Zimmer Holdings, Inc., 1.400%, 11/30/14		312,156
	500,000	Zoetis, Inc., 1.150%, 2/1/16(b)		501,332
				2,772,164
		Industrials (4.0%)
	410,000	Corrections Corp. of America, 7.750%, 6/1/17		430,500
	300,000	Iron Mountain, Inc., 8.000%, 6/15/20		314,250
	445,000	Penske Truck Leasing Co. LP/PTL Finance Corp., 3.125%, 5/11/15(b)		460,436
	245,000	Roper Industries, Inc., 6.625%, 8/15/13(d)		250,203
	350,000	Textron, Inc., 6.200%, 3/15/15		381,238
	280,000	Tyco Electronics Group SA, 1.600%, 2/3/15		283,319
	300,000	United Rentals North America, Inc., 10.250%, 11/15/19		348,750
	310,000	Waste Management, Inc., 6.375%, 3/11/15		342,446
				2,811,142
		Materials (3.0%)
	250,000	Anglo American Capital PLC, 9.375%, 4/8/14(b)		269,895
	250,000	ArcelorMittal USA LLC, 6.500%, 4/15/14		261,487
	200,000	Barrick Gold Corp., 2.900%, 5/30/16		210,288
	300,000	Ecolab, Inc., 1.000%, 8/9/15		300,793
	290,000	Freeport-McMoRan Copper & Gold, Inc., 1.400%, 2/13/15		292,100
	450,000	Vale Overseas, Ltd., 6.250%, 1/11/16		503,199
	240,000	Xstrata Finance Canada, Ltd., 1.800%, 10/23/15(b)		242,727
				2,080,489
		Telecommunication Services (2.3%)
	330,000	America Movil SAB de CV, 2.375%, 9/8/16		339,462
	325,000	AT&T, Inc., 0.875%, 2/13/15		325,653
	300,000	SBA Telecommunications, Inc., 8.250%, 8/15/19		330,750
	250,000	Telefonica Emisiones SAU, 2.582%, 4/26/13		250,246
	300,000	Vodafone Group PLC, 2.875%, 3/16/16		316,289
				1,562,400
		Utilities (1.6%)
	250,000	Duke Energy Corp., 2.150%, 11/15/16		258,344
	270,000	PSEG Power LLC, 5.500%, 12/1/15		299,967

Principal Amount			Fair Value
	CORPORATE BONDS — (continued)
		Utilities — (continued)
	$230,000	Southern California Edison Co., Series 05-A, 5.000%, 1/15/16	$	257,523
	250,000	Southern Power Co., Series D, 4.875%, 7/15/15		272,787
				1,088,621
		Total Corporate Bonds (Cost $41,487,059)		41,805,291
	MORTGAGE-BACKED SECURITIES (0.1%)
		Fannie Mae (0.1%)
	5,256	6.500%, 8/1/13, Pool #251901		5,278
	93,785	6.500%, 4/1/16, Pool #253706		100,010
				105,288
		Freddie Mac (0.0%)
	937	6.500%, 5/1/13, Pool #E00548		939
		Total Mortgage-Backed Securities (Cost $100,285)		106,227
	MUNICIPAL BONDS (6.0%)
		California (1.5%)
	1,000,000	Northern California Transmission Agency, California-Oregon Transmission Project, Refunding Revenue, Series B, 5.370%, 5/1/15		1,066,280
		Illinois (1.5%)
	1,000,000	State of Illinois, Build America Bonds, Transit Improvements G.O., 4.200%, 7/1/14		1,034,660
		New Jersey (0.5%)
	320,000	New Jersey Economic Development Authority, School Facilities Construction Refunding Revenue, 1.059%, 3/1/16		320,854
		New York (1.5%)
	1,000,000	New York State Urban Development Corp., Public Improvements, Taxable State Personal Income Tax Revenue, Series B, 2.626%, 12/15/14		1,038,400
		Virginia (1.0%)
	115,000	City of Danville, VA, Refunding G.O., Series B, Taxable (Assured Guaranty, State Aid Withholding), 4.200%, 3/1/14		118,560
	100,000	City of Danville, VA, Refunding G.O., Series B, Taxable (Assured Guaranty, State Aid Withholding), 4.200%, 3/1/14		103,556
	230,000	City of Danville, VA, Refunding G.O., Series B, Taxable (Assured Guaranty, State Aid Withholding), 4.550%, 3/1/15		245,026
	200,000	City of Danville, VA, Refunding G.O., Series B, Taxable (Assured Guaranty, State Aid Withholding), 4.550%, 3/1/15		215,216
				682,358
		Total Municipal Bonds (Cost $4,005,354)		4,142,552

Continued

19

Sterling Capital Short-Term Bond Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Shares			Fair Value
	PREFERRED STOCKS (1.9%)
		Consumer Staples (0.3%)
	2	HJ Heinz Finance Co., Series B, 8.000%(b)	$	204,625
		Financials (1.6%)
	15,000	Citigroup Capital XV, 6.500%		376,950
	7,480	DDR Corp., Series H, REIT, 7.375%		188,646
	7,810	National Retail Properties, Inc., REIT, Series D, 6.625%		207,355
	2,245	SL Green Realty Corp., Series C, REIT, 7.625%		56,731
	11,166	Vornado Realty LP, REIT, 7.875%		302,822
				1,132,504
		Total Preferred Stocks (Cost $1,357,260)		1,337,129
	INVESTMENT COMPANY (3.5%)
	2,413,488	Federated Treasury Obligations Fund, Institutional Shares		2,413,488
		Total Investment Company (Cost $2,413,488)		2,413,488
	Total Investments — 102.5% (Cost $70,775,737)			71,209,640
	Net Other Assets (Liabilities) — (2.5%)			(1,712,266)
	NET ASSETS — 100.0%		$	69,497,374

(a) 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 in effect as of March 31, 2013. The maturity date reflected is the final maturity date.

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

(c) Represents security purchased on a when-issued basis. At March 31, 2013, total cost of investments purchased on a when-issued basis was $318,938.

(d) Represents that all or a portion of the security was pledged as collateral for securities purchased on a when-issued basis.

BKNT — Bank Note

G.O. — General Obligation

GMTN — Global Medium Term Note

MTN — Medium Term Note

REIT — Real Estate Investment Trust

See accompanying notes to the financial statements.

20

Sterling Capital Intermediate U.S. Government Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	COLLATERALIZED MORTGAGE OBLIGATIONS (8.4%)
	$1,773,538	Fannie Mae, Series 2010-129, Class NA, 3.500%, 3/25/25	$	1,853,835
	2,000,000	Freddie Mac, Series K701, Class A2, 3.882%, 11/25/17(a)		2,223,718
	1,827,781	Freddie Mac, Series 3644, Class BA, 4.500%, 2/15/29		1,924,227
	628,519	Ginnie Mae, Series 1999-17, Class F, 0.503%, 5/16/29(a)		633,994
		Total Collateralized Mortgage Obligations (Cost $6,353,439)		6,635,774
	CORPORATE BONDS (4.0%)
		Financials (4.0%)
	1,000,000	Berkshire Hathaway, Inc., 0.800%, 2/11/16		1,005,539
	1,000,000	Goldman Sachs Group, Inc. (The), 5.125%, 1/15/15		1,068,367
	1,000,000	MBNA Corp., 5.000%, 6/15/15		1,076,889
		Total Corporate Bonds (Cost $2,990,908)		3,150,795
	MORTGAGE-BACKED SECURITIES (18.7%)
		Fannie Mae (9.2%)
	1,940,813	3.583%, 9/1/20, Pool #FN0000		2,138,087
	425,479	5.500%, 1/1/33, Pool #678321		469,006
	1,142,863	5.000%, 7/1/33, Pool #724965		1,243,434
	243,061	5.000%, 8/1/33, Pool #724365		264,130
	453,868	6.000%, 7/1/37, Pool #938378		498,089
	2,382,833	5.500%, 8/1/37, Pool #946238		2,599,402
				7,212,148
		Freddie Mac (8.7%)
	1,215,341	4.500%, 2/1/18, Pool #E94445		1,294,095
	3,619,384	3.500%, 12/1/25, Pool #G14007		3,894,763
	1,583,752	3.000%, 4/1/27, Pool #G18430		1,667,852
				6,856,710
		Ginnie Mae (0.8%)
	603,979	5.000%, 11/20/38, Pool #4283		639,576
		Total Mortgage-Backed Securities (Cost $13,583,656)		14,708,434
	MUNICIPAL BONDS (7.2%)
		Illinois (4.4%)
	1,000,000	State of Illinois, Building Public Improvements Revenue, Taxable, 3.081%, 6/15/23		1,022,100
	1,000,000	State of Illinois, Taxable Building Public Improvements Revenue, 1.998%, 6/15/18		1,028,330
	1,375,000	Village of Rosemont, IL, Taxable Corporate Purpose, Refunding G.O., Series B (AGM), 2.389%, 12/1/17		1,388,117
				3,438,547
		New York (2.8%)
	1,950,000	State of New York, Build America Bonds, Highway Improvements G.O., 4.090%, 3/1/18		2,214,108
		Total Municipal Bonds (Cost $5,399,391)		5,652,655

Principal Amount			Fair Value
	U.S. GOVERNMENT AGENCIES (25.1%)
		Fannie Mae (3.6%)
	$2,000,000	6.250%, 5/15/29	$	2,840,278
		Federal Farm Credit Bank (7.5%)
	5,000,000	4.670%, 2/27/18		5,887,965
		Federal Home Loan Bank (3.8%)
	2,000,000	1.000%, 1/17/23, Series 0000, STEP		2,000,518
	1,000,000	1.000%, 11/8/27, Series 0001, STEP		1,000,425
				3,000,943
		Freddie Mac (8.9%)
	2,000,000	4.875%, 6/13/18		2,394,324
	4,000,000	3.750%, 3/27/19		4,586,008
				6,980,332
		Private Export Funding Corp. (1.3%)
	1,000,000	1.450%, 8/15/19		1,011,178
		Total U.S. Government Agencies (Cost $18,425,931)		19,720,696
	U.S. TREASURY BONDS (3.6%)
	2,000,000	6.250%, 8/15/23		2,830,624
		Total U.S. Treasury Bonds (Cost $2,283,876)		2,830,624
	U.S. TREASURY NOTES (30.1%)
	1,500,000	3.375%, 6/30/13		1,512,188
	2,000,000	0.250%, 5/31/14		2,001,406
	5,000,000	0.625%, 7/15/14		5,027,150
	1,000,000	3.000%, 2/28/17		1,095,000
	500,000	3.500%, 2/15/18		566,094
	4,000,000	2.625%, 4/30/18		4,367,500
	2,500,000	1.125%, 5/31/19		2,512,695
	2,000,000	1.000%, 11/30/19		1,979,532
	1,500,000	3.125%, 5/15/21		1,689,024
	3,000,000	1.625%, 8/15/22		2,961,327
		Total U.S. Treasury Notes (Cost $23,493,458)		23,711,916
Shares
	INVESTMENT COMPANY (1.6%)
	1,236,542	Federated Treasury Obligations Fund, Institutional Shares		1,236,542
		Total Investment Company (Cost $1,236,542)		1,236,542
	Total Investments — 98.7% (Cost $73,767,201)			77,647,436
	Net Other Assets (Liabilities) — 1.3%			1,033,442
	NET ASSETS — 100.0%		$	78,680,878

(a) 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 in effect as of March 31, 2013. The maturity date reflected is the final maturity date.

AGM — Assured Guaranty Municipal Corp.

G.O. — General Obligation

STEP — Step Coupon Bond

See accompanying notes to the financial statements.

21

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	ASSET BACKED SECURITIES (5.0%)
	$1,592,142	Argent Securities, Inc. Pass Through Certificates, Series 2005-W3, Class A2D, 0.544%, 11/25/35(a)	$	1,453,352
	8,272,000	Avis Budget Rental Car Funding AESOP LLC, Series 2012-3A, Class A, 2.100%, 3/20/19(b)		8,441,022
	2,550,000	CarMax Auto Owner Trust, Series 2012-3, Class A4, 0.790%, 4/16/18		2,551,670
	5,000,000	Citibank Omni Master Trust, Series 2009-A14A, Class A14, 2.953%, 8/15/18(a)(b)		5,175,780
	896,523	Credit-Based Asset Servicing and Securitization LLC, Series 2005-CB5, Class AF2, STEP, 4.670%, 8/25/35		907,321
	3,140,669	Long Beach Mortgage Loan Trust, Series 2006-WL2, Class 2A3, 0.404%, 1/25/36(a)		2,949,201
	1,825,000	MBNA Credit Card Master Note Trust, Series 2006-A5, Class A5, 0.263%, 10/15/15(a)		1,824,823
	1,422,204	Park Place Securities, Inc. Pass Through Certificates, Series 2005-WHQ1, Class M2, 0.704%, 3/25/35(a)		1,415,814
	1,967,878	RAAC Trust, Series 2004-SP1, Class AI3, STEP, 5.618%, 3/25/34		2,020,684
		Total Asset Backed Securities (Cost $26,708,171)		26,739,667
	COLLATERALIZED MORTGAGE OBLIGATIONS (10.1%)
	1,288,331	Adjustable Rate Mortgage Trust, Series 2004-5, Class 4A1, 4.613%, 4/25/35(a)		1,276,693
	1,190,398	Banc of America Alternative Loan Trust, Series 2004-10, Class 1CB1, 6.000%, 11/25/34		1,196,310
	1,915,709	Banc of America Funding Trust, Series 2006-2, Class 3A1, 6.000%, 3/25/36		1,964,238
	419,505	Banc of America Mortgage Trust, Series 2005-3, Class 1A24, 5.500%, 4/25/35		434,837
	537,443	Chase Mortgage Finance Trust, Series 2004-S3, Class 2A5, 5.500%, 3/25/34		560,809
	1,061,093	Citicorp Mortgage Securities, Inc., Series 2005-1, Class 1A2, 5.000%, 2/25/35		1,066,892
	366,904	Citigroup Mortgage Loan Trust, Inc., Series 2004-NCM2, Class 3CB2, 6.500%, 8/25/19		391,979
	1,351,240	Countrywide Alternative Loan Trust, Series 2004-22CB, Class 1A1, 6.000%, 10/25/34		1,401,297
	830,904	Countrywide Home Loan Mortgage Pass Through Trust, Series 2002-38, Class A3, 5.000%, 2/25/18		832,108
	206,531	Countrywide Home Loan Mortgage Pass Through Trust, Series 2003-28, Class A3, 4.500%, 8/25/33		207,938
	392,745	Countrywide Home Loan Mortgage Pass Through Trust, Series 2003-J7, Class 1A3, 5.250%, 8/25/33		404,287
	543,264	Countrywide Home Loan Mortgage Pass Through Trust, Series 2004-3, Class A4, 5.750%, 4/25/34		562,029
	648,735	Countrywide Home Loan Mortgage Pass Through Trust, Series 2005-J4, Class A3, 5.500%, 11/25/35		658,601
	444,997	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-2, Class 4A1, 5.250%, 2/25/20		448,149

Principal Amount			Fair Value
	COLLATERALIZED MORTGAGE OBLIGATIONS — (continued)
	$808,839	Credit Suisse First Boston Mortgage Securities Corp., Series 2004-1, Class 2A1, 6.500%, 2/25/34	$	865,120
	548,926	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-6, Class 2A3, 5.500%, 7/25/35		575,705
	1,015,048	Fannie Mae, Series 2003-33, Class A, 4.000%, 5/25/33		1,103,630
	968,055	Fannie Mae, Series 2003-33, Class AQ, 4.000%, 5/25/33		1,040,008
	3,365,145	Fannie Mae, Series 2011-38, Class D, 4.500%, 5/25/41		3,767,317
	2,036,147	Freddie Mac, Series 3768, Class V, 4.000%, 11/15/23		2,234,508
	1,269,018	Freddie Mac, Series 3632, Class PK, 5.000%, 2/15/40		1,420,661
	5,281,196	Freddie Mac, Series 4077, Class PJ, 3.500%, 11/15/40		5,682,809
	1,983,836	Ginnie Mae, Series 2008-51, Class PG, 5.000%, 6/20/38		2,194,553
	1,613,893	MASTR Alternative Loan Trust, Series 2003-5, Class 8A1, 5.500%, 6/25/33		1,697,200
	1,166,562	MASTR Alternative Loan Trust, Series 2004-13, Class 3A1, 6.500%, 1/25/35		1,184,208
	302,036	MASTR Asset Securitization Trust, Series 2003-4, Class 5A1, 5.500%, 5/25/33		321,789
	304,842	MASTR Asset Securitization Trust, Series 2005-2, Class 1A1, 5.250%, 11/25/35		309,198
	720,185	MASTR Seasoned Securitization Trust, Series 2005-2, Class 1A1, 5.130%, 10/25/32		708,720
	2,717,003	PHHMC Trust, Series 2007-6, Class A1, 5.872%, 12/18/37(a)		2,870,482
	516,791	RAAC Trust, Series 2004-SP3, Class AI5, 4.890%, 12/25/32(a)		521,902
	1,495,522	RALI Trust, Series 2005-QR1, Class A, 6.000%, 10/25/34		1,592,958
	831,178	Residential Asset Securitization Trust, Series 2004-IP2, Class 4A, 2.763%, 12/25/34(a)		817,191
	2,843,488	Specialty Underwriting & Residential Finance Trust, Series 2004-AA1, Class 1A1, 5.000%, 10/25/34		2,880,459
	2,090,890	Structured Adjustable Rate Mortgage Loan Trust, Series 2004-6, Class 4A1, 2.715%, 6/25/34(a)		2,157,767
	1,470,571	Structured Asset Securities Corp. Mortgage Pass Through Certificates, Series 2003-10, Class A, 6.000%, 4/25/33		1,560,524
	1,269,001	Structured Asset Securities Corp. Trust, Series 2005-6, Class 5A2, 5.000%, 5/25/35		1,290,170
	703,661	Structured Asset Securities Corp. Trust, Series 2005-6, Class 5A1, 5.000%, 5/25/35		712,003
	529,244	Wells Fargo Mortgage Backed Securities Trust, Series 2007-3, Class 3A1, 5.500%, 4/25/22		546,614
	1,742,071	Wells Fargo Mortgage Backed Securities Trust, Series 2004-BB, Class A2, 2.625%, 1/25/35(a)		1,701,983
	1,065,488	Wells Fargo Mortgage Backed Securities Trust, Series 2005-4, Class A4, 5.000%, 4/25/35		1,105,936
	1,903,249	Wells Fargo Mortgage Backed Securities Trust, Series 2005-AR16, Class 6A3, 2.673%, 10/25/35(a)		1,872,094

Continued

22

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	COLLATERALIZED MORTGAGE OBLIGATIONS — (continued)
	$705,068	Wells Fargo Mortgage Backed Securities Trust, Series 2007-16, Class 1A1, 6.000%, 12/28/37	$	756,373
		Total Collateralized Mortgage Obligations (Cost $53,536,020)		54,898,049
	COMMERCIAL MORTGAGE-BACKED SECURITIES (19.3%)
	5,000,000	Banc of America Commercial Mortgage Trust, Series 2006-3, Class A4, 5.889%, 7/10/44(a)		5,631,045
	4,871,000	Banc of America Commercial Mortgage Trust, Series 2006-5, Class A4, 5.414%, 9/10/47		5,472,383
	234,251	Banc of America Commercial Mortgage Trust, Series 2007-2, Class A2, 5.619%, 4/10/49(a)		238,529
	2,500,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-1, Class AJ, 5.196%, 11/10/42(a)		2,680,003
	1,810,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-3, Class AM, 4.727%, 7/10/43		1,932,597
	1,750,000	Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR9, Class A4B, 4.943%, 9/11/42		1,900,279
	2,000,000	CD Commercial Mortgage Trust, Series 2005-CD1, Class AM, 5.218%, 7/15/44(a)		2,196,602
	5,000,000	CD Commercial Mortgage Trust, Series 2007-CD4, Class A4, 5.322%, 12/11/49		5,683,410
	3,100,000	CD Mortgage Trust, Series 2006-CD3, Class A5, 5.617%, 10/15/48		3,495,678
	3,000,000	COMM Mortgage Trust, Series 2005-LP5, Class AJ, 5.046%, 5/10/43(a)		3,251,460
	5,000,000	COMM Mortgage Trust, Series 2006-C7, Class A4, 5.748%, 6/10/46(a)		5,623,720
	3,845,000	Commercial Mortgage Trust, Series 2005-GG5, Class AM, 5.311%, 4/10/37(a)		4,182,306
	270,787	Credit Suisse First Boston Mortgage Securities Corp., Series 2002-CP5, Class C, 5.230%, 12/15/35		270,721
	600,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2004-C5, Class AJ, 4.889%, 11/15/37(a)		636,373
	2,828,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C1, Class AJ, 5.075%, 2/15/38(a)		2,963,639
	2,214,000	DBUBS Mortgage Trust, Series 2011-LC2A, Class A4, 4.537%, 7/10/44(b)		2,522,200
	500,000	DBUBS Mortgage Trust, Series 2011-LC2A, Class B, 4.998%, 7/10/44(a)(b)		565,933
	3,400,000	GMAC Commercial Mortgage Securities, Inc., Series 2005-C1, Class AM, 4.754%, 5/10/43		3,647,296
	2,832,000	GS Mortgage Securities Corp. II, Series 2013-KYO, Class A, 1.052%, 11/8/29(a)(b)		2,838,434
	2,000,000	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP2, Class AM, 4.780%, 7/15/42.		2,139,174
	4,679,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CB16, Class A4, 5.552%, 5/12/45		5,273,355
	2,820,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2011-C3, Class B, 5.013%, 2/15/46(a)(b)		3,172,210

Principal Amount			Fair Value
	COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
	$2,500,000	LB-UBS Commercial Mortgage Trust, Series 2007-C1, Class A4, 5.424%, 2/15/40	$	2,848,685
	500,000	Merrill Lynch Mortgage Trust, Series 2005-MKB2, Class AJ, 5.263%, 9/12/42(a)		526,788
	2,600,000	ML-CFC Commercial Mortgage Trust, Series 2006-3, Class A3, 5.389%, 7/12/46(a)		2,615,816
	2,390,000	Morgan Stanley Capital I Trust, Series 2006-HQ8, Class AM, 5.470%, 3/12/44(a)		2,654,446
	1,895,000	UBS-Barclays Commercial Mortgage Trust, Series 2012-C4, Class A3, 2.533%, 12/10/45		1,917,988
	1,050,000	Wachovia Bank Commercial Mortgage Trust, Series 2004-C11, Class B, 5.306%, 1/15/41(a)		1,151,198
	3,170,000	Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class AMFX, 5.179%, 7/15/42(a)		3,446,487
	890,261	Wachovia Bank Commercial Mortgage Trust, Series 2007-C30, Class A3, 5.246%, 12/15/43		916,964
	2,499,740	Wachovia Bank Commercial Mortgage Trust, Series 2006-C27, Class A3, 5.765%, 7/15/45(a)		2,767,112
	4,995,000	Wachovia Bank Commercial Mortgage Trust, Series 2006-C28, Class A4, 5.572%, 10/15/48		5,625,729
	1,995,000	Wachovia Commercial Mortgage Securities, Inc. Pass Through Certificates, Series 2003-C8, Class E, 5.264%, 11/15/35(a)		2,032,490
	300,000	Wachovia Commercial Mortgage Securities, Inc. Pass Through Certificates, Series 2003-C9, Class B, 5.109%, 12/15/35(a)		308,086
	4,962,000	WF-RBS Commercial Mortgage Trust, Series 2011-C2, Class B, 5.174%, 2/15/44(a)(b)		5,717,613
	5,143,000	WF-RBS Commercial Mortgage Trust, Series 2011-C3, Class A4, 4.375%, 3/15/44(b)		5,799,694
		Total Commercial Mortgage-Backed Securities (Cost $102,795,477)		104,646,443
	CORPORATE BONDS (41.6%)
		Consumer Discretionary (4.0%)
	1,621,000	Comcast Cable Communications Holdings, Inc., 9.455%, 11/15/22(c)		2,456,425
	566,000	COX Communications, Inc., 4.700%, 12/15/42(b)		557,042
	1,049,000	Delphi Corp., 5.875%, 5/15/19(c)		1,132,920
	1,487,000	Ford Motor Co., 7.450%, 7/16/31		1,880,633
	1,835,000	George Washington University (The), 3.485%, 9/15/22		1,941,091
	905,000	Grupo Televisa SAB, 6.000%, 5/15/18		1,054,091
	938,000	Home Depot, Inc. (The), 5.875%, 12/16/36(c)		1,165,836
	1,130,000	Interpublic Group of Cos., Inc. (The), 3.750%, 2/15/23		1,096,260
	893,000	Lowe’s Cos., Inc., 5.800%, 4/15/40		1,073,492
	1,640,000	Mohawk Industries, Inc., 3.850%, 2/1/23		1,667,227
	601,000	NBCUniversal Media LLC, 5.950%, 4/1/41		724,766
	942,500	Nielsen Finance LLC/Nielsen Finance Co., 4.500%, 10/1/20(b)		941,322
	636,000	Nordstrom, Inc., 6.250%, 1/15/18		761,102

Continued

23

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	CORPORATE BONDS — (continued)
		Consumer Discretionary — (continued)
	$791,000	Royal Caribbean Cruises, Ltd., 11.875%, 7/15/15	$	965,020
	1,575,000	Service Corp. International, 7.000%, 5/15/19		1,708,875
	1,041,000	Time Warner Cable, Inc., 5.875%, 11/15/40		1,109,916
	862,000	Wyndham Worldwide Corp., 5.625%, 3/1/21		968,026
	651,000	Wyndham Worldwide Corp., 4.250%, 3/1/22		681,807
				21,885,851
		Consumer Staples (1.4%)
	738,000	Altria Group, Inc., 9.950%, 11/10/38		1,218,765
	564,000	Anheuser-Busch InBev Worldwide, Inc., 6.375%, 1/15/40		760,083
	800,000	Beam, Inc., 5.875%, 1/15/36		934,248
	1,114,000	ConAgra Foods, Inc., 4.650%, 1/25/43		1,108,587
	1,052,000	CVS Caremark Corp., 6.125%, 9/15/39(c)		1,299,717
	1,886,000	Lorillard Tobacco Co., 6.875%, 5/1/20		2,287,335
				7,608,735
		Energy (4.6%)
	1,876,000	Atlas Pipeline Partners LP/Atlas Pipeline Finance Corp., 5.875%, 8/1/23(b)		1,866,620
	2,240,000	Boardwalk Pipelines LP, 3.375%, 2/1/23		2,198,495
	1,623,000	BP Capital Markets PLC, 1.375%, 11/6/17		1,625,155
	1,158,000	Cameron International Corp., 6.375%, 7/15/18		1,391,129
	1,396,000	Chesapeake Energy Corp., 3.250%, 3/15/16(d)		1,411,705
	862,000	Denbury Resources, Inc., 8.250%, 2/15/20		965,440
	1,198,000	Energy Transfer Partners LP, 9.000%, 4/15/19		1,578,399
	1,435,000	Enterprise Products Operating LLC, 5.950%, 2/1/41(c)		1,662,437
	870,000	Halliburton Co., 4.500%, 11/15/41		935,322
	1,160,000	Kinder Morgan Energy Partners LP, 3.950%, 9/1/22(c)		1,232,503
	856,000	NuStar Logistics LP, 8.150%, 4/15/18(c)		979,363
	1,086,000	Petrobras International Finance Co. - PifCo, 3.500%, 2/6/17(c)		1,121,287
	1,226,000	Petrohawk Energy Corp., 6.250%, 6/1/19		1,392,143
	975,000	Plains Exploration & Production Co., 6.500%, 11/15/20		1,077,375
	854,000	Regency Energy Partners LP/Regency Energy Finance Corp., 6.500%, 7/15/21		939,400
	1,127,000	Schlumberger Investment SA, 3.300%, 9/14/21(b)		1,203,325
	995,000	Shell International Finance BV, 6.375%, 12/15/38		1,374,211
	1,210,000	Statoil ASA, 3.150%, 1/23/22		1,281,718
	850,000	Western Gas Partners LP, 4.000%, 7/1/22		879,288
				25,115,315
		Financials (22.5%)
	1,040,000	ABN Amro North American Holding Preferred Capital Repackage Trust I, 3.388%, 12/29/49(a)(b)		1,040,000
	586,000	Aflac, Inc., 8.500%, 5/15/19		791,980
	892,000	Alexandria Real Estate Equities, Inc., REIT, 4.600%, 4/1/22		961,286
	3,075,000	American International Group, Inc., 3.800%, 3/22/17(c)		3,327,381
	1,756,000	American Tower Corp., REIT, 3.500%, 1/31/23(c)		1,741,615
	1,279,000	Associates Corp. of North America, 6.950%, 11/1/18		1,562,018

Principal Amount			Fair Value
	CORPORATE BONDS — (continued)
		Financials — (continued)
	$3,562,000	Bank of America Corp., MTN, 3.300%, 1/11/23(c)	$	3,512,342
	1,299,000	Bank of New York Mellon Corp. (The), STEP, 1.969%, 6/20/17		1,339,647
	1,016,000	Bank of Nova Scotia, 4.375%, 1/13/21		1,156,096
	2,573,000	Bear Stearns Cos. LLC (The), 5.550%, 1/22/17(c)		2,936,732
	916,000	BlackRock, Inc., 3.375%, 6/1/22		965,938
	1,300,000	BNP Paribas SA, MTN, 3.250%, 3/3/23		1,263,477
	1,055,000	Carlyle Holdings Finance LLC, 3.875%, 2/1/23(b)		1,080,625
	1,020,000	CIT Group, Inc., 4.750%, 2/15/15(b)		1,068,450
	960,000	Citigroup, Inc., 5.875%, 1/30/42		1,147,336
	848,000	CME Group, Inc., 3.000%, 9/15/22		855,728
	1,365,000	CNA Financial Corp., 7.350%, 11/15/19		1,727,787
	605,000	CNH Capital LLC, 3.875%, 11/1/15		620,125
	1,859,000	Colonial Realty LP, 6.250%, 6/15/14(c)		1,963,667
	1,376,000	Cooperatieve Centrale Raiffeisen- Boerenleenbank BA, 3.950%, 11/9/22		1,385,412
	1,474,000	CubeSmart LP, REIT, 4.800%, 7/15/22		1,614,235
	1,308,000	Duke Realty LP, REIT, 7.375%, 2/15/15		1,449,001
	1,381,000	Fifth Third Bancorp, 3.625%, 1/25/16		1,476,295
	664,000	First American Financial Corp., 4.300%, 2/1/23		691,040
	1,565,000	General Electric Capital Corp., GMTN, 6.875%, 1/10/39(c)		2,050,512
	4,388,000	General Electric Capital Corp., Series B, 6.250%, 12/15/49(a)(c)		4,815,975
	1,327,000	Goldman Sachs Group, Inc. (The), 6.250%, 2/1/41		1,576,947
	1,025,000	Goodman Funding Pty, Ltd., REIT, 6.375%, 11/12/20(b)		1,193,582
	1,393,000	HCP, Inc., REIT, 6.000%, 1/30/17		1,612,474
	2,107,000	Health Care REIT, Inc., 4.125%, 4/1/19(c)		2,284,173
	1,300,000	Healthcare Realty Trust, Inc., REIT, 3.750%, 4/15/23		1,292,547
	2,454,000	Healthcare Trust of America Holdings LP, 3.700%, 4/15/23(b)(d)		2,452,110
	972,000	Host Hotels & Resorts LP, REIT, Series D, 3.750%, 10/15/23		975,801
	2,513,000	HSBC Finance Corp., 6.676%, 1/15/21		2,973,723
	1,601,000	ING Bank NV, 4.000%, 3/15/16(b)(c)		1,715,471
	1,596,000	ING US, Inc., 2.900%, 2/15/18(b)		1,618,818
	1,061,000	Invesco Finance PLC, 3.125%, 11/30/22		1,082,836
	1,036,000	Jefferies Group LLC, 8.500%, 7/15/19(c)		1,289,727
	1,376,000	Jones Lang LaSalle, Inc., 4.400%, 11/15/22		1,415,497
	3,825,000	JPMorgan Chase & Co., 4.350%, 8/15/21(c)		4,219,644
	1,609,000	KeyCorp, MTN, 5.100%, 3/24/21(c)		1,873,224
	1,245,000	Kilroy Realty LP, REIT, 3.800%, 1/15/23		1,275,141
	742,000	Kimco Realty Corp., REIT, MTN, 5.783%, 3/15/16		835,119
	1,380,000	Liberty Mutual Group, Inc., 4.950%, 5/1/22(b)		1,513,169
	980,000	Macquarie Bank, Ltd., 5.000%, 2/22/17(b)		1,081,499
	952,000	Macquarie Bank, Ltd., 6.625%, 4/7/21(b)(c)		1,063,803
	1,120,000	Markel Corp., 7.125%, 9/30/19		1,380,642
	946,000	Massachusetts Mutual Life Insurance Co., 8.875%, 6/1/39(b)		1,462,363
	1,990,000	Merrill Lynch & Co., Inc., MTN, 6.875%, 4/25/18		2,401,970
	1,026,000	MetLife, Inc., 7.717%, 2/15/19		1,332,294
	4,026,000	Morgan Stanley, 5.375%, 10/15/15		4,396,988
	2,018,000	Morgan Stanley, GMTN, 6.625%, 4/1/18(c)		2,412,321

Continued

24

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	CORPORATE BONDS — (continued)
		Financials — (continued)
	$4,555,000	Murray Street Investment Trust I, STEP, 4.647%, 3/9/17(c)	$	4,980,888
	1,039,000	National Rural Utilities Cooperative Finance Corp., 10.375%, 11/1/18		1,516,334
	1,308,000	OneBeacon US Holdings, Inc., 4.600%, 11/9/22		1,369,051
	1,187,000	Pacific LifeCorp, 5.125%, 1/30/43(b)		1,150,738
	500,000	PNC Bank NA, BKNT, 4.875%, 9/21/17		572,290
	1,007,000	PNC Bank NA, BKNT, 6.000%, 12/7/17(c)		1,198,639
	1,388,000	Principal Financial Group, Inc., 1.850%, 11/15/17		1,402,446
	1,305,000	Prudential Financial, Inc., 8.875%, 6/15/38(a)(c)		1,603,506
	892,000	Prudential Financial, Inc., MTN, Series D, 7.375%, 6/15/19		1,145,297
	1,065,000	Reinsurance Group of America, Inc., 5.625%, 3/15/17		1,206,363
	960,000	Royal Bank of Scotland PLC (The), 5.625%, 8/24/20		1,116,000
	1,473,000	Simon Property Group LP, REIT, 10.350%, 4/1/19(c)		2,125,744
	1,014,000	Sirius International Group, Ltd., 6.375%, 3/20/17(b)		1,140,787
	1,245,000	SunTrust Banks, Inc., 3.500%, 1/20/17		1,333,084
	848,000	Swiss Re Solutions Holding Corp., 7.000%, 2/15/26		1,086,123
	1,399,000	Transatlantic Holdings, Inc., 8.000%, 11/30/39		1,945,012
	805,000	Validus Holdings, Ltd., 8.875%, 1/26/40		1,074,137
	1,603,000	Ventas Realty LP/Ventas Capital Corp., REIT, 2.000%, 2/15/18		1,612,084
	2,109,000	Wachovia Bank NA, MTN, 5.600%, 3/15/16(c)		2,382,141
	1,225,000	Wachovia Corp., 5.500%, 8/1/35		1,357,715
	1,000,000	WR Berkley Corp., 4.625%, 3/15/22		1,085,067
				121,680,029
		Health Care (2.1%)
	961,000	Amgen, Inc., 5.150%, 11/15/41		1,031,175
	200,000	CFR International SpA, 5.125%, 12/6/22(b)		205,609
	867,000	Cigna Corp., 5.375%, 2/15/42		980,278
	1,136,000	DaVita HealthCare Partners, Inc., 6.625%, 11/1/20		1,230,430
	1,190,000	DENTSPLY International, Inc., 2.750%, 8/15/16(c)		1,235,701
	766,000	Fresenius US Finance II, Inc., 9.000%, 7/15/15(b)		877,070
	716,000	HCA, Inc., 8.500%, 4/15/19		790,285
	814,000	Mylan, Inc., 7.875%, 7/15/20(b)		949,870
	1,491,000	Teva Pharmaceutical Finance IV BV, 3.650%, 11/10/21		1,586,722
	1,133,000	UnitedHealth Group, Inc., 4.625%, 11/15/41(c)		1,179,455
	1,340,000	Valeant Pharmaceuticals International, 6.500%, 7/15/16(b)		1,398,625
				11,465,220
		Industrials (2.6%)
	1,200,000	Bombardier, Inc., 6.125%, 1/15/23(b)		1,245,000
	1,101,000	Burlington Northern Santa Fe LLC, 4.950%, 9/15/41		1,184,837
	1,397,000	Corrections Corp. of America, 7.750%, 6/1/17		1,466,850
	1,378,000	Corrections Corp. of America, 4.125%, 4/1/20(b)		1,403,837

Principal Amount			Fair Value
	CORPORATE BONDS — (continued)
		Industrials — (continued)
	$   769,000	Equifax, Inc., 3.300%, 12/15/22	$	756,479
	1,062,000	Iron Mountain, Inc., 5.750%, 8/15/24		1,060,673
	1,335,000	Penske Truck Leasing Co. LP/PTL Finance Corp., 3.125%, 5/11/15(b)		1,381,307
	753,000	Republic Services, Inc., 6.200%, 3/1/40		931,110
	1,298,000	Ryder System, Inc., MTN, 2.350%, 2/26/19		1,310,339
	925,000	Textron, Inc., 4.625%, 9/21/16(c)		1,014,592
	976,000	United Rentals North America, Inc., 10.250%, 11/15/19		1,134,600
	1,060,000	Verisk Analytics, Inc., 5.800%, 5/1/21(c)		1,223,050
				14,112,674
		Information Technology (0.3%)
	361,000	Oracle Corp., 5.375%, 7/15/40		422,954
	1,214,000	Samsung Electronics America, Inc., 1.750%, 4/10/17(b)		1,231,360
				1,654,314
		Materials (1.6%)
	820,000	Anglo American Capital PLC, 4.125%, 9/27/22(b)		848,386
	1,172,000	Freeport-McMoRan Copper & Gold, Inc., 5.450%, 3/15/43(b)(c)		1,158,282
	1,035,000	Lubrizol Corp., 8.875%, 2/1/19		1,433,160
	691,000	Newmont Mining Corp., 4.875%, 3/15/42(c)		668,605
	1,672,000	Rio Tinto Finance USA PLC, 3.500%, 3/22/22		1,720,174
	738,000	Rock Tenn Co., 4.900%, 3/1/22		798,334
	868,000	Sealed Air Corp., 6.875%, 7/15/33(b)		824,600
	1,045,000	Xstrata Finance Canada, Ltd., 4.000%, 10/25/22(b)		1,052,504
				8,504,045
		Telecommunication Services (1.1%)
	1,181,000	AT&T, Inc., 5.550%, 8/15/41		1,301,770
	681,000	British Telecommunications PLC, 9.625%, 12/15/30		1,055,562
	1,236,000	CC Holdings GS V LLC, 2.381%, 12/15/17(b)(c)		1,243,992
	1,172,000	SBA Telecommunications, Inc., 5.750%, 7/15/20(b)		1,218,880
	890,000	Telefonica Emisiones SAU, 5.134%, 4/27/20(c)		937,066
				5,757,270
		Utilities (1.4%)
	1,088,000	CMS Energy Corp., 8.750%, 6/15/19		1,468,422
	1,619,000	Duke Energy Carolinas LLC, 6.100%, 6/1/37		2,045,603
	1,004,000	Progress Energy, Inc., 3.150%, 4/1/22		1,023,027
	550,000	PSEG Power LLC, 5.500%, 12/1/15		611,044
	471,000	PSEG Power LLC, 2.750%, 9/15/16		489,849
	1,847,000	Puget Energy, Inc., 5.625%, 7/15/22		2,034,517
				7,672,462
		Total Corporate Bonds (Cost $218,676,580)		225,455,915
	MORTGAGE-BACKED SECURITIES (14.5%)
		Fannie Mae (8.7%)
	2,258	6.000%, 10/1/13, Pool #252061		2,279
	61,188	5.000%, 8/1/20, Pool #832058		66,071
	186,276	6.000%, 7/1/22, Pool #944967		198,095
	291,560	5.000%, 9/1/25, Pool #255892		319,701
	13,297,000	2.500%, 4/15/28(d)		13,793,561

Continued

25

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	MORTGAGE-BACKED SECURITIES — (continued)
		Fannie Mae — (continued)
	$2,062,194	4.000%, 2/1/32, Pool #MA0977	$	2,214,668
	257,153	6.500%, 1/1/35, Pool #809198		305,193
	103,386	6.000%, 4/1/35, Pool #735503		116,359
	62,802	7.000%, 6/1/35, Pool #255820		73,027
	152,751	7.000%, 6/1/35, Pool #830686		176,830
	640,351	5.500%, 10/1/35, Pool #817568		702,459
	372,806	6.500%, 3/1/36, Pool #866062		417,778
	246,108	6.500%, 7/1/36, Pool #885493		285,589
	3,601,445	5.500%, 8/1/37, Pool #995082		3,973,257
	1,330,161	5.000%, 6/1/40, Pool #AD4927		1,453,768
	966,951	5.000%, 6/1/40, Pool #AD8718		1,062,095
	3,544,655	4.500%, 12/1/40, Pool #AH1100		3,824,055
	3,177,195	4.500%, 5/1/41, Pool #AI1023		3,429,616
	3,954,228	4.000%, 9/1/41, Pool #AI3940		4,218,790
	3,786,583	4.000%, 1/1/42, Pool #MA0956		4,039,929
	5,985,000	3.500%, 4/15/43(d)		6,319,786
				46,992,906
		Freddie Mac (3.7%)
	397,186	5.500%, 10/1/21, Pool #G12425		427,157
	325,876	5.000%, 12/1/21, Pool #J04025		349,346
	471,881	5.000%, 7/1/25, Pool #C90908		513,741
	2,231,920	3.500%, 4/1/32, Pool #C91437		2,374,351
	2,401,742	3.500%, 5/1/32, Pool #C91447		2,555,009
	3,485,777	3.500%, 7/1/32, Pool #C91467		3,708,222
	150,469	6.000%, 7/1/35, Pool #A36304		166,162
	449,537	5.000%, 3/1/36, Pool #G08115		485,200
	121,642	6.500%, 5/1/36, Pool #A48509		138,318
	129,273	5.000%, 7/1/36, Pool #G02291		139,165
	924,123	5.000%, 2/1/37, Pool #A57714		993,971
	637,520	6.000%, 8/1/37, Pool #A64981		697,037
	439,188	5.500%, 3/1/38, Pool #G04044		475,660
	414,223	4.500%, 10/1/39, Pool #A89346		443,136
	1,539,902	5.000%, 6/1/40, Pool #C03479		1,670,730
	1,388,870	3.797%, 7/1/40, Pool #1B4948(a)		1,462,919
	3,279,701	5.000%, 7/1/40, Pool #A93070		3,558,339
				20,158,463
		Ginnie Mae (2.1%)
	1,855,101	4.500%, 2/15/40, Pool #737031		2,037,577
	862,663	5.000%, 2/15/40, Pool #737037		946,126
	3,287,592	4.500%, 9/20/40, Pool #4801		3,636,623
	4,250,702	4.500%, 6/20/41, Pool #5082		4,683,365
				11,303,691
		Total Mortgage-Backed Securities (Cost $76,952,229)		78,455,060
	MUNICIPAL BONDS (7.6%)
		California (1.6%)
	3,700,000	Metropolitan Water District of Southern California, Build America Bonds, Water Utility Improvements Revenue, Callable 7/1/19 @ 100, 6.538%, 7/1/39		4,376,804
	2,230,000	Palo Alto, Unified School District Refunding G.O., Taxable, 2.441%, 8/1/21		2,216,776
	1,285,000	State of California, Build America Bonds, School Improvements G.O., Taxable, 7.625%, 3/1/40		1,850,593
				8,444,173

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Colorado (0.3%)
	$1,810,000	Colorado Housing & Finance Authority Revenue, Taxable, Series B, 1.600%, 5/15/16	$	1,842,870
		Connecticut (0.6%)
	3,000,000	State of Connecticut Special Tax Revenue, Build America Bonds, Transition Infrastructure, Series B, 4.126%, 11/1/20		3,366,210
		Florida (0.5%)
	2,500,000	Greater Orlando Aviation Authority, Airport Facilities Refunding Revenue, Taxable, Series D, 3.733%, 10/1/20		2,662,025
		Georgia (0.4%)
	1,840,000	Rockdale County Water & Sewerage Authority, Taxable, Refunding Revenue (County GTD), 2.860%, 7/1/23(d)		1,884,289
		Illinois (0.9%)
	4,500,000	State of Illinois, Building Public Improvements Revenue, Taxable, 3.081%, 6/15/23		4,599,450
		New Jersey (0.2%)
	1,305,000	New Jersey Economic Development Authority, School Facilities Construction Refunding Revenue, 1.648%, 3/1/18		1,308,067
		New Mexico (0.0%)
	5,000	State of New Mexico, Public Improvements Refunding Revenue, Series A1, 5.000%, 7/1/15		5,520
		New York (1.3%)
	2,900,000	City of New York, NY, Build America Bonds, Public Improvements G.O., 4.774%, 3/1/20		3,387,142
	1,640,000	City of New York, NY, Build America Bonds, Public Improvements G.O., 4.874%, 3/1/21		1,911,896
	750,000	New York State Environmental Facilities Corp., State Revolving Funds, Refunding Revenue Bonds, Taxable, Series C, 2.445%, 6/15/20		755,190
	900,000	New York State Environmental Facilities Corp., State Revolving Funds, Refunding Revenue Bonds, Taxable, Series C, 2.745%, 6/15/22		902,529
				6,956,757
		North Carolina (0.8%)
	4,500,000	North Carolina Eastern Municipal Power Agency Refunding Revenue, Taxable, Series C, 2.440%, 1/1/17		4,545,180
		Pennsylvania (0.4%)
	2,260,000	Philadelphia Authority for Industrial Development, Refunding Revenue, Taxable, 3.664%, 4/15/22		2,256,565
		Washington (0.3%)
	1,680,000	Port of Vancouver, WA, Refunding G.O., Limited Tax, Series B, 2.714%, 12/1/21		1,680,487
		Wisconsin (0.3%)
	1,640,000	Milwaukee County, WI, Pension Promissory Notes, Refunding G.O., Taxable, Callable 12/1/22 @ 100, 3.862%, 12/1/30		1,642,821
		Total Municipal Bonds (Cost $39,090,024)		41,194,414

Continued

26

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
U.S. TREASURY BONDS (0.3%)
$1,350,000	3.125%, 2/15/42	$	1,356,750
	Total U.S. Treasury Bonds (Cost $1,359,814)		1,356,750
U.S. TREASURY NOTES (0.8%)
4,334,000	1.750%, 5/31/16		4,518,195
	Total U.S. Treasury Notes (Cost $4,509,305)		4,518,195
Shares
PREFERRED STOCKS (2.3%)
	Consumer Staples (0.3%)
14	HJ Heinz Finance Co., Series B, 8.000%(b)		1,432,375
	Financials (1.9%)
46,418	Bank of America Corp., Series 8, 8.625%		1,183,659
61,601	Citigroup Capital XIII, 7.875%		1,761,173
56,290	Citigroup Capital XV, 6.500%		1,414,568
33,590	DDR Corp., Series H, REIT, 7.375%		847,140
34,550	DDR Corp., Series K, REIT, 6.250%		858,567
20,918	Merrill Lynch Preferred Capital Trust V, Series F, 7.280%		532,991
44,474	National Retail Properties, Inc., REIT, Series D, 6.625%		1,180,785
12,872	SL Green Realty Corp., Series C, REIT, 7.625%		325,275
77,135	US Bancorp, Series F, 6.500%		2,303,251
			10,407,409
	Telecommunication Services (0.1%)
28,000	Qwest Corp., 7.000%		750,960
	Total Preferred Stocks (Cost $12,275,304)		12,590,744
INVESTMENT COMPANY (2.9%)
15,859,688	Federated Treasury Obligations Fund, Institutional Shares		15,859,688
	Total Investment Company (Cost $15,859,688)		15,859,688
Total Investments — 104.4% (Cost $551,762,612)			565,714,925
Net Other Assets (Liabilities) — (4.4)%			(23,786,589)
NET ASSETS — 100.0%		$	541,928,336

(a) 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 in effect as of March 31, 2013. The maturity date reflected is the final maturity date.

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

(c) Represents that all or a portion of the security was pledged as collateral for securities purchased on a when-issued basis.

(d) Represents securities purchased on a when-issued basis. At March 31, 2013, total cost of investments purchased on a when-issued basis was $25,777,659.

BKNT — Bank Note

G.O. — General Obligation

GMTN — Global Medium Term Note

GTD — Guaranteed

MTN — Medium Term Note

REIT — Real Estate Investment Trust

STEP — Step Coupon Bond

See accompanying notes to the financial statements.

27

Sterling Capital Corporate Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
CORPORATE BONDS (93.4%)
	Consumer Discretionary (9.7%)
$  465,000	Comcast Cable Communications Holdings, Inc., 9.455%, 11/15/22	$	704,650
329,000	COX Communications, Inc., 4.700%, 12/15/42(a)		323,793
545,000	Daimler Finance North America LLC, 1.875%, 1/11/18(a)		549,224
756,000	Delphi Corp., 5.875%, 5/15/19		816,480
712,000	Ford Motor Co., 7.450%, 7/16/31		900,478
625,000	Grupo Televisa SAB, 6.000%, 5/15/18		727,963
372,000	Home Depot, Inc. (The), 5.875%, 12/16/36		462,357
545,000	Interpublic Group of Cos., Inc. (The), 3.750%, 2/15/23		528,727
475,000	Lowe’s Cos., Inc., 6.650%, 9/15/37		619,556
705,000	Mohawk Industries, Inc., 3.850%, 2/1/23		716,704
455,000	NBCUniversal Media LLC, 5.950%, 4/1/41		548,700
486,000	Nielsen Finance LLC/Nielsen Finance Co., 4.500%, 10/1/20(a)		485,393
600,000	Royal Caribbean Cruises, Ltd., 11.875%, 7/15/15		732,000
850,000	Service Corp. International, 7.000%, 5/15/19		922,250
436,000	Time Warner Cable, Inc., 5.875%, 11/15/40		464,864
648,000	Wyndham Worldwide Corp., 2.950%, 3/1/17		666,830
			10,169,969
	Consumer Staples (2.5%)
340,000	Altria Group, Inc., 9.950%, 11/10/38		561,491
364,000	Anheuser-Busch InBev Worldwide, Inc., 6.375%, 1/15/40		490,550
401,000	Beam, Inc., 5.875%, 1/15/36		468,292
537,000	ConAgra Foods, Inc., 4.650%, 1/25/43		534,391
495,000	Lorillard Tobacco Co., 6.875%, 5/1/20		600,335
			2,655,059
	Energy (10.9%)
1,055,000	Atlas Pipeline Partners LP/Atlas Pipeline Finance Corp., 5.875%, 8/1/23(a)		1,049,725
1,095,000	Boardwalk Pipelines LP, 3.375%, 2/1/23		1,074,711
614,000	BP Capital Markets PLC, 1.375%, 11/6/17		614,815
610,000	Buckeye Partners LP, 4.875%, 2/1/21		653,627
585,000	Cameron International Corp., 6.375%, 7/15/18		702,772
590,000	Chesapeake Energy Corp., 3.250%, 3/15/16(b)		596,637
692,000	Denbury Resources, Inc., 8.250%, 2/15/20		775,040
559,000	Energy Transfer Partners LP, 9.000%, 4/15/19		736,498
725,000	Enterprise Products Operating LLC, 6.450%, 9/1/40		895,998
280,000	Halliburton Co., 4.500%, 11/15/41		301,023
488,000	NuStar Logistics LP, 4.750%, 2/1/22		475,856
562,000	Petrobras International Finance Co. - PifCo, 3.500%, 2/6/17		580,261
508,000	Plains Exploration & Production Co., 6.500%, 11/15/20		561,340
545,000	Regency Energy Partners LP/Regency Energy Finance Corp., 6.500%, 7/15/21		599,500
441,000	Schlumberger Investment SA, 3.300%, 9/14/21(a)		470,866
330,000	Shell International Finance BV, 6.375%, 12/15/38		455,769
260,000	Statoil ASA, 5.100%, 8/17/40		305,859
485,000	Western Gas Partners LP, 4.000%, 7/1/22		501,712
			11,352,009

Principal Amount		Fair Value
CORPORATE BONDS — (continued)
	Financials (48.9%)
$  575,000	ABN Amro North American Holding Preferred Capital Repackage Trust I, 3.388%, 12/29/49(a)(c)	$	575,000
395,000	Aflac, Inc., 8.500%, 5/15/19		533,843
352,000	Alexandria Real Estate Equities, Inc., REIT, 4.600%, 4/1/22		379,342
1,425,000	American International Group, Inc., 3.800%, 3/22/17		1,541,957
840,000	American Tower Corp., REIT, 3.500%, 1/31/23		833,119
560,000	Associates Corp. of North America, 6.950%, 11/1/18		683,917
1,735,000	Bank of America Corp., MTN, 3.300%, 1/11/23		1,710,812
434,000	Bank of New York Mellon Corp. (The), STEP, 1.969%, 6/20/17		447,580
325,000	Bank of Nova Scotia, 4.375%, 1/13/21		369,814
905,000	Bear Stearns Cos. LLC (The), 5.550%, 1/22/17		1,032,935
430,000	BlackRock, Inc., 3.375%, 6/1/22		453,443
530,000	BNP Paribas SA, MTN, 3.250%, 3/3/23		515,110
450,000	Carlyle Holdings Finance LLC, 3.875%, 2/1/23(a)		460,930
565,000	CIT Group, Inc., 4.750%, 2/15/15(a)		591,837
690,000	Citigroup, Inc., 6.010%, 1/15/15		747,151
235,000	Citigroup, Inc., 6.875%, 3/5/38		308,319
491,000	CME Group, Inc., 3.000%, 9/15/22		495,474
700,000	CNA Financial Corp., 7.350%, 11/15/19		886,045
570,000	Colonial Realty LP, 6.250%, 6/15/14		602,093
600,000	Cooperatieve Centrale Raiffeisen- Boerenleenbank BA, 3.950%, 11/9/22		604,104
500,000	Countrywide Financial Corp., 6.250%, 5/15/16(d)		556,917
687,000	CubeSmart LP, REIT, 4.800%, 7/15/22		752,360
355,000	First American Financial Corp., 4.300%, 2/1/23		369,457
755,000	General Electric Capital Corp., GMTN, 6.875%, 1/10/39		989,224
1,237,000	General Electric Capital Corp., Series B, 6.250%, 12/15/49(c)		1,357,648
506,000	Goldman Sachs Group, Inc. (The), 6.250%, 2/1/41		601,308
550,000	Goodman Funding Pty, Ltd., REIT, 6.375%, 11/12/20(a)		640,459
598,000	HCP, Inc., REIT, 6.000%, 1/30/17		692,218
845,000	Health Care REIT, Inc., 4.125%, 4/1/19		916,054
609,000	Healthcare Realty Trust, Inc., REIT, 3.750%, 4/15/23		605,509
1,029,000	Healthcare Trust of America Holdings LP, 3.700%, 4/15/23(a)(b)		1,028,208
408,000	Host Hotels & Resorts LP, REIT, Series D, 3.750%, 10/15/23		409,595
892,000	HSBC Finance Corp., 6.676%, 1/15/21		1,055,536
500,000	ING Bank NV, 4.000%, 3/15/16(a)		535,750
625,000	ING US, Inc., 2.900%, 2/15/18(a)		633,936
485,000	Invesco Finance PLC, 3.125%, 11/30/22		494,982
470,000	Jefferies Group LLC, 8.500%, 7/15/19		585,108
308,000	Jones Lang LaSalle, Inc., 4.400%, 11/15/22		316,841
1,904,000	JPMorgan Chase & Co., 4.350%, 8/15/21		2,100,445
600,000	Kilroy Realty LP, REIT, 3.800%, 1/15/23		614,526
645,000	Liberty Mutual Group, Inc., 4.950%, 5/1/22(a)		707,242
410,000	Macquarie Bank, Ltd., 5.000%, 2/22/17(a)		452,464
595,000	Macquarie Bank, Ltd., 6.625%, 4/7/21(a)(d)		664,877
450,000	Markel Corp., 7.125%, 9/30/19		554,722

Continued

28

Sterling Capital Corporate Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
CORPORATE BONDS — (continued)
	Financials — (continued)
$380,000	Massachusetts Mutual Life Insurance Co., 8.875%, 6/1/39(a)	$	587,418
525,000	Merrill Lynch & Co., Inc., MTN, 6.875%, 4/25/18		633,685
405,000	MetLife, Inc., 7.717%, 2/15/19		525,905
765,000	Morgan Stanley, 5.375%, 10/15/15		835,493
1,452,000	Morgan Stanley, GMTN, 6.625%, 4/1/18		1,735,724
1,844,000	Murray Street Investment Trust I, STEP, 4.647%, 3/9/17(d)		2,016,412
442,000	National Rural Utilities Cooperative Finance Corp., 10.375%, 11/1/18		645,062
589,000	OneBeacon US Holdings, Inc., 4.600%, 11/9/22(d)		616,492
610,000	Pacific LifeCorp, 5.125%, 1/30/43(a)		591,365
850,000	PNC Bank NA, BKNT, 4.875%, 9/21/17		972,893
610,000	Principal Financial Group, Inc., 1.850%, 11/15/17		616,349
290,000	Prudential Financial, Inc., 8.875%, 6/15/38(c)		356,335
507,000	Reinsurance Group of America, Inc., 5.625%, 3/15/17		574,297
535,000	Reinsurance Group of America, Inc., 5.000%, 6/1/21(d)		596,382
445,000	Royal Bank of Scotland PLC (The), 5.625%, 8/24/20		517,313
460,000	Simon Property Group LP, REIT, 10.350%, 4/1/19		663,844
467,000	Sirius International Group, Ltd., 6.375%, 3/20/17(a)		525,392
100,000	Standard Chartered Bank, 6.400%, 9/26/17(a)		116,492
400,000	SunTrust Banks, Inc., 3.500%, 1/20/17		428,300
404,000	Swiss Re Solutions Holding Corp., 7.000%, 2/15/26		517,446
733,000	Transatlantic Holdings, Inc., 8.000%, 11/30/39		1,019,080
625,000	UBS AG, MTN, 5.875%, 7/15/16		701,486
575,000	US Bank NA, 3.778%, 4/29/20(c)(d)		605,803
253,000	Validus Holdings, Ltd., 8.875%, 1/26/40		337,586
606,000	Ventas Realty LP/Ventas Capital Corp., REIT, 2.000%, 2/15/18		609,434
500,000	Wachovia Corp., 5.625%, 10/15/16		570,642
536,000	Wachovia Corp., 5.500%, 8/1/35		594,070
495,000	WEA Finance LLC, 4.625%, 5/10/21(a)		552,126
565,000	WR Berkley Corp., 4.625%, 3/15/22		613,063
			51,084,100
	Health Care (5.1%)
425,000	Amgen, Inc., 5.150%, 11/15/41		456,035
300,000	CFR International SpA, 5.125%, 12/6/22(a)		308,414
340,000	Cigna Corp., 5.375%, 2/15/42		384,423
583,000	DaVita HealthCare Partners, Inc., 6.625%, 11/1/20		631,462
485,000	DENTSPLY International, Inc., 2.750%, 8/15/16		503,626
310,000	Fresenius US Finance II, Inc., 9.000%, 7/15/15(a)		354,950
445,000	HCA, Inc., 8.500%, 4/15/19		491,169
500,000	Mylan, Inc., 7.875%, 7/15/20(a)		583,458
650,000	UnitedHealth Group, Inc., 4.625%, 11/15/41		676,651
879,000	Valeant Pharmaceuticals International, 6.500%, 7/15/16(a)		917,456
			5,307,644

Principal Amount		Fair Value
CORPORATE BONDS — (continued)
	Industrials (5.6%)
$535,000	Bombardier, Inc., 6.125%, 1/15/23(a)	$	555,063
630,000	Burlington Northern Santa Fe LLC, 4.950%, 9/15/41		677,972
658,000	Corrections Corp. of America, 4.125%, 4/1/20(a)		670,337
567,000	Iron Mountain, Inc., 5.750%, 8/15/24		566,291
611,000	Penske Truck Leasing Co. LP/PTL Finance Corp., 3.125%, 5/11/15(a)		632,194
373,000	Republic Services, Inc., 6.200%, 3/1/40		461,227
668,000	Ryder System, Inc., MTN, 2.350%, 2/26/19		674,350
485,000	Textron, Inc., 4.625%, 9/21/16		531,975
514,000	United Rentals North America, Inc., 10.250%, 11/15/19		597,525
445,000	Verisk Analytics, Inc., 5.800%, 5/1/21		513,450
			5,880,384
	Information Technology (0.5%)
500,000	Samsung Electronics America, Inc., 1.750%, 4/10/17(a)		507,150
	Materials (4.2%)
350,000	Anglo American Capital PLC, 4.125%, 9/27/22(a)		362,116
290,000	Ecolab, Inc., 5.500%, 12/8/41		333,356
499,000	Freeport-McMoRan Copper & Gold, Inc., 5.450%, 3/15/43(a)		493,159
547,000	Newmont Mining Corp., 4.875%, 3/15/42		529,272
582,000	Rio Tinto Finance USA PLC, 3.500%, 3/22/22		598,769
489,000	Rock Tenn Co., 4.900%, 3/1/22		528,977
420,000	Sealed Air Corp., 6.875%, 7/15/33(a)(d)		399,000
500,000	Vale Overseas, Ltd., 6.250%, 1/23/17		570,471
600,000	Xstrata Finance Canada, Ltd., 4.000%, 10/25/22(a)		604,309
			4,419,429
	Telecommunication Services (2.8%)
428,000	AT&T, Inc., 5.550%, 8/15/41		471,768
350,000	British Telecommunications PLC, 9.625%, 12/15/30(d)		542,506
517,000	CC Holdings GS V LLC, 2.381%, 12/15/17(a)		520,343
250,000	SBA Communications Corp., 5.625%, 10/1/19(a)		257,187
513,000	SBA Telecommunications, Inc., 5.750%, 7/15/20(a)		533,520
575,000	Telefonica Emisiones SAU, 3.992%, 2/16/16(d)		599,345
			2,924,669
	Utilities (3.2%)
463,000	CMS Energy Corp., 8.750%, 6/15/19		624,889
495,000	Duke Energy Carolinas LLC, 6.100%, 6/1/37		625,432
270,000	Ohio Power Co., Series D, 6.600%, 3/1/33		346,968
500,000	Progress Energy, Inc., 3.150%, 4/1/22		509,475
375,000	PSEG Power LLC, 5.500%, 12/1/15		416,621
732,000	Puget Energy, Inc., 5.625%, 7/15/22		806,316
			3,329,701
	Total Corporate Bonds (Cost $94,977,716)		97,630,114

Continued

29

Sterling Capital Corporate Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Shares			Fair Value
	PREFERRED STOCKS (5.8%)
		Consumer Staples (0.3%)
	3	HJ Heinz Finance Co., Series B, 8.000%(a)	$	306,937
		Financials (4.9%)
	17,394	Bank of America Corp., Series 8, 8.625%		443,547
	29,200	Citigroup Capital XIII, 7.875%		834,828
	35,300	Citigroup Capital XV, 6.500%		887,089
	25,805	DDR Corp., Series H, REIT, 7.375%		650,802
	26,525	DDR Corp., Series K, REIT, 6.250%		659,146
	9,910	Merrill Lynch Preferred Capital Trust V, Series F, 7.280%		252,507
	21,336	National Retail Properties, Inc., REIT, Series D, 6.625%		566,471
	5,737	SL Green Realty Corp., Series C, REIT, 7.625%		144,974
	22,325	US Bancorp, Series F, 6.500%		666,625
				5,105,989
		Telecommunication Services (0.6%)
	8,120	Qwest Corp., 7.000%		217,778
	13,525	Qwest Corp., 7.375%		359,224
				577,002
		Total Preferred Stocks (Cost $5,913,487)		5,989,928

Shares		Fair Value
INVESTMENT COMPANY (0.3%)
319,528	Federated Treasury Obligations Fund, Institutional Shares	$	319,528
	Total Investment Company (Cost $319,528)		319,528
Total Investments — 99.5% (Cost $101,210,731)			103,939,570
Net Other Assets (Liabilities) — 0.5%			571,869
NET ASSETS — 100.0%		$	104,511,439

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

(b) Represents securities purchased on a when-issued basis. At March 31, 2013, total cost of investments purchased on a when-issued basis was $1,616,697.

(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 in effect as of March 31, 2013. The maturity date reflected is the final maturity date.

(d) Represents that all or a portion of the security was pledged as collateral for securities purchased on a when-issued basis.

BKNT — Bank Note

GMTN — Global Medium Term Note

MTN — Medium Term Note

REIT — Real Estate Investment Trust

STEP — Step Coupon Bond

See accompanying notes to the financial statements.

30

Sterling Capital Securitized Opportunities Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
ASSET BACKED SECURITIES (8.9%)
$   500,388	Argent Securities, Inc. Pass Through Certificates, Series 2005-W3, Class A2D, 0.544%, 11/25/35(a)	$	456,768
1,182,000	Avis Budget Rental Car Funding AESOP LLC, Series 2012-3A, Class A, 2.100%, 3/20/19(b)		1,206,152
1,000,000	Capital One Multi-Asset Execution Trust, Series 2007-A7, Class A7, 5.750%, 7/15/20		1,200,896
1,300,000	Hertz Vehicle Financing LLC, Series 2013-1A, Class A2, 1.830%, 8/25/19(b)		1,304,516
809,451	Long Beach Mortgage Loan Trust, Series 2006-WL2, Class 2A3, 0.404%, 1/25/36(a)		760,103
1,003,909	Park Place Securities, Inc. Pass Through Certificates, Series 2005-WHQ1, Class M2, 0.704%, 3/25/35(a)		999,398
	Total Asset Backed Securities (Cost $5,925,952)		5,927,833
COLLATERALIZED MORTGAGE OBLIGATIONS (22.3%)
301,504	Banc of America Alternative Loan Trust, Series 2004-10, Class 1CB1, 6.000%, 11/25/34		303,002
178,229	Banc of America Mortgage Trust, Series 2005-2, Class 2A1, 5.000%, 3/25/20		179,990
279,670	Banc of America Mortgage Trust, Series 2005-3, Class 1A24, 5.500%, 4/25/35		289,891
248,051	Chase Mortgage Finance Trust, Series 2004-S3, Class 2A5, 5.500%, 3/25/34		258,835
385,852	Citicorp Mortgage Securities, Inc., Series 2005-1, Class 1A2, 5.000%, 2/25/35		387,961
305,919	Citicorp Mortgage Securities, Inc., Series 2005-1, Class 1A4, 5.500%, 2/25/35		320,572
365,986	Citigroup Mortgage Loan Trust, Inc., Series 2004-NCM2, Class 3CB2, 6.500%, 8/25/19		390,999
355,589	Countrywide Alternative Loan Trust, Series 2004-22CB, Class 1A1, 6.000%, 10/25/34		368,762
175,681	Countrywide Home Loan Mortgage Pass Through Trust, Series 2003-J7, Class 1A3, 5.250%, 8/25/33		180,844
325,959	Countrywide Home Loan Mortgage Pass Through Trust, Series 2004-3, Class A4, 5.750%, 4/25/34		337,218
534,672	Countrywide Home Loan Mortgage Pass Through Trust, Series 2005-J4, Class A3, 5.500%, 11/25/35		542,803
581,114	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-2, Class 4A1, 5.250%, 2/25/20		585,230
312,897	Credit Suisse First Boston Mortgage Securities Corp., Series 2004-1, Class 2A1, 6.500%, 2/25/34		334,669
332,649	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-6, Class 2A3, 5.500%, 7/25/35		348,877
913,119	Fannie Mae, Series 2011-119, Class AP, 3.000%, 8/25/31		959,444
802,532	Fannie Mae, Series 2010-54, Class EJ, 4.000%, 6/25/40		869,719
841,286	Fannie Mae, Series 2011-38, Class D, 4.500%, 5/25/41		941,829
317,422	Freddie Mac, Series 3768, Class V, 4.000%, 11/15/23		348,345

Principal Amount		Fair Value
COLLATERALIZED MORTGAGE OBLIGATIONS — (continued)
$   285,746	Freddie Mac, Series 2485, Class WG, 6.000%, 8/15/32	$	324,539
479,092	Freddie Mac, Series 4077, Class PJ, 3.500%, 11/15/40		515,525
381,561	Freddie Mac, Series 3803, Class PJ, 4.250%, 1/15/41		413,356
393,859	Ginnie Mae, Series 2010-85, Class DQ, 3.000%, 12/20/39		411,396
79,023	GSR Mortgage Loan Trust, Series 2005-5F, Class 3A3, 5.000%, 6/25/35		78,534
573,604	MASTR Alternative Loan Trust, Series 2003-5, Class 8A1, 5.500%, 6/25/33		603,213
111,438	MASTR Alternative Loan Trust, Series 2004-13, Class 3A1, 6.500%, 1/25/35		113,124
300,488	MASTR Asset Securitization Trust, Series 2005-2, Class 1A1, 5.250%, 11/25/35		304,781
271,222	MASTR Seasoned Securitization Trust, Series 2005-2, Class 1A1, 5.130%, 10/25/32		266,904
489,061	PHHMC Trust, Series 2007-6, Class A1, 5.872%, 12/18/37(a)		516,687
217,939	RALI Trust, Series 2005-QR1, Class A, 6.000%, 10/25/34		232,138
331,449	RBSGC Mortgage Loan Trust, Series 2007-B, Class 3A1, 5.241%, 7/25/35(a)		343,170
580,304	Specialty Underwriting & Residential Finance Trust, Series 2004-AA1, Class 1A1, 5.000%, 10/25/34		587,849
182,893	Structured Asset Securities Corp. Mortgage Pass Through Certificates, Series 2003-10, Class A, 6.000%, 4/25/33		194,080
229,410	Structured Asset Securities Corp. Trust, Series 2005-6, Class 4A1, 5.000%, 5/25/35		232,650
152,280	Structured Asset Securities Corp. Trust, Series 2005-6, Class 5A1, 5.000%, 5/25/35		154,086
101,266	Structured Asset Securities Corp. Trust, Series 2005-6, Class 5A2, 5.000%, 5/25/35		102,956
392,665	Structured Asset Securities Corp. Trust, Series 2005-6, Class 2A1, 5.500%, 5/25/35		404,640
167,130	Wells Fargo Mortgage Backed Securities Trust, Series 2007-3, Class 3A1, 5.500%, 4/25/22		172,615
787,534	Wells Fargo Mortgage Backed Securities Trust, Series 2005-4, Class A4, 5.000%, 4/25/35		817,431
	Total Collateralized Mortgage Obligations (Cost $14,557,161)		14,738,664
COMMERCIAL MORTGAGE-BACKED SECURITIES (34.5%)
1,000,000	Banc of America Commercial Mortgage Trust, Series 2006-3, Class A4, 5.889%, 7/10/44(a)(c)		1,126,209
490,000	Banc of America Commercial Mortgage Trust, Series 2006-2, Class A4, 5.727%, 5/10/45(a)(c)		551,894
80,000	Banc of America Commercial Mortgage Trust, Series 2006-4, Class A4, 5.634%, 7/10/46		89,906
700,000	Banc of America Commercial Mortgage Trust, Series 2006-5, Class A4, 5.414%, 9/10/47(c)		786,423
47,154	Banc of America Commercial Mortgage Trust, Series 2007-2, Class A2, 5.619%, 4/10/49(a)		.48,016

Continued

31

Sterling Capital Securitized Opportunities Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
$300,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2004-2, Class B, 4.665%, 11/10/38(a)	$	310,116
418,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-1, Class AJ, 5.196%, 11/10/42(a)(c)		448,096
500,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-3, Class AM, 4.727%, 7/10/43		533,868
850,000	Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR9, Class A4B, 4.943%, 9/11/42(c)		922,993
250,000	Bear Stearns Commercial Mortgage Securities Trust, Series 2007-PW18, Class A4, 5.700%, 6/11/50(c)		292,880
210,000	CD Commercial Mortgage Trust, Series 2005-CD1, Class AM, 5.218%, 7/15/44(a)(c)		230,643
800,000	CD Commercial Mortgage Trust, Series 2007-CD4, Class A4, 5.322%, 12/11/49(c)		909,346
800,000	CD Mortgage Trust, Series 2006-CD2, Class A4, 5.305%, 1/15/46(a)(c)		882,958
420,000	CD Mortgage Trust, Series 2006-CD3, Class A5, 5.617%, 10/15/48(c)		473,608
500,000	COMM Mortgage Trust, Series 2005-LP5, Class AJ, 5.046%, 5/10/43(a)		541,910
800,000	COMM Mortgage Trust, Series 2006-C7, Class A4, 5.748%, 6/10/46(a)		899,795
618,000	Commercial Mortgage Trust, Series 2005-GG5, Class AM, 5.311%, 4/10/37(a)		672,215
180,000	Commercial Mortgage Trust, Series 2007-GG9, Class A4, 5.444%, 3/10/39(c)		205,181
400,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2004-C5, Class AJ, 4.889%, 11/15/37(a)(c)		424,248
422,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C1, Class AJ, 5.075%, 2/15/38(a)(c)		442,240
750,000	DBUBS Mortgage Trust, Series 2011-LC2A, Class A4, 4.537%, 7/10/44(b)(c)		854,404
500,000	DBUBS Mortgage Trust, Series 2011-LC2A, Class B, 4.998%, 7/10/44(a)(b)(c)		565,934
600,000	GMAC Commercial Mortgage Securities, Inc., Series 2005-C1, Class AM, 4.754%, 5/10/43		643,640
500,000	GS Mortgage Securities Corp. II, Series 2013-KYO, Class A, 1.052%, 11/8/29(a)(b)		501,136
175,000	GS Mortgage Securities Trust, Series 2010-C1, Class B, 5.148%, 8/10/43(b)		200,353
385,500	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP2, Class AM, 4.780%, 7/15/42(c)		412,326
400,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CB15, Class A4, 5.814%, 6/12/43(a)(c)		447,512
740,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CB16, Class A4, 5.552%, 5/12/45		833,999
500,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2011-C3, Class B, 5.013%, 2/15/46(a)(b)		562,450

Principal Amount		Fair Value
COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
$420,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2007-LDPX, Class A3, 5.420%, 1/15/49(c)	$	477,558
300,000	LB-UBS Commercial Mortgage Trust, Series 2007-C1, Class A4, 5.424%, 2/15/40(c)		341,842
240,000	Morgan Stanley Capital I Trust, Series 2006-HQ10, Class A4, 5.328%, 11/12/41(c)		270,847
160,000	Morgan Stanley Capital I Trust, Series 2006-HQ8, Class AM, 5.470%, 3/12/44(a)(c)		177,704
306,000	UBS-Barclays Commercial Mortgage Trust, Series 2012-C4, Class A3, 2.533%, 12/10/45		309,712
622,000	Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class AMFX, 5.179%, 7/15/42(a)(c)		676,251
800,000	Wachovia Bank Commercial Mortgage Trust, Series 2006-C28, Class A4, 5.572%, 10/15/48		901,018
500,000	Wachovia Commercial Mortgage Securities, Inc. Pass Through Certificates, Series 2003-C8, Class E, 5.264%, 11/15/35(a)		509,396
200,000	Wachovia Commercial Mortgage Securities, Inc. Pass Through Certificates, Series 2003-C9, Class B, 5.109%, 12/15/35(a)(c)		205,390
760,000	Wells Fargo Commercial Mortgage Trust, Series 2010-C1, Class B, 5.276%, 11/15/43(a)(b)		883,262
1,000,000	WF-RBS Commercial Mortgage Trust, Series 2011-C2, Class B, 5.174%, 2/15/44(a)(b)		1,152,280
1,000,000	WF-RBS Commercial Mortgage Trust, Series 2011-C3, Class A4, 4.375%, 3/15/44(b)		1,127,687
	Total Commercial Mortgage-Backed Securities (Cost $22,679,552)		22,847,246
MORTGAGE-BACKED SECURITIES (46.5%)
	Fannie Mae (30.0%)
990,983	3.500%, 6/1/27, Pool #MA1096		1,055,228
1,001,021	3.500%, 8/1/27, Pool #MA1158		1,065,917
5,616,000	2.500%, 4/15/28(d)		5,825,723
909,572	4.000%, 5/1/32, Pool #MA1074(c)		976,823
191,966	5.500%, 2/1/35, Pool #735230		211,784
143,805	5.500%, 12/1/35, Pool #AE0115		158,774
235,388	5.500%, 3/1/36, Pool #745353		258,218
544,933	5.500%, 9/1/36, Pool #938574		596,655
520,729	5.500%, 6/1/38, Pool #984277(c)		567,979
528,032	5.500%, 8/1/38, Pool #995072		586,341
360,443	4.500%, 9/1/39, Pool #AC1830		388,404
330,104	5.000%, 12/1/39, Pool #AC8518		366,454
707,558	5.000%, 7/1/40, Pool #AD7595		777,178
227,309	4.500%, 9/1/40, Pool #AE0411		249,559
1,088,352	4.500%, 10/1/40, Pool #AE1611		1,174,139
564,482	4.500%, 10/1/40, Pool #AE4855		608,976
308,809	4.000%, 1/1/41, Pool #AH4732		334,633
456,913	5.000%, 1/1/41, Pool #AH3373		503,870
71,973	4.000%, 2/1/41, Pool #AH6188		78,487
872,853	4.000%, 3/1/41, Pool #AH4008		931,048
298,385	4.500%, 6/1/41, Pool #AC9298		322,091
313,001	4.500%, 6/1/41, Pool #AL0397		337,868
2,351,000	3.500%, 4/15/43(d)		2,482,509
			19,858,658

Continued

32

Sterling Capital Securitized Opportunities Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	MORTGAGE-BACKED SECURITIES — (continued)
		Freddie Mac (13.5%)
	$1,022,343	3.500%, 5/1/32, Pool #C91458	$	1,087,584
	956,551	4.000%, 5/1/32, Pool #C91449		1,026,161
	890,623	3.500%, 7/1/32, Pool #C91467		947,458
	1,220,657	3.500%, 8/1/32, Pool #D99351		1,298,553
	276,968	5.500%, 10/1/39, Pool #A89387		300,574
	351,488	5.000%, 4/1/40, Pool #A91812		386,183
	267,973	5.500%, 4/1/40, Pool #C03467		290,227
	354,658	5.500%, 6/1/40, Pool #A92764		390,317
	354,408	5.000%, 8/1/40, Pool #C03491		381,312
	306,369	4.500%, 9/1/40, Pool #A93996		327,945
	456,420	4.000%, 12/1/40, Pool #A95447		496,409
	623,067	4.000%, 1/1/41, Pool #A96312		662,275
	724,509	4.000%, 5/1/42, Pool #G08492		779,157
	514,534	3.500%, 10/1/42, Pool #Q11895		547,369
				8,921,524
		Ginnie Mae (3.0%)
	408,591	4.500%, 6/15/39, Pool #720075		453,549
	676,919	4.000%, 8/15/40, Pool #783060		740,706
	49,303	4.000%, 12/20/40, Pool #755678		55,028
	300,928	4.500%, 3/20/41, Pool #4978		332,877
	381,580	4.500%, 5/15/41, Pool #738310		423,566
				2,005,726
		Total Mortgage-Backed Securities (Cost $30,524,162)		30,785,908

Shares		Fair Value
INVESTMENT COMPANY (1.1%)
734,839	Federated Treasury Obligations Fund, Institutional Shares	$	734,839
	Total Investment Company (Cost $734,839)		734,839
Total Investments — 113.3% (Cost $74,421,666)			75,034,490
Net Other Assets (Liabilities) — (13.3)%			(8,836,562)
NET ASSETS — 100.0%		$	66,197,928

(a) 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 in effect as of March 31, 2013. The maturity date reflected is the final maturity date.

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

(c) Represents that all or a portion of the security was pledged as collateral for securities purchased on a when-issued basis.

(d) Represents securities purchased on a when-issued basis. At March 31, 2013, total cost of investments purchased on a when-issued basis was $8,299,742.

See accompanying notes to the financial statements.

33

Sterling Capital Kentucky Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	MUNICIPAL BONDS (97.6%)
		Kentucky (97.6%)
	$590,000	Ballard County, KY, School District Finance Corp., Ballard County School Building, Refunding Revenue, (State Intercept), 3.000%, 6/1/20	$	637,654
	500,000	Bowling Green, KY, Industrial Improvements G.O., Series B, Callable 9/1/16 @ 100, OID, 4.400%, 9/1/21		542,345
	500,000	Christian County, KY, Public Courthouse Corp., Court Facility Project, Refunding Revenue, (AMBAC), 4.000%, 8/1/16		553,085
	500,000	Eastern Kentucky University, Refunding Revenue, Series A, (State Intercept), 5.000%, 4/1/24		605,595
	355,000	Fayette County, KY, School District Finance Corp., School Improvements Revenue, Series B, Callable 7/1/22 @ 100, 3.000%, 7/1/24		364,106
	700,000	Jefferson County, KY, School District Finance Corp., Jefferson County School Building, Refunding Revenue, Series A, (AGM), 5.250%, 1/1/19		855,085
	500,000	Jefferson County, KY, School District Finance Corp., Jefferson County School Building, Refunding Revenue, Series D, Callable 10/1/22 @ 100, 3.000%, 10/1/23		520,095
	500,000	Kentucky Asset/Liability Commission, Project Notes, Federal Highway Transit Improvements Revenue, First Series, (NATL-RE), 4.500%, 9/1/17		577,910
	510,000	Kentucky Asset/Liability Commission, University of Kentucky Project Notes, Revenue, Series B, Callable 10/1/17 @ 100, 5.000%, 10/1/21		586,811
	515,000	Kentucky Asset/Liability Commission, University of Kentucky Project Notes, University & College Revenue, (NATL-RE, FGIC), 5.000%, 10/1/15		571,259
	300,000	Kentucky Asset/Liability Commission, University of Kentucky Project Notes, University & College Revenue, Series A, Callable 10/1/17 @ 100, (AMBAC), 5.000%, 10/1/18		350,055
	670,000	Kentucky Economic Development Finance Authority, Baptist Healthcare System, Improvements Refunding Revenue, Series A, Callable 8/15/18 @ 100, OID, 4.750%, 8/15/19		767,733
	500,000	Kentucky Economic Development Finance Authority, Catholic Health Hospital, Improvements Revenue, Series B, 5.000%, 5/1/39(a)		534,850
	500,000	Kentucky Economic Development Finance Authority, Owensboro Medical Health System, Hospital Improvements Revenue, Series A, 5.000%, 6/1/16		553,855
	555,000	Kentucky Economic Development Finance Authority, Saint Elizabeth Medical Center, Inc. Refunding & Improvement Revenue, Series A, Callable 5/1/19 @ 100, OID, 5.000%, 5/1/24		638,294

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Kentucky — (continued)
	$500,000	Kentucky Infrastructure Authority, Waste Water & Drinking Water Revolving Fund, Water Utility Improvements Revenue, Series A, Callable 2/1/22 @ 100, 5.000%, 2/1/28	$	590,330
	500,000	Kentucky Municipal Power Agency, Prairie State Project, Power Improvements Revenue, Series A, (AGM), 5.000%, 9/1/20		602,860
	545,000	Kentucky Rural Water Finance Corp., Flexible Term Program, Refunding & Improvement Revenue, Callable 2/1/23 @ 100, 4.000%, 2/1/25		607,206
	370,000	Kentucky Rural Water Finance Corp., Flexible Term Program, Refunding & Improvements Revenue, 4.000%, 2/1/22		423,528
	500,000	Kentucky Rural Water Finance Corp., Flexible Term Program, Refunding & Improvements Revenue, Series B, Callable 2/1/20 @ 100, 4.000%, 2/1/21		564,010
	500,000	Kentucky State Property & Buildings Commission, Project No. 101, Refunding Revenue, 5.000%, 10/1/19		602,860
	410,000	Kentucky State Property & Buildings Commission, Project No. 76, Refunding Revenue, (AMBAC), 5.500%, 8/1/21		515,932
	460,000	Kentucky State Property & Buildings Commission, Project No. 83, Refunding Revenue, (AMBAC), 5.000%, 10/1/19		557,189
	525,000	Kentucky Turnpike Authority, Revitalization Projects Refunding Revenue, Series B, Callable 7/1/15 @ 100, (AMBAC), 5.000%, 7/1/25		576,985
	620,000	Kentucky Turnpike Authority, Revitalization Projects, Refunding Revenue, Series A, Callable 7/1/19 @ 100, 5.000%, 7/1/25		741,167
	430,000	Laurel County, KY, Judicial Center Public Properties Corp., Justice Center Projects, Public Improvements Revenue, Callable 3/1/18 @ 100, OID, 4.500%, 3/1/24		477,081
	700,000	Letcher County, KY, School District Finance Corp., Refunding Revenue, (State Intercept), 3.000%, 6/1/21		756,826
	525,000	Lexington-Fayette Urban County, KY, Airport Board, Refunding Revenue, Series A, 5.000%, 7/1/19		634,883
	500,000	Louisville & Jefferson County, KY, Metropolitan Government, Catholic Health Initiatives, Refunding Revenue, Series A, Callable 6/1/22 @ 100, 5.000%, 12/1/35		557,570
	500,000	Louisville & Jefferson County, KY, Metropolitan Government, Louisville Gas & Electric Co., Refunding Revenue, Series A, 1.650%, 10/1/33(a)		510,870
	500,000	Louisville & Jefferson County, KY, Metropolitan Sewer District, Sewer Refunding Revenue, Series A, Callable 11/15/21 @ 100, 5.000%, 5/15/30		581,305
	605,000	Louisville & Jefferson County, KY, Metropolitan Sewer District, Sewer Refunding Revenue, Series A, Callable 5/15/15 @ 100, (AGM), 5.000%, 5/15/19		662,499

Continued

34

Sterling Capital Kentucky Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	Kentucky — (continued)
$730,000	Louisville & Jefferson County, KY, Metropolitan Sewer District, Sewer Refunding Revenue, Series A, Callable 5/15/19 @ 100, 5.000%, 5/15/20	$	869,065
500,000	Louisville Regional Airport Authority, Refunding Revenue, Series B, 3.000%, 7/1/15		522,845
790,000	Northern Kentucky University, University & College Improvements Revenue, Series A, Callable 9/1/17 @ 100, (AMBAC, State Intercept), OID, 4.250%, 9/1/21		878,725
400,000	Northern Kentucky, Water Service District, Refunding Revenue, 3.000%, 2/1/18		430,768
500,000	Owensboro, KY, Refunding & Improvements G.O., Series B, 3.000%, 6/1/21		531,390
535,000	Owensboro, KY, Water Refunding & Improvements Revenue, Callable 9/15/18 @ 100, (AGC), 5.250%, 9/15/21		636,805
585,000	Owensboro-Daviess County, KY, Regional Water Resource Agency, Refunding & Improvements Revenue, Series A, (XLCA), 4.000%, 1/1/16		634,292
610,000	Pike County, KY, School District Finance Corp., School Improvements Revenue, (State Intercept), 3.000%, 11/1/20		665,339
660,000	Pulaski County, KY, Public Properties Corp., Administration Office of the Court Judicial Facility, Public Improvement Revenue, Callable 12/1/18 @ 100, OID, 5.500%, 12/1/24		798,692
270,000	Pulaski County, KY, Public Properties Corp., Administration Office of the Court Judicial Facility, Public Improvement Revenue, Callable 12/1/18 @ 100, OID, 5.625%, 12/1/25		328,560
300,000	Rowan County, KY, School District Finance Corp., School Improvements Revenue, (State Intercept), OID, 4.000%, 11/1/17		340,797
200,000	Russell, KY, Bon Secours Health System, Refunding Revenue, Callable 11/1/22 @ 100, 5.000%, 11/1/26		224,380
375,000	Warren County, KY, Community Hospital Corp. Project, Refunding Revenue, Series A, 5.000%, 8/1/14		393,420

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	Kentucky — (continued)
$380,000	Warren County, KY, Community Hospital Corp. Project, Refunding Revenue, Series A, 5.000%, 8/1/17	$	429,218
	Total Municipal Bonds (Cost $24,412,373)		26,306,129
Shares
INVESTMENT COMPANY (1.8%)
491,181	Federated Tax-Free Obligations Fund, Institutional Class		491,181
	Total Investment Company (Cost $491,181)		491,181
Total Investments — 99.4% (Cost $24,903,554)			26,797,310
Net Other Assets (Liabilities) — 0.6%			163,149
NET ASSETS — 100.0%		$	26,960,459

(a) 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 in effect as of March 31, 2013. The maturity date reflected is the final maturity date.

AGC — Assured Guaranty Corp.

AGM — Assured Guaranty Municipal Corp.

AMBAC — American Municipal Bond Assurance Corp.

FGIC — Financial Guaranty Insurance Corp.

G.O. — General Obligation

NATL — National

OID — Original Issue Discount

RE — Reinsurance

XLCA — XL Capital Assurance

See accompanying notes to the financial statements.

35

Sterling Capital Maryland Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
MUNICIPAL BONDS (96.3%)
	Maryland (96.3%)
$1,000,000	Anne Arundel County, MD, Consolidation General Improvements, Refunding G.O., Callable 4/1/22 @ 100, 4.000%, 4/1/24	$	1,143,550
1,000,000	Anne Arundel County, MD, Consolidation General Improvements, Refunding G.O., Callable 4/1/22 @ 100, 5.000%, 4/1/25		1,216,730
810,000	Anne Arundel County, MD, Economic Development, Anne Arundel Community College Project, Refunding Revenue, 4.000%, 9/1/20		909,719
1,290,000	Baltimore County, MD, 75th Issue, Refunding G.O., 4.000%, 8/1/20		1,525,877
945,000	Baltimore, MD, Consolidated Public Improvements, G.O., Series A, Callable 10/15/22 @ 100, 5.000%, 10/15/25		1,146,153
1,040,000	Baltimore, MD, Consolidated Public Improvements, Refunding G.O., Series B, 5.000%, 10/15/17		1,233,284
500,000	Baltimore, MD, Consolidated Public Improvements, Refunding G.O., Series B, 5.000%, 10/15/20		618,160
600,000	Baltimore, MD, Refunding Certificate of Participation, Series A, 5.000%, 10/1/17		698,994
250,000	Baltimore, MD, Waste Water Projects Revenue, Series C, Callable 7/1/16 @ 100 (AMBAC), 5.000%, 7/1/26		281,040
590,000	Cecil County, MD, Consolidated Public Improvements G.O., 4.000%, 6/1/18		677,922
1,250,000	Charles County, MD, Refunding G.O., 4.000%, 3/1/20		1,453,375
500,000	Frederick County, MD, Public Facilities Improvements, Refunding G.O., 4.000%, 8/1/18		578,055
1,000,000	Frederick County, MD, Public Facilities Improvements, Refunding G.O., 4.000%, 8/1/21		1,177,980
125,000	Howard County, MD, Miscellaneous Purpose Certificates of Participation, Series A, 8.050%, 2/15/21		183,783
135,000	Howard County, MD, Public Improvements Certificates of Participation, Series B, 8.250%, 2/15/20		192,974
250,000	Maryland Community Development Administration, Residential Housing Refunding Revenue, Series K, 4.100%, 9/1/16		266,890
805,000	Maryland Community Development Administration, Residential Single Family Housing Revenue, Series A, Callable 9/1/18 @ 100, 4.400%, 9/1/24		863,523
690,000	Maryland Community Development Administration, Residential Single Family Housing Revenue, Series A, Callable 9/1/18 @ 100, 4.750%, 9/1/29		743,682
315,000	Maryland Community Development Administration, Residential Single Family Housing Revenue, Series B, 3.750%, 9/1/14		327,074
505,000	Maryland Community Development Administration, Residential Single Family Housing Revenue, Series G, Callable 3/1/17 @ 100, 4.300%, 9/1/17		545,375

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	Maryland — (continued)
$250,000	Maryland Economic Development Corp., Electricity Lights & Power Improvements, Refunding Revenue, Callable 3/1/19 @ 100, 6.200%, 9/1/22	$	306,960
185,000	Maryland Economic Development Corp., Lutheran World Relief Refugee, Refunding Revenue, Callable 4/1/17 @ 100, 5.250%, 4/1/19		206,082
500,000	Maryland Economic Development Corp., Public Health Laboratory Public Improvements Revenue, 5.000%, 6/1/20		616,430
420,000	Maryland Economic Development Corp., Public Health Laboratory Public Improvements Revenue, Callable 6/1/21 @ 100, 5.000%, 6/1/26		495,554
735,000	Maryland Economic Development Corp., University of Maryland College Park Projects, Refunding Revenue (AGC), 5.000%, 6/1/16		799,812
555,000	Maryland Environmental Service, Mid Shore II Regional Landfill, Resource Recovery Improvements Revenue, 4.000%, 11/1/17		626,367
1,090,000	Maryland Health & Higher Educational Facilities Authority, Carroll Hospital, Refunding Revenue, Series A, 5.000%, 7/1/19		1,287,759
900,000	Maryland Health & Higher Educational Facilities Authority, College of Notre Dame, Refunding Revenue, 4.000%, 10/1/19		1,002,933
1,045,000	Maryland Health & Higher Educational Facilities Authority, Goucher College, Refunding Revenue, Series A, Callable 7/1/22 @ 100, 5.000%, 7/1/23		1,227,582
500,000	Maryland Health & Higher Educational Facilities Authority, Greater Baltimore Medical Center, Refunding Revenue, Series A, Callable 7/1/22 @ 100, 5.000%, 7/1/26		583,375
1,260,000	Maryland Health & Higher Educational Facilities Authority, Helix Health Issue, Refunding Revenue (AMBAC), OID, 5.000%, 7/1/27		1,572,026
530,000	Maryland Health & Higher Educational Facilities Authority, Maryland Institute College of Art, Refunding Revenue, Callable 6/1/22 @ 100, 5.000%, 6/1/23		616,989
330,000	Maryland Health & Higher Educational Facilities Authority, Medstar Health, Refunding Revenue, 5.000%, 8/15/19		397,881
460,000	Maryland Health & Higher Educational Facilities Authority, Memorial Hospital at Easton, Health, Hospital, Nursing Home Improvements Revenue, Callable 4/8/13 @ 100 (NATL-RE), OID, 4.700%, 7/1/19		460,570
320,000	Maryland Health & Higher Educational Facilities Authority, Peninsula Regional Medical Center, Health, Hospital, Nursing Home Improvements Revenue, 5.000%, 7/1/15		350,698

Continued

36

Sterling Capital Maryland Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	Maryland — (continued)
$725,000	Maryland Health & Higher Educational Facilities Authority, Peninsula Regional Medical Center, Health, Hospital, Nursing Home Improvements Revenue, Callable 7/1/16 @ 100, 5.000%, 7/1/26	$	800,531
400,000	Maryland Health & Higher Educational Facilities Authority, University of Maryland Medical System, Refunding Revenue, 5.000%, 7/1/19		475,036
555,000	Maryland Industrial Development Financing Authority, McDonogh School, Private Primary School Revenue, Series A, Callable 9/1/21 @ 100, 4.000%, 9/1/28		598,179
400,000	Maryland State Department of Transportation, County Transportation Transit Improvements Revenue, 5.250%, 12/15/17		483,728
500,000	Maryland State Department of Transportation, Transit Improvements Revenue, Second Issue, Callable 9/1/18 @ 100, 5.000%, 9/1/23		588,420
1,005,000	Maryland State Transportation Authority, Grant & Revenue Anticipation, Transit Improvements Revenue, 5.000%, 3/1/16		1,134,585
1,050,000	Maryland State Transportation Authority, Transportation Facilities Project, Highway Revenue, Series A, 4.000%, 7/1/18		1,210,367
635,000	Maryland State Transportation Authority, Transportation Facilities Project, Highway Revenue, Series A, 5.000%, 7/1/19		777,049
1,000,000	Maryland State Transportation Authority, Transportation Facilities Project, Refunding Revenue, Callable 7/01/22 @ 100 (G.O. of Authority), 4.500%, 7/1/23		1,197,230
590,000	Maryland, State & Local Facilities, Loan Public Improvements G.O., Second Series, Callable 7/15/18 @ 100, 5.000%, 7/15/23		708,655
250,000	Montgomery County Housing Opportunities Commission, Local Single Family Housing Revenue, Series A, 3.700%, 7/1/14		259,363
250,000	Montgomery County Housing Opportunities Commission, Refunding Revenue, Series A, Callable 1/1/16 @ 100 (FHA/VA Mortgages), 3.800%, 7/1/16		266,175
1,000,000	Montgomery County, MD, Consolidated Public Improvements G.O., Series A, Callable 6/1/15 @ 100, 5.000%, 6/1/24		1,093,950
775,000	Montgomery County, MD, Consolidated Public Improvements, Refunding G.O., Series A, 5.000%, 7/1/15		855,801
1,505,000	Montgomery County, MD, Consolidated Public Improvements, Refunding G.O., Series A, Callable 8/1/20 @ 100, 4.000%, 8/1/21		1,761,964
500,000	Montgomery County, MD, Department Liquor Control Public Improvements Revenue, Series A, Callable 4/1/21 @ 100, OID, 4.500%, 4/1/26		559,190

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	Maryland — (continued)
$1,000,000	Montgomery County, MD, Public Transportation Equipment Transit Improvements Certificate of Participation, 4.000%, 5/1/17	$	1,115,160
750,000	Montgomery County, MD, Water Quality Public Improvements Revenue, Series A, Callable 4/1/20 @ 100, 5.000%, 4/1/30		858,960
975,000	Prince George’s County, MD, Consolidated Public Improvements G.O., Series A, 4.000%, 9/15/15		1,061,677
1,000,000	Prince George’s County, MD, Consolidated Public Improvements G.O., Series A, Callable 9/15/21 @ 100, 5.000%, 9/15/28		1,194,690
505,000	Prince George’s County, MD, Equipment Acquisition Program, Public Improvements Certificates of Participation, 3.000%, 10/15/19		552,859
800,000	Queen Anne’s County, MD, Public Facilities, Refunding G.O., 3.000%, 1/15/19		883,424
1,000,000	Saint Mary’s College of Maryland, Academic & Auxiliary Fee, Refunding Revenue, Series A, Callable 9/1/15 @ 100, OID (AMBAC), 4.500%, 9/1/30		1,054,550
520,000	Saint Mary’s College of Maryland, Refunding Revenue, Series A, 4.000%, 9/1/21		593,034
500,000	Talbot County, MD, School Public Improvements G.O., 5.000%, 12/15/16		581,140
	Total Municipal Bonds (Cost $44,820,101)		47,000,875
Shares
INVESTMENT COMPANY (2.9%)
1,418,413	Federated Tax-Free Obligations Fund, Institutional Class		1,418,413
	Total Investment Company (Cost $1,418,413)		1,418,413
Total Investments — 99.2% (Cost $46,238,514)			48,419,288
Net Other Assets (Liabilities) — 0.8%			409,877
NET ASSETS — 100.0%		$	48,829,165

AGC — Assured Guaranty Corp.

AMBAC — American Municipal Bond Assurance Corp.

FHA — Federal Housing Authority

G.O. — General Obligation

NATL — National

OID — Original Issue Discount

RE — Reinsurance

VA — Veterans Administration

See accompanying notes to the financial statements.

37

Sterling Capital North Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
MUNICIPAL BONDS (98.5%)
	North Carolina (98.5%)
$2,335,000	Appalachian State University, University & College Improvements Revenue, Callable 10/1/21 @ 100, 5.000%, 10/1/24		$2,806,063
2,655,000	Appalachian State University, University & College Improvements Revenue, Callable 10/1/21 @ 100, 4.750%, 10/1/27		3,064,746
1,000,000	Beaufort County, NC, Refunding Limited G.O., Callable 6/1/22 @ 100, 5.000%, 6/1/24		1,183,010
2,250,000	Bladen County, NC, Refunding Revenue, Callable 6/1/22 @ 100, 4.000%, 6/1/29		2,446,155
1,065,000	Broad River Water Authority, NC, Water System Refunding Revenue, Callable 6/1/15 @ 100 (XLCA), 5.000%, 6/1/18		1,141,573
1,245,000	Brunswick County, NC, Refunding G.O., 4.000%, 2/1/19		1,435,460
1,075,000	Brunswick County, NC, Refunding Revenue, Callable 4/1/22 @ 100, 5.000%, 4/1/23		1,296,343
1,565,000	Brunswick County, NC, Refunding Revenue, Series A, Callable 4/1/22 @ 100, 5.000%, 4/1/29		1,821,206
1,935,000	Buncombe County, NC, Public Improvements Revenue, Series A, 4.000%, 6/1/17		2,176,507
1,000,000	Buncombe County, NC, University & College Improvements Certificate of Participation, Callable 4/1/16 @ 100 (NATL-RE), 5.000%, 4/1/19		1,120,970
1,060,000	Burlington, NC, Combined Enterprise System, Water Utility Improvements Revenue, Callable 2/1/22 @ 100, 5.000%, 2/1/34		1,203,259
1,000,000	Cabarrus County, NC, Installment Financing Contract, Correctional Facility Improvements Certificate of Participation, Series C, Callable 6/1/18 @ 100, OID, 5.000%, 6/1/23		1,167,060
2,975,000	Cabarrus County, NC, Installment Financing Contract, School Improvements Certificate of Participation, 4.000%, 1/1/15		3,154,333
1,960,000	Cabarrus County, NC, Installment Financing Contract, School Improvements Certificate of Participation, 5.000%, 1/1/17		2,261,801
1,430,000	Cabarrus County, NC, Installment Financing Contract, School Improvements Certificate of Participation, Callable 1/1/19 @ 100, 5.000%, 1/1/20		1,720,848
1,730,000	Cabarrus County, NC, Installment Financing Contract, School Improvements Certificate of Participation, Callable 1/1/19 @ 100, 5.000%, 1/1/23		2,038,736
1,240,000	Cape Fear Public Utility Authority, Water & Sewer System, Improvements Refunding Revenue, 5.000%, 8/1/21		1,543,651
1,475,000	Cape Fear Public Utility Authority, Water & Sewer System, Improvements Refunding Revenue, Callable 8/1/21 @ 100, 5.000%, 8/1/26		1,747,137
1,160,000	Cape Fear Public Utility Authority, Water & Sewer System, Improvements Revenue, Callable 8/1/18 @ 100, 5.000%, 8/1/26		1,362,629
1,005,000	Cape Fear Public Utility Authority, Water & Sewer System, Improvements Revenue, Callable 8/1/18 @ 100, 5.000%, 8/1/31		1,152,172

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	North Carolina — (continued)
$1,000,000	Cary, NC, Combined Utility Systems, Refunding Revenue, Callable 12/1/22 @100, 4.000%, 12/1/32		$1,074,700
1,000,000	Catawba County, NC, School Improvements Refunding Revenue, 4.000%, 10/1/19		1,150,920
1,000,000	Catawba County, NC, School Improvements Refunding Revenue, 4.000%, 10/1/20		1,152,720
1,000,000	Charlotte, NC, Airport Refunding Revenue, Series B, 5.000%, 7/1/15		1,096,760
1,000,000	Charlotte, NC, Port, Airport & Marina Improvements Revenue, Series A, Callable 7/1/20 @ 100, 5.000%, 7/1/27		1,140,030
1,280,000	Charlotte, NC, Storm Water Fee Public, Improvements Revenue, Callable 6/1/16 @ 100, 5.000%, 6/1/20		1,442,560
1,000,000	Charlotte, NC, Storm Water Fee Public, Improvements Revenue, Callable 6/1/16 @ 100, 5.000%, 6/1/23		1,129,010
1,415,000	Charlotte-Mecklenburg Hospital Authority, NC, Carolinas Health Care System Refunding Revenue, Series A, 5.000%, 1/15/17		1,626,953
4,765,000	Chatham County, NC, Refunding Revenue (County Guaranteed), 5.000%, 12/1/28		5,855,375
2,000,000	Concord, NC, Utilities Systems, Refunding Revenue, Series B, Callable 12/1/19 @ 100, 5.000%, 12/1/22		2,340,540
1,000,000	Dare County, NC, Refunding Revenue, Series D, Callable 6/1/22 @ 100, 5.000%, 6/1/29		1,145,520
1,160,000	Davie County, NC, Refunding G.O., 4.000%, 5/1/24		1,330,404
1,000,000	Durham Capital Financing Corp., Limited Obligation Refunding Revenue, 5.000%, 6/1/21		1,244,980
1,410,000	Durham County, NC, Industrial Facilities & Pollution Control Financing Authority, Research Triangle Institute, University & College Improvements Revenue, 5.000%, 2/1/20		1,694,961
2,000,000	Durham County, NC, Public Improvements Certificate of Participation, Series A, Callable 6/1/19 @ 100, 5.000%, 6/1/24		2,332,820
365,000	Elizabeth City State University, University & College Improvements Revenue, Series A (AGM), 4.000%, 4/1/13		365,091
380,000	Elizabeth City State University, University & College Improvements Revenue, Series A (AGM), 4.000%, 4/1/14		391,012
195,000	Elizabeth City State University, University & College Improvements Revenue, Series A (AGM), 4.000%, 4/1/15		204,729
2,170,000	Fayetteville, NC, Public Works Commission, Refunding Revenue, Series A, 5.000%, 3/1/16		2,443,311
1,085,000	Franklin County, NC, Public Facilities Projects, Certificate of Participation, Callable 9/1/17 @ 100 (NATL-RE), 5.000%, 9/1/22		1,254,542
1,855,000	Greensboro, NC, Combined Water & Sewer System, Refunding Revenue, Series A, Callable 6/1/22 @ 100, 5.000%, 6/1/23		2,308,232

Continued

38

Sterling Capital North Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		North Carolina — (continued)
	$1,000,000	Henderson County, NC, School Improvements Certificate of Participation, Series A (AMBAC), 5.000%, 6/1/16	$	1,127,160
	1,030,000	Henderson County, NC, University & College Improvements Revenue, Series B, 4.000%, 12/1/16		1,148,131
	1,545,000	High Point, NC, Refunding G.O., 5.000%, 3/1/22		1,948,168
	110,000	Holly Springs, NC, Parks & Recreation, Facilities Improvements G.O., Callable 2/1/22 @ 100, 3.000%, 2/1/25		114,488
	1,150,000	Iredell County, NC, School Improvements Project, Certificate of Participation, Callable 6/1/16 @ 100 (AMBAC), 5.000%, 6/1/22		1,291,807
	1,000,000	Lee County, NC, Public Facilities Projects, School Improvements Certificate of Participation, Callable 4/1/17 @ 100 (AGM), 5.000%, 4/1/19		1,139,970
	1,570,000	Lenoir County, NC, Refunding G.O., 4.000%, 2/1/19		1,810,179
	1,705,000	Lenoir County, NC, Refunding G.O., 4.000%, 2/1/20		1,979,471
	1,670,000	Lenoir County, NC, Refunding G.O., 4.000%, 2/1/21		1,942,577
	1,750,000	Lincoln County, NC, Refunding G.O., Series A, 5.000%, 6/1/18		2,100,385
	2,535,000	Lincoln County, NC, Refunding G.O., Series A, 4.000%, 6/1/19		2,943,743
	2,000,000	Lincoln County, NC, Refunding G.O., Series A, 4.000%, 6/1/24		2,318,140
	800,000	Lincolnton, NC, Combined Enterprise System, Refunding Revenue, Callable 5/1/15 @ 100 (XLCA), 5.000%, 5/1/17		842,016
	2,000,000	Mecklenburg County, NC, Refunding G.O., 5.000%, 2/1/21		2,515,660
	1,280,000	Monroe, NC, Combined Enterprise System, Refunding Revenue (AGM), 4.000%, 3/1/19		1,458,893
	1,000,000	Mooresville, NC, Enterprise System Refunding Revenue, Callable 5/1/22 @ 100, 4.000%, 5/1/24		1,118,960
	1,000,000	Mooresville, NC, Telecommunications Improvements Certificate of Participation, 5.000%, 9/1/15		1,100,150
	1,460,000	Mooresville, NC, Telecommunications Improvements Certificate of Participation, 5.000%, 9/1/16		1,655,932
	1,855,000	New Hanover County, NC, New Hanover County Projects, Refunding Revenue, 5.000%, 12/1/19		2,292,298
	1,015,000	New Hanover County, NC, New Hanover County Projects, Refunding Revenue, 5.000%, 12/1/20		1,267,867
	2,500,000	New Hanover County, NC, New Hanover Regional Medical, Refunding Revenue, 4.000%, 10/1/19		2,841,300
	1,270,000	New Hanover County, NC, New Hanover Regional Medical, Refunding Revenue, Callable 10/1/21 @ 100, 5.000%, 10/1/23		1,463,294
	645,000	New Hanover County, NC, Refunding Revenue, Callable 12/1/22 @ 100, 5.000%, 12/1/27		762,771

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		North Carolina — (continued)
	$1,000,000	New Hanover County, NC, Regional Medical Center, Health Hospital, Nursing Home Improvements Revenue, Series A, Callable 10/1/19 @ 100 (AGM), 5.000%, 10/1/21	$	1,165,430
	1,050,000	New Hanover County, NC, Regional Medical Center, Revenue, Series A, Callable 10/1/19 @ 100 (AGM), 5.000%, 10/1/22		1,209,012
	2,400,000	North Carolina Eastern Municipal Power Agency, Electric, Lights & Power Improvements Revenue, Series A, OID, 6.400%, 1/1/21		2,933,040
	1,000,000	North Carolina Eastern Municipal Power Agency, Refunding Revenue, Series A, 5.000%, 1/1/14		1,035,730
	1,000,000	North Carolina Eastern Municipal Power Agency, Refunding Revenue, Series A, Callable 1/1/16 @ 100 (AMBAC), 5.250%, 1/1/20		1,117,070
	2,015,000	North Carolina Medical Care Commission, Blue Ridge Healthcare, Refunding Revenue, Series A, 4.000%, 1/1/16		2,160,765
	2,095,000	North Carolina Medical Care Commission, Caromont Health Facilities, Health Hospital, Nursing Home Improvements Revenue (Assured Guaranty), OID, 3.500%, 2/15/19		2,319,395
	1,005,000	North Carolina Medical Care Commission, First Mortgage Deerfield, Health, Hospital, Nursing Home Improvements Revenue, Series A, Callable 11/1/18 @ 100, OID, 6.000%, 11/1/33		1,094,797
	1,515,000	North Carolina Medical Care Commission, Firsthealth Carolina, Refunding Revenue, Series C, Callable 10/1/14 @ 100, OID, 4.000%, 10/1/18		1,637,215
	915,000	North Carolina Medical Care Commission, Health Care Facilities, Refunding Revenue, Appalachian Regional Healthcare System, Series A, 5.000%, 7/1/19		1,063,413
	1,180,000	North Carolina Medical Care Commission, Health Care Facilities, Refunding Revenue, Appalachian Regional Healthcare System, Series A, 5.375%, 7/1/20		1,411,658
	1,315,000	North Carolina Medical Care Commission, Health Care Housing ARC Projects, Revenue, Series A (HUD Section 8), 4.650%, 10/1/14		1,350,676
	1,000,000	North Carolina Medical Care Commission, Mission Health Combine Group, Refunding Revenue, Callable 10/1/17 @ 100 (AGM-CR), 5.000%, 10/1/25		1,081,990
	3,000,000	North Carolina Medical Care Commission, North Carolina Baptist Hospital, Refunding Revenue, 5.000%, 6/1/20		3,673,920
	1,530,000	North Carolina Medical Care Commission, North Carolina Baptist Hospital, Refunding Revenue, Callable 6/1/20 @ 100, 5.250%, 6/1/29		1,741,155
	1,910,000	North Carolina Medical Care Commission, Novant Health Obligation Group, Refunding Revenue, Series A, Callable 11/1/13 @ 100, 5.000%, 11/1/14		1,960,176

Continued

39

Sterling Capital North Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount				Fair Value
	MUNICIPAL BONDS — (continued)
			North Carolina — (continued)
	$1,000,000		North Carolina Medical Care Commission, Novant Health, Refunding Revenue, Callable 11/1/13 @ 100 (AGM-CR), 5.000%, 11/1/15	$	1,023,310
	2,600,000		North Carolina Medical Care Commission, Rex Healthcare, Refunding Revenue, Series A, 5.000%, 7/1/17		3,010,670
	1,000,000		North Carolina Medical Care Commission, Stanly Memorial Hospital Project, Health, Hospital, Nursing Home Improvements Revenue, Callable 4/29/13 @ 100, OID, 6.250%, 10/1/19		1,002,710
	3,455,000		North Carolina Medical Care Commission, Universal Health System, Refunding Revenue, Series E2, 6.000%, 12/1/36(a)		3,717,891
	2,780,000		North Carolina Medical Care Commission, Vidant Health Care Facilities, Refunding Revenue, Series A, Callable 6/1/22 @ 100, 5.000%, 6/1/24		3,186,686
	2,000,000		North Carolina Medical Care Commission, Wakemed, Refunding Revenue, Series A, Callable 10/1/22 @ 100, 5.000%, 10/1/27		2,311,760
	2,000,000		North Carolina Medical Care Commission, Wakemed, Refunding Revenue, Series A, Callable 10/1/22 @ 100, 5.000%, 10/1/31		2,291,360
	1,115,000		North Carolina Medical Care Commission, Wilson Medical Center, Refunding Revenue, 5.000%, 11/1/17		1,292,252
	745,000		North Carolina Municipal Power Agency No. 1, Catawba Electric Power, Refunding Revenue, Series A, Callable 1/1/18 @ 100, 5.250%, 1/1/20		865,012
	1,360,000		North Carolina Municipal Power Agency No. 1, Catawba Electric, Revenue, Series B, 4.000%, 1/1/22		1,558,682
	1,080,000		North Carolina State, Highway Improvements Vehicle, Revenue (NATL-RE), 5.000%, 3/1/16		1,217,376
	2,150,000		North Carolina State, Highway Improvements Vehicle, Revenue (NATL-RE), 5.000%, 3/1/17		2,500,214
	1,085,000		North Carolina State, Highway Improvements Vehicle, Revenue, Callable 3/1/17 @ 100 (NATL-RE), 5.000%, 3/1/18		1,242,922
	4,000,000		North Carolina State, Highway Improvements Vehicle, Revenue, Callable 9/1/17 @ 100, 4.000%, 3/1/23(a)		4,489,880
	4,900,000		North Carolina State, Public Improvements, Revenue, Series C, Callable 5/1/21 @ 100, 4.000%, 5/1/23		5,521,026
	2,925,000		North Carolina State, Refunding G.O., Series A, 5.000%, 9/1/16		3,368,167
	2,380,000		North Carolina State, Refunding G.O., Series B, 5.000%, 4/1/17		2,792,073
	2,000,000	��	North Carolina State, Refunding G.O., Series D, 4.000%, 6/1/20		2,361,700
	2,000,000		North Carolina State, University & College Improvements G.O., Series A, Callable 3/1/17 @ 100, 5.000%, 3/1/20		2,329,080
	1,000,000		North Carolina State, Water Utility Improvements, Clean Water G.O., Series A, Callable 3/1/16 @ 100, 5.000%, 3/1/17		1,128,970

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		North Carolina — (continued)
	$2,140,000	Onslow County, NC, Public Improvements Limited Obligation Revenue, Series A, Callable 12/1/22 @ 100, 4.000%, 6/1/26	$	2,327,100
	2,140,000	Onslow County, NC, Public Improvements Limited Obligation Revenue, Series A, Callable 12/1/22 @ 100, 4.000%, 6/1/27		2,307,648
	1,520,000	Onslow Water & Sewer Authority, Water Utility Improvements Revenue, Series B, Callable 6/1/14 @ 100 (XLCA), 5.000%, 6/1/21		1,597,702
	1,365,000	Orange County, NC, Public Facilities Co., Public Improvements, Revenue, Callable 10/1/21 @ 100, 5.000%, 10/1/23		1,626,234
	1,105,000	Pasquotank County, NC, Refunding Certificate of Participation (NATL-RE), 5.250%, 6/1/18		1,294,563
	1,000,000	Pasquotank County, NC, Refunding Certificate of Participation (NATL-RE), 5.250%, 6/1/19		1,188,770
	1,210,000	Pender County, NC, Limited Obligation Refunding Revenue, Callable 6/1/22 @ 100, 5.000%, 6/1/26		1,409,335
	1,075,000	Pender County, NC, Limited Obligation Refunding Revenue, Callable 6/1/22 @ 100, 5.000%, 6/1/28		1,233,272
	1,390,000	Pitt County, NC, Certificate of Participation, Refunding Revenue, Callable 4/1/22 @ 100, 5.000%, 4/1/24		1,643,883
	1,395,000	Pitt County, NC, Certificate of Participation, Refunding Revenue, Callable 4/1/22 @ 100, 5.000%, 4/1/25		1,640,283
	1,535,000	Pitt County, NC, Pitt County Memorial Hospital Project, Refunding Revenue, Callable 4/29/13 @ 100, OID, 5.500%, 12/1/15		1,630,078
	1,400,000	Raleigh Durham Airport Authority, Refunding Revenue, Series B, 3.000%, 11/1/16		1,507,170
	2,150,000	Raleigh Durham Airport Authority, Refunding Revenue, Series B1, Callable 5/1/20 @ 100, 5.000%, 11/1/28		2,467,791
	2,000,000	Raleigh, NC, Combined Enterprise System, Refunding Revenue, Series A, Callable 3/1/22 @ 100, 5.000%, 3/1/27		2,393,820
	1,525,000	Rockingham County, NC, Public Improvements Certificate of Participation (Assured Guaranty), 5.000%, 4/1/17		1,766,041
	1,510,000	Rockingham County, NC, Refunding Revenue, 5.000%, 4/1/18		1,749,290
	1,825,000	Smithville Township, NC, Limited Tax Hospital, Refunding G.O., 5.000%, 6/1/24		2,251,137
	1,085,000	Surry County, NC, Northern Hospital District Revenue, Callable 4/1/18 @ 100, OID, 5.500%, 10/1/21		1,177,930
	1,000,000	Union County, NC, Enterprise Systems, Refunding Revenue, Series A, Callable 12/1/21 @ 100, 4.000%, 12/1/22		1,169,030
	1,260,000	Union County, NC, Enterprise Systems, Refunding Revenue, Series A, Callable 12/1/21 @ 100, 4.000%, 12/1/24		1,427,441
	1,380,000	Union County, NC, Enterprise Systems, Refunding Revenue, Series A, Callable 12/1/21 @ 100, 4.000%, 12/1/25		1,547,711
	2,185,000	Union County, NC, Refunding G.O., Series A, 5.000%, 3/1/22		2,755,176

Continued

40

Sterling Capital North Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	North Carolina — (continued)
$1,000,000	Union County, NC, Refunding Revenue, 5.000%, 12/1/23	$	1,235,780
1,000,000	Union County, NC, Refunding Revenue, 5.000%, 12/1/24		1,240,750
4,610,000	Union County, NC, School Improvements G.O., Series D, Callable 3/1/17 @ 100 (NATL-RE), 5.000%, 3/1/19		5,386,647
2,285,000	University of North Carolina at Greensboro, Refunding Revenue, Callable 4/1/21 @ 100, 5.000%, 4/1/23		2,746,844
2,000,000	University of North Carolina at Greensboro, Refunding Revenue, Callable 4/1/21 @ 100, 5.000%, 4/1/36		2,257,060
1,160,000	University of North Carolina System, Appalachian State University, Refunding Revenue, Series B1, 4.000%, 10/1/15		1,259,250
3,260,000	University of North Carolina System, Appalachian State University, Refunding Revenue, Series B1, Callable 4/1/20 @ 100, 5.250%, 10/1/22		3,921,291
3,095,000	University of North Carolina System, Asheville/Wilmington, Refunding Revenue, Series C, Callable 4/1/20 @ 100 (Assured Guaranty), 5.000%, 10/1/20		3,769,401
1,485,000	University of North Carolina System, Asheville/Wilmington, Refunding Revenue, Series C, Callable 4/1/20 @ 100 (Assured Guaranty), 5.250%, 10/1/24		1,753,577
1,975,000	University of North Carolina System, The University of North Carolina at Greensboro, Refunding Revenue, Series B2, 5.000%, 4/1/17		2,295,029
1,005,000	University of North Carolina System, University & College Improvements Revenue, Series A, Callable 10/1/16 @ 100 (NATL-RE), 5.000%, 10/1/17		1,142,203
500,000	University of North Carolina System, University & College Improvements Revenue, Series B (AMBAC), 4.000%, 4/1/14		514,670
1,565,000	University of North Carolina System, University & College Improvements, General Trust Indenture Revenue, Series C, 4.250%, 10/1/14		1,646,834
1,000,000	University of North Carolina System, University & College Improvements, General Trust Indenture Revenue, Series C, 4.500%, 10/1/17		1,130,910
1,865,000	Wilmington, NC, Limited Obligation Refunding Revenue, 5.000%, 6/1/22		2,301,205
1,000,000	Wilson, NC, Public Facilities Project, Public Improvements Certificate of Participation, Series A (Assured Guaranty), 5.000%, 5/1/16		1,124,170
1,000,000	Winston-Salem, NC, Water & Sewer System Refunding Revenue, Series A, Callable 6/1/17 @ 100, 5.000%, 6/1/19		1,160,920
	Total Municipal Bonds (Cost $237,781,440)		252,917,318

Shares		Fair Value
INVESTMENT COMPANY (3.2%)
8,116,637	Federated North Carolina Municipal Cash Trust, Institutional Shares	$	8,116,637
	Total Investment Company (Cost $8,116,637)		8,116,637
Total Investments — 101.7% (Cost $245,898,077)			261,033,955
Net Other Assets (Liabilities) — (1.7)%			(4,243,199)
NET ASSETS — 100.0%		$	256,790,756

(a) 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 in effect as of March 31, 2013. The maturity date reflected is the final maturity date.

AGM — Assured Guaranty Municipal Corp.

AMBAC — American Municipal Bond Assurance Corp.

CR — Custodial Receipts

G.O. — General Obligation

HUD — Housing & Urban Development

NATL — National

OID — Original Issue Discount

RE — Reinsurance

XLCA — XL Capital Assurance

See accompanying notes to the financial statements.

41

Sterling Capital South Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
MUNICIPAL BONDS (92.7%)
	South Carolina (92.7%)
$  1,000,000	Anderson Regional Joint Water System, Refunding Revenue, Series A, Callable 7/15/21 @ 100, 5.000%, 7/15/25	$	1,183,700
1,000,000	Anderson Regional Joint Water System, Refunding Revenue, Series A, Callable 7/15/22 @ 100, 4.000%, 7/15/27		1,078,800
1,000,000	Anderson, SC, Water & Sewer, Refunding Revenue (AGM), 5.000%, 7/1/17		1,163,840
1,095,000	Anderson, SC, Water & Sewer, Refunding Revenue (AGM), 5.000%, 7/1/19		1,316,212
1,000,000	Beaufort County School District, SC, Refunding G.O., Series A, Callable 3/1/17 @ 100 (AGM, SCSDE), 5.000%, 3/1/27		1,129,930
1,055,000	Beaufort County, SC, Refunding G.O., Series A (State Aid Withholding), 4.000%, 3/1/18		1,210,391
1,500,000	Beaufort County, SC, Refunding G.O., Series C (State Aid Withholding), 4.000%, 2/1/21		1,758,015
1,000,000	Beaufort County, SC, Refunding G.O., Series C (State Aid Withholding), 4.000%, 2/1/22		1,169,270
505,000	Bennettsville, SC, Combined Utility System, Refunding & Improvements Revenue, Callable 2/1/14 @ 100 (AMBAC), OID, 3.625%, 2/1/16		510,984
545,000	Bennettsville, SC, Combined Utility System, Refunding & Improvements Revenue, Callable 2/1/14 @ 100 (AMBAC), OID, 3.875%, 2/1/18		550,766
290,000	Camden, SC, Combined Public Utility System, Refunding & Improvements Revenue, Callable 3/1/14 @ 100 (NATL-RE, FGIC), 5.000%, 3/1/15		301,351
760,000	Cayce, SC, Waterworks & Sewer Systems Refunding & Improvements Revenue, Series A (XLCA), 5.250%, 7/1/16		860,533
595,000	Cayce, SC, Waterworks & Sewer Systems Refunding & Improvements Revenue, Series A (XLCA), 5.250%, 7/1/20		721,217
1,000,000	Charleston County, SC, Capital Improvement Transition Sales Tax G.O., Callable 11/1/21 @ 100 (State Aid Withholding), 4.000%, 11/1/28		1,103,910
1,000,000	Charleston County, SC, School District Development Corp., Refunding G.O., Series A (SCSDE), 5.000%, 2/1/23		1,258,940
965,000	Coastal Carolina University, University & College Improvements Revenue, 4.000%, 6/1/17		1,081,225
350,000	College of Charleston, Academic & Administrative Facilities Revenue, Series D (XLCA), 4.500%, 4/1/17		392,994
1,295,000	College of Charleston, University & College Improvements Refunding Revenue, Series A, Callable 4/1/21 @ 100, 5.000%, 4/1/25		1,494,106
1,170,000	Easley, SC, Combined Utility System Refunding Revenue, Callable 12/1/19 @ 100 (Assured Guaranty), 5.000%, 12/1/24		1,354,439
200,000	Educational Facilities Authority, Wofford College, University & College Improvements Revenue, Series A, 4.000%, 4/1/15		212,436

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	South Carolina — (continued)
$  335,000	Fort Mill School Facilities Corp., Installment Purchase Revenue, Callable 12/1/16 @ 100, 5.250%, 12/1/18	$	378,975
1,030,000	Georgetown County, SC, Refunding G.O. (State Aid Withholding), 4.000%, 3/1/23		1,193,193
1,000,000	Greenville County, SC, School District Installment Purchase Refunding Revenue, 5.000%, 12/1/23		1,234,720
1,075,000	Greenville County, SC, School District Installment Purchase Refunding Revenue, Callable 12/1/16 @ 100, 5.000%, 12/1/22		1,228,510
1,340,000	Greenville, SC, Hospital System Board, Facilities Refunding Revenue, 5.000%, 5/1/21		1,622,995
500,000	Greenville, SC, Hospital System Board, Facilities Refunding Revenue, Series A, Callable 5/1/18 @100, 5.250%, 5/1/22		582,975
1,000,000	Greenwood County, SC, Self Regional Healthcare Refunding Revenue, Series B, Callable 4/1/22 @ 100, 5.000%, 10/1/24		1,151,900
395,000	Greenwood County, SC, Self Regional Healthcare Revenue, Callable 10/1/19 @ 100, OID, 4.875%, 10/1/22		443,581
530,000	Greenwood County, SC, Self Regional Healthcare Revenue, Callable 10/1/19 @ 100, OID, 5.000%, 10/1/23		593,478
1,175,000	Greenwood, SC, Combined Public Utility Revenue, Series A, 4.000%, 12/1/18		1,335,106
500,000	Kershaw County School District, SC, Kershaw County School District Project, Refunding Revenue (AGC), 5.000%, 12/1/16		555,320
645,000	Lancaster Educational Assistance Program, Inc., Lancaster County School District Project, Revenue, Callable 12/1/14 @ 100, 5.250%, 12/1/17		681,043
825,000	Lexington County, SC, Health Services District, Inc., Refunding Revenue, 5.000%, 11/1/15		909,793
500,000	Lexington County, SC, Health Services District, Inc., Refunding Revenue, 5.000%, 11/1/16		566,325
725,000	Lexington County, SC, Health Services District, Inc., Refunding Revenue, Callable 11/1/21 @ 100, 5.000%, 11/1/22		864,338
1,000,000	Lexington County, SC, School District No. 1, G.O., Series C (SCSDE), 5.000%, 2/1/21		1,246,110
1,010,000	Lexington County, SC, School District No. 1, Refunding G.O., Callable 3/1/17 @ 100 (SCSDE), 5.125%, 3/1/21		1,163,257
1,000,000	Lexington One School Facilities Corp., Lexington County School District No. 1 Revenue, 5.000%, 12/1/16		1,147,050
940,000	Lexington, SC, Combined Waterworks & Sewer System Refunding Revenue, Callable 4/1/21 @100, 5.000%, 4/1/22		1,127,558
690,000	Lexington, SC, Combined Waterworks & Sewer System Refunding Revenue, Callable 4/1/21 @100, 5.000%, 4/1/25		804,575
790,000	Newberry Investing in Children’s Education, Newberry County School District Project, School Improvements Revenue, 5.250%, 12/1/14		845,126

Continued

42

Sterling Capital South Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	South Carolina — (continued)
$  1,000,000	North Charleston, SC, Sewer District, Sewer Improvements G.O., Callable 1/1/21 @100 (State Aid Withholding), 4.000%, 1/1/23	$	1,131,520
245,000	North Myrtle Beach, SC, Recreational Facility Improvements G.O. (State Aid Withholding), 4.000%, 3/1/19		282,664
790,000	Oconee County, SC, Duke Power Co. Project Refunding Revenue, 3.600%, 2/1/17		855,665
810,000	Orangeburg County, SC, School District No. 5, Refunding G.O. (SCSDE), 5.000%, 3/1/21		999,751
1,100,000	Orangeburg County, SC, School District No. 5, Refunding G.O., Callable 3/1/17 @100 (NATL-RE, SCSDE), 4.000%, 3/1/19		1,210,352
420,000	Piedmont Municipal Power Agency, Power System Refunding Revenue (NATL-RE), OID, 5.375%, 1/1/25		494,445
870,000	Piedmont Municipal Power Agency, Power System Refunding Revenue, Series A3, 5.000%, 1/1/16		966,448
425,000	Piedmont Municipal Power Agency, Power System Refunding Revenue, Series A3 (Assured Guaranty), 5.000%, 1/1/18		497,535
1,000,000	Piedmont Municipal Power Agency, Power System Refunding Revenue, Series B, Callable 1/1/22 @ 100, 4.000%, 1/1/23		1,090,980
1,000,000	Renewable Water Resources Sewage System, Refunding Revenue, 4.000%, 1/1/20		1,153,140
250,000	Renewable Water Resources Sewage System, Refunding Revenue, Series A, Callable 1/1/20 @ 100, 5.000%, 1/1/21		300,510
1,000,000	Richland County, SC, School District No. 1, Refunding G.O., Series A, Callable 9/1/21 @ 100 (SCSDE), 4.000%, 3/1/27		1,092,470
1,000,000	Rock Hill, SC, Combined Utility System, Refunding & Improvements Revenue, Series B (AGM), 5.000%, 1/1/20		1,204,160
1,000,000	Rock Hill, SC, Combined Utility System, Refunding Revenue, Series A, Callable 1/1/22 @100 (AGM), 5.000%, 1/1/23		1,205,990
365,000	Rock Hill, SC, Public Improvements G.O., Callable 4/1/21 @ 100 (State Aid Withholding), 5.000%, 4/1/26		427,243
390,000	Rock Hill, SC, Public Improvements G.O., Callable 4/1/21 @ 100 (State Aid Withholding), 5.000%, 4/1/27		453,235
150,000	SCAGO Educational Facilities Corp. for Pickens School District, Pickens County Project, School Improvements Revenue (AGM), 5.000%, 12/1/14		161,346
520,000	SCAGO Educational Facilities Corp. for Pickens School District, Pickens County Project, School Improvements Revenue, Callable 12/1/16 @ 100 (AGM), 5.000%, 12/1/18		593,039
825,000	SCAGO Educational Facilities Corp. for Pickens School District, Pickens County Project, School Improvements Revenue, Callable 12/1/16 @ 100 (AGM), 5.000%, 12/1/19		938,957

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	South Carolina — (continued)
$  905,000	SCAGO Educational Facilities Corp. for Spartanburg School District No. 5, Spartanburg County Project, School Improvements Revenue, Callable 10/1/15 @ 100 (AGM), 5.000%, 4/1/21	$	994,921
500,000	SCAGO Public Facilities Corp. for Georgetown County, Georgetown County Project, Refunding Revenue, Series A, 5.000%, 12/1/18		587,265
500,000	SCAGO Public Facilities Corp. for Georgetown County, Georgetown County Project, Refunding Revenue, Series A, 5.000%, 12/1/19		595,865
550,000	South Carolina Jobs-Economic Development Authority, AnMed Health Project, Refunding & Improvement Revenue, Series B (Assured Guaranty), 5.000%, 2/1/19		649,506
250,000	South Carolina Jobs-Economic Development Authority, AnMed Health Project, Refunding Revenue, 5.000%, 2/1/16		277,727
1,000,000	South Carolina Jobs-Economic Development Authority, Bons Secours Health System, Inc., Refunding Revenue, Callable 11/1/22 @ 100, 5.000%, 11/1/24		1,169,970
1,500,000	South Carolina Jobs-Economic Development Authority, Conway Hospital Income Project, Health, Hospital, Nursing Home Improvements Revenue, Callable 7/1/22 @ 100, 5.000%, 7/1/23		1,740,225
1,000,000	South Carolina Jobs-Economic Development Authority, Electric & Gas Co. Project, Refunding Revenue, Callable 2/1/23 @ 100, 4.000%, 2/1/28		1,050,650
800,000	South Carolina Jobs-Economic Development Authority, Kershaw County Medical Center Project, Health, Hospital, Nursing Home Improvements Revenue, OID, 5.000%, 9/15/18		900,024
500,000	South Carolina Jobs-Economic Development Authority, Palmetto Health Facilities, Refunding Revenue, Series A (AGM), 5.000%, 8/1/19		588,030
500,000	South Carolina Jobs-Economic Development Authority, Palmetto Health, Refunding & Improvement Facilities Revenue, OID, 5.000%, 8/1/18		581,960
1,050,000	South Carolina State Ports Authority, Port, Airport & Marina Improvements Revenue, 5.000%, 7/1/19		1,255,201
540,000	South Carolina State Public Service Authority, Electricity Lights & Power Improvements Revenue, Series A, Callable 1/1/17 @ 100 (AMBAC), 5.000%, 1/1/23		620,120
1,030,000	South Carolina State Public Service Authority, Refunding Revenue, Series A, Callable 1/1/19 @ 100, 5.000%, 1/1/27		1,170,811
735,000	South Carolina State Public Service Authority, Refunding Revenue, Series A, Callable 1/1/19 @ 100, 5.000%, 1/1/32		824,986

Continued

43

Sterling Capital South Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	South Carolina — (continued)
$  1,225,000	South Carolina State Public Service Authority, Refunding Revenue, Series B, Callable 1/1/16 @ 100 (NATL-RE), 5.000%, 1/1/22	$	1,366,500
1,190,000	South Carolina State, University & College Improvements G.O., Series B, Callable 3/1/21 @ 100, 5.000%, 3/1/24		1,445,755
500,000	South Carolina Transportation Infrastructure Bank, Refunding Revenue, Series B (AMBAC), 5.250%, 10/1/15		559,460
385,000	South Carolina Transportation Infrastructure Bank, Transit Improvements Revenue, Series A (XLCA), 5.000%, 10/1/15		428,389
400,000	Spartanburg County School District No. 1, SC, School Improvements G.O., Callable 9/1/16 @ 100 (AGM, SCSDE), 5.000%, 3/1/22		453,652
1,000,000	Spartanburg County, SC, Regional Health Services District, Refunding Revenue, Series A, 5.000%, 4/15/20		1,176,920
325,000	Spartanburg County, SC, Regional Health Services District, Refunding Revenue, Series A (Assured Guaranty), 4.000%, 4/15/16		352,872
600,000	Spartanburg County, SC, Regional Health Services District, Refunding Revenue, Series A, Callable 4/15/18 @ 100 (Assured Guaranty), 5.250%, 4/15/21		688,416
250,000	Three Rivers Solid Waste Authority, Solid Waste Disposal Facilities, Refunding Revenue, 5.000%, 12/15/13		257,587
830,000	Three Rivers Solid Waste Authority, Solid Waste Disposal Facilities, Refunding Revenue, 4.500%, 12/15/16		916,279
500,000	University of South Carolina Refunding Revenue, Series A, Callable 5/1/20 @ 100, 5.000%, 5/1/28		567,540
1,080,000	University of South Carolina, Moore School Business Project, University & College Improvements Revenue, Callable 5/1/22 @ 100, 5.000%,5/1/28		1,259,150
310,000	York County, SC, Public Improvements G.O., Callable 11/1/16 @ 100, OID, 5.100%, 11/1/21		355,059
370,000	York County, SC, School District No. 1, Refunding G.O., Series A, Callable 3/1/19 @ 100 (SCSDE), 5.000%, 3/1/20		442,779
	Total Municipal Bonds (Cost $73,899,807)		77,866,056

Shares		Fair Value
INVESTMENT COMPANY (5.9%)
4,920,986	Federated Tax-Free Obligations Fund, Institutional Class	$	4,920,986
	Total Investment Company (Cost $4,920,986)		4,920,986
Total Investments — 98.6% (Cost $78,820,793)			82,787,042
Net Other Assets (Liabilities) — 1.4%			1,154,459
NET ASSETS — 100.0%		$	83,941,501

AGC — Assured Guaranty Corp.

AGM — Assured Guaranty Municipal Corp.

AMBAC — American Municipal Bond Assurance Corp.

FGIC — Financial Guaranty Insurance Corp.

G.O. — General Obligation

NATL — National

OID — Original Issue Discount

RE — Reinsurance

SCSDE — South Carolina School District Enhancement

XLCA — XL Capital Assurance

See accompanying notes to the financial statements.

44

Sterling Capital Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
MUNICIPAL BONDS (96.9%)
	District of Columbia (1.2%)
$1,115,000	Metropolitan Washington Airports Authority, Port, Airport & Marina Improvement Revenue, Series A, Callable 10/1/20 @ 100, 5.000%, 10/1/23	$	1,342,939
400,000	Metropolitan Washington Airports Authority, Refunding Revenue, Series B, Callable 10/1/19 @ 100, 5.000%, 10/1/21		480,512
			1,823,451
	Virginia (95.7%)
2,760,000	Albemarle County, VA, Economic Development Authority, Refunding Revenue, 5.000%, 6/1/20		3,390,080
1,000,000	Albemarle County, VA, Economic Development Authority, Refunding Revenue, Callable 6/1/21 @ 100, OID, 4.000%, 6/1/30		1,055,640
1,000,000	Alexandria, VA, Public Improvements G.O., Series A, 5.000%, 6/15/16		1,143,110
1,000,000	Alexandria, VA, Refunding G.O. (State Aid Withholding), 5.000%, 6/15/21		1,263,950
1,000,000	Arlington County, VA, Industrial Development Authority, VA Hospital Center Arlington, Refunding Revenue, 5.000%, 7/1/18		1,171,340
2,430,000	Arlington County, VA, Refunding G.O., Series A, (State Aid Withholding), 3.000%, 8/1/21		2,690,229
1,100,000	Chesapeake Bay Bridge & Tunnel District, General Resolution, Refunding Revenue, (BHAC-CR, NATL-RE), 5.500%, 7/1/25		1,360,920
875,000	Chesapeake, VA, Refunding G.O., Series A, (State Aid Withholding), 4.000%, 12/1/21		1,028,335
1,100,000	Chesterfield County, VA, Economic Development Authority, Electric & Power, Refunding Revenue, Series A, Callable 5/1/19 @ 100, 5.000%, 5/1/23		1,266,815
475,000	Danville, VA, Refunding G.O., Series A, Callable 3/1/19 @ 100 (Assured Guaranty, State Aid Withholding), 5.000%, 3/1/21		564,642
550,000	Danville, VA, Refunding G.O., Series A, Callable 3/1/19 @ 100, (Assured Guaranty, State Aid Withholding), 5.000%, 3/1/22		645,749
1,500,000	Fairfax County, VA, Economic Development Authority, Route 28 Project, Refunding Revenue, Special Tax, Callable 4/1/22 @ 100, 3.000%, 4/1/24		1,527,090
1,410,000	Fairfax County, VA, Economic Development Authority, Community Services Facilities Project, Health, Hospital, Nursing, Home Improvements, Revenue, Series A, 4.500%, 3/1/21		1,660,021
2,500,000	Fairfax County, VA, Economic Development Authority, Laurel Hill Public Facilities Project, Refunding Revenue, 5.000%, 6/1/22		3,092,675
1,620,000	Fairfax County, VA, Economic Development Authority, Laurel Hill Public Facilities Project, Refunding Revenue, Callable 6/1/22 @ 100, 3.000%, 6/1/23		1,691,021
1,000,000	Fairfax County, VA, Economic Development Authority, Route 28 Project, Refunding Revenue, Special Tax, 4.000%, 4/1/22		1,134,990

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	Virginia — (continued)
$1,000,000	Fairfax County, VA, Industrial Development Authority, Inova Health System Project, Refunding Revenue, (AGM-CR), OID, 5.250%, 8/15/19	$	1,182,510
1,000,000	Fairfax County, VA, Industrial Development Authority, Inova Health System, Refunding Revenue, Series D, Callable 5/15/22 @ 100, 4.000%, 5/15/29		1,054,770
795,000	Fairfax County, VA, Industrial Development Authority, Inova Health Systems Project, Refunding Revenue, Series C, 5.000%, 5/15/18		944,961
915,000	Fairfax County, VA, Redevelopment & Housing Authority, Redevelopment & Housing Refunding Revenue, 3.500%, 10/1/18		1,029,558
1,325,000	Fairfax County, VA, Water Authority, Water Refunding Revenue Bonds, Series A, 4.000%, 4/1/21		1,570,244
1,250,000	Fairfax County, VV, Water Authority, Water Refunding Revenue Bonds, Series A, 4.000%, 4/1/23		1,479,475
1,000,000	Hampton, VA, Public Improvements, Refunding G.O., Series A, Callable 1/15/19 @100, 5.000%, 1/15/21		1,193,920
1,775,000	Harrisonburg, VA, Public Improvements, Refunding G.O., Series B, (State Aid Withholding), 5.000%, 7/15/18		2,136,834
500,000	Henrico County, VA, Public Improvement Refunding, G.O., 3.000%, 8/1/23		537,435
1,830,000	Henrico County, VA, Water & Sewer System, Refunding Revenue, 4.000%, 5/1/17		2,078,715
1,665,000	Loudoun County, VA, Industrial Development Authority, Refunding Revenue, 4.000%, 12/15/22		1,952,013
1,020,000	Loudoun County, VA, Public Improvements G.O., Series B, (State Aid Withholding), 5.000%, 12/1/16		1,185,505
1,000,000	Loudoun County, VA, School Improvements G.O., Series B, (State Aid Withholding), 5.000%, 12/1/14		1,079,430
1,000,000	Loudoun County, VA, School Improvements G.O., Series B, (State Aid Withholding), 5.000%, 12/1/15		1,122,980
1,465,000	Montgomery County, VA, Economic Development Authority, Virginia Tech Foundation, Refunding Revenue, Series A, Callable 6/1/20 @ 100, 5.000%, 6/1/27		1,684,018
2,460,000	Montgomery County, VA, Economic Development Authority, Virginia Tech Foundation, Refunding Revenue, Series A, Callable 6/1/21 @ 100, 5.000%, 6/1/24		2,935,961
1,315,000	Montgomery County, VA, Industrial Development Authority, Public Projects, Public Improvements, Revenue, 5.000%, 2/1/18		1,559,695
1,000,000	Montgomery County, VA, Industrial Development Authority, Public Projects, Public Improvements, Revenue, Callable 2/1/18 @ 100, 5.000%, 2/1/24		1,119,360

Continued

45

Sterling Capital Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Virginia — (continued)
	$1,330,000	Newport News Economic Development Authority, Refunding Revenue, Series A, Callable 7/1/22 @ 100, (Municipal Government GTD), 5.000%, 7/1/25	$	1,609,353
	2,000,000	Newport News, VA, General Water Improvements, Refunding G.O., Series A, 4.000%, 7/15/20		2,341,940
	1,000,000	Newport News, VA, General Water Improvements, Refunding G.O., Series B, 5.250%, 7/1/21		1,272,420
	1,105,000	Newport News, VA, Refunding G.O., Series B, (State Aid Withholding), 5.000%, 2/1/15		1,199,024
	500,000	Norfolk, VA, Bond Anticipation Notes Refunding G.O., Series A, Callable 4/8/13 @ 100, 3.000%,1/1/14		504,625
	1,840,000	Norfolk, VA, Capital Improvement, G.O. Series C, (State Aid Withholding), 4.000%, 10/1/18		2,128,162
	1,000,000	Norfolk, VA, Economic Development Authority, Bon Secours Health System, Inc., Refunding Revenue, Callable 11/1/22 @ 100, 5.000%, 11/1/29		1,116,970
	1,000,000	Norfolk, VA, Economic Development Authority, Sentara Healthcare, Refunding Revenue, Series B, Callable 11/1/22 @ 100, 5.000%, 11/1/24		1,201,620
	1,000,000	Norfolk, VA, Water Utility Improvements Revenue, Callable 11/1/18 @ 100, 5.000%, 11/1/23		1,181,620
	400,000	Northern Transportation District Commission, Virginia Railway Express Project, Refunding Revenue, Callable 4/29/13 @ 100, (AGM), 5.375%, 7/1/14		401,676
	900,000	Northwestern Regional Jail Authority, Correctional Facility Improvements, Revenue, Callable 7/1/15 @ 100, (NATL-RE), 5.000%, 7/1/33		992,763
	1,000,000	Pittsylvania County, VA, Refunding G.O., Series B, 3.000%, 3/1/16		1,065,930
	1,000,000	Pittsylvania County, VA, School Improvements G.O., Series B, 5.000%, 2/1/19		1,201,050
	1,320,000	Pittsylvania County, VA, School Improvements G.O., Series B, Callable 2/1/19 @ 100, OID, 5.200%, 2/1/20		1,580,396
	1,775,000	Pittsylvania County, VA, School Improvements G.O., Series B, Callable 2/1/19 @ 100, OID, 5.375%, 2/1/21		2,117,717
	1,175,000	Poquoson, VA, Refunding G.O., (State Aid Withholding), 5.000%, 2/15/19		1,418,871
	1,160,000	Poquoson, VA, Refunding G.O., (State Aid Withholding), 5.000%, 2/15/21		1,433,772
	1,325,000	Portsmouth, VA, Public Utilities, Refunding G.O., Series A, Callable 7/15/22 @ 100, (State Aid Withholding), 5.000%, 7/15/24		1,617,043
	2,155,000	Portsmouth, VA, Public Improvement, Refunding G.O., Series C, Callable 7/15/22 @ 100, 4.000%, 7/15/29		2,323,198
	1,655,000	Portsmouth, VA, Public Utilities, Refunding G.O., Series A, (State Aid Withholding), 4.000%, 7/15/19		1,919,320
	1,440,000	Portsmouth, VA, Refunding G.O., Series B, Callable 7/15/19 @ 100, 5.250%, 7/15/23		1,744,027

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Virginia — (continued)
	$1,055,000	Portsmouth, VA, Refunding G.O., Series D, Callable 7/15/20 @ 100, 5.000%, 7/15/21	$	1,292,544
	1,500,000	Prince William County, VA, County Facilities, Refunding Certificate of Participation, 3.500%, 10/1/18		1,667,265
	1,175,000	Prince William County, VA, Service Authority, Water & Sewer Systems, Refunding Revenue, Callable 7/1/13 @ 102, 5.000%, 7/1/14		1,213,047
	2,760,000	Prince William, VA, County Facilities, Refunding Certificates of Participation, 5.000%, 10/1/24		3,419,833
	1,520,000	Richmond Metropolitan Authority, Expressway, Refunding Revenue (NATL-RE), 5.250%, 7/15/16		1,715,290
	1,035,000	Richmond Metropolitan Authority, Expressway, Refunding Revenue, (NATL-RE), 5.250%, 7/15/15		1,134,733
	880,000	Riverside, VA, Regional Jail Authority, Refunding Revenue, Callable 7/1/13 @ 101, (NATL-RE), 5.000%, 7/1/17		899,351
	1,100,000	Smyth County, VA, Industrial Development Authority, Mountain States Health Alliance Refunding Revenue, 5.000%, 7/1/15		1,182,346
	885,000	Smyth County, VA, Industrial Development Authority, Mountain States Health Alliance Refunding Revenue, 5.000%, 7/1/20		1,020,210
	1,090,000	Smyth County, VA, Public Improvement, Refunding G.O., Series A, Callable 11/1/21 @ 100 (State Aid Withholding), 4.000%, 11/1/23		1,218,642
	1,530,000	Smyth County, VA, Public Improvement, Refunding G.O., Series A, Callable 11/1/21 @ 100 (State Aid Withholding), 5.000%, 11/1/25		1,803,074
	1,000,000	Spotsylvania County, VA, Public Improvements, G.O., Callable 1/15/16 @ 100 (AGM), 5.000%, 1/15/17		1,118,480
	1,420,000	Spotsylvania County, VA, Water & Sewer System, Refunding Revenue, Series A, Callable 6/1/20 @ 100, 5.000%, 6/1/28		1,632,688
	765,000	Stafford County & Staunton Industrial Development Authority, Virginia Municipal League Association Counties Program, Economic Improvements Revenue, Series B, (XLCA), 5.000%, 8/1/16		845,340
	75,000	Stafford County & Staunton Industrial Development Authority, Virginia Municipal League Association Counties Program, Miscellaneous Purposes Revenue, Series B, (AGC), OID, 4.250%, 8/1/15		79,858
	1,515,000	Stafford County & Staunton Industrial Development Authority, Virginia Municipal League Association, Public Improvements Revenue, Series I, 4.000%, 2/1/16		1,639,381
	800,000	Stafford County & Staunton Industrial Development Authority, Virginia Municipal League Association, Public Improvements Revenue, Series I, 4.000%, 2/1/17		880,008
	1,545,000	Suffolk, VA, Public Improvements, Refunding G.O., (State Aid Withholding), 5.000%, 6/1/20		1,910,671

Continued

46

Sterling Capital Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	Virginia — (continued)
$1,000,000	Suffolk, VA, Public Improvements, Refunding G.O., Callable 12/1/15 @100, 5.000%, 12/1/18	$	1,117,340
1,300,000	Suffolk, VA, Public Improvements, Refunding G.O., Series A, (NATL-RE), 5.000%, 2/1/16		1,464,099
2,425,000	Suffolk, VA, Public Improvements, Refunding G.O., Series A, (NATL-RE), 5.000%, 2/1/17		2,820,663
3,630,000	Upper Occoquan, VA, Sewage Authority, Refunding Revenue, Series A, Callable 7/1/17 @ 100, (AGM), 4.500%, 7/1/29		4,010,351
1,075,000	Virginia Biotechnology Research Partnership Authority, Constructions Laboratories Project, Refunding Revenue, 5.000%, 9/1/19		1,318,133
1,805,000	Virginia College Building Authority, Public Higher Education Financing Program, Refunding Revenue, Series B, (State Intercept), 5.000%, 9/1/20		2,227,749
2,190,000	Virginia College Building Authority, Public Higher Education Financing Program, Revenue, Series A, Callable 9/1/17 @ 100, (State Intercept), OID, 4.500%, 9/1/26		2,462,984
1,495,000	Virginia College Building Authority, Public Higher Education Financing Program, University & College Improvements Revenue, Series A, Callable 9/1/21 @ 100, (State Intercept), 4.000%, 9/1/22		1,713,270
825,000	Virginia College Building Authority, University & College Improvements Revenue, Series A, Callable 2/1/18 @ 100, (State Intercept), 5.000%, 2/1/21		965,745
1,000,000	Virginia Commonwealth, University & College Improvements G.O., Series A1, 4.000%, 6/1/20		1,182,350
1,075,000	Virginia Housing Development Authority, Refunding Revenue, Series A1, Callable 7/1/19 @ 100, (G.O. of Authority), 4.600%, 7/1/25		1,177,577
1,500,000	Virginia Housing Development Authority, State Single Family Housing Revenue, Series A, 3.900%, 3/1/19		1,644,750
2,000,000	Virginia Housing Development Authority, State Single Family Housing Revenue, Sub-Series C-3, Callable 10/1/22 @ 100, 2.800%, 4/1/25		1,980,640
1,500,000	Virginia Port Authority, Port, Airport & Marina Improvements Revenue, Callable 7/1/20 @ 100, 5.000%,7/1/28		1,742,895
1,000,000	Virginia Public Building Authority, Public Facilities Building Revenue, Series A, Callable 8/1/17 @ 100, (NATL-RE), 5.000%, 8/1/18		1,167,570
2,000,000	Virginia Public Building Authority, Public Improvements Revenue, Series A, Callable 8/1/21 @ 100, 5.000%, 8/1/26		2,395,600
1,000,000	Virginia Public School Authority, School Financing 1997 Resolution, School Improvement Revenue, Series B, Callable 8/1/17 @100, (NATL-RE), 5.000%, 8/1/26		1,150,200

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	Virginia — (continued)
$1,150,000	Virginia Resources Authority, State Revolving Fund, Refunding Revenue, 5.500%, 10/1/17	$	1,392,271
1,835,000	Virginia Small Business Financing Authority, Sentara Healthcare Refunding Revenue, 4.000%, 11/1/16		2,029,822
525,000	Virginia Small Business Financing Authority, Sentara Healthcare, Refunding Revenue, Callable 5/1/20 @ 100, OID, 4.000%, 11/1/20		596,699
1,255,000	Western Regional Jail Authority, Correctional Facilities Improvement Revenue, Callable 6/1/17 @ 100, (NATL-RE), 4.750%, 6/1/23		1,430,926
2,000,000	York County, VA, Economic Development Authority, Electric & Power, Refunding Revenue, Series A, 4.050%, 5/1/33(a)		2,064,560
			143,634,443
	Total Municipal Bonds (Cost $137,251,825)		145,457,894
Shares
INVESTMENT COMPANY (3.3%)
4,929,857	Federated Virginia Municipal Money Market Portfolio, Institutional Class		4,929,857
	Total Investment Company (Cost $4,929,857)		4,929,857
Total Investments — 100.2% (Cost $142,181,682)			150,387,751
Net Other Assets (Liabilities) — (0.2)%			(242,536)
NET ASSETS — 100.0%		$	150,145,215

(a) 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 in effect as of March 31, 2013. The maturity date reflected is the final maturity date.

AGC — Assured Guaranty Corp.

AGM — Assured Guaranty Municipal Corp.

BHAC — Berkshire Hathaway Insurance Corp.

CR — Custodial Receipts

FGIC — Financial Guaranty Insurance Corp.

G.O. — General Obligation

GTD — Guaranteed

NATL — National

OID — Original Issue Discount

RE — Reinsurance

XLCA — XL Capital Assurance

See accompanying notes to the financial statements.

47

Sterling Capital West Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	MUNICIPAL BONDS (96.9%)
		West Virginia (96.9%)
	$1,635,000	Berkeley County, WV, Board of Education, Refunding Public School, G.O., 2.000%, 5/1/16	$	1,693,108
	975,000	Berkeley County, WV, Public Service Sewer District, Sewer Improvements Revenue, Series A, Callable 3/1/15 @ 100, 5.000%, 3/1/22		1,047,355
	2,500,000	Berkeley, Hardy, & Jefferson Counties, WV, Scattered Site Project, Commercial Development Revenue, Callable 12/1/20 @ 100, (Freddie Mac), 5.375%, 12/1/44(a)		2,777,425
	670,000	Braxton County, WV, Board of Education, Public School Improvements G.O., Callable 5/1/18 @ 100, (AGM), 5.000%, 5/1/23		782,667
	1,450,000	Cabell County, WV, Board of Education, School Improvements G.O., (NATL-RE), 5.000%, 5/1/16		1,641,458
	1,215,000	Fairmont State University, WV, University & College Improvements Refunding Revenue, Series B, 4.000%, 6/1/19		1,374,930
	1,005,000	Fairmont State University, WV, University & College Improvements Refunding Revenue, Series A, Callable 6/1/21 @ 100, 5.000%, 6/1/23		1,184,563
	1,495,000	Fairmont State University, WV, University & College Improvements Refunding Revenue, Series B, Callable 6/1/21 @ 100, 5.000%, 6/1/23		1,762,112
	1,460,000	Fairmont, WV, Waterworks Refunding Revenue, Series D, (AGM), 3.000%, 7/1/18		1,568,784
	1,100,000	Fairmont, WV, Waterworks Refunding Revenue, Series D, Callable 7/1/19 @100, (AGM), 4.000%, 7/1/24		1,172,974
	2,250,000	Greenbrier County, WV, Board of Education, Public School Improvements G.O., (AGM), 5.000%, 5/1/18		2,692,823
	2,090,000	Hancock County, WV, Board of Education, Public School Improvements G.O., Callable 5/1/21 @ 100, (West Virginia Board Commission), OID, 4.500%, 5/1/32		2,296,366
	1,000,000	Hardy County, WV, Board of Education, Public School Improvements G.O., 2.000%, 6/1/19		1,037,410
	745,000	Jefferson County, WV, Board of Education Public School, Refunding G.O., (West Virginia Board Commission), 4.000%, 5/1/18		844,845
	1,605,000	Jefferson County, WV, Board of Education Public School, Refunding G.O., (West Virginia Board Commission), 4.000%, 5/1/19		1,836,136
	815,000	Jefferson County, WV, Board of Education Public School, Refunding G.O., (West Virginia Board Commission), 4.000%, 5/1/20		939,133
	435,000	Logan County, WV, 1st Mortgage Logan County, Health, Hospital, Nursing Home Improvements, Revenue, 8.000%, 12/1/16		504,504
	1,700,000	Marshall University, WV, Refunding Revenue, 5.000%, 5/1/19		2,035,393
	1,390,000	Marshall University, WV, University & College Improvements Revenue, Callable 5/1/21 @ 100, 5.000%, 5/1/26		1,609,676

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		West Virginia — (continued)
	$1,560,000	Marshall University, WV, University & College Improvements Revenue, Callable 5/1/21 @ 100, 5.000%, 5/1/27	$	1,793,875
	800,000	Monongalia County, WV, Board of Education, Public School Refunding G.O., (West Virginia Board Commission), 4.000%, 5/1/19		911,360
	1,545,000	Monongalia County, WV, Board of Education, Public School Refunding G.O., (West Virginia Board Commission), 5.000%, 5/1/20		1,871,258
	1,000,000	Monongalia County, WV, Board of Education, Public School Refunding G.O., Callable 5/1/22 @ 100, (West Virginia Board Commission), 5.000%, 5/1/23		1,204,330
	1,000,000	Monongalia County, WV, Board of Education, Public School Refunding G.O., Callable 5/1/22 @ 100, (West Virginia Board Commission), 4.000%, 5/1/25		1,086,250
	815,000	Monongalia County, WV, Building Commission, Health System Obligated Group Refunding Revenue, Callable 7/1/21 @ 100, OID, 6.250%, 7/1/31		941,586
	1,470,000	Monongalia County, WV, Building Commission, Health, Hospital, Nursing Home Improvement Revenue, Series A, Callable 7/1/15 @ 100, 5.250%, 7/1/20		1,553,849
	905,000	Ohio County, WV, County Commission Sewage System, Fort Henry Centre Financing District, Public Improvement, Tax Allocation, Series A, 5.350%, 6/1/17		938,241
	200,000	Ohio County, WV, County Commission Sewage System, Fort Henry Centre Financing District, Public Improvement, Tax Allocation, Series A, Callable 6/1/17 @ 100, 5.625%, 6/1/22		214,348
	1,190,000	Parkersburg, WV, Combined Waterworks & Sewer Systems, Refunding Revenue, Series C, (NATL-RE, FGIC), 5.000%, 9/1/14		1,255,010
	1,330,000	Parkersburg, WV, Combined Waterworks & Sewer Systems, Refunding Revenue, Series C, (NATL-RE, FGIC), 5.000%, 9/1/15		1,442,092
	420,000	Pleasants County, WV, Board of Education, Public School Improvements G.O., 3.000%, 5/1/17		452,432
	520,000	Pleasants County, WV, Board of Education, Public School Improvements G.O., 4.000%, 5/1/18		588,239
	960,000	Pleasants County, WV, Board of Education, Public School Improvements G.O., 4.000%, 5/1/21		1,101,533
	795,000	Pleasants County, WV, Board of Education, Public School Improvements G.O., Callable 5/1/21 @ 100, 4.000%, 5/1/22		895,504
	1,210,000	Pleasants County, WV, Board of Education, Public School Improvements G.O., Callable 5/1/21 @ 100, 4.000%, 5/1/23		1,342,568
	1,265,000	Pleasants County, WV, Board of Education, Public School Improvements G.O., Callable 5/1/21 @ 100, 4.000%, 5/1/24		1,385,049
	1,000,000	Preston County, WV, Board of Education, Public School Improvements G.O., (West Virginia Board Commission), 3.000%, 5/1/19		1,078,350

Continued

48

Sterling Capital West Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		West Virginia — (continued)
	$1,645,000	Preston County, WV, Board of Education, Public School Improvements G.O., (West Virginia Board Commission), 4.000%, 5/1/21	$	1,915,553
	1,000,000	Princeton, WV, Princeton Community Hospital Project, Refunding Revenue, Series A, 5.000%, 5/1/22		1,132,560
	2,105,000	Putnam County, WV, Board of Education, Public School Improvements, G.O., 4.000%, 5/1/19		2,440,432
	1,000,000	Putnam County, WV, Board of Education, Public School Improvements, G.O., Callable 5/1/20 @ 100, 4.000%, 5/1/22		1,130,900
	1,400,000	Shepherd University Board of Governors, Residence Facilities Projects, University & College Improvements, Revenue, Callable 6/1/15 @ 100, (NATL-RE), 5.000%, 6/1/25		1,521,660
	2,600,000	West Virginia Economic Development Authority, Correctional Juvenile Public Safety Facilities Lease, Refunding Revenue, Series A, Callable 6/1/22 @ 100, 5.000%, 6/1/26		3,038,360
	750,000	West Virginia Economic Development Authority, Department of Environmental Protection Lease, Refunding Revenue, Series B, 4.000%, 11/1/21		848,310
	1,000,000	West Virginia Economic Development Authority, Ohio Power Co. Amos Project, Resource Recovery Improvements Revenue, Series A, 3.125%, 3/1/43(a)		1,030,820
	1,710,000	West Virginia Economic Development Authority, The Diamond Project, Refunding Revenue, 3.000%, 12/15/18		1,854,529
	2,390,000	West Virginia Economic Development Authority, The Diamond Project, Refunding Revenue, Callable 12/15/18 @ 100, 3.000%, 12/15/19		2,555,364
	670,000	West Virginia Higher Education Policy Commission, Community & Technology Capital Improvements Revenue, Series A, 5.000%, 7/1/17		774,922
	1,600,000	West Virginia Higher Education Policy Commission, Higher Education Facilities, Refunding Revenue, Series A, 5.000%, 4/1/20		1,937,808
	1,750,000	West Virginia Higher Education Policy Commission, Higher Education Facilities, Refunding Revenue, Series A, 5.000%, 4/1/21		2,134,983
	250,000	West Virginia Higher Education Policy Commission, Higher Educational Facilities, Refunding Revenue, Series B, Callable 4/1/14 @ 100, (NATL-RE, FGIC), 5.000%, 4/1/16		260,660
	640,000	West Virginia Hospital Finance Authority, Charleston Area Medical Center, Inc., Health, Hospital , Nursing Home Revenue, Series A, Callable 7/16/12 @ 100, OID, 6.500%, 9/1/16		729,414
	845,000	West Virginia Hospital Finance Authority, Health System Obligation, Health, Hospital, Nursing Home Improvements, Revenue, Callable 1/1/15 @ 100, OID, 5.000%, 1/1/24		902,527

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		West Virginia — (continued)
	$1,575,000	West Virginia Hospital Finance Authority, United Health System Obligation, Refunding Revenue, Series E, Callable 12/1/18 @ 100, OID, 5.375%, 6/1/28	$	1,745,383
	1,655,000	West Virginia Hospital Finance Authority, United Hospital Center, Inc. Project, Revenue, Series A, Callable 6/1/16 @100, OID, (AMBAC), 4.750%, 6/1/31		1,720,621
	1,755,000	West Virginia Housing Development Fund, New Issue Bond Program, Refunding Revenue, Series A, 2.750%, 11/1/20		1,810,949
	1,240,000	West Virginia Housing Development Fund, New Issue Bond Program, Refunding Revenue, Series A, Callable 5/1/21 @100, 3.050%, 11/1/22		1,287,269
	550,000	West Virginia School Building Authority Excess, School Improvements Revenue, 5.000%, 7/1/16		626,527
	2,325,000	West Virginia School Building Authority, Capital Improvements, Refunding Revenue, Series A, (NATL-RE, FGIC), 5.000%, 7/1/16		2,650,942
	1,855,000	West Virginia School Building Authority, Capital Improvements, Refunding Revenue, Series A, Callable 7/1/17 @ 100, (NATL-RE, FGIC), 5.000%, 7/1/18		2,144,232
	1,640,000	West Virginia School Building Authority, Capital Improvements, Refunding Revenue, Series A, Callable 7/1/17 @ 100, (NATL-RE, FGIC), 5.000%, 7/1/19		1,900,891
	2,000,000	West Virginia School Building Authority, Capital Improvements, Refunding Revenue, Series A, Callable 7/1/17 @ 100, (NATL-RE, FGIC), 5.000%, 7/1/20		2,333,580
	1,150,000	West Virginia School Building Authority, Capital Improvements, Revenue, (NATL-RE), 5.250%, 7/1/14		1,218,356
	1,300,000	West Virginia School Building Authority, School Improvements Revenue, 5.000%, 7/1/18		1,553,916
	1,000,000	West Virginia School Building Authority, School Improvements Revenue, Callable 7/1/18 @ 100, OID, 5.000%, 7/1/27		1,147,660
	1,840,000	West Virginia School Building Authority, School Improvements Revenue, Callable 7/1/18 @100, 5.250%, 7/1/21		2,196,942
	1,890,000	West Virginia State Building Commission, Regional Jail Refunding Revenue, Series A, (AMBAC), 5.375%, 7/1/21		2,134,188
	1,020,000	West Virginia State Parkways Economic Development & Tourism Authority, Refunding Revenue (NATL-RE, FGIC G.O., of Authority), 5.250%, 5/15/17		1,194,614
	2,000,000	West Virginia State Parkways Economic Development & Tourism Authority, Refunding Revenue (NATL-RE, FGIC, G.O., of Authority), 5.250%, 5/15/19		2,438,340
	2,220,000	West Virginia University, University Project Refunding Revenue, Series A, Callable 10/1/22 @ 100, 5.000%, 10/1/23		2,710,198

Continued

49

Sterling Capital West Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

March 31, 2013 (Unaudited)

Principal Amount		Fair Value
MUNICIPAL BONDS — (continued)
	West Virginia — (continued)
$   285,000	West Virginia University, University Projects, Refunding Revenue, Series B, Callable 10/1/14 @ 100 (NATL-RE, FGIC), 5.000%, 10/1/21	$	305,144
1,500,000	West Virginia University, University Projects, University & College Improvement Revenue, Series B, 5.000%, 10/1/20		1,837,110
1,035,000	West Virginia University, University Projects, University & College Improvements Revenue, Series A, (NATL-RE), 5.250%, 4/1/28		1,327,812
500,000	West Virginia University, University Projects, University & College Improvements Revenue, Series B, 5.000%, 10/1/19		606,985
3,575,000	West Virginia University, University Projects, University & College Improvements Revenue, Series B, Callable 10/1/21 @ 100, 5.000%, 10/1/36		4,096,843
610,000	West Virginia Water Development Authority, Loan Program II, Refunding Revenue, Series AII, 3.000%, 11/1/20		655,256
530,000	West Virginia Water Development Authority, Loan Program II, Refunding Revenue, Series AII, 3.000%, 11/1/21		564,434
1,110,000	West Virginia Water Development Authority, Loan Program II, Refunding Revenue, Series B, Callable 11/1/13 @ 101, (AMBAC), 5.250%, 11/1/23		1,152,135
1,015,000	West Virginia Water Development Authority, Loan Program II, Refunding Revenue, Series B1, 4.000%, 11/1/22		1,153,385
620,000	West Virginia Water Development Authority, Loan Program II, Refunding Revenue, Series BII, 3.000%, 11/1/20		665,998
2,090,000	West Virginia, State Road, Refunding G.O., (NATL-RE, FGIC), 5.000%, 6/1/15		2,296,053
	Total Municipal Bonds (Cost $112,399,990)		118,542,101

Shares		Fair Value
INVESTMENT COMPANY (2.3%)
2,773,566	Federated Tax-Free Obligations Fund, Institutional Class	$	2,773,566
	Total Investment Company (Cost $2,773,566)		2,773,566
Total Investments — 99.2% (Cost $115,173,556)			121,315,667
Net Other Assets (Liabilities) — 0.8%			1,012,993
NET ASSETS — 100.0%		$	122,328,660

(a) 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 in effect as of March 31, 2013. The maturity date reflected is the final maturity date.

AGM — Assured Guaranty Municipal Corp.

AMBAC — American Municipal Bond Assurance Corp.

FGIC — Financial Guaranty Insurance Corp.

G.O. — General Obligation

NATL — National

OID — Original Issue Discount

RE — Reinsurance

See accompanying notes to the financial statements.

50

Sterling Capital Strategic Allocation Conservative Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Shares		Fair Value
AFFILIATED INVESTMENT COMPANIES (96.4%)
237,292	Sterling Capital Equity Income Fund, Institutional Class	$	4,166,842
198,735	Sterling Capital Special Opportunities Fund, Institutional Class		3,982,646
961,303	Sterling Capital Total Return Bond Fund, Institutional Class		10,526,270
	Total Affiliated Investment Companies (Cost $17,628,275)		18,675,758
NON-AFFILIATED INVESTMENT COMPANY (3.5%)
671,974	Federated Treasury Obligations Fund, Institutional Shares		671,974
	Total Non-Affiliated Investment Company (Cost $671,974)		671,974
Total Investments — 99.9% (Cost $18,300,249)			19,347,732
Net Other Assets (Liabilities) — 0.1%			19,742
NET ASSETS — 100.0%		$	19,367,474

See accompanying notes to the financial statements.

51

Sterling Capital Strategic Allocation Balanced Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Shares		Fair Value
AFFILIATED INVESTMENT COMPANIES (98.2%)
634,789	Sterling Capital Equity Income Fund, Institutional Class	$	11,146,887
531,832	Sterling Capital Special Opportunities Fund, Institutional Class		10,657,916
1,072,794	Sterling Capital Total Return Bond Fund, Institutional Class		11,747,097
	Total Affiliated Investment Companies (Cost $31,845,350)		33,551,900
NON-AFFILIATED INVESTMENT COMPANY (1.8%)
608,280	Federated Treasury Obligations Fund, Institutional Shares		608,280
	Total Non-Affiliated Investment Company (Cost $608,280)		608,280
Total Investments — 100.0% (Cost $32,453,630)			34,160,180
Net Other Assets (Liabilities) — (0.0%)			(10,158)
NET ASSETS — 100.0%		$	34,150,022

See accompanying notes to the financial statements.

52

Sterling Capital Strategic Allocation Growth Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Shares		Fair Value
AFFILIATED INVESTMENT COMPANIES (96.8%)
573,381	Sterling Capital Equity Income Fund, Institutional Class	$	10,068,573
477,777	Sterling Capital Special Opportunities Fund, Institutional Class		9,574,649
426,213	Sterling Capital Total Return Bond Fund, Institutional Class		4,667,035
	Total Affiliated Investment Companies (Cost $23,151,209)		24,310,257
NON-AFFILIATED INVESTMENT COMPANY (2.9%)
722,351	Federated Treasury Obligations Fund, Institutional Shares		722,351
	Total Non-Affiliated Investment Company (Cost $722,351)		722,351
Total Investments — 99.7% (Cost $23,873,560)			25,032,608
Net Other Assets (Liabilities) — 0.3%			65,555
NET ASSETS — 100.0%		$	25,098,163

See accompanying notes to the financial statements.

53

Sterling Capital Strategic Allocation Equity Fund

Schedule of Portfolio Investments

March 31, 2013 (Unaudited)

Shares		Fair Value
AFFILIATED INVESTMENT COMPANIES (51.8%)
22,115	Sterling Capital Equity Income Fund, Institutional Class	$	388,346
37,457	Sterling Capital Mid Value Fund, Institutional Class		624,036
115,201	Sterling Capital Select Equity Fund, Institutional Class		1,546,000
10,863	Sterling Capital Small Value Fund, Institutional Class		150,131
47,317	Sterling Capital Special Opportunities Fund, Institutional Class		948,225
	Total Affiliated Investment Companies (Cost $2,663,546)		3,656,738
NON-AFFILIATED INVESTMENT COMPANIES (11.9%)
27,011	Credit Suisse Commodity Return Strategy Fund(a)		213,658
252,139	Federated Treasury Obligations Fund, Institutional Shares		252,139
15,933	Harding, Loevner International Equity Portfolio		259,233
2,979	Lazard Emerging Markets Equity Portfolio		57,558
1,689	Oppenheimer Developing Markets Fund		59,009
	Total Non-Affiliated Investment Companies (Cost $789,401)		841,597
EXCHANGE TRADED FUNDS (36.8%)
3,090	iShares Dow Jones US Real Estate Index Fund		214,693
12,113	iShares MSCI EAFE Index Fund		714,425
5,458	iShares MSCI EAFE Small Cap Index Fund		239,934
4,653	iShares MSCI EAFE Value Index Fund		231,431
13,661	iShares MSCI Emerging Markets Index Fund		584,418
1,821	iShares Russell 2000 Index Fund		171,647
6,259	iShares Russell Midcap Growth Index Fund		437,316
	Total Exchange Traded Funds (Cost $2,107,158)		2,593,864
Total Investments — 100.5% (Cost $5,560,105)			7,092,199
Net Other Assets (Liabilities) — (0.5)%			(33,532)
NET ASSETS — 100.0%		$	7,058,667

(a) Represents non-income producing security.

See accompanying notes to the financial statements.

54

Sterling Capital Funds

Statements of Assets and Liabilities

March 31, 2013 (Unaudited)

	Sterling Capital Select Equity Fund			Sterling Capital Mid Value Fund
Assets:
Investments at fair value (a)	$	221,081,576		$	425,072,380
Interest and dividends receivable		270,076			965,412
Receivable for investments sold		1,493,381			823,974
Receivable for capital shares issued		503,823			1,425,421
Deferred offering costs		—			—
Prepaid expenses		21,682			36,691
Total Assets		223,370,538			428,323,878
Liabilities:
Call options written
(premiums received $ — , $ — , $ — , $339,824, $159,873, $ — and $ — , respectively)		—			—
Distributions payable		—			—
Payable for investments purchased		—			64,950
Payable for capital shares redeemed		126,072			270,439
Accrued expenses and other payables:
Investment advisory fees		113,724			246,202
Administration fees		18,938			35,174
Compliance service fees		261			425
Distribution (12b-1) fees		7,360			7,461
Trustee fees		414			889
Transfer agent fees		21,350			41,217
Other		26,812			46,021
Total Liabilities		314,931			712,778
Net Assets	$	223,055,607		$	427,611,100
Net Assets Consist of:
Capital	$	285,944,101		$	343,247,699
Accumulated undistributed (distributions in excess of) net investment income		38,295			872,732
Accumulated realized gain (loss)		(111,632,655	)		(13,059,976	)
Net unrealized appreciation (depreciation)		48,705,866			96,550,645
Net Assets	$	223,055,607		$	427,611,100
Net Assets
Class A Shares	$	28,308,128		$	24,959,607
Class B Shares		1,444,010			2,073,295
Class C Shares		177,350			671,504
Institutional Shares		193,126,119			399,906,543
Class R Shares		—			151
Total	$	223,055,607		$	427,611,100
Shares of Beneficial Interest Outstanding (Unlimited number of shares authorized, no par value)
Class A Shares		2,120,324			1,507,524
Class B Shares		110,072			132,259
Class C Shares		13,613			42,964
Institutional Shares		14,389,733			24,001,493
Class R Shares		—			9
Total		16,633,742			25,684,249
Net Asset Value
Class A Shares - redemption price per share	$	13.35		$	16.56
Class B Shares - offering price per share*	$	13.12		$	15.68
Class C Shares - offering price per share*	$	13.03		$	15.63
Institutional Shares	$	13.42		$	16.66
Class R Shares	$	—		$	16.42	**
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	$	14.16		$	17.57
(a) Investments at cost	$	172,375,710		$	328,521,735

* Redemption price per share varies by length of time shares are held.

** The Sterling Capital Mid Value Fund and Sterling Capital Small Value Fund net asset value for Class R Shares is calculated using unrounded net assets of $151.20 and $144.73 divided by the unrounded shares of 9.207 and 10.520, respectively.

See accompanying notes to the financial statements.

55

Sterling Capital Small Value Fund			Sterling Capital Special Opportunities Fund			Sterling Capital Equity Income Fund			Sterling Capital Ultra Short Bond Fund			Sterling Capital Short-Term Bond Fund
$	92,762,430		$	699,154,830		$	1,514,586,114		$	41,824,418		$	71,209,640
	156,312			680,538			3,207,896			434,036			544,084
	481,234			622,630			155,139			—			49,964
	435,263			1,278,259			7,680,623			152,618			1,009,360
	—			—			—			4,887			—
	22,266			39,175			77,147			1,662			5,578
	93,857,505			701,775,432			1,525,706,919			42,417,621			72,818,626
	—			48,849			665,535			—			—
	—			—			2,182			6,157			127,432
	367,772			3,026,839			5,953,579			408,246			3,109,226
	7,501			460,384			3,024,557			9,780			47,320
	58,163			433,936			856,839			6,310			14,355
	7,756			57,847			122,328			3,169			5,755
	95			834			1,223			20			50
	2,103			120,012			302,036			1,011			2,923
	190			1,463			2,507			—			71
	8,560			85,887			95,604			2,315			5,341
	10,446			80,615			142,803			3,632			8,779
	462,586			4,316,666			11,169,193			440,640			3,321,252
$	93,394,919		$	697,458,766		$	1,514,537,726		$	41,976,981		$	69,497,374
$	87,708,533		$	513,771,164		$	1,211,449,241		$	41,987,445		$	78,266,146
	8,603			601,103			1,430,561			(3,608	)		(459,128	)
	(7,327,101	)		33,219,757			27,550,772			2,372			(8,743,547	)
	13,004,884			149,866,742			274,107,152			(9,228	)		433,903
$	93,394,919		$	697,458,766		$	1,514,537,726		$	41,976,981		$	69,497,374
$	7,616,813		$	177,564,999		$	459,837,903		$	4,910,912		$	12,935,282
	447,932			10,550,205			11,949,503			—			—
	180,821			87,040,904			238,897,284			—			242,724
	85,149,208			421,891,252			801,640,788			37,066,069			56,319,368
	145			411,406			2,212,248			—			—
$	93,394,919		$	697,458,766		$	1,514,537,726		$	41,976,981		$	69,497,374
	554,230			9,086,687			26,246,148			491,333			1,377,327
	33,280			588,734			683,882			—			—
	13,442			4,853,828			13,730,368			—			25,853
	6,159,678			21,051,289			45,660,559			3,707,722			5,996,954
	11			20,703			126,931			—			—
	6,760,641			35,601,241			86,447,888			4,199,055			7,400,134
$	13.74		$	19.54		$	17.52		$	10.00		$	9.39
$	13.46		$	17.92		$	17.47		$	—		$	—
$	13.45		$	17.93		$	17.40		$	—		$	9.39
$	13.82		$	20.04		$	17.56		$	10.00		$	9.39
$	13.76	**	$	19.87		$	17.43		$	—		$	—
	5.75	%		5.75	%		5.75	%		0.50	%		2.00	%
$	14.58		$	20.73		$	18.59		$	10.05		$	9.58
$	79,757,546		$	549,579,063		$	1,239,973,300		$	41,833,646		$	70,775,737

56

Sterling Capital Funds

Statements of Assets and Liabilities

March 31, 2013 (Unaudited)

	Sterling Capital Intermediate U.S. Government Fund			Sterling Capital Total Return Bond Fund
Assets:
Investments at fair value (a)	$	77,647,436		$	565,714,925
Cash		—			—
Interest and dividends receivable		369,468			4,129,773
Receivable for investments sold		876,988			3,784,898
Receivable for capital shares issued		87,895			1,832,394
Prepaid expenses		6,836			23,873
Total Assets		78,988,623			575,485,863
Liabilities:
Cash overdraft		—			52,089
Distributions payable		119,024			810,574
Payable for investments purchased		—			31,892,583
Payable for capital shares redeemed		122,399			456,730
Accrued expenses and other payables:
Investment advisory fees		29,038			155,765
Administration fees		6,769			45,809
Compliance service fees		184			707
Distribution (12b-1) fees		4,169			18,778
Trustee fees		199			794
Other		25,963			123,698
Total Liabilities		307,745			33,557,527
Net Assets	$	78,680,878		$	541,928,336
Net Assets Consist of:
Capital	$	82,169,468		$	525,431,639
Accumulated undistributed (distributions in excess of) net investment income		624,891			(1,831,615	)
Accumulated realized gain (loss)		(7,993,716	)		4,375,999
Net unrealized appreciation (depreciation)		3,880,235			13,952,313
Net Assets	$	78,680,878		$	541,928,336
Net Assets
Class A Shares	$	12,225,728		$	50,211,389
Class B Shares		768,558			2,635,398
Class C Shares		1,047,869			6,926,001
Institutional Shares		64,638,723			482,150,025
Class R Shares		—			5,523
Total	$	78,680,878		$	541,928,336
Shares of Beneficial Interest Outstanding (Unlimited number of shares authorized, no par value)
Class A Shares		1,146,561			4,589,433
Class B Shares		72,318			240,626
Class C Shares		98,411			632,073
Institutional Shares		6,054,819			44,044,079
Class R Shares		—			507
Total		7,372,109			49,506,718
Net Asset Value
Class A Shares - redemption price per share	$	10.66		$	10.94
Class B Shares - offering price per share*	$	10.63		$	10.95
Class C Shares - offering price per share*	$	10.65		$	10.96
Institutional Shares	$	10.68		$	10.95
Class R Shares	$	—		$	10.90	***
Maximum Sales Charge - Class A Shares		2.00	%		5.75	%
Maximum Offering Price (100%/(100% - Maximum Sales Charge)) of net asset value adjusted to the nearest cent per share - Class A Shares	$	10.88		$	11.61
(a) Investments at cost	$	73,767,201		$	551,762,612

* Redemption price per share varies by length of time shares are held.

** The Sterling Capital Corporate Fund and Sterling Capital Securitized Opportunities Fund net asset value for Class C Shares is calculated using unrounded net assets of $2,711.61 and $2,702.08 divided by the unrounded shares of 256.734 and 266.169, respectively.

*** The Sterling Capital Total Return Bond Fund net asset value for Class R Shares is calculated using unrounded net assets of $ 5,523.28 divided by the unrounded shares of 506.628.

See accompanying notes to the financial statements.

57

Sterling Capital Corporate Fund			Sterling Capital Securitized Opportunities Fund			Sterling Capital Kentucky Intermediate Tax-Free Fund			Sterling Capital Maryland Intermediate Tax-Free Fund			Sterling Capital North Carolina Intermediate Tax-Free Fund
$	103,939,570		$	75,034,490		$	26,797,310		$	48,419,288		$	261,033,955
	—			410			—			—			—
	1,247,670			228,246			289,714			449,218			3,293,774
	1,974,542			2,023,513			—			—			—
	244,548			87,839			32,487			65,603			322,993
	10,863			10,782			2,060			2,382			7,145
	107,417,193			77,385,280			27,121,571			48,936,491			264,657,867
	—			—			—			—			—
	65,314			26,069			39,867			48,168			349,821
	2,329,423			10,662,837			—			—			7,035,921
	452,599			459,971			98,733			21,217			286,003
	31,546			21,316			10,391			18,809			97,921
	9,011			6,103			2,313			4,164			21,768
	91			58			32			53			306
	5			5			2,668			3,564			18,861
	161			42			32			48			242
	17,604			10,951			7,076			11,303			56,268
	2,905,754			11,187,352			161,112			107,326			7,867,111
$	104,511,439		$	66,197,928		$	26,960,459		$	48,829,165		$	256,790,756
$	100,569,757		$	66,024,226		$	24,979,115		$	46,234,801		$	240,567,885
	(17,151	)		(456,416	)		3,293			4,599			78,543
	1,229,994			17,294			84,295			408,991			1,008,450
	2,728,839			612,824			1,893,756			2,180,774			15,135,878
$	104,511,439		$	66,197,928		$	26,960,459		$	48,829,165		$	256,790,756
$	12,770		$	14,729		$	11,501,389		$	9,627,820		$	66,214,381
	—			—			—			—			—
	2,712			2,702			277,843			1,748,095			5,735,336
	104,495,957			66,180,497			15,181,227			37,453,250			184,841,039
	—			—			—			—			—
$	104,511,439		$	66,197,928		$	26,960,459		$	48,829,165		$	256,790,756
	1,209			1,451			1,038,196			848,854			5,930,672
	—			—			—			—			—
	257			266			25,079			154,083			514,096
	9,891,362			6,517,451			1,372,562			3,296,956			16,556,805
	—			—			—			—			—
	9,892,828			6,519,168			2,435,837			4,299,893			23,001,573
$	10.56		$	10.15		$	11.08		$	11.34		$	11.16
$	—		$	—		$	—		$	—		$	—
$	10.56	**	$	10.15	**	$	11.08		$	11.35		$	11.16
$	10.56		$	10.15		$	11.06		$	11.36		$	11.16
$	—		$	—		$	—		$	—		$	—
	2.00	%		2.00	%		2.00	%		2.00	%		2.00	%
$	10.78		$	10.36		$	11.32		$	11.57		$	11.39
$	101,210,731		$	74,421,666		$	24,903,554		$	46,238,514		$	245,898,077

58

Sterling Capital Funds

Statements of Assets and Liabilities

March 31, 2013 (Unaudited)

	Sterling Capital South Carolina Intermediate Tax-Free Fund			Sterling Capital Virginia Intermediate Tax-Free Fund
Assets:
Investments at fair value - unaffiliated (a)	$	82,787,042		$	150,387,751
Investments at fair value - affiliated (b)		—			—
Interest and dividends receivable - unaffiliated		903,725			1,429,614
Dividends receivable - affiliated		—			—
Receivable for investments sold		—			2,045,198
Receivable for capital shares issued		488,174			16,504
Prepaid expenses		4,197			6,861
Total Assets		84,183,138			153,885,928
Liabilities:
Distributions payable		92,901			179,110
Payable for investments purchased		—			3,411,250
Payable for capital shares redeemed		85,665			33,081
Accrued expenses and other payables:
Investment advisory fees		31,768			57,445
Administration fees		7,065			12,770
Compliance service fees		73			171
Distribution (12b-1) fees		5,994			13,833
Trustee fees		71			151
Printing fees		4,395			8,051
Transfer agent fees		6,698			13,388
Other		7,007			11,463
Total Liabilities		241,637			3,740,713
Net Assets	$	83,941,501		$	150,145,215
Net Assets Consist of:
Capital	$	79,822,943		$	140,849,751
Accumulated undistributed (distributions in excess of) net investment income		6,527			51,004
Accumulated realized gain (loss)		145,782			1,038,391
Net unrealized appreciation (depreciation)		3,966,249			8,206,069
Net Assets	$	83,941,501		$	150,145,215
Net Assets
Class A Shares	$	25,264,315		$	51,966,754
Class B Shares		—			—
Class C Shares		996,345			3,344,926
Institutional Shares		57,680,841			94,833,535
Total	$	83,941,501		$	150,145,215
Shares of Beneficial Interest Outstanding (Unlimited number of shares authorized, no par value)
Class A Shares		2,249,248			4,244,704
Class B Shares		—			—
Class C Shares		88,722			273,299
Institutional Shares		5,169,675			7,748,333
Total		7,507,645			12,266,336
Net Asset Value
Class A Shares - redemption price per share	$	11.23		$	12.24
Class B Shares - offering price per share*	$	—		$	—
Class C Shares - offering price per share*	$	11.23		$	12.24
Institutional Shares	$	11.16		$	12.24
Maximum Sales Charge - Class A Shares		2.00	%		2.00	%
Maximum Offering Price (100%/(100% - Maximum Sales Charge)) of net asset value adjusted to the nearest cent per share - Class A Shares	$	11.46		$	12.49
Investments at cost:
(a) Investments at cost - unaffiliated	$	78,820,793		$	142,181,682
(b) Investments at cost - affiliated	$	—		$	—

* Redemption price per share varies by length of time shares are held.

** The Sterling Capital Strategic Allocation Equity Fund net asset value for Class I Shares is calculated using unrounded net assets of $5,477.36 divided by the unrounded shares of 615.729.

See accompanying notes to the financial statements.

59

Sterling Capital West Virginia Intermediate Tax Free Fund			Sterling Capital Strategic Allocation Conservative Fund			Sterling Capital Strategic Allocation Balanced Fund			Sterling Capital Strategic Allocation Growth Fund			Sterling Capital Strategic Allocation Equity Fund
$	121,315,667		$	671,974		$	608,280		$	722,351		$	3,435,461
	—			18,675,758			33,551,900			24,310,257			3,656,738
	1,635,616			4			5			4			3,578
	—			36,275			40,180			15,827			—
	—			—			—			—			—
	143,606			6,512			569			66,177			—
	9,991			4,436			5,171			5,661			2,688
	123,104,880			19,394,959			34,206,105			25,120,277			7,098,465
	163,909			7,904			1,192			412			—
	—			—			—			—			—
	516,335			10,921			36,318			8,064			33,170
	47,142			—			—			—			1,592
	10,486			—			—			—			—
	149			23			50			33			10
	9,619			4,290			10,341			7,638			2,423
	173			—			210			153			79
	7,007			1,328			2,273			1,719			650
	11,489			2,065			3,636			2,707			817
	9,911			954			2,063			1,388			1,057
	776,220			27,485			56,083			22,114			39,798
$	122,328,660		$	19,367,474		$	34,150,022		$	25,098,163		$	7,058,667
$	115,453,910		$	25,481,553		$	42,114,960		$	35,472,290		$	16,256,663
	(13,980	)		(26,044	)		(25,744	)		(11,848	)		(13,195	)
	746,619			(7,135,518	)		(9,645,744	)		(11,521,327	)		(10,716,895	)
	6,142,111			1,047,483			1,706,550			1,159,048			1,532,094
$	122,328,660		$	19,367,474		$	34,150,022		$	25,098,163		$	7,058,667
$	41,771,408		$	14,511,356		$	29,092,407		$	20,351,329		$	5,871,907
	—			1,237,762			4,335,917			3,581,756			1,152,580
	897,861			262,439			434,385			348,744			28,703
	79,659,391			3,355,917			287,313			816,334			5,477
$	122,328,660		$	19,367,474		$	34,150,022		$	25,098,163		$	7,058,667
	4,051,297			1,463,739			3,050,389			2,263,463			667,377
	—			124,550			464,198			408,537			138,110
	87,075			26,604			46,338			39,887			3,451
	7,717,513			335,002			29,931			90,605			616
	11,855,885			1,949,895			3,590,856			2,802,492			809,554
$	10.31		$	9.91		$	9.54		$	8.99		$	8.80
$	—		$	9.94		$	9.34		$	8.77		$	8.35
$	10.31		$	9.86		$	9.37		$	8.74		$	8.32
$	10.32		$	10.02		$	9.60		$	9.01		$	8.90	**
	2.00	%		5.75	%		5.75	%		5.75	%		5.75	%
$	10.52		$	10.51		$	10.12		$	9.54		$	9.34
$	115,173,556		$	671,974		$	608,280		$	722,351		$	2,896,559
$	—		$	17,628,275		$	31,845,350		$	23,151,209		$	2,663,546

60

Sterling Capital Funds

Statements of Operations

For the Six Months Ended March 31, 2013 (Unaudited)

	Sterling Capital Select Equity Fund			Sterling Capital Mid Value Fund
Investment Income:
Interest income	$	—		$	—
Dividend income		2,417,502			3,811,324
Foreign tax withholding		(17,259	)		(15,611	)
Total investment income		2,400,243			3,795,713
Expenses:
Investment advisory fees (See Note 5)		776,925			1,320,485
Administration fees (See Note 5)		111,179			188,939
Distribution fees - Class A Shares		34,700			27,823
Distribution fees - Class B Shares		7,720			9,804
Distribution fees - Class C Shares		841			2,842
Distribution fees - Class R Shares		—			—
Compliance service fees (See Note 5)		1,356			2,246
Trustee fees		10,823			18,149
Accounting out-of-pocket fees		4,928			6,303
Audit fees		12,816			21,567
Custodian fees		5,534			9,157
Fund accounting fees (See Note 5)		8,324			14,148
Legal fees		12,850			21,898
Offering costs		—			—
Printing fees		14,082			23,632
Transfer agent fees (See Note 5)		48,911			94,382
Other		24,837			35,188
Total expenses before waivers		1,075,826			1,796,563
Less expenses waived by the Investment Advisor (See Note 5)		(110,989	)		—
Net expenses		964,837			1,796,563
Net investment income		1,435,406			1,999,150
Realized and Unrealized Gain (Loss):
Net realized gain (loss) from:
Investments		6,559,638			11,018,278
Litigation proceeds		326,489			38,133
Written options		—			—
Change in unrealized appreciation/depreciation on:
Investments		2,641,311			46,313,458
Written options		—			—
Total realized and unrealized gain (loss)		9,527,438			57,369,869
Change in net assets from operations	$	10,962,844		$	59,369,019

* Commencement of operations is November 30, 2012.

See accompanying notes to the financial statements.

61

Sterling Capital Small Value Fund			Sterling Capital Special Opportunities Fund			Sterling Capital Equity Income Fund			Sterling Capital Ultra Short Bond Fund*			Sterling Capital Short-Term Bond Fund
$	—		$	—		$	—		$	105,265		$	812,931
	645,663			5,692,903			20,462,358			546			45,808
	(6,331	)		(108,158	)		(378,593	)		—			—
	639,332			5,584,745			20,083,765			105,811			858,739
	326,695			2,563,356			4,543,323			19,472			92,051
	41,798			327,640			650,272			9,842			30,733
	8,593			215,850			505,206			2,634			13,745
	2,145			58,310			60,361			—			—
	650			415,241			1,047,649			—			1,182
	—			942			3,630			—			—
	497			4,037			7,625			114			344
	4,007			32,222			61,031			875			2,780
	3,269			9,667			16,658			3,103			11,072
	4,704			37,731			73,905			1,263			3,326
	2,058			16,287			31,052			438			1,452
	3,131			24,541			48,678			730			2,301
	4,824			38,007			71,778			908			3,328
	—			—			—			1,284			—
	5,529			41,587			78,950			1,375			3,852
	21,934			198,978			439,280			3,876			12,617
	21,869			48,326			76,283			2,026			5,745
	451,703			4,032,722			7,715,681			47,940			184,528
	—			—			—			—			(5,349	)
	451,703			4,032,722			7,715,681			47,940			179,179
	187,629			1,552,023			12,368,084			57,871			679,560
	586,195			37,480,592			23,004,833			2,372			210,115
	39,236			189			2,475			—			—
	—			(377,586	)		454,718			—			—
	11,825,686			29,366,577			109,722,004			(9,228	)		(377,653	)
	—			877,506			260,559			—			—
	12,451,117			67,347,278			133,444,589			(6,856	)		(167,538	)
$	12,638,746		$	68,899,301		$	145,812,673		$	51,015		$	512,022

62

Sterling Capital Funds

Statements of Operations

For the Six Months Ended March 31, 2013 (Unaudited)

	Sterling Capital Intermediate U.S. Government Fund			Sterling Capital Total Return Bond Fund
Investment Income:
Interest income	$	1,086,857		$	9,266,463
Dividend income		82			341,211
Total investment income		1,086,939			9,607,674
Expenses:
Investment advisory fees (See Note 5)		193,357			1,039,988
Administration fees (See Note 5)		41,699			281,424
Distribution fees - Class A Shares		15,664			63,147
Distribution fees - Class B Shares		4,235			14,433
Distribution fees - Class C Shares		5,365			34,033
Distribution fees - Class R Shares		—			15
Compliance service fees (See Note 5)		559			3,481
Trustee fees		4,348			27,725
Accounting out-of-pocket fees		4,941			30,340
Audit fees		4,726			32,911
Custodian fees		2,195			14,366
Fund accounting fees (See Note 5)		3,122			21,081
Interest expense (See Note 7)		—			—
Legal fees		5,111			32,562
Printing fees		5,765			35,735
Transfer agent fees (See Note 5)		21,188			124,061
Other		9,348			27,724
Total expenses before waivers		321,623			1,783,026
Less expenses waived by the Investment Advisor (See Note 5)		—			(26,579	)
Net expenses		321,623			1,756,447
Net investment income		765,316			7,851,227
Realized and Unrealized Gain (Loss):
Net realized gain from investments		766,452			5,569,712
Change in unrealized appreciation/depreciation on investments		(1,747,237	)		(9,511,292	)
Total realized and unrealized loss		(980,785	)		(3,941,580	)
Change in net assets from operations	$	(215,469	)	$	3,909,647

See accompanying notes to the financial statements.

63

Sterling Capital Corporate Fund			Sterling Capital Securitized Opportunities Fund			Sterling Capital Kentucky Intermediate Tax-Free Fund			Sterling Capital Maryland Intermediate Tax-Free Fund			Sterling Capital North Carolina Intermediate Tax-Free Fund
$	1,850,196		$	1,174,754		$	421,883		$	651,315		$	4,057,274
	147,350			129			72			432			316
	1,997,546			1,174,883			421,955			651,747			4,057,590
	190,606			165,019			60,349			105,462			583,772
	33,623			27,627			13,437			23,517			129,931
	4			4			14,290			11,656			81,757
	—			—			—			—			—
	4			4			1,255			8,459			25,253
	—			—			—			—			—
	580			523			163			279			1,577
	4,613			4,247			1,279			2,195			12,438
	11,243			13,869			5,589			7,034			14,713
	5,665			5,234			1,510			2,605			14,659
	2,396			2,231			693			1,167			6,472
	3,736			3,210			1,006			1,758			9,730
	—			19			—			—			—
	5,195			4,720			1,428			2,451			13,867
	6,307			5,976			1,841			3,015			15,936
	17,453			17,045			5,809			10,591			57,815
	4,406			4,169			2,239			5,397			9,865
	285,831			253,897			110,888			185,586			977,785
	(81,220	)		(76,067	)		—			—			—
	204,611			177,830			110,888			185,586			977,785
	1,792,935			997,053			311,067			466,161			3,079,805
	1,356,538			197,558			88,324			402,149			988,204
	(1,558,514	)		(920,974	)		(167,199	)		(701,056	)		(3,486,045	)
	(201,976	)		(723,416	)		(78,875	)		(298,907	)		(2,497,841	)
$	1,590,959		$	273,637		$	232,192		$	167,254		$	581,964

64

Sterling Capital Funds

Statements of Operations

For the Six Months Ended March 31, 2013 (Unaudited)

	Sterling Capital South Carolina Intermediate Tax-Free Fund			Sterling Capital Virginia Intermediate Tax-Free Fund
Investment Income:
Interest income	$	1,142,436		$	2,175,455
Dividend income - unaffiliated		282			206
Dividend income - affiliated		—			—
Total investment income		1,142,718			2,175,661
Expenses:
Investment advisory fees (See Note 5)		178,772			335,054
Administration fees (See Note 5)		39,830			74,533
Distribution fees - Class A Shares		30,019			64,485
Distribution fees - Class B Shares		—			—
Distribution fees - Class C Shares		3,232			16,024
Compliance service fees (See Note 5)		460			898
Trustee fees		3,698			7,094
Audit fees		4,447			8,381
Custodian fees		1,940			3,699
Fund accounting fees (See Note 5)		2,980			5,584
Insurance		1,017			2,015
Legal fees		4,141			7,915
Printing fees		4,976			9,180
Registration fees		1,994			2,502
Transfer agent fees (See Note 5)		17,487			32,101
Other		10,889			14,139
Total expenses before waivers		305,882			583,604
Less expenses waived/reimbursed by the Investment Advisor (See Note 5)		—			—
Net expenses		305,882			583,604
Net investment income		836,836			1,592,057
Realized and Unrealized Gain (Loss):
Net realized gain from:
Investment transactions - unaffiliated		133,922			1,169,364
Investment transactions - affiliated		—			—
Distributions from unaffiliated funds		—			—
Distributions from affiliated funds		—			—
Change in unrealized appreciation/depreciation on investments		(482,870	)		(2,437,876	)
Total realized and unrealized gain (loss)		(348,948	)		(1,268,512	)
Change in net assets from operations	$	487,888		$	323,545

See accompanying notes to the financial statements.

65

Sterling Capital West Virginia Intermediate Tax-Free Fund			Sterling Capital Strategic Allocation Conservative Fund			Sterling Capital Strategic Allocation Balanced Fund			Sterling Capital Strategic Allocation Growth Fund			Sterling Capital Strategic Allocation Equity Fund
$	1,911,061		$	—		$	—		$	—		$	—
	290			49,211			126,070			99,316			33,979
	—			223,883			298,757			160,133			21,897
	1,911,351			273,094			424,827			259,449			55,876
	281,123			23,527			42,032			30,017			9,227
	62,537			—			—			—			—
	51,598			17,527			35,050			23,489			7,426
	—			6,420			23,986			20,261			6,947
	4,143			1,107			2,120			1,578			209
	767			117			210			148			46
	6,113			961			1,623			1,151			386
	7,228			1,107			1,963			1,399			1,478
	3,180			506			874			627			207
	4,685			706			1,261			901			277
	1,751			269			504			357			163
	6,806			1,041			1,864			1,326			796
	7,909			1,450			2,442			1,834			680
	4,655			3,777			5,211			4,564			6,715
	27,208			5,067			8,159			6,066			1,743
	12,245			2,861			3,256			2,993			3,001
	481,948			66,443			130,555			96,711			39,301
	—			(4,056	)		(7,219	)		(5,232	)		—
	481,948			62,387			123,336			91,479			39,301
	1,429,403			210,707			301,491			167,970			16,575
	696,381			1,167,936			2,994,087			2,607,851			130,271
	—			852,775			2,189,548			1,912,977			69,875
	—			11,268			16,746			8,766			1,904
	—			101,060			147,742			86,805			47,036
	(1,540,297	)		(1,638,519	)		(3,838,438	)		(3,159,472	)		342,863
	(843,916	)		494,520			1,509,685			1,456,927			591,949
$	585,487		$	705,227		$	1,811,176		$	1,624,897		$	608,524

66

    Sterling Capital Funds

    Statements of Changes in Net Assets

	Sterling Capital Select Equity Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
From Investment Activities:
Operations:
Net investment income	$	1,435,406		$	2,457,825
Net realized gain		6,886,127			3,798,125
Change in unrealized appreciation/depreciation		2,641,311			48,298,392
Change in net assets from operations		10,962,844			54,554,342
Distributions to Class A Shareholders From:
Net investment income		(162,648	)		(258,767	)
Net realized gains		—			—
Distributions to Class B Shareholders From:
Net investment income		(3,413	)		(3,948	)
Net realized gains		—			—
Distributions to Class C Shareholders From:
Net investment income		(427	)		(542	)
Net realized gains		—			—
Distributions to Institutional Class Shareholders From:
Net investment income		(1,357,888	)		(2,127,270	)
Net realized gains		—			—
Distributions to Class R Shareholders From:
Net investment income		—			—
Net realized gains		—			—
Change in net assets from shareholder distributions		(1,524,376	)		(2,390,527	)
Capital Transactions:
Change in net assets from capital transactions		(6,057,190	)		(16,021,699	)
Change in net assets		3,381,278			36,142,116
Net Assets:
Beginning of period		219,674,329			183,532,213
End of period	$	223,055,607		$	219,674,329
Accumulated undistributed net investment income	$	38,295		$	127,265

See accompanying notes to the financial statements.

67

Sterling Capital Mid Value Fund						Sterling Capital Small Value Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	1,999,150		$	3,535,707		$	187,629		$	356,521
	11,056,411			22,174,757			625,431			2,143,060
	46,313,458			57,049,107			11,825,686			12,911,771
	59,369,019			82,759,571			12,638,746			15,411,352
	(77,835	)		(165,158	)		(7,314	)		—
	—			—			(79,193	)		(547,335	)
	(3,710	)		(5,215	)		—			—
	—			—			(5,235	)		(45,967	)
	(1,159	)		(1,375	)		—			—
	—			—			(1,544	)		(8,215	)
	(1,450,300	)		(3,319,999	)		(171,712	)		—
	—			—			(872,669	)		(5,945,250	)
	(1	)		(1	)		—			—
	—			—			(1	)		(9	)
	(1,533,005	)		(3,491,748	)		(1,137,668	)		(6,546,776	)
	4,688,114			(34,231,132	)		2,923,142			(1,660,022	)
	62,524,128			45,036,691			14,424,220			7,204,554
	365,086,972			320,050,281			78,970,699			71,766,145
$	427,611,100		$	365,086,972		$	93,394,919		$	78,970,699
$	872,732		$	406,587		$	8,603		$	—

68

    Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Special Opportunities Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
From Investment Activities:
Operations:
Net investment income	$	1,552,023		$	212,150
Net realized gain		37,103,195			31,486,869
Change in unrealized appreciation/depreciation		30,244,083			108,303,489
Change in net assets from operations		68,899,301			140,002,508
Distributions to Class A Shareholders From:
Net investment income		(54,587	)		—
Net realized gains		(8,583,850	)		(3,787,895	)
Distributions to Class B Shareholders From:
Net investment income		—			—
Net realized gains		(643,747	)		(326,596	)
Distributions to Class C Shareholders From:
Net investment income		5			—
Net realized gains		(4,427,390	)		(1,523,626	)
Distributions to Institutional Class Shareholders From:
Net investment income		(1,115,681	)		—
Net realized gains		(18,269,580	)		(6,499,368	)
Distributions to Class R Shareholders From:
Net investment income		—			—
Net realized gains		(17,945	)		(5,704	)
Change in net assets from shareholder distributions		(33,112,775	)		(12,143,189	)
Capital Transactions:
Change in net assets from capital transactions		5,684,428			(88,356,869	)
Change in net assets		41,470,954			39,502,450
Net Assets:
Beginning of period		655,987,812			616,485,362
End of period	$	697,458,766		$	655,987,812
Accumulated undistributed (distributions in excess of) net investment income	$	601,103		$	219,343

* Commencement of operations.

See accompanying notes to the financial statements.

69

Sterling Capital Equity Income Fund						Sterling Capital Ultra Short Bond Fund			Sterling Capital Short-Term Bond Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Period November 30, 2012* to March 31, 2013 (Unaudited)			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	12,368,084		$	15,936,707		$	57,871		$	679,560		$	1,262,285
	23,462,026			43,658,501			2,372			210,115			229,158
	109,982,563			120,629,987			(9,228	)		(377,653	)		1,186,455
	145,812,673			180,225,195			51,015			512,022			2,677,898
	(3,716,033	)		(3,853,569	)		(4,524	)		(176,011	)		(269,952	)
	(3,938,641	)		—			—			—			—
	(60,162	)		(60,891	)		—			—			—
	(121,503	)		—			—			—			—
	(1,194,579	)		(862,533	)		—			(2,893	)		(1,852	)
	(2,047,025	)		—			—			—			—
	(7,087,443	)		(7,828,151	)		(56,955	)		(862,400	)		(1,754,266	)
	(6,452,928	)		—			—			—			—
	(12,240	)		(9,825	)		—			—			—
	(12,837	)		—			—			—			—
	(24,643,391	)		(12,614,969	)		(61,479	)		(1,041,304	)		(2,026,070	)
	177,897,145			323,453,318			41,987,445			13,610,642			(7,600,136	)
	299,066,427			491,063,544			41,976,981			13,081,360			(6,948,308	)
	1,215,471,299			724,407,755			—			56,416,014			63,364,322
$	1,514,537,726		$	1,215,471,299		$	41,976,981		$	69,497,374		$	56,416,014
$	1,430,561		$	1,132,934		$	(3,608	)	$	(459,128	)	$	(97,384	)

70

    Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Intermediate U.S. Government Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
From Investment Activities:
Operations:
Net investment income	$	765,316		$	3,033,372
Net realized gain		766,452			6,285,092
Change in unrealized appreciation/depreciation		(1,747,237	)		(4,256,203	)
Change in net assets from operations		(215,469	)		5,062,261
Distributions to Class A Shareholders From:
Net investment income		(186,110	)		(355,244	)
Net realized gains		—			—
Distributions to Class B Shareholders From:
Net investment income		(9,423	)		(23,573	)
Net realized gains		—			—
Distributions to Class C Shareholders From:
Net investment income		(11,884	)		(18,651	)
Net realized gains		—			—
Distributions to Institutional Class Shareholders From:
Net investment income		(1,111,206	)		(3,900,325	)
Net realized gains		—			—
Distributions to Class R Shareholders From:
Net investment income		—			—
Net realized gains		—			—
Change in net assets from shareholder distributions		(1,318,623	)		(4,297,793	)
Capital Transactions:
Change in net assets from capital transactions		(12,026,262	)		(79,955,641	)
Change in net assets		(13,560,354	)		(79,191,173	)
Net Assets:
Beginning of period		92,241,232			171,432,405
End of period	$	78,680,878		$	92,241,232
Accumulated undistributed (distributions in excess of) net investment income	$	624,891		$	1,178,198

See accompanying notes to the financial statements.

71

Sterling Capital Total Return Bond Fund						Sterling Capital Corporate Fund						Sterling Capital Securitized Opportunities Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	7,851,227		$	14,589,950		$	1,792,935		$	2,530,206		$	997,053		$	1,174,093
	5,569,712			8,294,401			1,356,538			896,976			197,558			268,767
	(9,511,292	)		13,355,995			(1,558,514	)		4,641,012			(920,974	)		1,233,633
	3,909,647			36,240,346			1,590,959			8,068,194			273,637			2,676,493
	(870,762	)		(1,498,746	)		(47	)		—			(49	)		—
	(385,353	)		(972,586	)		—			—			—			—
	(38,787	)		(97,020	)		—			—			—			—
	(22,718	)		(91,479	)		—			—			—			—
	(92,121	)		(133,490	)		(11	)		—			(11	)		—
	(55,269	)		(105,048	)		—			—			—			—
	(9,280,819	)		(17,141,811	)		(1,792,877	)		(2,533,734	)		(1,456,698	)		(1,625,700	)
	(3,851,849	)		(10,048,727	)		(1,020,381	)		(32,802	)		—			(26,599	)
	(86	)		(185	)		—			—			—			—
	(42	)		(137	)		—			—			—			—
	(14,597,806	)		(30,089,229	)		(2,813,316	)		(2,566,536	)		(1,456,758	)		(1,652,299	)
	(20,796,929	)		138,913,175			12,787,490			41,116,246			(21,141,728	)		53,593,679
	(31,485,088	)		145,064,292			11,565,133			46,617,904			(22,324,849	)		54,617,873
	573,413,424			428,349,132			92,946,306			46,328,402			88,522,777			33,904,904
$	541,928,336		$	573,413,424		$	104,511,439		$	92,946,306		$	66,197,928		$	88,522,777
$	(1,831,615	)	$	599,733		$	(17,151	)	$	(17,151	)	$	(456,416	)	$	3,289

72

    Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Kentucky Intermediate Tax-Free Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
From Investment Activities:
Operations:
Net investment income	$	311,067		$	619,706
Net realized gain		88,324			131,599
Change in unrealized appreciation/depreciation		(167,199	)		706,779
Change in net assets from operations		232,192			1,458,084
Distributions to Class A Shareholders From:
Net investment income		(124,568	)		(235,881	)
Net realized gains		(59,631	)		(21,478	)
Distributions to Class C Shareholders From:
Net investment income		(1,791	)		(1,190	)
Net realized gains		(1,451	)		—
Distributions to Institutional Class Shareholders From:
Net investment income		(183,871	)		(381,011	)
Net realized gains		(78,819	)		(32,802	)
Change in net assets from shareholder distributions		(450,131	)		(672,362	)
Capital Transactions:
Change in net assets from capital transactions		1,454,912			2,451,157
Change in net assets		1,236,973			3,236,879
Net Assets:
Beginning of period		25,723,486			22,486,607
End of period	$	26,960,459		$	25,723,486
Accumulated undistributed net investment income	$	3,293		$	2,456

See accompanying notes to the financial statements.

73

Sterling Capital Maryland Intermediate Tax-Free Fund						Sterling Capital North Carolina Intermediate Tax-Free Fund						Sterling Capital South Carolina Intermediate Tax-Free Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	466,161		$	888,216		$	3,079,805		$	6,059,160		$	836,836		$	1,500,568
	402,149			618,471			988,204			2,021,592			133,922			698,534
	(701,056	)		761,535			(3,486,045	)		6,501,111			(482,870	)		1,900,048
	167,254			2,268,222			581,964			14,581,863			487,888			4,099,150
	(85,051	)		(201,126	)		(719,964	)		(1,375,822	)		(232,262	)		(421,586	)
	(119,442	)		(62,182	)		(459,916	)		(333,256	)		(180,619	)		(108,257	)
	(8,957	)		(6,230	)		(36,420	)		(16,041	)		(3,749	)		(1,338	)
	(22,174	)		—			(38,065	)		—			(3,997	)		—
	(371,186	)		(678,515	)		(2,319,129	)		(4,657,350	)		(598,114	)		(1,071,805	)
	(453,539	)		(168,673	)		(1,369,438	)		(1,073,201	)		(404,480	)		(255,887	)
	(1,060,349	)		(1,116,726	)		(4,942,932	)		(7,455,670	)		(1,423,221	)		(1,858,873	)
	4,549,213			9,615,217			2,301,990			38,943,769			9,447,067			16,988,719
	3,656,118			10,766,713			(2,058,978	)		46,069,962			8,511,734			19,228,996
	45,173,047			34,406,334			258,849,734			212,779,772			75,429,767			56,200,771
$	48,829,165		$	45,173,047		$	256,790,756		$	258,849,734		$	83,941,501		$	75,429,767
$	4,599		$	3,632		$	78,543		$	74,251		$	6,527		$	3,816

74

    Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Virginia Intermediate Tax-Free Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
From Investment Activities:
Operations:
Net investment income	$	1,592,057		$	3,174,312
Net realized gain		1,169,364			1,659,383
Change in unrealized appreciation/depreciation		(2,437,876	)		2,622,988
Change in net assets from operations		323,545			7,456,683
Distributions to Class A Shareholders From:
Net investment income		(512,377	)		(1,009,563	)
Net realized gains		(438,803	)		(248,762	)
Distributions to Class B Shareholders From:
Net investment income		—			—
Distributions to Class C Shareholders From:
Net investment income		(19,700	)		(19,681	)
Net realized gains		(27,453	)		—
Distributions to Institutional Class Shareholders From:
Net investment income		(1,051,811	)		(2,132,796	)
Net realized gains		(789,514	)		(488,933	)
Change in net assets from shareholder distributions		(2,839,658	)		(3,899,735	)
Capital Transactions:
Change in net assets from capital transactions		7,172,156			24,166,172
Change in net assets		4,656,043			27,723,120
Net Assets:
Beginning of period		145,489,172			117,766,052
End of period	$	150,145,215		$	145,489,172
Accumulated undistributed (distributions in excess of) net investment income	$	51,004		$	42,835

See accompanying notes to the financial statements.

75

Sterling Capital West Virginia Intermediate Tax-Free Fund						Sterling Capital Strategic Allocation Conservative Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	1,429,403		$	3,149,696		$	210,707		$	380,749
	696,381			1,453,300			2,133,039			308,621
	(1,540,297	)		2,839,195			(1,638,519	)		1,538,274
	585,487			7,442,191			705,227			2,227,644
	(436,469	)		(952,616	)		(190,783	)		(267,399	)
	(471,436	)		(138,148	)		—			—
	—			—			(11,831	)		(20,360	)
	(5,640	)		(1,859	)		(2,317	)		(2,578	)
	(9,918	)		—			—			—
	(979,478	)		(2,179,987	)		(47,125	)		(92,187	)
	(976,220	)		(296,719	)		—			—
	(2,879,161	)		(3,569,329	)		(252,056	)		(382,524	)
	(1,250,743	)		16,758,372			260,151			201,953
	(3,544,417	)		20,631,234			713,322			2,047,073
	125,873,077			105,241,843			18,654,152			16,607,079
$	122,328,660		$	125,873,077		$	19,367,474		$	18,654,152
$	(13,980	)	$	(21,796	)	$	(26,044	)	$	15,305

76

    Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Strategic Allocation Balanced Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
From Investment Activities:
Operations:
Net investment income	$	301,491		$	521,593
Net realized gain		5,348,123			730,254
Change in unrealized appreciation/depreciation		(3,838,438	)		3,998,714
Change in net assets from operations		1,811,176			5,250,561
Distributions to Class A Shareholders From:
Net investment income		(304,850	)		(458,188	)
Distributions to Class B Shareholders From:
Net investment income		(32,383	)		(52,650	)
Distributions to Class C Shareholders From:
Net investment income		(2,993	)		(3,592	)
Distributions to Institutional Class Shareholders From:
Net investment income		(3,327	)		(11,553	)
Change in net assets from shareholder distributions		(343,553	)		(525,983	)
Capital Transactions:
Change in net assets from capital transactions		(1,768,946	)		(2,902,316	)
Change in net assets		(301,323	)		1,822,262
Net Assets:
Beginning of period		34,451,345			32,629,083
End of period	$	34,150,022		$	34,451,345
Accumulated undistributed (distributions in excess of) net investment income	$	(25,744	)	$	16,318

See accompanying notes to the financial statements.

77

Sterling Capital Strategic Allocation Growth Fund						Sterling Capital Strategic Allocation Equity Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	167,970		$	280,662		$	16,575		$	41,482
	4,616,399			428,285			249,086			356,758
	(3,159,472	)		3,478,670			342,863			1,066,358
	1,624,897			4,187,617			608,524			1,464,598
	(163,251	)		(231,372	)		(27,241	)		(40,965	)
	(20,186	)		(29,195	)		(3,962	)		—
	(1,726	)		(1,653	)		(132	)		—
	(7,798	)		(14,297	)		(52	)		(151	)
	(192,961	)		(276,517	)		(31,387	)		(41,116	)
	(737,984	)		(2,627,059	)		(898,597	)		(1,611,678	)
	693,952			1,284,041			(321,460	)		(188,196	)
	24,404,211			23,120,170			7,380,127			7,568,323
$	25,098,163		$	24,404,211		$	7,058,667		$	7,380,127
$	(11,848	)	$	13,143		$	(13,195	)	$	1,617

78

    Sterling Capital Funds

Statements of Changes in Net Assets (continued)

	Sterling Capital Select Equity Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	638,952		$	1,062,879
Distributions reinvested		159,393			253,756
Value of shares redeemed		(2,272,597	)		(4,211,469	)
Change in net assets from Class A Share transactions		(1,474,252	)		(2,894,834	)
Class B Shares:
Proceeds from shares issued		4,181			12,498
Distributions reinvested		3,388			3,935
Value of shares redeemed		(263,288	)		(792,138	)
Change in net assets from Class B Share transactions		(255,719	)		(775,705	)
Class C Shares:
Proceeds from shares issued		7,774			33,121
Distributions reinvested		409			526
Value of shares redeemed		(5,120	)		(93,964	)
Change in net assets from Class C Share transactions		3,063			(60,317	)
Institutional Shares:
Proceeds from shares issued		15,642,550			14,298,868
Distributions reinvested		1,283,472			1,975,021
Value of shares redeemed		(21,256,304	)		(28,564,732	)
Change in net assets from Institutional Share transactions		(4,330,282	)		(12,290,843	)
Class R Shares:
Distributions reinvested		—			—
Change in net assets from Class R Share transactions		—			—
Change in net assets from capital transactions	$	(6,057,190	)	$	(16,021,699	)
Share Transactions:
Class A Shares:
Issued		49,776			90,084
Reinvested		12,628			21,538
Redeemed		(177,939	)		(361,768	)
Change in Class A Shares		(115,535	)		(250,146	)
Class B Shares:
Issued		345			1,107
Reinvested		279			359
Redeemed		(20,804	)		(68,825	)
Change in Class B Shares		(20,180	)		(67,359	)
Class C Shares:
Issued		626			2,923
Reinvested		34			48
Redeemed		(419	)		(7,754	)
Change in Class C Shares		241			(4,783	)
Institutional Shares:
Issued		1,211,244			1,202,478
Reinvested		100,930			165,956
Redeemed		(1,632,486	)		(2,426,482	)
Change in Institutional Shares		(320,312	)		(1,058,048	)
Class R Shares:
Reinvested		—			—
Change in Class R Shares		—			—
Change in Shares		(455,786	)		(1,380,336	)

(a) Fractional share.

See accompanying notes to the financial statements.

79

Sterling Capital Mid Value Fund						Sterling Capital Small Value Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	1,949,041		$	3,078,221		$	441,125		$	818,659
	76,808			161,679			81,044			503,951
	(2,400,706	)		(3,887,142	)		(575,331	)		(1,487,047	)
	(374,857	)		(647,242	)		(53,162	)		(164,437	)
	52			36,688			28,362			15,205
	3,706			5,079			5,235			44,496
	(214,701	)		(1,246,500	)		(74,394	)		(260,909	)
	(210,943	)		(1,204,733	)		(40,797	)		(201,208	)
	54,908			102,390			52,683			29,417
	1,068			1,265			1,544			8,011
	(10,180	)		(71,276	)		(178	)		(19,444	)
	45,796			32,379			54,049			17,984
	44,308,309			52,535,101			10,602,776			15,967,841
	1,220,635			2,720,764			1,024,021			5,393,757
	(40,300,827	)		(87,667,402	)		(8,663,746	)		(22,673,968	)
	5,228,117			(32,411,537	)		2,963,051			(1,312,370	)
	1			1			1			9
	1			1			1			9
$	4,688,114		$	(34,231,132	)	$	2,923,142		$	(1,660,022	)
	126,674			229,741			34,488			69,216
	5,482			12,080			6,642			46,065
	(163,065	)		(288,550	)		(46,312	)		(125,861	)
	(30,909	)		(46,729	)		(5,182	)		(10,580	)
	4			2,921			2,256			1,381
	279			414			442			4,116
	(15,304	)		(97,107	)		(6,020	)		(22,310	)
	(15,021	)		(93,772	)		(3,322	)		(16,813	)
	3,801			8,162			4,191			2,518
	80			103			130			741
	(749	)		(5,307	)		(14	)		(1,702	)
	3,132			2,958			4,307			1,557
	2,899,116			3,866,763			829,348			1,334,230
	86,631			200,698			82,593			491,234
	(2,691,156	)		(6,522,864	)		(688,546	)		(1,891,341	)
	294,591			(2,455,403	)		223,395			(65,877	)
	—	(a)		—	(a)		1			—	(a)
	—	(a)		—	(a)		1			—	(a)
	251,793			(2,592,946	)		219,199			(91,713	)

80

    Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Special Opportunities Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	10,717,651		$	28,334,736
Distributions reinvested		8,067,659			3,597,310
Value of shares redeemed		(24,867,111	)		(94,894,473	)
Change in net assets from Class A Share transactions		(6,081,801	)		(62,962,427	)
Class B Shares:
Proceeds from shares issued		40,544			151,320
Distributions reinvested		630,334			320,071
Value of shares redeemed		(3,104,081	)		(7,589,603	)
Change in net assets from Class B Share transactions		(2,433,203	)		(7,118,212	)
Class C Shares:
Proceeds from shares issued		4,430,046			9,253,233
Distributions reinvested		4,202,670			1,443,247
Value of shares redeemed		(8,177,688	)		(14,000,923	)
Change in net assets from Class C Share transactions		455,028			(3,304,443	)
Institutional Shares:
Proceeds from shares issued		57,163,733			68,386,406
Distributions reinvested		15,960,250			5,285,666
Value of shares redeemed		(59,412,284	)		(88,649,057	)
Change in net assets from Institutional Share transactions		13,711,699			(14,976,985	)
Class R Shares:
Proceeds from shares issued		15,000			730
Distributions reinvested		17,705			4,468
Value of shares redeemed		—			—
Change in net assets from Class R Share transactions		32,705			5,198
Change in net assets from capital transactions	$	5,684,428		$	(88,356,869	)
Share Transactions:
Class A Shares:
Issued		573,744			1,617,617
Reinvested		446,028			220,965
Redeemed		(1,337,572	)		(5,361,514	)
Change in Class A Shares		(317,800	)		(3,522,932	)
Class B Shares:
Issued		2,309			9,283
Reinvested		37,926			21,154
Redeemed		(180,168	)		(467,895	)
Change in Class B Shares		(139,933	)		(437,458	)
Class C Shares:
Issued		257,218			563,180
Reinvested		252,716			95,327
Redeemed		(477,229	)		(866,889	)
Change in Class C Shares		32,705			(208,382	)
Institutional Shares:
Issued		2,934,100			3,799,918
Reinvested		859,634			317,267
Redeemed		(3,099,345	)		(4,977,737	)
Change in Institutional Shares		694,389			(860,552	)
Class R Shares:
Issued		779			40
Reinvested		962			340
Redeemed		—			—
Change in Class R Shares		1,741			380
Change in Shares		271,102			(5,028,944	)

* Commencement of operations.

See accompanying notes to the financial statements.

81

Sterling Capital Equity Income Fund						Sterling Capital Ultra Short Bond Fund			Sterling Capital Short-Term Bond Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Period November 30, 2012* to March 31, 2013 (Unaudited)			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	101,766,468		$	167,670,442		$	4,954,900		$	5,956,802		$	1,893,814
	6,756,121			3,305,248			1,057			150,040			244,731
	(57,983,763	)		(64,760,110	)		(45,537	)		(2,039,925	)		(951,586	)
	50,538,826			106,215,580			4,910,420			4,066,917			1,186,959
	146,067			596,547			—			—			—
	175,399			58,632			—			—			—
	(2,087,999	)		(2,804,359	)		—			—			—
	(1,766,533	)		(2,149,180	)		—			—			—
	32,868,431			78,710,849			—			41,025			243,382
	3,029,729			775,793			—			2,764			1,780
	(10,928,969	)		(14,554,947	)		—			(15,374	)		(29,256	)
	24,969,191			64,931,695			—			28,415			215,906
	169,324,516			284,061,419			40,938,079			17,621,316			18,872,983
	10,940,692			6,073,026			35,991			225,801			464,837
	(76,721,458	)		(136,408,778	)		(3,897,045	)		(8,331,807	)		(28,340,821	)
	103,543,750			153,725,667			37,077,025			9,515,310			(9,003,001	)
	1,233,670			902,903			—			—			—
	21,135			5,089			—			—			—
	(642,894	)		(178,436	)		—			—			—
	611,911			729,556			—			—			—
$	177,897,145		$	323,453,318		$	41,987,445		$	13,610,642		$	(7,600,136	)
	6,187,360			11,015,927			495,781			630,815			200,476
	416,858			214,666			106			15,921			25,948
	(3,545,097	)		(4,241,406	)		(4,554	)		(216,059	)		(101,057	)
	3,059,121			6,989,187			491,333			430,677			125,367
	8,864			39,988			—			—			—
	10,927			3,859			—			—			—
	(127,443	)		(184,294	)		—			—			—
	(107,652	)		(140,447	)		—			—			—
	2,010,520			5,201,450			—			4,342			25,766
	189,078			50,992			—			293			189
	(673,255	)		(959,719	)		—			(1,628	)		(3,109	)
	1,526,343			4,292,723			—			3,007			22,846
	10,091,869			18,485,078			4,093,901			1,868,381			2,000,634
	672,340			393,313			3,599			23,951			49,286
	(4,666,937	)		(8,899,253	)		(389,778	)		(882,781	)		(3,012,888	)
	6,097,272			9,979,138			3,707,722			1,009,551			(962,968	)
	74,909			57,024			—			—			—
	1,295			327			—			—			—
	(40,466	)		(11,986	)		—			—			—
	35,738			45,365			—			—			—
	10,610,822			21,165,966		��	4,199,055			1,443,235			(814,755	)

82

    Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Intermediate U.S. Government Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	829,082		$	3,424,229
Distributions reinvested		165,853			324,834
Value of shares redeemed		(1,328,374	)		(4,383,481	)
Change in net assets from Class A Share transactions		(333,439	)		(634,418	)
Class B Shares:
Proceeds from shares issued		—			7,979
Distributions reinvested		9,351			22,200
Value of shares redeemed		(121,248	)		(756,698	)
Change in net assets from Class B Share transactions		(111,897	)		(726,519	)
Class C Shares:
Proceeds from shares issued		88,347			739,041
Distributions reinvested		11,369			17,125
Value of shares redeemed		(128,614	)		(324,483	)
Change in net assets from Class C Share transactions		(28,898	)		431,683
Institutional Shares:
Proceeds from shares issued		6,476,738			40,930,823
Distributions reinvested		341,488			1,142,234
Value of shares redeemed		(18,370,254	)		(121,099,444	)
Change in net assets from Institutional Share transactions		(11,552,028	)		(79,026,387	)
Class R Shares:
Distributions reinvested		—			—
Value of shares redeemed		—			—
Change in net assets from Class R Share transactions		—			—
Change in net assets from capital transactions	$	(12,026,262	)	$	(79,955,641	)
Share Transactions:
Class A Shares:
Issued		76,935			317,350
Reinvested		15,450			30,028
Redeemed		(123,719	)		(406,364	)
Change in Class A Shares		(31,334	)		(58,986	)
Class B Shares:
Issued		—			741
Reinvested		873			2,060
Redeemed		(11,376	)		(70,352	)
Change in Class B Shares		(10,503	)		(67,551	)
Class C Shares:
Issued		8,204			68,488
Reinvested		1,061			1,584
Redeemed		(11,998	)		(30,026	)
Change in Class C Shares		(2,733	)		40,046
Institutional Shares:
Issued		603,887			3,785,855
Reinvested		31,758			105,480
Redeemed		(1,707,038	)		(11,189,931	)
Change in Institutional Shares		(1,071,393	)		(7,298,596	)
Class R Shares:
Reinvested		—			—
Redeemed		—			—
Change in Class R Shares		—			—
Change in Shares		(1,115,963	)		(7,385,087	)

See accompanying notes to the financial statements.

83

Sterling Capital Total Return Bond Fund						Sterling Capital Corporate Fund						Sterling Capital Securitized Opportunities Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	8,381,470		$	17,864,518		$	12,693		$	—		$	14,677		$	—
	1,119,257			2,255,520			47			—			49			—
	(8,391,984	)		(7,830,831	)		—			—			—			—
	1,108,743			12,289,207			12,740			—			14,726			—
	45,573			347,460			—			—			—			—
	59,253			180,782			—			—			—			—
	(546,708	)		(1,196,835	)		—			—			—			—
	(441,882	)		(668,593	)		—			—			—			—
	2,203,960			2,772,580			2,692			—			2,693			—
	136,224			204,372			11			—			11			—
	(1,121,066	)		(1,417,093	)		—			—			—			—
	1,219,118			1,559,859			2,703			—			2,704			—
	103,192,156			211,895,993			44,365,986			56,819,950			21,509,450			61,359,243
	6,684,438			13,066,517			2,308,283			2,151,139			1,243,981			1,546,139
	(132,559,630	)		(99,229,731	)		(33,902,222	)		(17,854,843	)		(43,912,589	)		(9,311,703	)
	(22,683,036	)		125,732,779			12,772,047			41,116,246			(21,159,158	)		53,593,679
	128			323			—			—			—			—
	—			(400	)		—			—			—			—
	128			(77	)		—			—			—			—
$	(20,796,929	)	$	138,913,175		$	12,787,490		$	41,116,246		$	(21,141,728	)	$	53,593,679
	758,380			1,625,145			1,204			—			1,446			—
	101,455			206,480			5			—			5			—
	(760,693	)		(713,303	)		—			—			—			—
	99,142			1,118,322			1,209			—			1,451			—
	4,089			31,675			—			—			—			—
	5,364			16,565			—			—			—			—
	(49,499	)		(108,855	)		—			—			—			—
	(40,046	)		(60,615	)		—			—			—			—
	198,249			251,999			256			—			265			—
	12,334			18,689			1			—			1			—
	(101,938	)		(128,804	)		—			—			—			—
	108,645			141,884			257			—			266			—
	9,374,628			19,307,577			4,184,795			5,564,408			2,106,119			6,010,600
	605,672			1,194,698			216,891			207,803			121,914			151,588
	(12,045,068	)		(9,028,012	)		(3,199,408	)		(1,742,368	)		(4,312,045	)		(914,631	)
	(2,064,768	)		11,474,263			1,202,278			4,029,843			(2,084,012	)		5,247,557
	12			30			—			—			—			—
	—			(36	)		—			—			—			—
	12			(6	)		—			—			—			—
	(1,897,015	)		12,673,848			1,203,744			4,029,843			(2,082,295	)		5,247,557

84

    Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Kentucky Intermediate Tax-Free Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	775,026		$	2,102,672
Distributions reinvested		114,332			149,655
Value of shares redeemed		(266,675	)		(333,929	)
Change in net assets from Class A Share transactions		622,683			1,918,398
Class C Shares:
Proceeds from shares issued		70,000			206,000
Distributions reinvested		3,140			1,190
Value of shares redeemed		(1,022	)		—
Change in net assets from Class C Share transactions		72,118			207,190
Institutional Shares:
Proceeds from shares issued		2,501,673			4,026,055
Distributions reinvested		9,176			7,280
Value of shares redeemed		(1,750,738	)		(3,707,766	)
Change in net assets from Institutional Share transactions		760,111			325,569
Change in net assets from capital transactions	$	1,454,912		$	2,451,157
Share Transactions:
Class A Shares:
Issued		69,534			190,973
Reinvested		10,232			13,621
Redeemed		(23,937	)		(30,493	)
Change in Class A Shares		55,829			174,101
Class C Shares:
Issued		6,189			18,594
Reinvested		281			107
Redeemed		(92	)		—
Change in Class C Shares		6,378			18,701
Institutional Shares:
Issued		224,560			367,004
Reinvested		823			660
Redeemed		(157,685	)		(338,328	)
Change in Institutional Shares		67,698			29,336
Change in Shares		129,905			222,138

See accompanying notes to the financial statements.

85

Sterling Capital Maryland Intermediate Tax-Free Fund						Sterling Capital North Carolina Intermediate Tax-Free Fund						Sterling Capital South Carolina Intermediate Tax-Free Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	1,131,215		$	2,342,105		$	7,336,393		$	17,255,510		$	4,238,856		$	6,175,005
	171,595			208,003			931,501			1,234,786			335,754			446,118
	(1,370,963	)		(2,179,696	)		(6,508,501	)		(5,987,904	)		(1,409,895	)		(1,244,999	)
	(68,153	)		370,412			1,759,393			12,502,392			3,164,715			5,376,124
	691,375			1,294,459			2,719,826			3,224,796			561,996			501,589
	30,808			5,292			69,015			13,425			4,981			464
	(261,227	)		—			(205,981	)		(23,073	)		(70,621	)		—
	460,956			1,299,751			2,582,860			3,215,148			496,356			502,053
	7,462,235			13,645,051			26,074,424			54,083,709			12,209,578			19,730,550
	208,828			152,722			524,793			637,136			187,082			181,073
	(3,514,653	)		(5,852,719	)		(28,639,480	)		(31,494,616	)		(6,610,664	)		(8,801,081	)
	4,156,410			7,945,054			(2,040,263	)		23,226,229			5,785,996			11,110,542
$	4,549,213		$	9,615,217		$	2,301,990		$	38,943,769		$	9,447,067		$	16,988,719
	98,336			205,724			648,693			1,542,881			372,707			553,727
	14,970			18,336			82,411			110,720			29,612			40,070
	(118,842	)		(191,585	)		(572,173	)		(537,040	)		(125,010	)		(111,158	)
	(5,536	)		32,475			158,931			1,116,561			277,309			482,639
	60,112			113,789			239,821			287,363			49,950			44,566
	2,688			461			6,107			1,192			439			41
	(22,967	)		—			(18,310	)		(2,077	)		(6,274	)		—
	39,833			114,250			227,618			286,478			44,115			44,607
	650,680			1,198,604			2,314,438			4,848,480			1,086,077			1,780,935
	18,200			13,423			46,455			57,094			16,618			16,337
	(306,402	)		(515,296	)		(2,541,271	)		(2,825,464	)		(588,309	)		(799,828	)
	362,478			696,731			(180,378	)		2,080,110			514,386			997,444
	396,775			843,456			206,171			3,483,149			835,810			1,524,690

86

    Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Virginia Intermediate Tax-Free Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	3,925,416		$	12,566,917
Distributions reinvested		770,520			940,960
Value of shares redeemed		(2,687,257	)		(3,129,732	)
Change in net assets from Class A Share transactions		2,008,679			10,378,145
Class B Shares:
Proceeds from shares issued		—			—
Distributions reinvested		—			—
Value of shares redeemed		—			—
Change in net assets from Class B Share transactions		—			—
Class C Shares:
Proceeds from shares issued		522,018			2,929,673
Distributions reinvested		42,590			16,299
Value of shares redeemed		(48,602	)		(100,920	)
Change in net assets from Class C Share transactions		516,006			2,845,052
Institutional Shares:
Proceeds from shares issued		11,171,205			22,613,452
Distributions reinvested		151,128			182,970
Value of shares redeemed		(6,674,862	)		(11,853,447	)
Change in net assets from Institutional Share transactions		4,647,471			10,942,975
Change in net assets from capital transactions	$	7,172,156		$	24,166,172
Share Transactions:
Class A Shares:
Issued		316,025			1,025,951
Reinvested		62,238			76,789
Redeemed		(217,327	)		(255,473	)
Change in Class A Shares		160,936			847,267
Class B Shares:
Issued		—			—
Reinvested		—			—
Redeemed		—			—
Change in Class B Shares		—			—
Class C Shares:
Issued		42,028			238,604
Reinvested		3,440			1,319
Redeemed		(3,927	)		(8,165	)
Change in Class C Shares		41,541			231,758
Institutional Shares:
Issued		903,389			1,844,600
Reinvested		12,219			14,934
Redeemed		(541,631	)		(965,783	)
Change in Institutional Shares		373,977			893,751
Change in Shares		576,454			1,972,776

See accompanying notes to the financial statements.

87

Sterling Capital West Virginia Intermediate Tax-Free Fund						Sterling Capital Strategic Allocation Conservative Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	6,000,624		$	9,155,672		$	1,506,640		$	3,180,882
	721,879			757,047			169,745			241,018
	(4,223,271	)		(3,941,099	)		(1,209,772	)		(1,648,778	)
	2,499,232			5,971,620			466,613			1,773,122
	—			—			64,510			119,783
	—			—			11,831			20,318
	—			—			(264,859	)		(727,930	)
	—			—			(188,518	)		(587,829	)
	192,485			721,806			55,501			54,135
	13,957			1,366			2,317			2,578
	(21,357	)		—			(7,612	)		(19,155	)
	185,085			723,172			50,206			37,558
	9,988,867			23,223,921			325,438			388,233
	283,735			112,183			44,843			90,703
	(14,207,662	)		(13,272,524	)		(438,431	)		(1,499,834	)
	(3,935,060	)		10,063,580			(68,150	)		(1,020,898	)
$	(1,250,743	)	$	16,758,372		$	260,151		$	201,953
	574,926			889,767			154,110			343,558
	69,193			73,406			17,382			25,813
	(401,899	)		(382,000	)		(123,521	)		(176,199	)
	242,220			581,173			47,971			193,172
	—			—			6,598			12,664
	—			—			1,210			2,188
	—			—			(27,225	)		(77,881	)
	—			—			(19,417	)		(63,029	)
	18,401			69,281			5,680			5,790
	1,337			131			238			278
	(2,075	)		—			(778	)		(2,053	)
	17,663			69,412			5,140			4,015
	956,673			2,244,831			33,031			40,673
	27,149			10,929			4,542			9,612
	(1,360,080	)		(1,286,425	)		(44,542	)		(156,109	)
	(376,258	)		969,335			(6,969	)		(105,824	)
	(116,375	)		1,619,920			26,725			28,334

88

    Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Strategic Allocation Balanced Fund
	For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	1,916,558		$	3,042,700
Distributions reinvested		301,554			453,657
Value of shares redeemed		(2,735,747	)		(4,068,653	)
Change in net assets from Class A Share transactions		(517,635	)		(572,296	)
Class B Shares:
Proceeds from shares issued		22,718			178,190
Distributions reinvested		32,354			52,548
Value of shares redeemed		(1,103,150	)		(2,480,087	)
Change in net assets from Class B Share transactions		(1,048,078	)		(2,249,349	)
Class C Shares:
Proceeds from shares issued		39,009			123,308
Distributions reinvested		2,993			3,592
Value of shares redeemed		(45,748	)		(127,641	)
Change in net assets from Class C Share transactions		(3,746	)		(741	)
Institutional Shares:
Proceeds from shares issued		12,703			374,010
Distributions reinvested		2,762			10,649
Value of shares redeemed		(214,952	)		(464,589	)
Change in net assets from Institutional Share transactions		(199,487	)		(79,930	)
Change in net assets from capital transactions	$	(1,768,946	)	$	(2,902,316	)
Share Transactions:
Class A Shares:
Issued		206,272			347,447
Reinvested		32,459			52,009
Redeemed		(296,520	)		(463,231	)
Change in Class A Shares		(57,789	)		(63,775	)
Class B Shares:
Issued		2,481			20,794
Reinvested		3,573			6,230
Redeemed		(121,617	)		(289,470	)
Change in Class B Shares		(115,563	)		(262,446	)
Class C Shares:
Issued		4,281			14,247
Reinvested		329			423
Redeemed		(5,016	)		(14,903	)
Change in Class C Shares		(406	)		(233	)
Institutional Shares:
Issued		1,379			44,463
Reinvested		295			1,222
Redeemed		(23,309	)		(53,488	)
Change in Institutional Shares		(21,635	)		(7,803	)
Change in Shares		(195,393	)		(334,257	)

See accompanying notes to the financial statements.

89

Sterling Capital Strategic Allocation Growth Fund						Sterling Capital Strategic Allocation Equity Fund
For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012			For the Six Months Ended March 31, 2013 (Unaudited)			For the Year Ended September 30, 2012
$	2,074,222		$	2,730,572		$	411,990		$	1,515,723
	161,843			229,377			26,626			40,594
	(1,839,694	)		(3,212,435	)		(869,252	)		(1,497,813	)
	396,371			(252,486	)		(430,636	)		58,504
	34,258			1,908			—			6,531
	20,154			28,979			3,962			—
	(1,054,923	)		(2,081,772	)		(449,197	)		(1,631,215	)
	(1,000,511	)		(2,050,885	)		(445,235	)		(1,624,684	)
	37,326			71,767			4,800			10,407
	1,726			1,653			131			—
	(4,125	)		(44,690	)		(19,037	)		(1,572	)
	34,927			28,730			(14,106	)		8,835
	29,252			96,677			—			—
	7,561			13,864			—			—
	(205,584	)		(462,959	)		(8,620	)		(54,333	)
	(168,771	)		(352,418	)		(8,620	)		(54,333	)
$	(737,984	)	$	(2,627,059	)	$	(898,597	)	$	(1,611,678	)
	237,189			336,395			49,107			196,597
	18,699			28,482			3,220			5,386
	(216,124	)		(397,333	)		(101,100	)		(194,590	)
	39,764			(32,456	)		(48,773	)		7,393
	3,931			247			—			907
	2,415			3,752			504			—
	(124,198	)		(263,366	)		(55,853	)		(222,239	)
	(117,852	)		(259,367	)		(55,349	)		(221,332	)
	4,438			9,126			604			1,432
	207			213			17			—
	(501	)		(5,765	)		(2,309	)		(209	)
	4,144			3,574			(1,688	)		1,223
	3,393			12,207			—			—
	871			1,716			—			—
	(24,032	)		(59,728	)		(1,013	)		(7,760	)
	(19,768	)		(45,805	)		(1,013	)		(7,760	)
	(93,712	)		(334,054	)		(106,823	)		(220,476	)

90

    Sterling Capital Funds

    Financial Highlights, Class A Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

			Investment Activities									Distributions
	Net Asset Value, Beginning of Period		Net investment income (loss)(a)			Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Return of capital			Total Distributions
Sterling Capital Select Equity Fund
Six Months Ended March 31, 2013 (Unaudited)	$	12.80		0.07			0.56			0.63			(0.08	)		—			—			(0.08	)
Year Ended September 30, 2012	$	9.90		0.11			2.90			3.01			(0.11	)		—			—			(0.11	)
Year Ended September 30, 2011	$	10.52		0.11			(0.62	)		(0.51	)		(0.11	)		—			—			(0.11	)
Year Ended September 30, 2010	$	10.08		0.10			0.45			0.55			(0.11	)		—			—			(0.11	)
Year Ended September 30, 2009	$	11.31		0.11			(1.22	)		(1.11	)		(0.12	)		—			—			(0.12	)
Year Ended September 30, 2008	$	19.13		0.15			(5.14	)		(4.99	)		(0.10	)		(2.73	)		—			(2.83	)
Sterling Capital Mid Value Fund
Six Months Ended March 31, 2013 (Unaudited)	$	14.28		0.06			2.27			2.33			(0.05	)		—			—			(0.05	)
Year Ended September 30, 2012	$	11.37		0.10			2.91			3.01			(0.10	)		—			—			(0.10	)
Year Ended September 30, 2011	$	12.08		0.04			(0.70	)		(0.66	)		(0.05	)		—			—			(0.05	)
Year Ended September 30, 2010	$	10.81		0.04			1.27			1.31			(0.04	)		—			—			(0.04	)
Year Ended September 30, 2009	$	10.50		0.02			0.31			0.33			(0.02	)		—			—			(0.02	)
Year Ended September 30, 2008	$	14.93		0.02			(3.07	)		(3.05	)		(0.02	)		(1.36	)		—			(1.38	)
Sterling Capital Small Value Fund
Six Months Ended March 31, 2013 (Unaudited)	$	12.01		0.01			1.88			1.89			(0.01	)		(0.15	)		—			(0.16	)
Year Ended September 30, 2012	$	10.79		0.03			2.17			2.20			—			(0.98	)		—			(0.98	)
Year Ended September 30, 2011	$	11.19		(0.05	)		(0.35	)		(0.40	)		—			—			—			—
February 1, 2010 to September 30, 2010(e)	$	10.55		0.04			0.63			0.67	��		(0.03	)		—			—			(0.03	)
Sterling Capital Special Opportunities Fund
Six Months Ended March 31, 2013 (Unaudited)	$	18.51		0.04	(g)		1.95			1.99			(0.01	)		(0.95	)		—			(0.96	)
Year Ended September 30, 2012	$	15.25		—	(h)		3.57			3.57			—			(0.31	)		—			(0.31	)
Year Ended September 30, 2011	$	15.93		(0.06	)		(0.52	)		(0.58	)		—			(0.10	)		—			(0.10	)
Year Ended September 30, 2010	$	14.66		(0.06	)		1.33			1.27			—			—			—			—
Year Ended September 30, 2009	$	15.34		—	(h)		—	(h)		—	(h)		—	(h)		(0.57	)		(0.11	)		(0.68	)
Year Ended September 30, 2008	$	18.29		(0.08	)		(2.12	)		(2.20	)		—			(0.75	)		—			(0.75	)
Sterling Capital Equity Income Fund
Six Months Ended March 31, 2013 (Unaudited)	$	16.03		0.16			1.64			1.80			(0.15	)		(0.16	)		—			(0.31	)
Year Ended September 30, 2012	$	13.25		0.25			2.72			2.97			(0.19	)		—			—			(0.19	)
Year Ended September 30, 2011	$	13.05		0.25			0.14	(j)		0.39			(0.19	)		—			—			(0.19	)
Year Ended September 30, 2010	$	11.43		0.30			1.56			1.86			(0.24	)		—			—			(0.24	)
Year Ended September 30, 2009	$	12.35		0.30			(0.99	)		(0.69	)		(0.20	)		(0.03	)		—			(0.23	)
Year Ended September 30, 2008	$	15.03		0.43			(2.21	)		(1.78	)		(0.32	)		(0.58	)		—			(0.90	)
Sterling Capital Ultra Short Bond Fund
November 30, 2012 to March 31, 2013 (Unaudited)(e)	$	10.00		0.01			—			0.01			(0.01	)		—			—			(0.01	)
Sterling Capital Short-Term Bond Fund
Six Months Ended March 31, 2013 (Unaudited)	$	9.47		0.09			(0.02	)		0.07			(0.15	)		—			—			(0.15	)
Year Ended September 30, 2012	$	9.36		0.19			0.24			0.43			(0.32	)		—			—			(0.32	)
Year Ended September 30, 2011	$	9.68		0.17			(0.19	)		(0.02	)		(0.30	)		—			—			(0.30	)
Year Ended September 30, 2010	$	9.66		0.16			0.10			0.26			(0.24	)		—			—			(0.24	)
Year Ended September 30, 2009	$	9.54		0.24			0.19			0.43			(0.31	)		—			—			(0.31	)
Year Ended September 30, 2008	$	9.52		0.33			0.07			0.40			(0.38	)		—			—			(0.38	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income (loss) has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 4.77%.

(e) Period from commencement of operations.

(f) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 6.01%.

(g) For the period ended March 31, 2013, net investment income per share reflects a special dividend which amounted to $0.02 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 0.26% per share.

(h) Amount is less than $0.005.

(i) Ratio is below 0.005%.

(j) The amount shown for a share outstanding throughout the period does not accord with the change in aggregate gains and losses in the portfolio of securities during the period because of the timing of sales and purchases of Fund shares in relation to fluctuating market values during the period.

See accompanying notes to the financial statements.

91

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(b)			Net Assets, End of Period (000)		Ratio of net expenses to average net assets(c)			Ratio of net investment income (loss) to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$	13.35		4.92	%(d)	$	28,308		1.08	%		1.08	%		1.18	%		47.21	%
$	12.80		30.52	%	$	28,618		1.08	%		0.98	%		1.28	%		68.75	%
$	9.90		(5.01	)%	$	24,603		1.08	%		0.93	%		1.47	%		66.29	%
$	10.52		5.47	%	$	28,849		1.09	%		0.98	%		1.48	%		119.85	%
$	10.08		(9.67	)%	$	29,290		1.06	%		1.25	%		1.45	%		92.97	%
$	11.31		(29.46	)%	$	36,066		1.14	%		1.05	%		1.43	%		38.43	%
$	16.56		16.40	%	$	24,960		1.18	%		0.83	%		1.18	%		12.72	%
$	14.28		26.57	%	$	21,976		1.19	%		0.78	%		1.20	%		21.62	%
$	11.37		(5.51	)%	$	18,017		1.18	%		0.32	%		1.22	%		38.30	%
$	12.08		12.09	%	$	18,890		1.20	%		0.33	%		1.30	%		45.02	%
$	10.81		3.24	%	$	10,717		1.21	%		0.19	%		1.26	%		46.83	%
$	10.50		(22.00	)%	$	28,068		1.14	%		0.17	%		1.18	%		65.74	%
$	13.74		15.90	%	$	7,617		1.30	%		0.22	%		1.30	%		23.09	%
$	12.01		21.31	%	$	6,720		1.33	%		0.22	%		1.44	%		32.86	%
$	10.79		(3.57	)%	$	6,152		1.33	%		(0.39	)%		1.69	%		63.02	%
$	11.19		6.39	%(f)	$	5,389		1.40	%		0.49	%		1.91	%		95.89	%
$	19.54		11.12	%	$	177,565		1.27	%		0.44	%(g)		1.27	%		23.78	%
$	18.51		23.67	%	$	174,085		1.29	%		(0.00	)%(i)		1.38	%		19.38	%
$	15.25		(3.72	)%	$	197,138		1.28	%		(0.35	)%		1.53	%		31.51	%
$	15.93		8.66	%	$	202,670		1.29	%		(0.38	)%		1.55	%		25.65	%
$	14.66		1.74	%	$	175,319		1.28	%		0.02	%		1.54	%		45.22	%
$	15.34		(12.61	)%	$	123,249		1.24	%		(0.48	)%		1.49	%		25.80	%
$	17.52		11.39	%	$	459,838		1.19	%		1.91	%		1.19	%		15.29	%
$	16.03		22.47	%	$	371,659		1.19	%		1.61	%		1.26	%		21.30	%
$	13.25		2.93	%	$	214,622		1.18	%		1.80	%		1.43	%		16.64	%
$	13.05		16.42	%	$	143,283		1.19	%		2.43	%		1.45	%		21.63	%
$	11.43		(5.33	)%	$	99,480		1.18	%		2.93	%		1.45	%		37.13	%
$	12.35		(12.47	)%	$	98,584		1.14	%		3.09	%		1.39	%		30.01	%
$	10.00		0.13	%	$	4,911		0.71	%		0.39	%		0.71	%		22.42	%
$	9.39		0.74	%	$	12,935		0.79	%		2.01	%		0.80	%		28.80	%
$	9.47		4.68	%	$	8,965		0.81	%		2.04	%		0.91	%		85.13	%
$	9.36		(0.20	)%	$	7,684		0.85	%		1.81	%		1.20	%		120.09	%
$	9.68		2.75	%	$	7,747		0.95	%		1.66	%		1.36	%		55.50	%
$	9.66		4.57	%	$	4,909		0.98	%		2.44	%		1.38	%		89.57	%
$	9.54		4.23	%	$	4,680		0.90	%		3.42	%		1.30	%		48.20	%

92

    Sterling Capital Funds

Financial Highlights, Class A Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

			Investment Activities								Distributions
	Net Asset Value, Beginning of Period		Net investment income(a)		Net realized/ unrealized gains (losses) on  investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital Intermediate U.S. Government Fund
Six Months Ended March 31, 2013 (Unaudited)	$	10.86		0.09		(0.13	)		(0.04	)		(0.16	)		—			(0.16	)
Year Ended September 30, 2012	$	10.79		0.20		0.16			0.36			(0.29	)		—			(0.29	)
Year Ended September 30, 2011	$	10.80		0.24		0.06			0.30			(0.31	)		—			(0.31	)
Year Ended September 30, 2010	$	10.56		0.29		0.27			0.56			(0.32	)		—			(0.32	)
Year Ended September 30, 2009	$	10.03		0.33		0.55			0.88			(0.35	)		—			(0.35	)
Year Ended September 30, 2008	$	9.93		0.41		0.11			0.52			(0.42	)		—			(0.42	)
Sterling Capital Total Return Bond Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.15		0.14		(0.08	)		0.06			(0.19	)		(0.08	)		(0.27	)
Year Ended September 30, 2012	$	11.05		0.29		0.46			0.75			(0.38	)		(0.27	)		(0.65	)
Year Ended September 30, 2011	$	11.32		0.38		0.01			0.39			(0.45	)		(0.21	)		(0.66	)
Year Ended September 30, 2010	$	10.78		0.43		0.61			1.04			(0.49	)		(0.01	)		(0.50	)
Year Ended September 30, 2009	$	9.88		0.45		0.90			1.35			(0.45	)		—			(0.45	)
Year Ended September 30, 2008	$	10.12		0.43		(0.21	)		0.22			(0.46	)		—			(0.46	)
Sterling Capital Corporate Fund
February 1, 2013 to March 31, 2013 (Unaudited)(d)	$	10.53		0.06		0.02			0.08			(0.05	)		—			(0.05	)
Sterling Capital Securitized Opportunities Fund
February 1, 2013 to March 31, 2013 (Unaudited)(d)	$	10.16		0.01		0.03			0.04			(0.05	)		—			(0.05	)
Sterling Capital Kentucky Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.17		0.12		(0.03	)		0.09			(0.12	)		(0.06	)		(0.18	)
Year Ended September 30, 2012	$	10.80		0.27		0.40			0.67			(0.27	)		(0.03	)		(0.30	)
Year Ended September 30, 2011	$	10.83		0.29		0.02	(e)		0.31			(0.29	)		(0.05	)		(0.34	)
Year Ended September 30, 2010	$	10.68		0.29		0.25			0.54			(0.29	)		(0.10	)		(0.39	)
Year Ended September 30, 2009	$	9.88		0.33		0.89			1.22			(0.32	)		(0.10	)		(0.42	)
Year Ended September 30, 2008	$	10.06		0.32		(0.18	)		0.14			(0.32	)		—			(0.32	)
Sterling Capital Maryland Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.56		0.10		(0.07	)		0.03			(0.10	)		(0.15	)		(0.25	)
Year Ended September 30, 2012	$	11.23		0.24		0.41			0.65			(0.24	)		(0.08	)		(0.32	)
Year Ended September 30, 2011	$	11.21		0.28		0.06			0.34			(0.28	)		(0.04	)		(0.32	)
Year Ended September 30, 2010	$	10.97		0.28		0.24			0.52			(0.28	)		—	(f)		(0.28	)
Year Ended September 30, 2009	$	10.04		0.30		1.01			1.31			(0.30	)		(0.08	)		(0.38	)
Year Ended September 30, 2008	$	10.15		0.31		(0.11	)		0.20			(0.31	)		—			(0.31	)
Sterling Capital North Carolina Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.36		0.12		(0.12	)		—			(0.12	)		(0.08	)		(0.20	)
Year Ended September 30, 2012	$	11.02		0.27		0.41			0.68			(0.27	)		(0.07	)		(0.34	)
Year Ended September 30, 2011	$	11.01		0.29		0.07			0.36			(0.29	)		(0.06	)		(0.35	)
Year Ended September 30, 2010	$	10.87		0.30		0.20			0.50			(0.30	)		(0.06	)		(0.36	)
Year Ended September 30, 2009	$	10.09		0.33		0.88			1.21			(0.33	)		(0.10	)		(0.43	)
Year Ended September 30, 2008	$	10.33		0.35		(0.20	)		0.15			(0.35	)		(0.04	)		(0.39	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) Period from commencement of operations.

(e) The amount shown for a share outstanding throughout the period does not accord with the change in aggregate gains and losses in the portfolio of securities during the period because of the timing of sales and purchases of Fund shares in relation to fluctuating market values during the period.

(f) Amount is less than $0.005.

See accompanying notes to the financial statements.

93

				Ratios/Supplementary Data
Net Asset Value, End of Period	Total Return (excludes sales charge)(b)			Net Assets, End of Period (000)		Ratio of net expenses to average net assets(c)			Ratio of net investment income to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$10.66		(0.38	)%	$	12,226		0.96	%		1.64	%		0.96	%		35.03	%
$10.86		3.41	%	$	12,788		0.97	%		1.81	%		1.10	%		71.68	%
$10.79		2.86	%	$	13,344		0.96	%		2.30	%		1.33	%		83.62	%
$10.80		5.38	%	$	14,235		0.96	%		2.76	%		1.34	%		83.92	%
$10.56		8.90	%	$	12,865		0.95	%		3.14	%		1.32	%		47.13	%
$10.03		5.30	%	$	9,654		0.92	%		4.08	%		1.29	%		116.07	%
$10.94		0.58	%	$	50,211		0.83	%		2.58	%		0.84	%		82.02	%
$11.15		7.13	%	$	50,063		0.88	%		2.65	%		0.99	%		110.82	%
$11.05		3.68	%	$	37,274		0.95	%		3.47	%		1.32	%		131.87	%
$11.32		10.00	%	$	31,465		0.96	%		3.90	%		1.34	%		122.94	%
$10.78		13.89	%	$	15,760		0.96	%		4.38	%		1.33	%		122.26	%
$9.88		2.06	%	$	8,700		0.91	%		4.24	%		1.28	%		190.15	%
$10.56		0.81	%	$	13		0.84	%		3.43	%		0.84	%		51.73	%
$10.15		0.42	%	$	15		0.89	%		0.41	%		0.89	%		97.85	%
$11.08		0.80	%	$	11,501		0.96	%		2.19	%		0.96	%		6.95	%
$11.17		6.21	%	$	10,969		0.95	%		2.43	%		1.04	%		16.52	%
$10.80		3.00	%	$	8,729		0.93	%		2.76	%		1.28	%		15.73	%
$10.83		5.25	%	$	8,380		0.94	%		2.76	%		1.40	%		20.68	%
$10.68		12.71	%	$	6,999		0.92	%		3.18	%		1.37	%		33.56	%
$9.88		1.34	%	$	5,510		0.89	%		3.13	%		1.34	%		54.22	%
$11.34		0.29	%	$	9,628		0.96	%		1.83	%		0.96	%		14.69	%
$11.56		5.80	%	$	9,877		0.95	%		2.08	%		1.05	%		34.94	%
$11.23		3.09	%	$	9,232		0.92	%		2.52	%		1.28	%		21.89	%
$11.21		4.81	%	$	11,763		0.94	%		2.52	%		1.40	%		12.26	%
$10.97		13.44	%	$	8,273		0.90	%		2.84	%		1.38	%		37.11	%
$10.04		1.84	%	$	4,389		0.79	%		3.01	%		1.34	%		108.13	%
$11.16		0.04	%	$	66,214		0.92	%		2.20	%		0.92	%		7.51	%
$11.36		6.25	%	$	65,544		0.92	%		2.39	%		1.00	%		19.76	%
$11.02		3.35	%	$	51,294		0.92	%		2.67	%		1.22	%		15.15	%
$11.01		4.79	%	$	46,560		0.93	%		2.79	%		1.34	%		19.19	%
$10.87		12.35	%	$	29,765		0.92	%		3.17	%		1.32	%		38.42	%
$10.09		1.42	%	$	20,971		0.89	%		3.34	%		1.29	%		82.02	%

94

    Sterling Capital Funds

Financial Highlights, Class A Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

			Investment Activities								Distributions
	Net Asset Value, Beginning of Period		Net investment income(a)		Net realized/ unrealized gains (losses) on  investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital South Carolina Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.36		0.11		(0.05	)		0.06			(0.11	)		(0.08	)		(0.19	)
Year Ended September 30, 2012	$	10.97		0.24		0.46			0.70			(0.24	)		(0.07	)		(0.31	)
Year Ended September 30, 2011	$	10.93		0.26		0.07			0.33			(0.26	)		(0.03	)		(0.29	)
Year Ended September 30, 2010	$	10.68		0.30		0.25			0.55			(0.30	)		—			(0.30	)
Year Ended September 30, 2009	$	9.95		0.33		0.90			1.23			(0.33	)		(0.17	)		(0.50	)
Year Ended September 30, 2008	$	10.28		0.34		(0.24	)		0.10			(0.34	)		(0.09	)		(0.43	)
Sterling Capital Virginia Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	12.45		0.12		(0.11	)		0.01			(0.12	)		(0.10	)		(0.22	)
Year Ended September 30, 2012	$	12.12		0.28		0.40			0.68			(0.28	)		(0.07	)		(0.35	)
Year Ended September 30, 2011	$	12.14		0.31		0.02			0.33			(0.31	)		(0.04	)		(0.35	)
Year Ended September 30, 2010	$	12.07		0.33		0.18			0.51			(0.33	)		(0.11	)		(0.44	)
Year Ended September 30, 2009	$	11.11		0.36		1.05			1.41			(0.36	)		(0.09	)		(0.45	)
Year Ended September 30, 2008	$	11.32		0.37		(0.16	)		0.21			(0.37	)		(0.05	)		(0.42	)
Sterling Capital West Virginia Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	10.51		0.11		(0.08	)		0.03			(0.11	)		(0.12	)		(0.23	)
Year Ended September 30, 2012	$	10.16		0.27		0.39			0.66			(0.27	)		(0.04	)		(0.31	)
Year Ended September 30, 2011	$	10.17		0.32		—			0.32			(0.32	)		(0.01	)		(0.33	)
Year Ended September 30, 2010	$	10.04		0.33		0.15			0.48			(0.33	)		(0.02	)		(0.35	)
Year Ended September 30, 2009	$	9.36		0.33		0.69			1.02			(0.33	)		(0.01	)		(0.34	)
Year Ended September 30, 2008	$	9.71		0.33		(0.33	)		—			(0.33	)		(0.02	)		(0.35	)
Sterling Capital Strategic Allocation Conservative Fund(d)
Six Months Ended March 31, 2013 (Unaudited)	$	9.68		0.11		0.25			0.36			(0.13	)		—			(0.13	)
Year Ended September 30, 2012	$	8.74		0.20		0.94			1.14			(0.20	)		—			(0.20	)
Year Ended September 30, 2011	$	9.06		0.22		(0.26	)		(0.04	)		(0.28	)		—			(0.28	)
Year Ended September 30, 2010	$	8.50		0.26		0.57			0.83			(0.27	)		—			(0.27	)
Year Ended September 30, 2009	$	8.43		0.23		0.21			0.44			(0.23	)		(0.14	)		(0.37	)
Year Ended September 30, 2008	$	10.53		0.26		(1.24	)		(0.98	)		(0.39	)		(0.73	)		(1.12	)
Sterling Capital Strategic Allocation Balanced Fund(d)
Six Months Ended March 31, 2013 (Unaudited)	$	9.13		0.09		0.42			0.51			(0.10	)		—			(0.10	)
Year Ended September 30, 2012	$	7.95		0.14		1.18			1.32			(0.14	)		—			(0.14	)
Year Ended September 30, 2011	$	8.39		0.15		(0.41	)		(0.26	)		(0.18	)		—			(0.18	)
Year Ended September 30, 2010	$	7.79		0.18		0.60			0.78			(0.18	)		—			(0.18	)
Year Ended September 30, 2009	$	7.77		0.16		0.02			0.18			(0.16	)		—			(0.16	)
Year Ended September 30, 2008	$	10.94		0.17		(1.86	)		(1.69	)		(0.35	)		(1.13	)		(1.48	)
Sterling Capital Strategic Allocation Growth Fund(d)
Six Months Ended March 31, 2013 (Unaudited)	$	8.47		0.07		0.53			0.60			(0.08	)		—			(0.08	)
Year Ended September 30, 2012	$	7.20		0.10		1.27			1.37			(0.10	)		—			(0.10	)
Year Ended September 30, 2011	$	7.69		0.10		(0.48	)		(0.38	)		(0.11	)		—			(0.11	)
Year Ended September 30, 2010	$	7.11		0.13		0.58			0.71			(0.13	)		—			(0.13	)
Year Ended September 30, 2009	$	7.33		0.12		(0.22	)		(0.10	)		(0.12	)		—			(0.12	)
Year Ended September 30, 2008	$	11.13		0.11		(2.21	)		(2.10	)		(0.33	)		(1.37	)		(1.70	)
Sterling Capital Strategic Allocation Equity Fund(d)
Six Months Ended March 31, 2013 (Unaudited)	$	8.14		0.02		0.68			0.70			(0.04	)		—			(0.04	)
Year Ended September 30, 2012	$	6.78		0.06		1.36			1.42			(0.06	)		—			(0.06	)
Year Ended September 30, 2011	$	7.33		0.07		(0.57	)		(0.50	)		(0.05	)		—			(0.05	)
Year Ended September 30, 2010	$	6.77		0.10		0.56			0.66			(0.10	)		—			(0.10	)
Year Ended September 30, 2009	$	7.41		0.07		(0.65	)		(0.58	)		(0.06	)		—			(0.06	)
Year Ended September 30, 2008	$	12.26		0.04		(2.76	)		(2.72	)		(0.32	)		(1.81	)		(2.13	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) The expense ratios exclude the impact of fees/expenses paid by each underlying fund.

See accompanying notes to the financial statements.

95

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(b)			Net Assets, End of Period (000)		Ratio of net expenses to average net assets(c)			Ratio of net investment income to average  net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$	11.23		0.55	%	$	25,264		0.94	%		1.94	%		0.94	%		5.39	%
$	11.36		6.48	%	$	22,398		0.95	%		2.16	%		1.02	%		26.49	%
$	10.97		3.11	%	$	16,338		0.96	%		2.43	%		1.26	%		25.83	%
$	10.93		5.25	%	$	15,290		0.98	%		2.81	%		1.39	%		14.60	%
$	10.68		12.78	%	$	11,255		0.98	%		3.18	%		1.38	%		42.06	%
$	9.95		0.94	%	$	7,481		0.96	%		3.28	%		1.36	%		127.76	%
$	12.24		0.13	%	$	51,967		0.93	%		2.00	%		0.93	%		15.41	%
$	12.45		5.68	%	$	50,835		0.93	%		2.25	%		1.01	%		21.63	%
$	12.12		2.85	%	$	39,231		0.93	%		2.64	%		1.23	%		15.33	%
$	12.14		4.39	%	$	35,284		0.94	%		2.79	%		1.35	%		9.54	%
$	12.07		13.11	%	$	20,230		0.92	%		3.05	%		1.32	%		35.90	%
$	11.11		1.79	%	$	9,683		0.89	%		3.25	%		1.29	%		53.28	%
$	10.31		0.30	%	$	41,771		0.93	%		2.13	%		0.93	%		9.48	%
$	10.51		6.59	%	$	40,019		0.93	%		2.60	%		0.93	%		26.70	%
$	10.16		3.22	%	$	32,791		0.94	%		3.19	%		0.94	%		23.34	%
$	10.17		4.87	%	$	29,858		0.94	%		3.33	%		0.95	%		6.60	%
$	10.04		11.14	%	$	19,518		0.93	%		3.45	%		0.93	%		24.19	%
$	9.36		(0.08	)%	$	16,138		0.91	%		3.41	%		0.91	%		39.13	%
$	9.91		3.76	%	$	14,511		0.65	%		2.26	%		0.69	%		54.77	%
$	9.68		13.10	%	$	13,704		0.69	%		2.09	%		0.77	%		7.99	%
$	8.74		(0.55	)%	$	10,689		0.64	%		2.34	%		0.97	%		8.36	%
$	9.06		9.93	%	$	7,230		0.46	%		3.01	%		0.97	%		33.33	%
$	8.50		5.95	%	$	5,929		0.43	%		2.95	%		0.93	%		21.56	%
$	8.43		(10.33	)%	$	7,573		0.35	%		2.72	%		0.85	%		39.99	%
$	9.54		5.63	%	$	29,092		0.62	%		1.92	%		0.66	%		74.88	%
$	9.13		16.76	%	$	28,375		0.66	%		1.65	%		0.75	%		17.65	%
$	7.95		(3.29	)%	$	25,227		0.58	%		1.68	%		0.91	%		9.96	%
$	8.39		10.18	%	$	25,419		0.41	%		2.27	%		0.92	%		47.76	%
$	7.79		2.67	%	$	24,426		0.38	%		2.36	%		0.88	%		22.46	%
$	7.77		(17.44	)%	$	27,775		0.35	%		1.82	%		0.85	%		63.63	%
$	8.99		7.07	%	$	20,351		0.63	%		1.53	%		0.68	%		90.14	%
$	8.47		19.14	%	$	18,827		0.68	%		1.30	%		0.76	%		20.21	%
$	7.20		(5.10	)%	$	16,246		0.59	%		1.26	%		0.93	%		9.06	%
$	7.69		10.13	%	$	17,838		0.42	%		1.81	%		0.93	%		57.35	%
$	7.11		(1.25	)%	$	16,609		0.39	%		1.89	%		0.89	%		24.08	%
$	7.33		(21.65	)%	$	18,321		0.35	%		1.23	%		0.85	%		77.54	%
$	8.80		8.61	%	$	5,872		0.92	%		0.60	%		0.92	%		8.19	%
$	8.14		20.99	%	$	5,830		0.81	%		0.78	%		0.89	%		27.91	%
$	6.78		(6.91	)%	$	4,806		0.71	%		0.87	%		1.05	%		10.72	%
$	7.33		9.90	%	$	5,148		0.50	%		1.41	%		1.06	%		66.32	%
$	6.77		(7.60	)%	$	4,810		0.46	%		1.23	%		0.97	%		20.24	%
$	7.41		(26.23	)%	$	5,680		0.38	%		0.44	%		0.88	%		67.40	%

96

    Sterling Capital Funds

Financial Highlights, Class B Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

				Investment Activities									Distributions
	Net Asset Value, Beginning of Period			Net investment income (loss)(a)			Net  realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Return of capital			Total Distributions
Sterling Capital Select Equity Fund
Six Months Ended March 31, 2013 (Unaudited)	$	12.58			0.02			0.55			0.57			(0.03	)		—			—			(0.03	)
Year Ended September 30, 2012	$	9.73			0.03			2.84			2.87			(0.02	)		—			—			(0.02	)
Year Ended September 30, 2011	$	10.33			0.02			(0.60	)		(0.58	)		(0.02	)		—			—			(0.02	)
Year Ended September 30, 2010	$	9.90			0.02			0.44			0.46			(0.03	)		—			—			(0.03	)
Year Ended September 30, 2009	$	11.11			0.05			(1.21	)		(1.16	)		(0.05	)		—			—			(0.05	)
Year Ended September 30, 2008	$	18.90			0.04			(5.05	)		(5.01	)		(0.05	)		(2.73	)		—			(2.78	)
Sterling Capital Mid Value Fund
Six Months Ended March 31, 2013 (Unaudited)	$	13.55			—	(e)		2.16			2.16			(0.03	)		—			—			(0.03	)
Year Ended September 30, 2012	$	10.80			—	(e)		2.77			2.77			(0.02	)		—			—			(0.02	)
Year Ended September 30, 2011	$	11.52			(0.06	)		(0.66	)		(0.72	)		—			—			—			—
Year Ended September 30, 2010	$	10.35			(0.05	)		1.22			1.17			—	(e)		—			—			—	(e)
Year Ended September 30, 2009	$	10.14			(0.05	)		0.27			0.22			(0.01	)		—			—			(0.01	)
Year Ended September 30, 2008	$	14.55			(0.07	)		(2.98	)		(3.05	)		—			(1.36	)		—			(1.36	)
Sterling Capital Small Value Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.80			(0.03	)		1.84			1.81			—			(0.15	)		—			(0.15	)
Year Ended September 30, 2012	$	10.69			(0.06	)		2.15			2.09			—			(0.98	)		—			(0.98	)
Year Ended September 30, 2011	$	11.17			(0.15	)		(0.33	)		(0.48	)		—			—			—			—
February 1, 2010 to September 30, 2010(f)	$	10.55			(0.02	)		0.64			0.62			—			—			—			—
Sterling Capital Special Opportunities Fund
Six Months Ended March 31, 2013 (Unaudited)	$	17.11			(0.03	)(h)		1.79			1.76			—			(0.95	)		—			(0.95	)
Year Ended September 30, 2012	$	14.22			(0.12	)		3.32			3.20			—			(0.31	)		—			(0.31	)
Year Ended September 30, 2011	$	14.97			(0.18	)		(0.47	)		(0.65	)		—			(0.10	)		—			(0.10	)
Year Ended September 30, 2010	$	13.89			(0.16	)		1.24			1.08			—			—			—			—
Year Ended September 30, 2009	$	14.65			(0.05	)		(0.05	)		(0.10	)		—	(e)		(0.57	)		(0.09	)		(0.66	)
Year Ended September 30, 2008	$	17.63			(0.21	)		(2.02	)		(2.23	)		—			(0.75	)		—			(0.75	)
Sterling Capital Equity Income Fund
Six Months Ended March 31, 2013 (Unaudited)	$	15.99			0.09			1.63			1.72			(0.08	)		(0.16	)		—			(0.24	)
Year Ended September 30, 2012	$	13.21			0.13			2.72			2.85			(0.07	)		—			—			(0.07	)
Year Ended September 30, 2011	$	13.01			0.14			0.14	(i)		0.28			(0.08	)		—			—			(0.08	)
Year Ended September 30, 2010	$	11.39			0.20			1.57			1.77			(0.15	)		—			—			(0.15	)
Year Ended September 30, 2009	$	12.31			0.22			(0.98	)		(0.76	)		(0.13	)		(0.03	)		—			(0.16	)
Year Ended September 30, 2008	$	14.99			0.32			(2.20	)		(1.88	)		(0.22	)		(0.58	)		—			(0.80	)
Sterling Capital Intermediate U.S. Government Fund
Six Months Ended March 31, 2013 (Unaudited)	$	10.82			0.05			(0.12	)		(0.07	)		(0.12	)		—			—			(0.12	)
Year Ended September 30, 2012	$	10.75			0.12			0.16			0.28			(0.21	)		—			—			(0.21	)
Year Ended September 30, 2011	$	10.77			0.17			0.04			0.21			(0.23	)		—			—			(0.23	)
Year Ended September 30, 2010	$	10.52			0.21			0.28			0.49			(0.24	)		—			—			(0.24	)
Year Ended September 30, 2009	$	10.00	��		0.25			0.54			0.79			(0.27	)		—			—			(0.27	)
Year Ended September 30, 2008	$	9.90			0.34			0.10			0.44			(0.34	)		—			—			(0.34	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income (loss) has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 4.37%.

(e) Amount is less than $0.005.

(f) Period from commencement of operations.

(g) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 5.50%.

(h) For the period ended March 31, 2013, net investment loss per share reflects a special dividend which amounted to $0.02 per share. Excluding the special dividend, the ratio of net investment loss to average net assets would have been (0.50)% per share.

(i) The amount shown for a share outstanding throughout the period does not accord with the change in aggregate gains and losses in the portfolio of securities during the period because of the timing of sales and purchases of Fund shares in relation to fluctuating market values during the period.

See accompanying notes to the financial statements.

97

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(b)			Net Assets, End of Period (000)		Ratio of net expenses to average net assets(c)			Ratio of net investment income (loss) to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$	13.12		4.53	%(d)	$	1,444		1.83	%		0.33	%		1.93	%		47.21	%
$	12.58		29.55	%	$	1,638		1.83	%		0.24	%		1.95	%		68.75	%
$	9.73		(5.67	)%	$	1,922		1.83	%		0.18	%		1.97	%		66.29	%
$	10.33		4.64	%	$	3,121		1.83	%		0.17	%		1.98	%		119.85	%
$	9.90		(10.31	)%	$	4,501		1.82	%		0.54	%		1.96	%		92.97	%
$	11.11		(29.98	)%	$	7,866		1.89	%		0.28	%		1.93	%		38.43	%
$	15.68		15.95	%	$	2,073		1.93	%		0.07	%		1.93	%		12.72	%
$	13.55		25.72	%	$	1,996		1.93	%		(0.01	)%		1.95	%		21.62	%
$	10.80		(6.25	)%	$	2,604		1.93	%		(0.45	)%		1.97	%		38.30	%
$	11.52		11.32	%	$	3,796		1.94	%		(0.48	)%		2.05	%		45.02	%
$	10.35		2.17	%	$	3,454		1.96	%		(0.60	)%		2.01	%		46.83	%
$	10.14		(22.60	)%	$	4,136		1.89	%		(0.58	)%		1.93	%		65.74	%
$	13.46		15.48	%	$	448		2.05	%		(0.53	)%		2.05	%		23.09	%
$	11.80		20.43	%	$	432		2.08	%		(0.53	)%		2.11	%		32.86	%
$	10.69		(4.30	)%	$	571		2.08	%		(1.15	)%		2.19	%		63.02	%
$	11.17		5.88	%(g)	$	932		2.15	%		(0.28	)%		2.41	%		95.89	%
$	17.92		10.70	%	$	10,550		2.02	%		(0.32	)%(h)		2.02	%		23.78	%
$	17.11		22.76	%	$	12,466		2.04	%		(0.77	)%		2.04	%		19.38	%
$	14.22		(4.43	)%	$	16,582		2.03	%		(1.10	)%		2.03	%		31.51	%
$	14.97		7.78	%	$	22,538		2.04	%		(1.13	)%		2.05	%		25.65	%
$	13.89		1.04	%	$	24,068		2.03	%		(0.39	)%		2.04	%		45.22	%
$	14.65		(13.28	)%	$	26,347		1.99	%		(1.22	)%		1.99	%		25.80	%
$	17.47		10.94	%	$	11,950		1.94	%		1.15	%		1.94	%		15.29	%
$	15.99		21.60	%	$	12,653		1.93	%		0.85	%		1.93	%		21.30	%
$	13.21		2.13	%	$	12,314		1.93	%		1.02	%		1.93	%		16.64	%
$	13.01		15.59	%	$	13,959		1.94	%		1.67	%		1.94	%		21.63	%
$	11.39		(6.05	)%	$	13,567		1.93	%		2.18	%		1.95	%		37.13	%
$	12.31		(13.14	)%	$	15,176		1.89	%		2.35	%		1.89	%		30.01	%
$	10.63		(0.67	)%	$	769		1.71	%		0.89	%		1.71	%		35.03	%
$	10.82		2.64	%	$	896		1.72	%		1.10	%		1.76	%		71.68	%
$	10.75		1.99	%	$	1,617		1.71	%		1.58	%		1.83	%		83.62	%
$	10.77		4.71	%	$	2,690		1.71	%		1.99	%		1.84	%		83.92	%
$	10.52		8.01	%	$	3,256		1.70	%		2.42	%		1.82	%		47.13	%
$	10.00		4.52	%	$	3,070		1.67	%		3.34	%		1.79	%		116.07	%

98

    Sterling Capital Funds

Financial Highlights, Class B Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

			Investment Activities									Distributions
	Net Asset Value, Beginning of Period		Net investment income (loss)(a)			Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital Total Return Bond Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.16		0.10			(0.08	)		0.02			(0.15	)		(0.08	)		(0.23	)
Year Ended September 30, 2012	$	11.06		0.22			0.45			0.67			(0.30	)		(0.27	)		(0.57	)
Year Ended September 30, 2011	$	11.33		0.30			0.01			0.31			(0.37	)		(0.21	)		(0.58	)
Year Ended September 30, 2010	$	10.78		0.35			0.62			0.97			(0.41	)		(0.01	)		(0.42	)
Year Ended September 30, 2009	$	9.89		0.37			0.89			1.26			(0.37	)		—			(0.37	)
Year Ended September 30, 2008	$	10.13		0.36			(0.22	)		0.14			(0.38	)		—			(0.38	)
Sterling Capital Strategic Allocation Conservative Fund(e)
Six Months Ended March 31, 2013 (Unaudited)	$	9.70		0.07			0.26			0.33			(0.09	)		—			(0.09	)
Year Ended September 30, 2012	$	8.76		0.12			0.94			1.06			(0.12	)		—			(0.12	)
Year Ended September 30, 2011	$	9.07		0.15			(0.25	)		(0.10	)		(0.21	)		—			(0.21	)
Year Ended September 30, 2010	$	8.50		0.20			0.57			0.77			(0.20	)		—			(0.20	)
Year Ended September 30, 2009	$	8.43		0.17			0.21			0.38			(0.17	)		(0.14	)		(0.31	)
Year Ended September 30, 2008	$	10.54		0.19			(1.25	)		(1.06	)		(0.32	)		(0.73	)		(1.05	)
Sterling Capital Strategic Allocation Balanced Fund(e)
Six Months Ended March 31, 2013 (Unaudited)	$	8.94		0.05			0.41			0.46			(0.06	)		—			(0.06	)
Year Ended September 30, 2012	$	7.79		0.07			1.16			1.23			(0.08	)		—			(0.08	)
Year Ended September 30, 2011	$	8.22		0.08			(0.40	)		(0.32	)		(0.11	)		—			(0.11	)
Year Ended September 30, 2010	$	7.63		0.12			0.59			0.71			(0.12	)		—			(0.12	)
Year Ended September 30, 2009	$	7.62		0.11			0.01			0.12			(0.11	)		—			(0.11	)
Year Ended September 30, 2008	$	10.75		0.10			(1.81	)		(1.71	)		(0.29	)		(1.13	)		(1.42	)
Sterling Capital Strategic Allocation Growth Fund(e)
Six Months Ended March 31, 2013 (Unaudited)	$	8.26		0.03			0.52			0.55			(0.04	)		—			(0.04	)
Year Ended September 30, 2012	$	7.03		0.04			1.24			1.28			(0.05	)		—			(0.05	)
Year Ended September 30, 2011	$	7.51		0.04			(0.46	)		(0.42	)		(0.06	)		—			(0.06	)
Year Ended September 30, 2010	$	6.95		0.08			0.56			0.64			(0.08	)		—			(0.08	)
Year Ended September 30, 2009	$	7.17		0.07			(0.22	)		(0.15	)		(0.07	)		—			(0.07	)
Year Ended September 30, 2008	$	10.92		0.04			(2.15	)		(2.11	)		(0.27	)		(1.37	)		(1.64	)
Sterling Capital Strategic Allocation Equity Fund(e)
Six Months Ended March 31, 2013 (Unaudited)	$	7.74		(0.01	)		0.64			0.63			(0.02	)		—			(0.02	)
Year Ended September 30, 2012	$	6.44		—	(d)		1.30			1.30			—			—			—
Year Ended September 30, 2011	$	7.01		0.01			(0.54	)		(0.53	)		(0.04	)		—			(0.04	)
Year Ended September 30, 2010	$	6.45		0.04			0.55			0.59			(0.03	)		—			(0.03	)
Year Ended September 30, 2009	$	7.09		0.03			(0.62	)		(0.59	)		(0.05	)		—			(0.05	)
Year Ended September 30, 2008	$	11.86		(0.03	)		(2.65	)		(2.68	)		(0.28	)		(1.81	)		(2.09	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income (loss) has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) Amount is less than $0.005.

(e) The expense ratios exclude the impact of fees/expenses paid by each underlying fund.

See accompanying notes to the financial statements.

99

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(b)			Net Assets, End of Period (000)		Ratio of net expenses to average net assets(c)			Ratio of net investment income (loss) to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$	10.95		0.20	%	$	2,635		1.58	%		1.84	%		1.59	%		82.02	%
$	11.16		6.33	%	$	3,132		1.63	%		1.97	%		1.67	%		110.82	%
$	11.06		2.91	%	$	3,776		1.70	%		2.74	%		1.82	%		131.87	%
$	11.33		9.18	%	$	4,762		1.71	%		3.21	%		1.83	%		122.94	%
$	10.78		13.03	%	$	5,362		1.71	%		3.62	%		1.83	%		122.26	%
$	9.89		1.31	%	$	4,951		1.66	%		3.49	%		1.78	%		190.15	%
$	9.94		3.46	%	$	1,238		1.40	%		1.48	%		1.44	%		54.77	%
$	9.70		12.16	%	$	1,397		1.44	%		1.34	%		1.44	%		7.99	%
$	8.76		(1.24	)%	$	1,813		1.37	%		1.61	%		1.47	%		8.36	%
$	9.07		9.15	%	$	2,403		1.21	%		2.25	%		1.47	%		33.33	%
$	8.50		5.15	%	$	3,184		1.18	%		2.20	%		1.43	%		21.56	%
$	8.43		(11.09	)%	$	4,081		1.10	%		1.98	%		1.35	%		39.99	%
$	9.34		5.22	%	$	4,336		1.37	%		1.13	%		1.41	%		74.88	%
$	8.94		15.80	%	$	5,184		1.41	%		0.87	%		1.41	%		17.65	%
$	7.79		(4.01	)%	$	6,560		1.31	%		0.96	%		1.41	%		9.96	%
$	8.22		9.40	%	$	9,771		1.16	%		1.48	%		1.41	%		47.76	%
$	7.63		1.81	%	$	11,734		1.13	%		1.63	%		1.38	%		22.46	%
$	7.62		(17.99	)%	$	15,305		1.10	%		1.07	%		1.35	%		63.63	%
$	8.77		6.71	%	$	3,582		1.39	%		0.77	%		1.43	%		90.14	%
$	8.26		18.19	%	$	4,346		1.43	%		0.52	%		1.43	%		20.21	%
$	7.03		(5.68	)%	$	5,521		1.33	%		0.52	%		1.43	%		9.06	%
$	7.51		9.22	%	$	8,275		1.17	%		1.05	%		1.43	%		57.35	%
$	6.95		(1.89	)%	$	9,973		1.15	%		1.17	%		1.40	%		24.08	%
$	7.17		(22.32	)%	$	13,306		1.10	%		0.47	%		1.35	%		77.54	%
$	8.35		8.19	%	$	1,153		1.66	%		(0.17	)%		1.66	%		8.19	%
$	7.74		20.19	%	$	1,497		1.56	%		(0.04	)%		1.56	%		27.91	%
$	6.44		(7.68	)%	$	2,673		1.45	%		0.14	%		1.54	%		10.72	%
$	7.01		9.17	%	$	3,673		1.25	%		0.63	%		1.55	%		66.32	%
$	6.45		(8.38	)%	$	4,215		1.21	%		0.50	%		1.47	%		20.24	%
$	7.09		(26.69	)%	$	5,406		1.13	%		(0.31	)%		1.38	%		67.40	%

100

    Sterling Capital Funds

Financial Highlights, Class C Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

			Investment Activities									Distributions
	Net Asset Value, Beginning of Period		Net investment income (loss)(a)			Net  realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments				Return of capital			Total Distributions
Sterling Capital Select Equity Fund
Six Months Ended March 31, 2013 (Unaudited)	$	12.49		0.02			0.55			0.57			(0.03	)		—				—			(0.03	)
Year Ended September 30, 2012	$	9.67		0.03			2.82			2.85			(0.03	)		—		��		—			(0.03	)
Year Ended September 30, 2011	$	10.28		0.01			(0.59	)		(0.58	)		(0.03	)		—				—			(0.03	)
Year Ended September 30, 2010	$	9.85		0.02			0.45			0.47			(0.04	)		—				—			(0.04	)
Year Ended September 30, 2009	$	11.08		0.04			(1.21	)		(1.17	)		(0.06	)		—				—			(0.06	)
Year Ended September 30, 2008	$	18.87		0.04			(5.05	)		(5.01	)		(0.05	)		(2.73	)			—			(2.78	)
Sterling Capital Mid Value Fund
Six Months Ended March 31, 2013 (Unaudited)	$	13.51		0.01			2.14			2.15			(0.03	)		—				—			(0.03	)
Year Ended September 30, 2012	$	10.78		—	(e)		2.76			2.76			(0.03	)		—				—			(0.03	)
Year Ended September 30, 2011	$	11.50		(0.05	)		(0.67	)		(0.72	)		—			—				—			—
Year Ended September 30, 2010	$	10.34		(0.05	)		1.21			1.16			—	(e)		—				—			—	(e)
Year Ended September 30, 2009	$	10.14		(0.05	)		0.26			0.21			(0.01	)		—				—			(0.01	)
Year Ended September 30, 2008	$	14.55		(0.07	)		(2.98	)		(3.05	)		—			(1.36	)			—			(1.36	)
Sterling Capital Small Value Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.79		(0.03	)		1.84			1.81			—			(0.15	)			—			(0.15	)
Year Ended September 30, 2012	$	10.69		(0.06	)		2.14			2.08			—			(0.98	)			—			(0.98	)
Year Ended September 30, 2011	$	11.17		(0.15	)		(0.33	)		(0.48	)		—			—				—			—
February 1, 2010 to September 30, 2010(f)	$	10.55		(0.01	)		0.64			0.63			(0.01	)		—				—			(0.01	)
Sterling Capital Special Opportunities Fund
Six Months Ended March 31, 2013 (Unaudited)	$	17.12		(0.03	)(h)		1.79			1.76			—			(0.95	)			—			(0.95	)
Year Ended September 30, 2012	$	14.23		(0.12	)		3.32			3.20			—			(0.31	)			—			(0.31	)
Year Ended September 30, 2011	$	14.98		(0.18	)		(0.47	)		(0.65	)		—			(0.10	)			—			(0.10	)
Year Ended September 30, 2010	$	13.89		(0.16	)		1.25			1.09			—			—				—			—
Year Ended September 30, 2009	$	14.66		(0.06	)		(0.05	)		(0.11	)		—	(e)		(0.57	)			(0.09	)		(0.66	)
Year Ended September 30, 2008	$	17.64		(0.21	)		(2.02	)		(2.23	)		—			(0.75	)			—			(0.75	)
Sterling Capital Equity Income Fund
Six Months Ended March 31, 2013 (Unaudited)	$	15.92		0.09			1.64			1.73			(0.09	)		(0.16	)			—			(0.25	)
Year Ended September 30, 2012	$	13.17		0.13			2.70			2.83			(0.08	)		—				—			(0.08	)
Year Ended September 30, 2011	$	12.98		0.15			0.13	(i)		0.28			(0.09	)		—				—			(0.09	)
Year Ended September 30, 2010	$	11.37		0.21			1.56			1.77			(0.16	)		—				—			(0.16	)
Year Ended September 30, 2009	$	12.30		0.22			(0.99	)		(0.77	)		(0.13	)		(0.03	)			—			(0.16	)
Year Ended September 30, 2008	$	14.98		0.33			(2.21	)		(1.88	)		(0.22	)		(0.58	)			—			(0.80	)
Sterling Capital Short-Term Bond Fund
Six Months Ended March 31, 2013 (Unaudited)	$	9.47		0.06			(0.03	)		0.03			(0.11	)		—				—			(0.11	)
February 1, 2012 to September 30, 2012(f)	$	9.45		0.08			0.10			0.18			(0.16	)		—				—			(0.16	)
Sterling Capital Intermediate U.S. Government Fund
Six Months Ended March 31, 2013 (Unaudited)	$	10.84		0.05			(0.12	)		(0.07	)		(0.12	)		—				—			(0.12	)
Year Ended September 30, 2012	$	10.77		0.11			0.17			0.28			(0.21	)		—				—			(0.21	)
Year Ended September 30, 2011	$	10.79		0.16			0.05			0.21			(0.23	)		—				—			(0.23	)
Year Ended September 30, 2010	$	10.53		0.21			0.29			0.50			(0.24	)		—				—			(0.24	)
Year Ended September 30, 2009	$	10.01		0.24			0.55			0.79			(0.27	)		—				—			(0.27	)
Year Ended September 30, 2008	$	9.90		0.34			0.12			0.46			(0.35	)		—				—			(0.35	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income (loss) has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 4.44%.

(e) Amount is less than $0.005.

(f) Period from commencement of operations.

(g) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 5.55%.

(h) For the period ended March 31, 2013, net investment loss per share reflects a special dividend which amounted to $0.02 per share. Excluding the special dividend, the ratio of net investment loss to average net assets would have been (0.49)% per share.

(i) The amount shown for a share outstanding throughout the period does not accord with the change in aggregate gains and losses in the portfolio of securities during the period because of the timing of sales and purchases of Fund shares in relation to fluctuating market values during the period.

See accompanying notes to the financial statements.

101

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(b)			Net Assets, End of Period (000)		Ratio of net expenses to average net assets(c)			Ratio of net investment income (loss) to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$	13.03		4.60	%(d)	$	177		1.83	%		0.32	%		1.93	%		47.21	%
$	12.49		29.51	%	$	167		1.83	%		0.22	%		1.95	%		68.75	%
$	9.67		(5.72	)%	$	176		1.84	%		0.13	%		1.99	%		66.29	%
$	10.28		4.75	%	$	110		1.84	%		0.23	%		1.99	%		119.85	%
$	9.85		(10.43	)%	$	93		1.81	%		0.49	%		1.95	%		92.97	%
$	11.08		(30.00	)%	$	143		1.89	%		0.28	%		1.94	%		38.43	%
$	15.63		15.94	%	$	672		1.93	%		0.09	%		1.93	%		12.72	%
$	13.51		25.67	%	$	538		1.94	%		0.03	%		1.95	%		21.62	%
$	10.78		(6.26	)%	$	398		1.93	%		(0.42	)%		1.97	%		38.30	%
$	11.50		11.26	%	$	436		1.95	%		(0.42	)%		2.06	%		45.02	%
$	10.34		2.08	%	$	176		1.96	%		(0.59	)%		2.01	%		46.83	%
$	10.14		(22.59	)%	$	328		1.89	%		(0.60	)%		1.93	%		65.74	%
$	13.45		15.49	%	$	181		2.05	%		(0.54	)%		2.05	%		23.09	%
$	11.79		20.33	%	$	108		2.08	%		(0.52	)%		2.11	%		32.86	%
$	10.69		(4.30	)%	$	81		2.09	%		(1.13	)%		2.19	%		63.02	%
$	11.17		5.93	%(g)	$	57		2.16	%		(0.11	)%		2.38	%		95.89	%
$	17.93		10.69	%	$	87,041		2.02	%		(0.31	)%(h)		2.02	%		23.78	%
$	17.12		22.75	%	$	82,536		2.04	%		(0.75	)%		2.04	%		19.38	%
$	14.23		(4.43	)%	$	71,564		2.03	%		(1.10	)%		2.03	%		31.51	%
$	14.98		7.85	%	$	73,282		2.04	%		(1.12	)%		2.05	%		25.65	%
$	13.89		0.97	%	$	58,479		2.03	%		(0.51	)%		2.04	%		45.22	%
$	14.66		(13.27	)%	$	50,230		1.99	%		(1.23	)%		1.99	%		25.80	%
$	17.40		11.03	%	$	238,897		1.94	%		1.16	%		1.94	%		15.29	%
$	15.92		21.54	%	$	194,345		1.94	%		0.86	%		1.94	%		21.30	%
$	13.17		2.13	%	$	104,208		1.93	%		1.05	%		1.93	%		16.64	%
$	12.98		15.62	%	$	69,549		1.94	%		1.69	%		1.95	%		21.63	%
$	11.37		(6.10	)%	$	39,164		1.93	%		2.18	%		1.95	%		37.13	%
$	12.30		(13.07	)%	$	32,637		1.89	%		2.39	%		1.89	%		30.01	%
$	9.39		0.37	%	$	243		1.54	%		1.27	%		1.56	%		28.80	%
$	9.47		1.90	%	$	216		1.57	%		1.22	%		1.57	%		85.13	%
$	10.65		(0.66	)%	$	1,048		1.71	%		0.88	%		1.71	%		35.03	%
$	10.84		2.64	%	$	1,097		1.72	%		1.06	%		1.75	%		71.68	%
$	10.77		1.99	%	$	658		1.71	%		1.54	%		1.83	%		83.62	%
$	10.79		4.80	%	$	536		1.71	%		2.00	%		1.84	%		83.92	%
$	10.53		8.00	%	$	426		1.70	%		2.31	%		1.82	%		47.13	%
$	10.01		4.62	%	$	176		1.67	%		3.33	%		1.79	%		116.07	%

102

    Sterling Capital Funds

Financial Highlights, Class C Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

				Investment Activities								Distributions
	Net Asset Value, Beginning of Period			Net investment income(a)		Net realized/ unrealized gains (losses) on  investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital Total Return Bond Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.17			0.10		(0.08	)		0.02			(0.15	)		(0.08	)		(0.23	)
Year Ended September 30, 2012	$	11.07			0.21		0.46			0.67			(0.30	)		(0.27	)		(0.57	)
Year Ended September 30, 2011	$	11.34			0.30		0.01			0.31			(0.37	)		(0.21	)		(0.58	)
Year Ended September 30, 2010	$	10.79			0.34		0.63			0.97			(0.41	)		(0.01	)		(0.42	)
Year Ended September 30, 2009	$	9.89			0.37		0.90			1.27			(0.37	)		—			(0.37	)
Year Ended September 30, 2008	$	10.14			0.36		(0.23	)		0.13			(0.38	)		—			(0.38	)
Sterling Capital Corporate Fund
February 1, 2013 to March 31, 2013 (Unaudited)(d)	$	10.53			0.04		0.03			0.07			(0.04	)		—			(0.04	)
Sterling Capital Securitized Opportunities Fund
February 1, 2013 to March 31, 2013 (Unaudited)(d)	$	10.16			0.01		0.02			0.03			(0.04	)		—			(0.04	)
Sterling Capital Kentucky Intermediate Tax-Free Fund			��
Six Months Ended March 31, 2013 (Unaudited)	$	11.16			0.08		(0.02	)		0.06			(0.08	)		(0.06	)		(0.14	)
February 1, 2012 to September 30, 2012(d)	$	11.08			0.11		0.09			0.20			(0.12	)		—			(0.12	)
Sterling Capital Maryland Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.56			0.06		(0.06	)		—			(0.06	)		(0.15	)		(0.21	)
February 1, 2012 to September 30, 2012(d)	$	11.47			0.09		0.09			0.18			(0.09	)		—			(0.09	)
Sterling Capital North Carolina Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.35			0.08		(0.11	)		(0.03	)		(0.08	)		(0.08	)		(0.16	)
February 1, 2012 to September 30, 2012(d)	$	11.25			0.11		0.11			0.22			(0.12	)		—			(0.12	)
Sterling Capital South Carolina Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.36			0.07		(0.05	)		0.02			(0.07	)		(0.08	)		(0.15	)
February 1, 2012 to September 30, 2012(d)	$	11.25			0.10		0.11			0.21			(0.10	)		—			(0.10	)
Sterling Capital Virginia Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	12.44			0.08		(0.10	)		(0.02	)		(0.08	)		(0.10	)		(0.18	)
February 1, 2012 to September 30, 2012(d)	$	12.37			0.11		0.07			0.18			(0.11	)		—			(0.11	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) Period from commencement of operations.

See accompanying notes to the financial statements.

103

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(b)			Net Assets, End of Period (000)		Ratio of net expenses to average net assets(c)			Ratio of net investment income to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$	10.96		0.21	%	$	6,926		1.59	%		1.81	%		1.60	%		82.02	%
$	11.17		6.32	%	$	5,845		1.63	%		1.90	%		1.66	%		110.82	%
$	11.07		2.91	%	$	4,224		1.70	%		2.68	%		1.82	%		131.87	%
$	11.34		9.18	%	$	2,140		1.71	%		3.09	%		1.85	%		122.94	%
$	10.79		13.14	%	$	400		1.71	%		3.61	%		1.83	%		122.26	%
$	9.89		1.21	%	$	184		1.66	%		3.49	%		1.78	%		190.15	%
$	10.56		0.69	%	$	3		1.54	%		2.39	%		1.54	%		51.73	%
$	10.15		0.32	%	$	3		1.59	%		0.56	%		1.59	%		97.85	%
$	11.08		0.51	%	$	278		1.71	%		1.43	%		1.71	%		6.95	%
$	11.16		1.82	%	$	209		1.71	%		1.45	%		1.71	%		16.52	%
$	11.35		0.00	%	$	1,748		1.71	%		1.06	%		1.71	%		14.69	%
$	11.56		1.57	%	$	1,321		1.71	%		1.12	%		1.71	%		34.94	%
$	11.16		(0.25	)%	$	5,735		1.67	%		1.44	%		1.67	%		7.51	%
$	11.35		1.93	%	$	3,251		1.67	%		1.49	%		1.67	%		19.76	%
$	11.23		0.17	%	$	996		1.69	%		1.16	%		1.69	%		5.39	%
$	11.36		1.86	%	$	507		1.69	%		1.29	%		1.69	%		26.49	%
$	12.24		(0.17	)%	$	3,345		1.68	%		1.23	%		1.68	%		15.41	%
$	12.44		1.48	%	$	2,884		1.68	%		1.36	%		1.68	%		21.63	%

104

    Sterling Capital Funds

Financial Highlights, Class C Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

			Investment Activities									Distributions
	Net Asset Value, Beginning of Period		Net investment income (loss)(a)			Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital West Virginia Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	10.51		0.07			(0.08	)		(0.01	)		(0.07	)		(0.12	)		(0.19	)
February 1, 2012 to September 30, 2012(d)	$	10.38		0.11			0.14			0.25			(0.12	)		—			(0.12	)
Sterling Capital Strategic Allocation Conservative Fund(f)
Six Months Ended March 31, 2013 (Unaudited)	$	9.64		0.07			0.25			0.32			(0.10	)		—			(0.10	)
Year Ended September 30, 2012	$	8.71		0.12			0.94			1.06			(0.13	)		—			(0.13	)
Year Ended September 30, 2011	$	9.03		0.15			(0.26	)		(0.11	)		(0.21	)		—			(0.21	)
Year Ended September 30, 2010	$	8.47		0.20			0.57			0.77			(0.21	)		—			(0.21	)
Year Ended September 30, 2009	$	8.41		0.17			0.21			0.38			(0.18	)		(0.14	)		(0.32	)
Year Ended September 30, 2008	$	10.51		0.19			(1.24	)		(1.05	)		(0.32	)		(0.73	)		(1.05	)
Sterling Capital Strategic Allocation Balanced Fund(f)
Six Months Ended March 31, 2013 (Unaudited)	$	8.98		0.05			0.41			0.46			(0.07	)		—			(0.07	)
Year Ended September 30, 2012	$	7.82		0.08			1.16			1.24			(0.08	)		—			(0.08	)
Year Ended September 30, 2011	$	8.26		0.08			(0.40	)		(0.32	)		(0.12	)		—			(0.12	)
Year Ended September 30, 2010	$	7.68		0.12			0.59			0.71			(0.13	)		—			(0.13	)
Year Ended September 30, 2009	$	7.67		0.11			0.01			0.12			(0.11	)		—			(0.11	)
Year Ended September 30, 2008	$	10.81		0.09			(1.82	)		(1.73	)		(0.28	)		(1.13	)		(1.41	)
Sterling Capital Strategic Allocation Growth Fund(f)
Six Months Ended March 31, 2013 (Unaudited)	$	8.24		0.03			0.52			0.55			(0.05	)		—			(0.05	)
Year Ended September 30, 2012	$	7.01		0.04			1.24			1.28			(0.05	)		—			(0.05	)
Year Ended September 30, 2011	$	7.50		0.04			(0.46	)		(0.42	)		(0.07	)		—			(0.07	)
Year Ended September 30, 2010	$	6.94		0.08			0.56			0.64			(0.08	)		—			(0.08	)
Year Ended September 30, 2009	$	7.17		0.07			(0.22	)		(0.15	)		(0.08	)		—			(0.08	)
Year Ended September 30, 2008	$	10.92		0.04			(2.15	)		(2.11	)		(0.27	)		(1.37	)		(1.64	)
Sterling Capital Strategic Allocation Equity Fund(f)
Six Months Ended March 31, 2013 (Unaudited)	$	7.71		(0.01	)		0.64			0.63			(0.02	)		—			(0.02	)
Year Ended September 30, 2012	$	6.42		—	(e)		1.29			1.29			—			—			—
Year Ended September 30, 2011	$	6.98		0.01			(0.53	)		(0.52	)		(0.04	)		—			(0.04	)
Year Ended September 30, 2010	$	6.47		0.04			0.54			0.58			(0.07	)		—			(0.07	)
Year Ended September 30, 2009	$	7.10		0.02			(0.60	)		(0.58	)		(0.05	)		—			(0.05	)
Year Ended September 30, 2008	$	11.87		(0.03	)		(2.66	)		(2.69	)		(0.27	)		(1.81	)		(2.08	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income (loss) has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) Period from commencement of operations.

(e) Amount is less than $0.005.

(f) The expense ratios exclude the impact of fees/expenses paid by each underlying fund.

See accompanying notes to the financial statements.

105

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(b)			Net Assets, End of Period (000)		Ratio of net expenses to average net assets(c)			Ratio of net investment income (loss) to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$	10.31		(0.07	)%	$	898		1.68	%		1.38	%		1.68	%		9.48	%
$	10.51		2.41	%	$	729		1.64	%		1.63	%		1.64	%		26.70	%
$	9.86		3.33	%	$	262		1.39	%		1.52	%		1.44	%		54.77	%
$	9.64		12.23	%	$	207		1.44	%		1.33	%		1.44	%		7.99	%
$	8.71		(1.30	)%	$	152		1.39	%		1.57	%		1.47	%		8.36	%
$	9.03		9.17	%	$	127		1.21	%		2.28	%		1.47	%		33.33	%
$	8.47		5.09	%	$	101		1.17	%		2.19	%		1.43	%		21.56	%
$	8.41		(10.99	)%	$	94		1.10	%		1.99	%		1.35	%		39.99	%
$	9.37		5.11	%	$	434		1.37	%		1.14	%		1.41	%		74.88	%
$	8.98		15.88	%	$	420		1.41	%		0.91	%		1.41	%		17.65	%
$	7.82		(3.97	)%	$	367		1.35	%		0.93	%		1.42	%		9.96	%
$	8.26		9.34	%	$	186		1.16	%		1.49	%		1.42	%		47.76	%
$	7.68		1.85	%	$	89		1.13	%		1.58	%		1.38	%		22.46	%
$	7.67		(18.02	)%	$	79		1.10	%		1.04	%		1.35	%		63.63	%
$	8.74		6.66	%	$	349		1.38	%		0.80	%		1.43	%		90.14	%
$	8.24		18.29	%	$	294		1.43	%		0.55	%		1.43	%		20.21	%
$	7.01		(5.78	)%	$	226		1.36	%		0.50	%		1.43	%		9.06	%
$	7.50		9.33	%	$	157		1.17	%		1.07	%		1.43	%		57.35	%
$	6.94		(1.90	)%	$	99		1.14	%		1.13	%		1.39	%		24.08	%
$	7.17		(22.31	)%	$	55		1.10	%		0.49	%		1.35	%		77.54	%
$	8.32		8.25	%	$	29		1.65	%		(0.16	)%		1.65	%		8.19	%
$	7.71		20.09	%	$	40		1.56	%		0.04	%		1.56	%		27.91	%
$	6.42		(7.55	)%	$	25		1.48	%		0.10	%		1.56	%		10.72	%
$	6.98		9.02	%	$	17		1.22	%		0.58	%		1.54	%		66.32	%
$	6.47		(8.11	)%	$	6		1.13	%		0.35	%		1.36	%		20.24	%
$	7.10		(26.77	)%	$	1		1.13	%		(0.32	)%		1.43	%		67.40	%

106

    Sterling Capital Funds

    Financial Highlights, Institutional Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

			Investment Activities									Distributions
	Net Asset Value, Beginning of Period		Net investment income (loss)(a)			Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Return of capital			Total Distributions
Sterling Capital Select Equity Fund
Six Months Ended March 31, 2013 (Unaudited)	$	12.87		0.09			0.55			0.64			(0.09	)		—			—			(0.09	)
Year Ended September 30, 2012	$	9.95		0.14			2.92			3.06			(0.14	)		—			—			(0.14	)
Year Ended September 30, 2011	$	10.57		0.14			(0.62	)		(0.48	)		(0.14	)		—			—			(0.14	)
Year Ended September 30, 2010	$	10.13		0.13			0.45			0.58			(0.14	)		—			—			(0.14	)
Year Ended September 30, 2009	$	11.36		0.13			(1.22	)		(1.09	)		(0.14	)		—			—			(0.14	)
Year Ended September 30, 2008	$	19.20		0.18			(5.16	)		(4.98	)		(0.13	)		(2.73	)		—			(2.86	)
Sterling Capital Mid Value Fund
Six Months Ended March 31, 2013 (Unaudited)	$	14.37		0.08			2.27			2.35			(0.06	)		—			—			(0.06	)
Year Ended September 30, 2012	$	11.43		0.14			2.94			3.08			(0.14	)		—			—			(0.14	)
Year Ended September 30, 2011	$	12.14		0.08			(0.71	)		(0.63	)		(0.08	)		—			—			(0.08	)
Year Ended September 30, 2010	$	10.86		0.07			1.27			1.34			(0.06	)		—			—			(0.06	)
Year Ended September 30, 2009	$	10.56		0.04			0.29			0.33			(0.03	)		—			—			(0.03	)
Year Ended September 30, 2008	$	15.00		0.05			(3.10	)		(3.05	)		(0.03	)		(1.36	)		—			(1.39	)
Sterling Capital Small Value Fund
Six Months Ended March 31, 2013 (Unaudited)	$	12.08		0.03			1.89			1.92			(0.03	)		(0.15	)		—			(0.18	)
Year Ended September 30, 2012	$	10.82		0.06			2.18			2.24			—			(0.98	)		—			(0.98	)
Year Ended September 30, 2011	$	11.19		(0.02	)		(0.35	)		(0.37	)		—			—			—			—
Year Ended September 30, 2010	$	10.27		0.06			0.92			0.98			(0.06	)		—			—			(0.06	)
Year Ended September 30, 2009	$	9.89		0.02			0.65			0.67			—			(0.29	)		—			(0.29	)
Year Ended September 30, 2008	$	14.68		—	(f)		(2.24	)		(2.24	)		—			(2.55	)		—			(2.55	)
Sterling Capital Special Opportunities Fund
Six Months Ended March 31, 2013 (Unaudited)	$	18.99		0.07	(g)		1.99			2.06			(0.06	)		(0.95	)		—			(1.01	)
Year Ended September 30, 2012	$	15.60		0.04			3.66			3.70			—			(0.31	)		—			(0.31	)
Year Ended September 30, 2011	$	16.25		(0.02	)		(0.53	)		(0.55	)		—			(0.10	)		—			(0.10	)
Year Ended September 30, 2010	$	14.92		(0.02	)		1.35			1.33			—			—			—			—
Year Ended September 30, 2009	$	15.58		0.04			(0.01	)		0.03			—	(f)		(0.58	)		(0.11	)		(0.69	)
Year Ended September 30, 2008	$	18.51		(0.04	)		(2.14	)		(2.18	)		—			(0.75	)		—			(0.75	)
Sterling Capital Equity Income Fund
Six Months Ended March 31, 2013 (Unaudited)	$	16.06		0.18			1.65			1.83			(0.17	)		(0.16	)		—			(0.33	)
Year Ended September 30, 2012	$	13.27		0.28			2.74			3.02			(0.23	)		—			—			(0.23	)
Year Ended September 30, 2011	$	13.07		0.29			0.14	(h)		0.43			(0.23	)		—			—			(0.23	)
Year Ended September 30, 2010	$	11.44		0.33			1.57			1.90			(0.27	)		—			—			(0.27	)
Year Ended September 30, 2009	$	12.37		0.32			(0.99	)		(0.67	)		(0.23	)		(0.03	)		—			(0.26	)
Year Ended September 30, 2008	$	15.05		0.51			(2.26	)		(1.75	)		(0.35	)		(0.58	)		—			(0.93	)
Sterling Capital Ultra Short Bond Fund
November 30, 2012 to March 31, 2013 (Unaudited)(i)	$	10.00		0.02			—			0.02			(0.02	)		—			—			(0.02	)
Sterling Capital Short-Term Bond Fund
Six Months Ended March 31, 2013 (Unaudited)	$	9.47		0.11			(0.03	)		0.08			(0.16	)		—			—			(0.16	)
Year Ended September 30, 2012	$	9.36		0.22			0.24			0.46			(0.35	)		—			—			(0.35	)
Year Ended September 30, 2011	$	9.68		0.20			(0.19	)		0.01			(0.33	)		—			—			(0.33	)
Year Ended September 30, 2010	$	9.67		0.19			0.09			0.28			(0.27	)		—			—			(0.27	)
Year Ended September 30, 2009	$	9.54		0.25			0.22			0.47			(0.34	)		—			—			(0.34	)
Year Ended September 30, 2008	$	9.53		0.35			0.06			0.41			(0.40	)		—			—			(0.40	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income (loss) has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 4.87%.

(e) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 9.10%.

(f) Amount is less than $0.005.

(g) For the period ended March 31, 2013, net investment income per share reflects a special dividend which amounted to $0.02 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 0.51% per share.

(h) The amount shown for a share outstanding throughout the period does not accord with the change in aggregate gains and losses in the portfolio of securities during the period because of the timing of sales and purchases of Fund shares in relation to fluctuating market values during the period.

(i) Period from commencement of operations.

See accompanying notes to the financial statements.

107

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return(b)			Net Assets, End of Period (000)		Ratio of net expenses to average net assets(c)			Ratio of net investment income (loss) to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$	13.42		5.02	%(d)	$	193,126		0.83	%		1.33	%		0.93	%		47.21	%
$	12.87		30.89	%	$	189,252		0.83	%		1.22	%		0.95	%		68.75	%
$	9.95		(4.74	)%	$	156,832		0.83	%		1.18	%		0.98	%		66.29	%
$	10.57		5.71	%	$	183,791		0.84	%		1.23	%		0.99	%		119.85	%
$	10.13		(9.40	)%	$	177,725		0.81	%		1.51	%		0.95	%		92.97	%
$	11.36		(29.32	)%	$	257,036		0.89	%		1.28	%		0.94	%		38.43	%
$	16.66		16.44	%	$	399,907		0.93	%		1.08	%		0.93	%		12.72	%
$	14.37		27.00	%	$	340,577		0.93	%		1.02	%		0.95	%		21.62	%
$	11.43		(5.29	)%	$	299,032		0.93	%		0.58	%		0.97	%		38.30	%
$	12.14		12.39	%	$	319,451		0.94	%		0.58	%		1.05	%		45.02	%
$	10.86		3.21	%	$	200,331		0.96	%		0.44	%		1.02	%		46.83	%
$	10.56		(21.87	)%	$	163,840		0.89	%		0.43	%		0.93	%		65.74	%
$	13.82		16.01	%	$	85,149		1.05	%		0.48	%		1.05	%		23.09	%
$	12.08		21.65	%	$	71,711		1.08	%		0.47	%		1.11	%		32.86	%
$	10.82		(3.31	)%	$	64,962		1.08	%		(0.14	)%		1.19	%		63.02	%
$	11.19		9.59	%(e)	$	60,073		1.20	%		0.56	%		1.42	%		95.89	%
$	10.27		8.68	%	$	25,790		1.42	%		0.23	%		1.79	%		89.00	%
$	9.89		(17.16	)%	$	22,635		1.26	%		0.01	%		1.40	%		64.00	%
$	20.04		11.24	%	$	421,891		1.02	%		0.68	%(g)		1.02	%		23.78	%
$	18.99		23.97	%	$	386,543		1.04	%		0.25	%		1.04	%		19.38	%
$	15.60		(3.46	)%	$	330,913		1.04	%		(0.09	)%		1.04	%		31.51	%
$	16.25		8.91	%	$	254,834		1.04	%		(0.13	)%		1.05	%		25.65	%
$	14.92		1.91	%	$	228,421		1.03	%		0.30	%		1.04	%		45.22	%
$	15.58		(12.35	)%	$	167,544		0.99	%		(0.24	)%		0.99	%		25.80	%
$	17.56		11.56	%	$	801,641		0.94	%		2.15	%		0.94	%		15.29	%
$	16.06		22.80	%	$	635,360		0.94	%		1.86	%		0.94	%		21.30	%
$	13.27		3.17	%	$	392,660		0.93	%		2.06	%		0.93	%		16.64	%
$	13.07		16.77	%	$	236,580		0.94	%		2.68	%		0.95	%		21.63	%
$	11.44		(5.18	)%	$	177,281		0.93	%		3.19	%		0.95	%		37.13	%
$	12.37		(12.24	)%	$	140,256		0.89	%		3.72	%		0.89	%		30.01	%
$	10.00		0.21	%	$	37,066		0.47	%		0.62	%		0.47	%		22.42	%
$	9.39		0.87	%	$	56,319		0.54	%		2.27	%		0.55	%		28.80	%
$	9.47		4.94	%	$	47,235		0.56	%		2.30	%		0.58	%		85.13	%
$	9.36		0.05	%	$	55,680		0.60	%		2.07	%		0.70	%		120.09	%
$	9.68		2.90	%	$	60,089		0.70	%		1.93	%		0.86	%		55.50	%
$	9.67		4.94	%	$	59,123		0.70	%		2.58	%		0.85	%		89.57	%
$	9.54		4.38	%	$	44,912		0.65	%		3.68	%		0.80	%		48.20	%

108

    Sterling Capital Funds

Financial Highlights, Institutional Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

			Investment Activities								Distributions
	Net Asset Value, Beginning of Period		Net investment income(a)		Net realized/ unrealized gains (losses) on  investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital Intermediate U.S. Government Fund
Six Months Ended March 31, 2013 (Unaudited)	$	10.87		0.10		(0.12	)		(0.02	)		(0.17	)		—			(0.17	)
Year Ended September 30, 2012	$	10.80		0.23		0.16			0.39			(0.32	)		—			(0.32	)
Year Ended September 30, 2011	$	10.82		0.27		0.05			0.32			(0.34	)		—			(0.34	)
Year Ended September 30, 2010	$	10.57		0.32		0.28			0.60			(0.35	)		—			(0.35	)
Year Ended September 30, 2009	$	10.05		0.35		0.55			0.90			(0.38	)		—			(0.38	)
Year Ended September 30, 2008	$	9.94		0.44		0.12			0.56			(0.45	)		—			(0.45	)
Sterling Capital Total Return Bond Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.16		0.16		(0.09	)		0.07			(0.20	)		(0.08	)		(0.28	)
Year Ended September 30, 2012	$	11.06		0.32		0.46			0.78			(0.41	)		(0.27	)		(0.68	)
Year Ended September 30, 2011	$	11.33		0.41		0.01			0.42			(0.48	)		(0.21	)		(0.69	)
Year Ended September 30, 2010	$	10.78		0.46		0.62			1.08			(0.52	)		(0.01	)		(0.53	)
Year Ended September 30, 2009	$	9.89		0.47		0.89			1.36			(0.47	)		—			(0.47	)
Year Ended September 30, 2008	$	10.13		0.46		(0.22	)		0.24			(0.48	)		—			(0.48	)
Sterling Capital Corporate Fund
Six Months Ended March 31, 2013 (Unaudited)(d)	$	10.70		0.19		(0.03	)		0.16			(0.19	)		(0.11	)		(0.30	)
Year Ended September 30, 2012	$	9.94		0.36		0.77			1.13			(0.36	)		(0.01	)		(0.37	)
June 30, 2011 to September 30, 2011(e)	$	10.00		0.08		(0.07	)		0.01			(0.07	)		—			(0.07	)
Sterling Capital Securitized Opportunities Fund
Six Months Ended March 31, 2013 (Unaudited)(d)	$	10.29		0.12		(0.09	)		0.03			(0.17	)		—			(0.17	)
Year Ended September 30, 2012	$	10.11		0.26		0.30			0.56			(0.37	)		(0.01	)		(0.38	)
June 30, 2011 to September 30, 2011(e)	$	10.00		0.06		0.12			0.18			(0.07	)		—			(0.07	)
Sterling Capital Kentucky Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.15		0.14		(0.04	)		0.10			(0.13	)		(0.06	)		(0.19	)
Year Ended September 30, 2012	$	10.79		0.29		0.39			0.68			(0.29	)		(0.03	)		(0.32	)
Year Ended September 30, 2011	$	10.81		0.32		0.03	(f)		0.35			(0.32	)		(0.05	)		(0.37	)
Year Ended September 30, 2010	$	10.67		0.32		0.24			0.56			(0.32	)		(0.10	)		(0.42	)
Year Ended September 30, 2009	$	9.87		0.35		0.90			1.25			(0.35	)		(0.10	)		(0.45	)
Year Ended September 30, 2008	$	10.05		0.34		(0.18	)		0.16			(0.34	)		—			(0.34	)
Sterling Capital Maryland Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.58		0.12		(0.07	)		0.05			(0.12	)		(0.15	)		(0.27	)
Year Ended September 30, 2012	$	11.25		0.26		0.41			0.67			(0.26	)		(0.08	)		(0.34	)
Year Ended September 30, 2011	$	11.22		0.31		0.06			0.37			(0.30	)		(0.04	)		(0.34	)
Year Ended September 30, 2010	$	10.99		0.30		0.23			0.53			(0.30	)		—	(g)		(0.30	)
Year Ended September 30, 2009	$	10.06		0.33		1.01			1.34			(0.33	)		(0.08	)		(0.41	)
Year Ended September 30, 2008	$	10.17		0.34		(0.11	)		0.23			(0.34	)		—			(0.34	)
Sterling Capital North Carolina Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.36		0.14		(0.12	)		0.02			(0.14	)		(0.08	)		(0.22	)
Year Ended September 30, 2012	$	11.02		0.30		0.40			0.70			(0.29	)		(0.07	)		(0.36	)
Year Ended September 30, 2011	$	11.01		0.31		0.07			0.38			(0.31	)		(0.06	)		(0.37	)
Year Ended September 30, 2010	$	10.87		0.33		0.20			0.53			(0.33	)		(0.06	)		(0.39	)
Year Ended September 30, 2009	$	10.09		0.36		0.88			1.24			(0.36	)		(0.10	)		(0.46	)
Year Ended September 30, 2008	$	10.33		0.37		(0.20	)		0.17			(0.37	)		(0.04	)		(0.41	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income (loss) has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) The Fund converted Class S Shares into Institutional Shares effective February 1, 2013.

(e) Period from commencement of operations.

(f) The amount shown for a share outstanding throughout the period does not accord with the change in aggregate gains and losses in the portfolio of securities during the period because of the timing of sales and purchases of Fund shares in relation to fluctuating market values during the period.

(g) Amount is less than $0.005.

See accompanying notes to the financial statements.

109

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return(b)			Net Assets, End of Period (000)		Ratio of net expenses to average net assets(c)			Ratio of net investment income to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$	10.68		(0.16	)%	$	64,639		0.71	%		1.90	%		0.71	%		35.03	%
$	10.87		3.67	%	$	77,460		0.72	%		2.12	%		0.77	%		71.68	%
$	10.80		3.02	%	$	155,814		0.71	%		2.55	%		0.83	%		83.62	%
$	10.82		5.74	%	$	176,096		0.71	%		3.00	%		0.84	%		83.92	%
$	10.57		9.06	%	$	177,141		0.70	%		3.35	%		0.82	%		47.13	%
$	10.05		5.67	%	$	110,289		0.67	%		4.33	%		0.79	%		116.07	%
$	10.95		0.70	%	$	482,150		0.59	%		2.83	%		0.59	%		82.02	%
$	11.16		7.39	%	$	514,368		0.62	%		2.90	%		0.66	%		110.82	%
$	11.06		3.94	%	$	383,070		0.70	%		3.73	%		0.82	%		131.87	%
$	11.33		10.27	%	$	383,868		0.71	%		4.19	%		0.84	%		122.94	%
$	10.78		14.16	%	$	339,730		0.71	%		4.61	%		0.83	%		122.26	%
$	9.89		2.32	%	$	430,079		0.66	%		4.48	%		0.78	%		190.15	%
$	10.56		1.56	%	$	104,496		0.41	%		3.60	%		0.57	%		51.73	%
$	10.70		11.54	%	$	92,946		0.34	%		3.52	%		0.59	%		73.74	%
$	9.94		0.12	%	$	46,328		0.30	%		3.27	%		0.58	%		6.86	%
$	10.15		0.33	%	$	66,180		0.42	%		2.33	%		0.59	%		97.85	%
$	10.29		5.61	%	$	88,523		0.34	%		2.54	%		0.59	%		113.69	%
$	10.11		1.84	%	$	33,905		0.34	%		2.50	%		0.64	%		26.17	%
$	11.06		0.93	%	$	15,181		0.71	%		2.44	%		0.71	%		6.95	%
$	11.15		6.39	%	$	14,546		0.70	%		2.68	%		0.72	%		16.52	%
$	10.79		3.34	%	$	13,757		0.68	%		3.01	%		0.79	%		15.73	%
$	10.81		5.42	%	$	15,284		0.69	%		3.01	%		0.90	%		20.68	%
$	10.67		13.00	%	$	12,814		0.67	%		3.44	%		0.87	%		33.56	%
$	9.87		1.59	%	$	10,924		0.64	%		3.38	%		0.84	%		54.22	%
$	11.36		0.42	%	$	37,453		0.71	%		2.07	%		0.71	%		14.69	%
$	11.58		6.05	%	$	33,974		0.70	%		2.31	%		0.72	%		34.94	%
$	11.25		3.44	%	$	25,174		0.67	%		2.77	%		0.78	%		21.89	%
$	11.22		4.97	%	$	26,322		0.68	%		2.77	%		0.89	%		12.26	%
$	10.99		13.70	%	$	20,704		0.65	%		3.10	%		0.87	%		37.11	%
$	10.06		2.10	%	$	11,527		0.54	%		3.26	%		0.84	%		108.13	%
$	11.16		0.16	%	$	184,841		0.67	%		2.46	%		0.67	%		7.51	%
$	11.36		6.51	%	$	190,055		0.67	%		2.64	%		0.67	%		19.76	%
$	11.02		3.60	%	$	161,486		0.67	%		2.92	%		0.72	%		15.15	%
$	11.01		5.05	%	$	147,848		0.68	%		3.05	%		0.84	%		19.19	%
$	10.87		12.63	%	$	130,113		0.67	%		3.42	%		0.82	%		38.42	%
$	10.09		1.67	%	$	103,560		0.64	%		3.59	%		0.79	%		82.02	%

110

    Sterling Capital Funds

Financial Highlights, Institutional Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

			Investment Activities								Distributions
	Net Asset Value, Beginning of Period		Net investment income(a)		Net realized/ unrealized gains (losses) on  investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital South Carolina Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.28		0.12		(0.04	)		0.08			(0.12	)		(0.08	)		(0.20	)
Year Ended September 30, 2012	$	10.90		0.27		0.45			0.72			(0.27	)		(0.07	)		(0.34	)
Year Ended September 30, 2011	$	10.86		0.29		0.06			0.35			(0.28	)		(0.03	)		(0.31	)
Year Ended September 30, 2010	$	10.61		0.32		0.25			0.57			(0.32	)		—			(0.32	)
Year Ended September 30, 2009	$	9.89		0.35		0.89			1.24			(0.35	)		(0.17	)		(0.52	)
Year Ended September 30, 2008	$	10.21		0.36		(0.23	)		0.13			(0.36	)		(0.09	)		(0.45	)
Sterling Capital Virginia Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	12.44		0.14		(0.10	)		0.04			(0.14	)		(0.10	)		(0.24	)
Year Ended September 30, 2012	$	12.12		0.31		0.39			0.70			(0.31	)		(0.07	)		(0.38	)
Year Ended September 30, 2011	$	12.14		0.34		0.02			0.36			(0.34	)		(0.04	)		(0.38	)
Year Ended September 30, 2010	$	12.07		0.36		0.18			0.54			(0.36	)		(0.11	)		(0.47	)
Year Ended September 30, 2009	$	11.10		0.39		1.06			1.45			(0.39	)		(0.09	)		(0.48	)
Year Ended September 30, 2008	$	11.31		0.40		(0.16	)		0.24			(0.40	)		(0.05	)		(0.45	)
Sterling Capital West Virginia Intermediate Tax-Free Fund
Six Months Ended March 31, 2013 (Unaudited)	$	10.52		0.12		(0.08	)		0.04			(0.12	)		(0.12	)		(0.24	)
Year Ended September 30, 2012	$	10.17		0.29		0.39			0.68			(0.29	)		(0.04	)		(0.33	)
Year Ended September 30, 2011	$	10.18		0.34		—			0.34			(0.34	)		(0.01	)		(0.35	)
Year Ended September 30, 2010	$	10.05		0.36		0.15			0.51			(0.36	)		(0.02	)		(0.38	)
Year Ended September 30, 2009	$	9.37		0.36		0.68			1.04			(0.35	)		(0.01	)		(0.36	)
Year Ended September 30, 2008	$	9.72		0.36		(0.34	)		0.02			(0.35	)		(0.02	)		(0.37	)
Sterling Capital Strategic Allocation Conservative Fund(d)
Six Months Ended March 31, 2013 (Unaudited)	$	9.79		0.12		0.25			0.37			(0.14	)		—			(0.14	)
Year Ended September 30, 2012	$	8.83		0.22		0.96			1.18			(0.22	)		—			(0.22	)
Year Ended September 30, 2011	$	9.15		0.25		(0.27	)		(0.02	)		(0.30	)		—			(0.30	)
Year Ended September 30, 2010	$	8.58		0.29		0.57			0.86			(0.29	)		—			(0.29	)
Year Ended September 30, 2009	$	8.50		0.30		0.17			0.47			(0.25	)		(0.14	)		(0.39	)
Year Ended September 30, 2008	$	10.62		0.28		(1.26	)		(0.98	)		(0.41	)		(0.73	)		(1.14	)
Sterling Capital Strategic Allocation Balanced Fund(d)
Six Months Ended March 31, 2013 (Unaudited)	$	9.18		0.09		0.44			0.53			(0.11	)		—			(0.11	)
Year Ended September 30, 2012	$	8.00		0.17		1.18			1.35			(0.17	)		—			(0.17	)
Year Ended September 30, 2011	$	8.44		0.19		(0.43	)		(0.24	)		(0.20	)		—			(0.20	)
Year Ended September 30, 2010	$	7.83		0.20		0.61			0.81			(0.20	)		—			(0.20	)
Year Ended September 30, 2009	$	7.81		0.24		(0.04	)		0.20			(0.18	)		—			(0.18	)
Year Ended September 30, 2008	$	10.99		0.19		(1.86	)		(1.67	)		(0.38	)		(1.13	)		(1.51	)
Sterling Capital Strategic Allocation Growth Fund(d)
Six Months Ended March 31, 2013 (Unaudited)	$	8.48		0.07		0.55			0.62			(0.09	)		—			(0.09	)
Year Ended September 30, 2012	$	7.21		0.12		1.27			1.39			(0.12	)		—			(0.12	)
Year Ended September 30, 2011	$	7.70		0.13		(0.49	)		(0.36	)		(0.13	)		—			(0.13	)
Year Ended September 30, 2010	$	7.12		0.15		0.58			0.73			(0.15	)		—			(0.15	)
Year Ended September 30, 2009	$	7.34		0.22		(0.31	)		(0.09	)		(0.13	)		—			(0.13	)
Year Ended September 30, 2008	$	11.14		0.13		(2.20	)		(2.07	)		(0.36	)		(1.37	)		(1.73	)
Sterling Capital Strategic Allocation Equity Fund(d)
Six Months Ended March 31, 2013 (Unaudited)	$	8.23		0.04		0.67			0.71			(0.04	)		—			(0.04	)
Year Ended September 30, 2012	$	6.87		0.07		1.38			1.45			(0.09	)		—			(0.09	)
Year Ended September 30, 2011	$	7.41		0.10		(0.58	)		(0.48	)		(0.06	)		—			(0.06	)
Year Ended September 30, 2010	$	6.85		0.12		0.57			0.69			(0.13	)		—			(0.13	)
Year Ended September 30, 2009	$	7.48		0.20		(0.77	)		(0.57	)		(0.06	)		—			(0.06	)
Year Ended September 30, 2008	$	12.35		0.07		(2.78	)		(2.71	)		(0.35	)		(1.81	)		(2.16	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) The expense ratios exclude the impact of fees/expenses paid by each underlying fund.

See accompanying notes to the financial statements.

111

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return(b)			Net Assets, End of Period (000)		Ratio of net expenses to average net assets(c)			Ratio of net investment income to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$	11.16		0.76	%	$	57,681		0.69	%		2.19	%		0.69	%		5.39	%
$	11.28		6.68	%	$	52,526		0.70	%		2.41	%		0.70	%		26.49	%
$	10.90		3.37	%	$	39,863		0.71	%		2.68	%		0.76	%		25.83	%
$	10.86		5.53	%	$	30,183		0.73	%		3.05	%		0.89	%		14.60	%
$	10.61		13.01	%	$	17,274		0.73	%		3.45	%		0.88	%		42.06	%
$	9.89		1.27	%	$	13,298		0.71	%		3.52	%		0.86	%		127.76	%
$	12.24		0.33	%	$	94,834		0.68	%		2.25	%		0.68	%		15.41	%
$	12.44		5.87	%	$	91,770		0.68	%		2.50	%		0.68	%		21.63	%
$	12.12		3.11	%	$	78,535		0.68	%		2.90	%		0.73	%		15.33	%
$	12.14		4.65	%	$	77,222		0.69	%		3.05	%		0.85	%		9.54	%
$	12.07		13.39	%	$	71,599		0.67	%		3.36	%		0.82	%		35.90	%
$	11.10		2.13	%	$	71,631		0.64	%		3.50	%		0.79	%		53.28	%
$	10.32		0.43	%	$	79,659		0.68	%		2.38	%		0.68	%		9.48	%
$	10.52		6.85	%	$	85,125		0.68	%		2.85	%		0.68	%		26.70	%
$	10.17		3.48	%	$	72,451		0.69	%		3.44	%		0.69	%		23.34	%
$	10.18		5.13	%	$	70,760		0.69	%		3.58	%		0.70	%		6.60	%
$	10.05		11.41	%	$	63,599		0.68	%		3.71	%		0.68	%		24.19	%
$	9.37		0.18	%	$	56,829		0.66	%		3.66	%		0.66	%		39.13	%
$	10.02		3.84	%	$	3,356		0.40	%		2.50	%		0.44	%		54.77	%
$	9.79		13.47	%	$	3,346		0.44	%		2.33	%		0.44	%		7.99	%
$	8.83		(0.31	)%	$	3,954		0.37	%		2.61	%		0.47	%		8.36	%
$	9.15		10.22	%	$	4,798		0.21	%		3.26	%		0.47	%		33.33	%
$	8.58		6.28	%	$	5,316		0.14	%		3.84	%		0.39	%		21.56	%
$	8.50		(10.21	)%	$	39,937		0.10	%		2.97	%		0.35	%		39.99	%
$	9.60		5.83	%	$	287		0.38	%		1.85	%		0.41	%		74.88	%
$	9.18		16.94	%	$	474		0.42	%		1.98	%		0.42	%		17.65	%
$	8.00		(3.02	)%	$	475		0.29	%		2.13	%		0.41	%		9.96	%
$	8.44		10.53	%	$	1,169		0.16	%		2.52	%		0.41	%		47.76	%
$	7.83		2.91	%	$	1,322		0.13	%		3.61	%		0.38	%		22.46	%
$	7.81		(17.23	)%	$	21,298		0.10	%		2.07	%		0.35	%		63.63	%
$	9.01		7.31	%	$	816		0.39	%		1.71	%		0.43	%		90.14	%
$	8.48		19.40	%	$	936		0.43	%		1.54	%		0.43	%		20.21	%
$	7.21		(4.86	)%	$	1,127		0.32	%		1.62	%		0.43	%		9.06	%
$	7.70		10.39	%	$	1,684		0.17	%		2.05	%		0.43	%		57.35	%
$	7.12		(0.87	)%	$	1,650		0.14	%		3.54	%		0.38	%		24.08	%
$	7.34		(21.54	)%	$	17,836		0.10	%		1.48	%		0.35	%		77.54	%
$	8.90		8.70	%	$	5		0.65	%		1.00	%		0.65	%		8.19	%
$	8.23		21.26	%	$	13		0.56	%		0.86	%		0.56	%		27.91	%
$	6.87		(6.64	)%	$	64		0.45	%		1.18	%		0.55	%		10.72	%
$	7.41		10.15	%	$	67		0.25	%		1.65	%		0.52	%		66.32	%
$	6.85		(7.33	)%	$	693		0.17	%		3.41	%		0.42	%		20.24	%
$	7.48		(26.02	)%	$	14,000		0.13	%		0.70	%		0.38	%		67.40	%

112

    Sterling Capital Funds

Financial Highlights, Class R Shares

The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years or, if shorter, the period of the Funds’ operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).

			Investment Activities									Distributions
	Net Asset Value, Beginning of Period		Net investment income (loss)(a)			Net realized/ unrealized gains (loss) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital Mid Value Fund
Six Months Ended March 31, 2013 (Unaudited)	$	14.20		0.04			2.24			2.28			(0.06	)		—			(0.06	)
Year Ended September 30, 2012	$	11.36		0.08			2.90			2.98			(0.14	)		—			(0.14	)
Year Ended September 30, 2011	$	12.12		0.05			(0.73	)		(0.68	)		(0.08	)		—			(0.08	)
February 1, 2010 to September 30, 2010(e)	$	11.11		0.03			1.01			1.04			(0.03	)		—			(0.03	)
Sterling Capital Small Value Fund
Six Months Ended March 31, 2013 (Unaudited)	$	12.03		0.01			1.90			1.91			(0.03	)		(0.15	)		(0.18	)
Year Ended September 30, 2012	$	10.79		0.05			2.17			2.22			—			(0.98	)		(0.98	)
Year Ended September 30, 2011	$	11.18		(0.02	)		(0.37	)		(0.39	)		—			—			—
February 1, 2010 to September 30, 2010(e)	$	10.55		0.06			0.62			0.68			(0.05	)		—			(0.05	)
Sterling Capital Special Opportunities Fund
Six Months Ended March 31, 2013 (Unaudited)	$	18.83		0.02	(g)		1.97			1.99			—			(0.95	)		(0.95	)
Year Ended September 30, 2012	$	15.54		(0.04	)		3.64			3.60			—			(0.31	)		(0.31	)
Year Ended September 30, 2011	$	16.26		(0.11	)		(0.51	)		(0.62	)		—			(0.10	)		(0.10	)
February 1, 2010 to September 30, 2010(e)	$	15.32		(0.03	)		0.97			0.94			—			—			—
Sterling Capital Equity Income Fund
Six Months Ended March 31, 2013 (Unaudited)	$	15.95		0.14			1.63			1.77			(0.13	)		(0.16	)		(0.29	)
Year Ended September 30, 2012	$	13.19		0.20			2.72			2.92			(0.16	)		—			(0.16	)
Year Ended September 30, 2011	$	13.03		0.24			0.13			0.37			(0.21	)		—			(0.21	)
February 1, 2010 to September 30, 2010(e)	$	11.94		0.23			1.04			1.27			(0.18	)		—			(0.18	)
Sterling Capital Total Return Bond Fund
Six Months Ended March 31, 2013 (Unaudited)	$	11.11		0.15			(0.11	)		0.04			(0.17	)		(0.08	)		(0.25	)
Year Ended September 30, 2012	$	11.02		0.26			0.46			0.72			(0.36	)		(0.27	)		(0.63	)
Year Ended September 30, 2011	$	11.32		0.37			(0.03	)		0.34			(0.43	)		(0.21	)		(0.64	)
February 1, 2010 to September 30, 2010(e)	$	10.87		0.25			0.50			0.75			(0.30	)		—			(0.30	)

* During the periods certain fees were voluntarily waived (See Note 5 in the Notes to the Financial Statements). If such reductions had not occurred, the ratios would have been as indicated.

** Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.

(a) Per share net investment income (loss) has been calculated using the average daily shares method.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) Net Assets are below $1,000.

(e) Period from commencement of operations.

(f) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 6.08%.

(g) For the period ended March 31, 2013, net investment income per share reflects a special dividend which amounted to $0.02 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 0.01% per share.

See accompanying notes to the financial statements.

113

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(b)			Net Assets, End of Period (000)			Ratio of net expenses to average net assets(c)			Ratio of net investment income to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
$	16.42		16.15	%	$	—	(d)		1.42	%		0.56	%		1.42	%		12.72	%
$	14.20		26.17	%	$	—	(d)		1.44	%		0.59	%		1.44	%		21.62	%
$	11.36		(5.71	)%	$	—	(d)		1.44	%		0.36	%		1.56	%		38.30	%
$	12.12		9.47	%	$	—	(d)		1.44	%		0.42	%		1.68	%		45.02	%
$	13.76		16.00	%	$	—	(d)		1.54	%		0.20	%		1.54	%		23.09	%
$	12.03		21.49	%	$	—	(d)		1.57	%		0.44	%		1.59	%		32.86	%
$	10.79		(3.49	)%	$	—	(d)		1.57	%		(0.12	)%		1.58	%		63.02	%
$	11.18		6.46	%(f)	$	—	(d)		1.65	%		0.82	%		3.44	%		95.89	%
$	19.87		10.95	%	$	411			1.52	%		0.19	%(g)		1.52	%		23.78	%
$	18.83		23.41	%	$	357			1.54	%		(0.25	)%		1.54	%		19.38	%
$	15.54		(3.95	)%	$	289			1.54	%		(0.62	)%		1.54	%		31.51	%
$	16.26		6.20	%	$	—	(d)		1.54	%		(0.29	)%		1.57	%		25.65	%
$	17.43		11.25	%	$	2,212			1.44	%		1.70	%		1.44	%		15.29	%
$	15.95		22.19	%	$	1,454			1.44	%		1.35	%		1.44	%		21.30	%
$	13.19		2.74	%	$	604			1.43	%		1.72	%		1.43	%		16.64	%
$	13.03		10.76	%	$	—	(d)		1.45	%		2.86	%		1.49	%		21.63	%
$	10.90		0.41	%	$	6			1.09	%		2.66	%		1.09	%		82.02	%
$	11.11		6.79	%	$	6			1.12	%		2.41	%		1.16	%		110.82	%
$	11.02		3.24	%	$	6			1.20	%		3.32	%		1.33	%		131.87	%
$	11.32		7.03	%	$	42			1.21	%		3.45	%		1.37	%		122.94	%

114

Sterling Capital Funds

Notes to Financial Statements (Unaudited)

March 31, 2013

1. Organization:

Sterling Capital Funds (the “Trust”) commenced operations on October 5, 1992 and is registered under the Investment Company Act of 1940, as amended (“the 1940 Act”), as an open-end investment company established as a Massachusetts business trust.

As the date of these financial statements, Trust offers shares of Sterling Capital Select Equity Fund, Sterling Capital Mid Value Fund, Sterling Capital Small Value Fund, Sterling Capital Special Opportunities Fund, Sterling Capital Equity Income Fund, Sterling Capital Ultra Short Bond Fund, Sterling Capital Short-Term Bond Fund, Sterling Capital Intermediate U.S. Government Fund, Sterling Capital Total Return Bond Fund, Sterling Capital Corporate Fund, Sterling Capital Securitized Opportunities Fund, Sterling Capital Kentucky Intermediate Tax-Free Fund, Sterling Capital Maryland Intermediate Tax-Free Fund, Sterling Capital North Carolina Intermediate Tax-Free Fund, Sterling Capital South Carolina Intermediate Tax-Free Fund, Sterling Capital Virginia Intermediate Tax-Free Fund, Sterling Capital West Virginia Intermediate Tax-Free Fund, Sterling Capital Strategic Allocation Conservative Fund, Sterling Capital Strategic Allocation Balanced Fund, Sterling Capital Strategic Allocation Growth Fund, Sterling Capital Strategic Allocation Equity Fund, and Sterling Capital Equity Index Fund (referred to individually as a “Fund” and collectively as the “Funds”). This report includes all Funds in the Trust, except for Sterling Capital Equity Index Fund which is shown in a separate report. Sterling Capital Kentucky Intermediate Tax-Free Fund, Sterling Capital Maryland Intermediate Tax-Free Fund, Sterling Capital North Carolina Intermediate Tax-Free Fund, Sterling Capital South Carolina Intermediate Tax-Free Fund, Sterling Capital Virginia Intermediate Tax-Free Fund and Sterling Capital West Virginia Intermediate Tax-Free Fund are referred to as the “Tax-Free Funds.” Sterling Capital Strategic Allocation Conservative Fund, Sterling Capital Strategic Allocation Balanced Fund, Sterling Capital Strategic Allocation Growth Fund and Sterling Capital Strategic Allocation Equity Fund are referred to as the “Funds of Funds.” The Funds, excluding the Funds of Funds, are referred to as the “Variable Net Asset Value Funds.” The Funds of Funds invest in underlying mutual funds and exchange traded funds as opposed to individual securities.

All Funds are “diversified” funds, as defined in the 1940 Act. The Tax-Free Funds are non-diversified funds, which means they may invest in the securities of a limited number of issuers.

By owning shares of underlying investment companies (including exchange traded funds), each of the Funds of Funds invests, to varying degrees, in securities of U.S. and non-U.S. companies, including small and medium sized companies, and in fixed-income securities. Funds of Funds with exposure to underlying equity funds may include funds that invest in real estate of other similar securities. In addition, underlying investment companies may invest in derivatives.

The Funds are authorized to issue an unlimited amount of shares. As of March 31, 2013, the Funds discussed herein offered up to five classes of shares: Class A Shares, Class B Shares, Class C Shares, Class R Shares and Institutional Shares. Class B Shares of the Funds are closed to new accounts and additional purchases by existing shareholders. Sterling Capital Corporate Fund and Sterling Capital Securitized Opportunities Fund converted Class S Shares into Institutional Shares effective February 1, 2013. Sterling Capital Mid Value Fund, Sterling Capital Small Value Fund, Sterling Capital Special Opportunities Fund, Sterling Capital Equity Income Fund and Sterling Capital Total Return Bond Fund offer Class R Shares. Class B Shares automatically convert to Class A Shares after eight years. Class A Shares of the Variable Net Asset Value Funds and Funds of Funds, excluding Sterling Capital Ultra Short Bond Fund, Sterling Capital Short-Term Bond Fund, Sterling Capital Intermediate U.S. Government Fund, Sterling Capital Corporate Fund, Sterling Capital Securitized Opportunities Fund, and the Tax-Free Funds, have a maximum sales charge of 5.75% as a percentage of original purchase price. Class A Shares of Sterling Capital Ultra Short Bond Fund has a maximum sales charge of 0.50%, Class A Shares of Sterling Capital Short-Term Bond Fund, Sterling Capital Intermediate U.S. Government Fund, Sterling Capital Corporate Fund, Sterling Capital Securitized Opportunities Fund, and the Tax-Free Funds have a maximum sales charge of 2.00%, as a percentage of the original purchase price. Prior to February 1, 2013 for Sterling Capital Short-Term Bond Fund, Sterling Capital Intermediate U.S. Government Fund, and the Tax-Free Funds, the maximum sales charge on Class A Shares were 2.50%. Purchases of $1 million or more of Class A Shares are not subject to a front-end sales charge but will be subject to a Contingent Deferred Sales Charge (“CDSC”) of 1.00% of the purchase price if redeemed within two years after purchase for all Funds except Tax-Free Funds, Intermediate U.S. Government Fund and Short-Term Bond Fund. With respect to Tax-Free Funds, Intermediate U.S. Government Fund and Short-Term Bond Fund, sales over $500,000 are not subject to a sales load but will be subject to a CDSC of 0.50% of the purchase price if redeemed within 18 months of purchase. This charge is based on the lower of the price paid for the shares or their net asset value at the time of redemption. In addition, a CDSC of up to 1.00% of the purchase price of Class A Shares will be charged to the following shareholders who received a sales charge waiver and then redeem their shares within two

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years after purchase: employees of the Trust, Sterling Capital Management LLC (“Sterling Capital”) and its affiliates purchased prior to February 1, 2012. This charge is based on the lower of the price paid for the shares or their net asset value at the time of redemption. The Class B Shares of the Funds will be subject to a CDSC ranging from a maximum of 5.00% if redeemed less than one year after purchase to 0.00% if redeemed more than six years after purchase. Class C Shares of the Funds are offered without any front-end sales charge but will be subject to a maximum CDSC of 1.00% if redeemed less than one year after purchase.

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 Trust’s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, in the normal course of business, the Funds may enter into contracts with their vendors and others that provide for general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds. However, based on experience, the Funds expect that risk of loss to be remote.

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Funds. The policies are in conformity with United States generally accepted accounting principles (“U.S. GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of 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 reporting period. Actual results could differ from those estimates.

Securities Valuation — Investments in securities held by 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 price 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 (the “Board”) to value certain securities, including the use of electronic and matrix techniques. Short-term obligations without significant credit risk that mature in 60 days or less are valued at either amortized cost or original cost plus interest, which approximates fair value. Investments in open-end investment companies, including underlying funds invested in by the Funds of Funds, are valued at their respective net asset values as reported by such companies. Investments in closed-end investment companies and exchange traded funds are valued at their market values based upon the latest available sale price or, absent such a price, by reference to the latest available bid prices in the principal market in which such securities are normally traded. The differences between cost and fair value of investments are reflected as either unrealized appreciation or depreciation. Securities for which market quotations are not readily available or deemed unreliable (e.g., an approved pricing service does not provide a price, a furnished price is in error, certain stale prices, or an event occurs that materially affects the furnished price) will be fair valued in accordance with procedures established in good faith under the general supervision of the Board. The following Funds had security that was recorded at fair value at March 31, 2013:

	Fair Value		Percentage of Net Assets
Sterling Capital Small Value Fund	$	—		0.000	%
Sterling Capital Special Opportunities Fund		4,250		0.001	%

Fair Value Measurements — The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

• Level 1 – quoted prices in active markets for identical securities

• Level 2 – based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

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• Level 3 – based on significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. During the period ended March 31, 2013, there were no significant changes to the valuation policies and procedures.

The summary of inputs used to determine the fair value of each Fund’s investments as of March 31, 2013 is as follows:

	Level 1– Quoted Prices		Level 2– Other Significant Observable Inputs		Level 3– Significant Unobservable Inputs		Total
Assets:
Investments in Securities
Sterling Capital Select Equity Fund	$	221,081,576(a)	$	—		$—	$	221,081,576
Sterling Capital Mid Value Fund		425,072,380(a)		—		—		425,072,380
Sterling Capital Small Value Fund		92,762,430(a)		—		—		92,762,430
Sterling Capital Special Opportunities Fund		699,154,830(a)		—		—		699,154,830
Sterling Capital Equity Income Fund		1,514,586,114(a)		—		—		1,514,586,114
Sterling Capital Ultra Short Bond Fund		200,304(b)		41,624,114(a)		—		41,824,418
Sterling Capital Short-Term Bond Fund		3,545,992(b)		67,663,648(a)		—		71,209,640
Sterling Capital Intermediate U.S. Government Fund		1,236,542(b)		76,410,894(a)		—		77,647,436
Sterling Capital Total Return Bond Fund		27,018,057(b)		538,696,868(a)		—		565,714,925
Sterling Capital Corporate Fund		6,002,519(b)		97,937,051(a)		—		103,939,570
Sterling Capital Securitized Opportunities Fund		734,839(b)		74,299,651(a)		—		75,034,490
Sterling Capital Kentucky Intermediate Tax-Free Fund		491,181(b)		26,306,129(a)		—		26,797,310
Sterling Capital Maryland Intermediate Tax-Free Fund		1,418,413(b)		47,000,875(a)		—		48,419,288
Sterling Capital North Carolina Intermediate Tax-Free Fund		8,116,637(b)		252,917,318(a)		—		261,033,955
Sterling Capital South Carolina Intermediate Tax-Free Fund		4,920,986(b)		77,866,056(a)		—		82,787,042
Sterling Capital Virginia Intermediate Tax-Free Fund		4,929,857(b)		145,457,894(a)		—		150,387,751
Sterling Capital West Virginia Intermediate Tax-Free Fund		2,773,566(b)		118,542,101(a)		—		121,315,667
Sterling Capital Strategic Allocation Conservative Fund		19,347,732(a)		—		—		19,347,732
Sterling Capital Strategic Allocation Balanced Fund		34,160,180(a)		—		—		34,160,180
Sterling Capital Strategic Allocation Growth Fund		25,032,608(a)		—		—		25,032,608
Sterling Capital Strategic Allocation Equity Fund		7,092,199(a)		—		—		7,092,199
Liabilities:
Other Financial Instruments-
Written Options (Equity Risk)
Sterling Capital Special Opportunities Fund (c)	$	46,053	$	2,796		$—	$	48,849
Sterling Capital Equity Income Fund (c)		665,535		—		—		665,535

(a) Industries, countries or security types are disclosed in the Schedules of Portfolio Investments.

(b) Represents investment companies and/or certain preferred stocks.

(c) Other financial instruments are written options shown at value.

The Fund’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period. There were no transfers between Level 1 and Level 2 during the period ended March 31, 2013.

Options Contracts — Sterling Capital Special Opportunities Fund and Sterling Capital Equity Income Fund write (sell) “covered” call options on securities and purchase options on securities to close out options previously written by it. These transactions are entered into to hedge against changes in security prices (equity risk) or for the purposes of earning additional income (i.e., speculation).

The risk associated with purchasing an option is that the Fund pays a premium whether or not the option is exercised. Additionally, the Funds bear the risk of loss of the premium and change in value should the counterparty not perform under the contract. Put and call options purchased are accounted for in the same manner as other securities owned. The cost of securities acquired through the exercise of call options is increased by the premiums paid. The proceeds from securities sold through the exercise of put options are decreased by the premiums paid.

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In writing an option, the Funds contract with a specified counterparty to purchase (put option written) or sell (call option written) a specified quantity (notional amount) of an underlying asset at a specified price during a specified period upon demand of the counterparty. The risk associated with writing an option is that the Funds bear the market risk of an unfavorable change in the price of an underlying asset and are required to buy or sell an underlying asset under the contractual terms of the option at a price different from the current value. The Funds execute transactions in both listed and over-the-counter options. When purchasing over-the-counter options, the Fund bears the risk of economic loss from counterparty default, equal to the market value of the option. Listed options involve minimal counterparty risk since the listed options are guaranteed against default by the exchange on which they trade. Transactions in over-the-counter options expose the Funds to the risk of default by the counterparty to the transaction. In the event of default by the counterparty to the over-the-counter transaction, the Funds’ maximum amount of loss is the premium paid (as the purchaser) or the unrealized depreciation of the contract (as the writer).

Sterling Capital Special Opportunities and Sterling Capital Equity Income Funds invested in written options to economically hedge the downside exposure by collecting a premium when sold against the equity holding. Details of written option activity for the period ended March 31, 2013 are as follows:

	Sterling Capital Special Opportunities Fund						Sterling Capital Equity Income Fund
Covered Call Options	Number of Contracts			Premiums Received			Number of Contracts			Premiums Received
Balance at beginning of period		9,228		$	1,059,728			8,813		$	640,609
Options written		10,834			1,079,146			3,413			159,873
Options closed		(6,459	)		(869,977	)		(4,913	)		(334,974	)
Options expired		(3,261	)		(295,769	)		(1,900	)		(154,638	)
Options exercised		(7,500	)		(633,304	)		(2,000	)		(150,997	)
Options split		475			—			—			—
Balance at end of period		3,317		$	339,824			3,413		$	159,873

The following is a summary of written call options outstanding as of March 31, 2013:

	Number of Contracts		Value
Sterling Capital Special Opportunities Fund
eBay, Inc., $57.50, 4/20/13		360	$	(21,960	)
eBay, Inc., $60.00, 4/20/13		360		(7,560	)
EOG Resources, Inc., $140.00, 4/20/13		599		(10,183	)
EOG Resources, Inc., $145.00, 4/20/13		350		(2,100	)
Yamana Gold, Inc., $21.00, 4/20/13(a)		250		(4,250	)
Yum! Brands, Inc., $75.00, 4/20/13		1,398		(2,796	)
		3,317	$	(48,849	)
Sterling Capital Equity Income Fund
TE Connectivity, Ltd., $40.00, 4/20/13		3,413	$	(665,535	)

(a) Security was fair valued under methods approved by the Board.

Derivative Instruments Categorized by Risk Exposure — The Fund’s derivative contracts held at March 31, 2013, are not accounted for as hedging instruments under U.S. GAAP. The following is a summary of the location of the derivative instruments held by the Funds on the Statements of Assets and Liabilities and the category of primary risk exposure as of March 31, 2013:

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March 31, 2013

Fair Values of Derivative Instruments	Statements of Assets and Liabilities Location	Sterling Capital Special Opportunities Fund		Sterling Capital Equity Income Fund
Liabilities
Equity contracts	Call options written		$48,849		$665,535

The effect of derivative instruments on the Statements of Operations for the period ended March 31, 2013:

Net Realized Gain (Loss)	Sterling Capital Special Opportunities Fund		Sterling Capital Equity Income Fund
Written options (equity contracts)		$(377,586)		$454,718

Net Change in Unrealized Appreciation (Depreciation)	Sterling Capital Special Opportunities Fund		Sterling Capital Equity Income Fund
Written options (equity contracts)		$877,506		$260,559

For the period ended March 31, 2013, the average quarterly balance of derivative instruments was as follows:

	Sterling Capital Special Opportunities Fund		Sterling Capital Equity Income Fund
Written Options (Equity Risk)
Average number of written option contracts		6,104		4,163
Average premium		$594,913		$248,307

Securities Transactions and Related Income — During the period, security transactions are accounted for no later than one business day following the trade date. For financial reporting purposes, however, security transactions as of the last business day of the reporting period are accounted for on the trade date. Interest income is recognized on the accrual basis and includes, where applicable, the 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 may purchase securities on a “when-issued” basis. Sterling Capital Select Equity Fund, Sterling Capital Mid Value Fund, Sterling Capital Small Value Fund, Sterling Capital Special Opportunities Fund, and Sterling Capital Equity Income 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 at least 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.

Mortgage Dollar Rolls — The Variable Net Asset Value Funds may sell mortgage-backed securities for delivery in the current month and simultaneously contract to repurchase substantially similar (same type, coupon and maturity) securities on a specific future date at an agreed-upon price. The market value of the securities that the Fund is required to purchase may decline below the agreed upon repurchase price of those securities. Pools of mortgages collateralizing those securities may have different prepayment histories than those sold. During the period between the sale and repurchase, the Fund will not be entitled to receive interest and principal payments on the securities sold. Proceeds of the sale will be invested in additional instruments for the Fund, and the income from these investments will generate income for the Fund. If such

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March 31, 2013

income does not exceed the income, capital appreciation and gain or loss that would have been realized on the securities sold as part of the dollar roll, the use of this technique will diminish the investment performance of the Fund compared with what the performance would have been without the use of dollar rolls. The Funds account for mortgage dollar roll transactions as purchases and sales.

Expenses and Allocation Methodology — 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. Expenses that are attributable to both the Trust and the Sterling Capital Variable Insurance Funds are allocated across the Funds and Sterling Capital Variable Insurance Funds, based upon relative net assets or on another reasonable basis. Income and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets or another appropriate basis.

Distributions to Shareholders — Dividends from net investment income are declared daily and paid monthly for Sterling Capital Ultra Short Bond Fund, Sterling Capital Short-Term Bond Fund, Sterling Capital Intermediate U.S. Government Fund, Sterling Capital Total Return Bond Fund, Sterling Capital Corporate Fund, Sterling Capital Securitized Opportunities Fund, and the Tax-Free Funds. Dividends from net investment income are declared and paid quarterly for Sterling Capital Select Equity Fund, Sterling Capital Mid Value Fund, Sterling Capital Small Value Fund, Sterling Capital Special Opportunities Fund, Sterling Capital Equity Income Fund and the Funds of Funds if the annualized yield of the distribution exceeds an amount determined annually by the Board. Distributable net realized gains, if any, are declared and distributed at least annually. Distributions to shareholders which exceed net investment income and net realized gains for tax purposes are reported as distributions of capital.

The character of income and gains distributed are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (e.g., reclass of net operating losses, disposition of market discount and market premium bonds, paydown gains and losses, mortgage dollar roll gains and losses, regulated investment companies (RICs) and the character of distributions), such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require reclassification. These reclassifications have no impact on net assets or net asset values per share.

Credit Enhancements — Certain obligations held in the Funds have credit enhancement or liquidity features that may, under certain circumstances, provide for repayment of principal and interest on the obligation upon demand date, interest rate reset date or final maturity. These enhancements may include: letters of credit; liquidity guarantees; security purchase agreements; tender option purchase agreements; and third party insurance (i.e., AMBAC).

Offering Costs — Offering costs are amortized on a straight-line basis over one year from each Fund’s respective commencement of operations. In the event that any of the initial shares are redeemed during the period of amortization of the Fund’s offering costs, the redemption proceeds will be reduced by any such unamortized offering costs in the same proportion as the number of shares being redeemed bears to the number of those shares outstanding at the time of redemption.

Federal Income Taxes — It is the policy of each Fund to 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 of 1986, as amended, 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 was required in the Funds’ financial statements.

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March 31, 2013

3. Purchases and Sales of Securities:

Purchases and sales of securities (excluding U.S. Government securities and securities maturing less than one year from acquisition) for the period ended March 31, 2013 were as follows:

	Purchases		Sales
Sterling Capital Select Equity Fund	$	101,869,635	$	108,460,473
Sterling Capital Mid Value Fund		46,838,911		50,032,253
Sterling Capital Small Value Fund		18,740,447		20,522,792
Sterling Capital Special Opportunities Fund		148,594,696		185,458,806
Sterling Capital Equity Income Fund		298,911,935		176,732,089
Sterling Capital Ultra Short Bond Fund		48,666,927		7,069,291
Sterling Capital Short-Term Bond Fund		32,843,787		16,917,975
Sterling Capital Intermediate U.S. Government Fund		999,910		106,194
Sterling Capital Total Return Bond Fund		250,319,182		148,628,276
Sterling Capital Corporate Fund		63,242,134		50,223,626
Sterling Capital Securitized Opportunities Fund		24,221,934		16,829,630
Sterling Capital Kentucky Intermediate Tax-Free Fund		2,891,679		1,805,452
Sterling Capital Maryland Intermediate Tax-Free Fund		10,424,945		6,541,973
Sterling Capital North Carolina Intermediate Tax-Free Fund		24,279,843		18,978,377
Sterling Capital South Carolina Intermediate Tax-Free Fund		11,607,455		4,093,963
Sterling Capital Virginia Intermediate Tax-Free Fund		26,492,643		22,298,919
Sterling Capital West Virginia Intermediate Tax-Free Fund		11,553,074		15,503,456
Sterling Capital Strategic Allocation Conservative Fund		10,149,748		10,793,898
Sterling Capital Strategic Allocation Balanced Fund		24,858,316		26,402,943
Sterling Capital Strategic Allocation Growth Fund		21,311,206		22,277,141
Sterling Capital Strategic Allocation Equity Fund		590,856		1,563,638

Purchases and sales of U.S. Government Securities (excluding securities maturing less than one year from acquisition) for the period ended March 31, 2013 were as follows:

	Purchases		Sales
Sterling Capital Ultra Short Bond Fund	$	806,838	$	—
Sterling Capital Short-Term Bond Fund		1,139,984		506,139
Sterling Capital Intermediate U.S. Government Fund		27,541,798		38,802,877
Sterling Capital Total Return Bond Fund		233,226,704		325,997,977
Sterling Capital Corporate Fund		661,787		659,413
Sterling Capital Securitized Opportunities Fund		64,956,846		80,529,079

4. Investments in Affiliated Issuers:

A summary of the Funds’ transactions in the shares of affiliated issuers during the period ended March 31, 2013 is set forth below:

	Shares Held at September 30, 2012		Shares Purchased		Shares Sold		Shares Held at March 31, 2013		Value at March 31, 2013		Dividend Income October 1, 2012- March 31, 2013		Distributions and Net Realized Gain (Loss) October 1, 2012- March 31, 2013
Sterling Capital Strategic Allocation Conservative Fund
Sterling Capital Equity Income Fund, Institutional Class		32,730		213,398		8,836		237,292	$	4,166,842	$	20,572	$	30,254
Sterling Capital Mid Value Fund, Institutional Class		50,109		—		50,109		—		—		2,456		415,011
Sterling Capital Select Equity Fund, Institutional Class		112,321		18,454		130,775		—		—		7,613		356,600
Sterling Capital Small Value Fund, Institutional Class		14,866		179		15,045		—		—		—		36,555

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March 31, 2013

	Shares Held at September 30, 2012		Shares Purchased		Shares Sold		Shares Held at March 31, 2013		Value at March 31, 2013		Dividend Income October 1, 2012- March 31, 2013		Distributions and Net Realized Gain (Loss) October 1, 2012- March 31, 2013
Sterling Capital Special Opportunities Fund, Institutional Class		17,928		186,215		5,408		198,735	$	3,982,646	$	819	$	37,492
Sterling Capital Total Return Bond Fund, Institutional Class		958,838		66,398		63,933		961,303		10,526,270		192,009		78,221
Sterling Capital U.S. Treasury Money Market Fund, Institutional Class		477,966		20,566,389		21,044,355		—		—		22		—
Sterling Capital Ultra Short Bond Fund, Institutional Class		—		62,691		62,691		—		—		392		(298	)
Total Affiliates		1,664,758		21,113,724		21,381,152		1,397,330	$	18,675,758	$	223,883	$	953,835
Sterling Capital Strategic Allocation Balanced Fund
Sterling Capital Equity Income Fund, Institutional Class		87,512		571,327		24,051		634,788	$	11,146,887	$	54,826	$	80,838
Sterling Capital Mid Value Fund, Institutional Class		134,044		—		134,044		—		—		6,384		1,029,081
Sterling Capital Select Equity Fund, Institutional Class		300,570		48,975		349,545		—		—		20,347		966,790
Sterling Capital Small Value Fund, Institutional Class		39,791		478		40,269		—		—		—		95,415
Sterling Capital Special Opportunities Fund, Institutional Class		47,953		498,522		14,643		531,832		10,657,916		2,098		70,727
Sterling Capital Total Return Bond Fund, Institutional Class		1,079,666		79,942		86,813		1,072,795		11,747,097		214,531		94,590
Sterling Capital U.S. Treasury Money Market Fund, Institutional Class		695,238		23,952,005		24,647,243		—		—		32		—
Sterling Capital Ultra Short Bond Fund, Institutional Class		—		55,154		55,154		—		—		539		(151	)
Total Affiliates		2,384,774		25,206,403		25,351,762		2,239,415	$	33,551,900	$	298,757	$	2,337,290
Sterling Capital Strategic Allocation Growth Fund
Sterling Capital Equity Income Fund, Institutional Class		77,829		508,079		12,527		573,381	$	10,068,573	$	50,049	$	44,568
Sterling Capital Mid Value Fund, Institutional Class		119,207		—		119,207		—		—		6,292		913,825
Sterling Capital Select Equity Fund, Institutional Class		267,337		78,418		345,755		—		—		19,504		866,774
Sterling Capital Small Value Fund, Institutional Class		35,401		426		35,827		—		—		—		89,722
Sterling Capital Special Opportunities Fund, Institutional Class		42,644		442,841		7,708		477,777		9,574,649		2,095		48,722

122

Sterling Capital Funds

Notes to Financial Statements (Unaudited) — (continued)

March 31, 2013

	Shares Held at September 30, 2012		Shares Purchased		Shares Sold		Shares Held at March 31, 2013		Value at March 31, 2013		Dividend Income October 1, 2012- March 31, 2013		Distributions and Net Realized Gain (Loss) October 1, 2012- March 31, 2013
Sterling Capital Total Return Bond Fund, Institutional Class		412,720		64,426		50,933		426,213	$	4,667,035	$	81,641	$	36,290
Sterling Capital U.S. Treasury Money Market Fund, Institutional Class		524,724		17,199,969		17,724,693		—		—		27		—
Sterling Capital Ultra Short Bond Fund, Institutional Class		—		49,147		49,147		—		—		525		(119	)
Total Affiliates		1,479,862		18,343,306		18,345,797		1,477,371	$	24,310,257	$	160,133	$	1,999,782
Sterling Capital Strategic Allocation Equity Fund
Sterling Capital Equity Income Fund, Institutional Class		24,962		563		3,410		22,115	$	388,346	$	4,088	$	16,392
Sterling Capital Mid Value Fund, Institutional Class		39,708		7,252		9,503		37,457		624,036		2,804		26,187
Sterling Capital Select Equity Fund, Institutional Class		126,410		4,890		16,099		115,201		1,546,000		11,564		19,282
Sterling Capital Small Value Fund, Institutional Class		11,825		1,785		2,747		10,863		150,131		336		6,559
Sterling Capital Special Opportunities Fund, Institutional Class		46,308		9,971		8,962		47,317		948,225		3,020		48,590
Sterling Capital U.S. Treasury Money Market Fund, Institutional Class		109,118		5,726,529		5,835,647		—		—		5		—
Sterling Capital Ultra Short Bond Fund, Institutional Class		—		18,033		18,033		—		—		80		(99	)
Total Affiliates		358,331		5,769,023		5,894,401		232,953	$	3,656,738	$	21,897	$	116,911

5. Related Party Transactions:

Under the terms of the investment advisory agreement, Sterling Capital (the “Advisor”) is entitled to receive fees based on a percentage of the average daily net assets of the Funds. These fees are accrued daily and payable on a monthly basis and are reflected on the Statements of Operations as “Investment advisory fees.” Sterling Capital waived investment advisory fees and reimbursed certain expenses for the Funds referenced below which are not subject to recoupment, except as noted, and are included on the Statements of Operations as “Less expenses waived/reimbursed by the Investment Advisor.” Information regarding these transactions is as follows for the period ended March 31, 2013:

	Prior to February 1, 2013				Effective February 1, 2013
	Contractual Fee Rate		Fee Rate after Contractual Waivers		Contractual Fee Rate		Fee Rate after Contractual Waivers
Sterling Capital Select Equity Fund		0.70%		0.60%(1)		0.70%		0.60%(2)
Sterling Capital Mid Value Fund		0.70%		0.70%		0.70%		0.70%
Sterling Capital Small Value Fund		0.80%		0.80%		0.75%		0.75%
Sterling Capital Special Opportunities Fund		0.80%		0.80%		0.75%		0.75%
Sterling Capital Equity Income Fund		0.70%		0.70%		0.70%		0.70%
Sterling Capital Ultra Short Bond Fund		0.20%		0.20%		0.20%		0.20%
Sterling Capital Short-Term Bond Fund		0.30%		0.30%		0.30%		0.25%(2)

123

Sterling Capital Funds

Notes to Financial Statements (Unaudited) — (continued)

March 31, 2013

	Prior to February 1, 2013				Effective February 1, 2013
	Contractual Fee Rate		Fee Rate after Contractual Waivers		Contractual Fee Rate		Fee Rate after Contractual Waivers
Sterling Capital Intermediate U.S. Government Fund		0.48%		0.48%		0.43%		0.43%
Sterling Capital Total Return Bond Fund		0.37%		0.37%		0.37%		0.34%(2)
Sterling Capital Corporate Fund		0.40%		0.15%(3)		0.35%		0.35%
Sterling Capital Securitized Opportunities Fund		0.40%		0.15%(3)		0.35%		0.35%
Sterling Capital Kentucky Intermediate Tax-Free Fund		0.45%		0.45%		0.45%		0.45%
Sterling Capital Maryland Intermediate Tax-Free Fund		0.45%		0.45%		0.45%		0.45%
Sterling Capital North Carolina Intermediate Tax-Free Fund		0.45%		0.45%		0.45%		0.45%
Sterling Capital South Carolina Intermediate Tax-Free Fund		0.45%		0.45%		0.45%		0.45%
Sterling Capital Virginia Intermediate Tax-Free Fund		0.45%		0.45%		0.45%		0.45%
Sterling Capital West Virginia Intermediate Tax-Free Fund		0.45%		0.45%		0.45%		0.45%
Sterling Capital Strategic Allocation Conservative Fund		0.25%		0.25%		0.25%		0.00%(2)
Sterling Capital Strategic Allocation Balanced Fund		0.25%		0.25%		0.25%		0.00%(2)
Sterling Capital Strategic Allocation Growth Fund		0.25%		0.25%		0.25%		0.00%(2)
Sterling Capital Strategic Allocation Equity Fund		0.25%		0.25%		0.25%		0.25%

(1) Sterling Capital contractually agreed to limit the advisory fees paid by the Fund from February 1, 2012 through January 31, 2013.

(2) Sterling Capital contractually agreed to limit the advisory fees paid by the Fund through January 31, 2014.

(3) Sterling Capital contractually agreed to limit the advisory fees paid by the Fund from June 30, 2011 through January 31, 2013.

Sterling Capital serves as the administrator to the Funds pursuant to an administration agreement. The Funds (except the Funds of Funds) pay their portion of a fee to Sterling Capital for providing administration services based on the aggregate assets of the Funds and Sterling Capital Variable Insurance Funds, excluding the assets of the Funds of Funds, and Sterling Capital Strategic Allocation Equity VIF, at a rate of 0.1075% on the first $3.5 billion of average net assets, 0.075% on the next $1 billion of average net assets; 0.06% on the next $1.5 billion of average net assets; and 0.04% of average net assets over $6 billion. Expenses incurred are reflected on the Statements of Operations as “Administration fees.” Pursuant to a sub-administration agreement with Sterling Capital, BNY Mellon Investment Servicing (US) Inc. (“BNY Mellon” or the “Sub-Administrator”), serves as the sub-administrator to the Funds subject to the general supervision of the Board and Sterling Capital. For these services, BNY Mellon is entitled to a fee payable by Sterling Capital.

BNY Mellon serves as the Funds’ fund accountant and transfer agent and receives compensation by the Funds for these services. Expenses incurred are reflected on the Statements of Operations as “Fund accounting fees” and “Transfer agent fees.”

Sterling Capital’s Chief Compliance Officer (“CCO”) serves as the Funds’ CCO. The CCO’s compensation is reviewed and approved by the Funds’ Board and paid by Sterling Capital. However, the Funds reimburse Sterling Capital for their allocable portion of the CCO’s salary. Expenses incurred for the Funds are reflected on the Statements of Operations as “Compliance service fees.”

For the period ended March 31, 2013, the Funds paid $41,652 in brokerage fees to Scott&Stringfellow on the execution of purchases and sales of the Funds’ portfolio investments.

The Funds have adopted a Distribution and Shareholder Services Plan (the “Plan”) in accordance with Rule 12b-1 under the 1940 Act. Sterling Capital Distributors, LLC (“the Distributor”) serves as distributor to the Funds pursuant to an underwriting agreement. The Plan provides for payments to the Distributor of up to 0.25%, 1.00%, 1.00% and 0.50% of the average daily net assets of the Class A Shares, Class B Shares, Class C Shares, and Class R Shares, respectively. The Distributor is entitled to receive commissions on sales of shares of the Variable Net Asset Value Funds. For the period ended March 31, 2013, the Distributor received $501,881 from commissions earned on sales of shares of the Variable Net Asset Value Funds. Commissions paid to affiliated broker-dealers during the period ended March 31, 2013 were $45,518. The fees may be used by the Distributor to pay banks, broker dealers and other institutions, including affiliates of the Advisor.

Sterling Capital and/or its affiliates may pay out of their own bona fide profits compensation to broker-dealers and other persons for the sale and distribution of the shares and/or for the servicing of the shares. These are additional payments over and above the sales charge (including Rule 12b-1 fees) and service fees paid by the Funds. The payments, which may be different for different financial institutions, will not change the price an investor will pay for shares or the amount that a Fund will receive for the sale of shares.

124

Sterling Capital Funds

Notes to Financial Statements (Unaudited) — (continued)

March 31, 2013

Certain Officers and a Trustee of the Funds are affiliated with Sterling Capital or the Sub-Administrator. Such Officers and Trustee receive no compensation from the Funds for serving in their respective roles. Each of the Trustees who are not interested persons (as defined in the 1940 Act) of the Trust who serve on the Board are compensated at the annual rate of $44,000 plus $5,000 for each regularly scheduled quarterly meeting attended, $4,000 for each special meeting attended in person and $1,500 for each special meeting attended by telephone, plus reimbursement for certain out of pocket expenses. The Trustee who is an interested person as defined in the 1940 Act of the Trust, but not affiliated with Sterling Capital is compensated at the annual rate of $44,000 plus $4,000 for each regularly scheduled quarterly meeting attended, $3,200 for each special meeting attended in person and $1,200 for each special meeting attended by telephone, plus reimbursement for certain out of pocket expenses. Each Trustee serving on a Committee of the Board receives a fee of $4,000 for each Committee meeting attended in person and $3,000 for each Committee meeting attended by telephone, plus reimbursement for certain out of pocket expenses. Committee meeting fees are only paid when such Committee meetings are not held in conjunction with a regular board meeting. Additionally, the Chairman of the Board and the Audit Committee Chairman each receive an annual retainer of $15,000, and the Chairman of the Nominations Committee receives additional compensation at the rate of $1,000 for each meeting over which he or she presides as Chairman. The fees are allocated across the Trust and the Sterling Capital Variable Insurance Funds based upon relative net assets.

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. Line of Credit:

U.S. Bank, N.A. has made available a credit facility to the Trust, pursuant to an umbrella credit agreement (“the Agreement”). The primary purpose of the Agreement is to allow the Trust to avoid security liquidations that Sterling Capital believes are unfavorable to shareholders. Under the Agreement, an aggregate commitment amount of $50,000,000 has been made available for use by all funds of the Trust. Outstanding principal amounts under the Agreement bear interest at a rate per annum equal to the Prime Rate minus two percent (2%), but never at a rate of less than one percent (1%) per annum. The Agreement expires on December 14, 2013. During the period ended March 31, 2013 the following Fund utilized lines of credit:

	Average Interest Rate	Average Loan Balance		Number of Days Outstanding	Interest Expense Incurred		Maximum Amount Borrowed
Sterling Capital Securitized Opportunities Fund	1.25%	$	555,000	1	$	19		$555,000

8. Federal Tax Information:

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense. During the period, the Funds did not incur any interest or penalties.

Management has analyzed the Funds’ tax positions taken on federal income tax returns for all open tax years (current and prior three tax years), and has concluded that no provision for federal income tax was required in the Funds’ financial statements. The Funds’ federal income and excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

Under the Regulated Investment Company Modernization Act of 2010, capital losses originating in taxable years beginning after December 22, 2010 (“post-enactment capital losses”) are carried forward indefinitely. Furthermore, post-enactment capital losses will retain their character as either short-term or long-term capital losses rather than being considered all short-term capital losses as under previous law.

At September 30, 2012, the following Funds had net capital loss carryforwards available to offset future net capital gains, if any, to the extent provided by the Treasury regulations.

125

Sterling Capital Funds

Notes to Financial Statements (Unaudited) — (continued)

March 31, 2013

	Amount With No Expiration*
	Short-term Losses		Long-term Losses		Amount		Expires
Sterling Capital Select Equity Fund	$	—	$	—	$	105,475,467		2017
Sterling Capital Select Equity Fund		—		—		10,325,708		2018
Sterling Capital Mid Value Fund		—		—		15,885,455		2017
Sterling Capital Mid Value Fund		—		—		3,723,793		2018
Sterling Capital Small Value Fund		—		—		3,271,029		2016
Sterling Capital Small Value Fund		—		—		2,655,981		2017
Sterling Capital Short-Term Bond Fund		—		—		2,094,190		2013
Sterling Capital Short-Term Bond Fund		—		—		1,246,269		2014
Sterling Capital Short-Term Bond Fund		—		—		3,940,976		2015
Sterling Capital Short-Term Bond Fund		—		—		160,380		2016
Sterling Capital Short-Term Bond Fund		—		—		359,956		2019
Sterling Capital Short-Term Bond Fund		268,870		—		—		—
Sterling Capital Intermediate U.S. Government Fund		—		—		8,245,320		2016
Sterling Capital Intermediate U.S. Government Fund		—		—		37,464		2019
Sterling Capital Securitized Opportunities Fund		32,647		—		—		—
Sterling Capital Strategic Allocation Conservative Fund		—		—		8,879,216		2018
Sterling Capital Strategic Allocation Balanced Fund		—		—		436,053		2017
Sterling Capital Strategic Allocation Balanced Fund		—		—		9,432,218		2018
Sterling Capital Strategic Allocation Balanced Fund		—		—		3,964,763		2019
Sterling Capital Strategic Allocation Growth Fund		—		—		1,235,282		2017
Sterling Capital Strategic Allocation Growth Fund		—		—		8,914,876		2018
Sterling Capital Strategic Allocation Growth Fund		—		—		4,640,596		2019
Sterling Capital Strategic Allocation Growth Fund		—		204,650		—		—
Sterling Capital Strategic Allocation Equity Fund		—		—		958,260		2017
Sterling Capital Strategic Allocation Equity Fund		—		—		8,277,491		2018
Sterling Capital Strategic Allocation Equity Fund		—		—		1,129,373		2019
Sterling Capital Strategic Allocation Equity Fund		—		24,904		—		—

  * Post-Enactment Losses: Must be utilized prior to losses subject to expiration.

The tax character of distributions paid to shareholders during the fiscal year ended September 30, 2012 were as follows:

	Distributions paid from
	Ordinary Income		Net Long-Term Gains		Total Taxable Distributions		Tax Exempt Distributions		Current Year Distributions of Earnings and Profits		Total Distributions Paid*
Sterling Capital Select Equity Fund	$	2,390,527	$	—	$	2,390,527	$	—	$	—	$	2,390,527
Sterling Capital Mid Value Fund		3,491,965		—		3,491,965		—		—		3,491,965
Sterling Capital Small Value Fund		570,145		5,976,631		6,546,776		—		—		6,546,776
Sterling Capital Special Opportunities Fund		—		12,143,189		12,143,189		—		—		12,143,189
Sterling Capital Equity Income Fund		12,616,604		—		12,616,604		—		—		12,616,604
Sterling Capital Short-Term Bond Fund		2,091,408		—		2,091,408		—		—		2,091,408
Sterling Capital Intermediate U.S. Government Fund		4,460,688		—		4,460,688		—		—		4,460,688
Sterling Capital Total Return Bond Fund		19,420,164		10,539,121		29,959,285		—		—		29,959,285
Sterling Capital Corporate Fund		2,545,491		—		2,545,491		—		—		2,545,491
Sterling Capital Securitized Opportunities Fund		1,615,249		—		1,615,249		—		—		1,615,249
Sterling Capital Kentucky Intermediate Tax-Free Fund		11		54,280		54,291		619,583		—		673,874
Sterling Capital Maryland Intermediate Tax-Free Fund		2,596		230,855		233,451		878,029		—		1,111,480
Sterling Capital North Carolina Intermediate Tax-Free Fund		4,068		1,406,457		1,410,525		6,036,740		—		7,447,265
Sterling Capital South Carolina Intermediate Tax-Free Fund		59		364,144		364,203		1,487,515		—		1,851,718
Sterling Capital Virginia Intermediate Tax-Free Fund		1,040		737,695		738,735		3,170,117		—		3,908,852
Sterling Capital West Virginia Intermediate Tax-Free Fund		11,793		434,867		446,660		3,138,207		—		3,584,867
Sterling Capital Strategic Allocation Conservative Fund		379,625		—		379,625		—		—		379,625
Sterling Capital Strategic Allocation Balanced Fund		525,866		—		525,866		—		—		525,866
Sterling Capital Strategic Allocation Growth Fund		276,162		—		276,162		—		—		276,162
Sterling Capital Strategic Allocation Equity Fund		40,900		—		40,900		—		—		40,900

126

Sterling Capital Funds

Notes to Financial Statements (Unaudited) — (continued)

March 31, 2013

Under current tax law, capital losses realized after October 31 and ordinary losses realized after December 31 of a Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The following Funds had deferred qualified late-year losses, which will be treated as arising on the first business day of the fiscal year ending September 30, 2013:

	Qualified Late-Year Ordinary Losses		Qualified Late-Year Capital Losses
Sterling Capital Short-Term Bond Fund	$	313,326	$	119,515
Sterling Capital Securitized Opportunities Fund		—		147,617
Sterling Capital Strategic Allocation Conservative Fund		—		12,161
Sterling Capital Strategic Allocation Balanced Fund		—		321,891
Sterling Capital Strategic Allocation Growth Fund		—		482,653
Sterling Capital Strategic Allocation Equity Fund		—		320,320

At March 31, 2013, federal income tax cost, gross unrealized appreciation and gross unrealized depreciation on securities were as follows:

	Tax Cost		Gross Tax Unrealized Appreciation		Gross Tax Unrealized Depreciation			Net Tax Unrealized Appreciation (Depreciation)
Sterling Capital Select Equity Fund	$	175,835,686	$	50,250,856	$	(5,004,966	)	$	45,245,890
Sterling Capital Mid Value Fund		331,687,153		106,842,976		(13,457,749	)		93,385,227
Sterling Capital Small Value Fund		81,419,234		17,208,838		(5,865,642	)		11,343,196
Sterling Capital Special Opportunities Fund		550,176,186		151,602,598		(2,623,954	)		148,978,644
Sterling Capital Equity Income Fund		1,240,019,367		284,275,709		(9,708,962	)		274,566,747
Sterling Capital Ultra Short Bond Fund		41,833,646		30,025		(39,253	)		(9,228	)
Sterling Capital Short-Term Bond Fund		70,775,737		654,451		(220,548	)		433,903
Sterling Capital Intermediate U.S. Government Fund		73,767,201		3,918,363		(38,128	)		3,880,235
Sterling Capital Total Return Bond Fund		551,808,495		15,812,246		(1,905,816	)		13,906,430
Sterling Capital Corporate Fund		101,217,605		3,121,887		(399,922	)		2,721,965
Sterling Capital Securitized Opportunities Fund		74,421,666		786,889		(174,065	)		612,824
Sterling Capital Kentucky Intermediate Tax-Free Fund		24,903,794		1,903,024		(9,508	)		1,893,516
Sterling Capital Maryland Intermediate Tax-Free Fund		46,238,514		2,180,965		(191	)		2,180,774
Sterling Capital North Carolina Intermediate Tax-Free Fund		245,903,981		15,454,621		(324,647	)		15,129,974
Sterling Capital South Carolina Intermediate Tax-Free Fund		78,821,502		4,028,547		(63,007	)		3,965,540
Sterling Capital Virginia Intermediate Tax-Free Fund		142,207,806		8,415,947		(236,002	)		8,179,945
Sterling Capital West Virginia Intermediate Tax-Free Fund		115,173,556		6,281,928		(139,817	)		6,142,111
Sterling Capital Strategic Allocation Conservative Fund		18,378,559		1,047,483		(78,310	)		969,173
Sterling Capital Strategic Allocation Balanced Fund		32,644,148		1,706,550		(190,518	)		1,516,032
Sterling Capital Strategic Allocation Growth Fund		24,091,825		1,159,048		(218,265	)		940,783
Sterling Capital Strategic Allocation Equity Fund		5,802,161		1,532,138		(242,100	)		1,290,038

9. Subsequent Events:

Management has evaluated the need for the disclosure and/or adjustments resulting from subsequent events through the date the financial statements were issued, and has noted the following item:

On February 26, 2013, the Board approved the liquidation and termination of Sterling Capital Strategic Allocation Equity Fund. Accordingly, the assets of the Fund will be liquidated on April 26, 2013. After paying in full all known or reasonably ascertainable liabilities of the Fund, including without limitation all charges, taxes and expenses of the Fund, whether due, accrued or anticipated, that have been incurred or are expected to be incurred by the Fund, the Fund will distribute to its shareholders their pro rata share of the proceeds.

127

BOARD CONSIDERATION OF ADVISORY AGREEMENTS (UNAUDITED)

2012 Approvals

The Board of Trustees, at a meeting held on August 15-16, 2012, approved the continuance of the investment advisory agreement between Sterling Capital Funds (the “Trust”) and Sterling Capital Management LLC (“Sterling Capital”), which serves as investment adviser to each series of the Trust (the “Funds”) for a new term running through December 31, 2012. The Board of Trustees also approved the continuance of the sub-advisory agreement (the “Sub-Advisory Agreement”) of Sterling Capital with Scott & Stringfellow, LLC (“Scott & Stringfellow” and, together with Sterling Capital, the “Advisers”), with respect to the Sterling Capital Special Opportunities Fund and the Sterling Capital Equity Income Fund for a new term running through January 31, 2013. At a meeting held on November 14, 2012, the Board of Trustees approved the further continuance of the Advisory Agreement between the Trust and Sterling Capital for a new term running through January 31, 2014. At the meeting held on November 14, 2012, the Board of Trustees also approved the termination of the Sub-Advisory Agreement effective as of January 1, 2013, in connection with the anticipated transaction by which the portfolio manager of the Sterling Capital Special Opportunities Fund would become an employee of Sterling Capital and would continue to serve as portfolio manager of the Fund in such capacity. The Board approved the continuation of the Advisory Agreements two times in 2012 in order to adjust the Board’s contract review schedule for future years. As a result of this schedule change, the Board will have additional time for its review and deliberations in future years. All of the above referenced agreements are collectively referred to herein as the “Advisory Agreements” and are performed by the “Advisers.”

The Trustees reviewed extensive material in connection with their consideration of the Advisory Agreements, including data from an independent provider of mutual fund data (as assembled by the Trust’s administrator), which, where applicable, included comparisons with industry averages for comparable funds for advisory fees, 12b-1 fees, and total fund expenses. The data reflected Sterling Capital fee waivers in place, as well as Sterling Capital’s contractual investment advisory fee levels. The Board was assisted in its review by independent legal counsel, who provided memoranda detailing the legal standards for review of the Advisory Agreements. To facilitate its review, the Board received a detailed presentation by Sterling Capital, which included a fund-by-fund analysis of each fund’s investment process and performance. Presentations were also provided by each entity proposed to be utilized by Sterling Capital as a sub-adviser. The Board also received and considered fund-by-fund profitability information from the Advisers. The Independent Trustees met outside the presence of management and the Advisers with their independent legal counsel as part of their deliberations.

In their deliberations regarding the Advisory Agreements, each Trustee attributed different weights to various factors involved in an analysis of the Advisory Agreements, and in each case no factor alone was considered determinative. The Trustees determined that the overall arrangements between the Trust and the Advisers, as provided in the Advisory Agreements, were fair and reasonable and that the continuance of the Advisory Agreements was in the best interests of each applicable Fund and its shareholders.

The matters addressed below were considered by the Trustees in reaching their conclusions.

Nature, Extent and Quality of Services Provided by the Adviser and Sub-Adviser

The Trustees received and considered information regarding the nature, extent, and quality of the services provided to each Fund under the Advisory Agreements. The Trustees took into account information furnished throughout the year at Trustee meetings, as well as materials furnished specifically in connection with the annual review process. The Trustees considered the background and experience of each Adviser’s senior management and the expertise of investment personnel of each Adviser responsible for the day-to-day management of each Fund. The Trustees considered the overall reputation, and the capabilities and commitment of the Advisers to provide high quality service to the Funds.

The Trustees received information concerning the investment philosophy and investment processes applied or to be applied by the Advisers in managing the Funds as well as each Adviser’s Form ADV. The Trustees also considered information regarding regulatory compliance and compliance with the investment policies of the Funds. The Trustees also considered each Adviser’s trading practices, including Scott & Stringfellow, which engages in affiliated brokerage for portfolio trades for the Funds it sub-advises. The Trustees also considered the procedures of the Advisers designed to fulfill the Advisers’ fiduciary duty to the Funds with respect to possible conflicts of interest, including the Advisers’ codes of ethics (regulating the personal trading of its officers and employees).

Based on their review, the Trustees concluded that, with respect to the nature, extent and quality of services to be provided by the Advisers, the nature and extent of responsibilities was consistent with mutual fund industry norms, and that the quality of the services provided or to be provided by the Advisers was or was expected to be satisfactory or better.

Investment Performance

The Trustees considered performance results of each Fund in absolute terms and relative to each Fund’s benchmark and peer group. In the Trustees’ review of performance, long- and short-term performance were considered. In conducting their review, the Trustees particularly focused on Funds where performance compared unfavorably with peers.

After reviewing the performance of each Fund and taking into consideration the management style, investment strategies, and prevailing market conditions during the prior year and for longer periods, the Trustees concluded that the performance of each Fund was acceptable or better or that, in cases where performance issues were encountered, Sterling Capital was appropriately addressing the situation.

128

Cost of Services, Including the Profits Realized by the Advisers and Affiliates

The Trustees considered peer group comparable information with respect to the advisory fees charged by Sterling Capital to each of the Funds, taking into consideration both contractual and actual (i.e., after fee waivers) fee levels. The Trustees also considered the advisory fee waivers in place for certain Funds. The Trustees also considered recent fee reductions for the Intermediate U.S. Government Bond Fund, the Small Value Fund and the Special Opportunities Fund. The Trustees concluded that the investment advisory and sub-advisory fees (collectively, the “investment advisory fees”) paid by the Funds fell within an acceptable range as compared to peer groups, and were fair and reasonable.

As part of their review, the Trustees considered benefits to Sterling Capital aside from investment advisory fees. The Trustees reviewed administration fees received by Sterling Capital and considered the fallout benefits to Sterling Capital such as the research services available to Sterling Capital by reason of brokerage commissions generated by the Funds’ turnover. The Trustees also considered benefits to Sterling Capital’s affiliates, including brokerage commissions received by Scott & Stringfellow for executing trades on behalf of the Sterling Capital Special Opportunities Fund and the Sterling Capital Equity Income Fund. With respect to Scott & Stringfellow, the Trustees noted that brokerage commissions were paid at a standard commission rate, which was consistent with that used by Sterling Capital with respect to all equity funds of the Trust and that such brokerage arrangements were considered by Scott & Stringfellow to be advantageous.

The Trustees also considered information from Sterling Capital regarding fees for separate accounts managed by Sterling Capital with investment objectives and strategies similar to those of comparable Funds. The Trustees noted that management of the Funds was a much more intensive process than management of separate accounts, including daily fluctuations in the size of the Funds and the need to comply with extensive and complex restrictions set by applicable regulation or established in controlling disclosure documents, and therefore the Trustees concluded that the differences between the services that Sterling Capital provides to the Funds and those it provides to separate accounts substantially limit the probative value of comparisons to those other clients.

The Trustees also considered the reasonableness of the current and proposed advisory fees in the context of the profitability of the Advisers. In determining whether the investment advisory fees were reasonable, the Trustees reviewed profitability information provided by the Advisers with respect to investment advisory services. With respect to such information, the Trustees recognized that such profitability data was generally unaudited and represented an Adviser’s own determination of its and its affiliates’ revenues from the contractual services provided or expected to be provided to the Funds, less expenses of providing such services. Expenses include direct and indirect costs and were calculated using an allocation methodology developed by the Adviser. The Trustees also recognized that it is difficult to make comparisons of profitability from fund investment advisory and sub-advisory contracts, because comparative information is not generally publicly available and could be affected by numerous factors. Based on their review, the Trustees concluded that the profitability of the Advisers as a result of their relationships with the Funds was acceptable.

Based on the foregoing, the Trustees concluded that the fees proposed under the Advisory Agreements were fair and reasonable, in light of the services and benefits provided or expected to be provided to each Fund.

Economies of Scale

The Trustees also considered whether fee levels reflect economies of scale and whether economies of scale would be produced by the growth of the Funds’ assets. The Trustees also considered the advisory fee waivers in place for certain Funds and found that the waivers were a reasonable way to provide the benefits of economies of scale to shareholders of such Funds. The Trustees concluded that each Fund’s advisory fee levels fairly reflected such economies of scale as might exist at current asset levels.

129

Sterling Capital Funds

March 31, 2013

Other Information (Unaudited)

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 1-800-228-1872; and (ii) on the Securities and Exchange Commission’s (the “Commission”) website at http://www.sec.gov.

Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30^th is available (i) without charge, upon request, by calling 1-800-228-1872 and (ii) on the Commission’s website at http://www.sec.gov.

The Funds file complete Schedules of Portfolio Holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available without charge on the Commission’s website at http://www.sec.gov, or may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

130

INVESTMENT ADVISOR

Sterling Capital Management LLC

Two Morrocroft Centre

4064 Colony Road, Suite 300

Charlotte, NC 28211

DISTRIBUTOR

Sterling Capital Distributors, LLC

400 Berwyn Park

899 Cassatt Road

Berwyn, PA 19312

LEGAL COUNSEL

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199

TRANSFER AGENT

BNY Mellon Investment Servicing (US) Inc.

301 Bellevue Parkway

Wilmington, DE 19809

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

KPMG LLP

1601 Market Street

Philadelphia, PA 19103

Item 2. Code of Ethics.

Not applicable.

Item 3. Audit Committee Financial Expert.

Not applicable.

Item 4. Principal Accountant Fees and Services.

Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Investments.

(a) Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management

              Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and

             Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.

Item 11. Controls and Procedures.

(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are effective to provide reasonable assurance that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that information required to be disclosed by the registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1) Not applicable.

(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

(a)(3) Not applicable.

(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes- Oxley Act of 2002 are attached hereto.

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)                              Sterling Capital Funds

By (Signature and Title)	/s/ James T. Gillespie
	James T. Gillespie, President
	(principal executive officer)

Date     5/28/13

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/ James T. Gillespie
	James T. Gillespie, President
	(principal executive officer)

Date     5/28/13

By (Signature and Title)	/s/ Kenneth R. Cotner
	Kenneth R. Cotner, Treasurer
	(principal financial officer)

Date     5/28/13