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<Table>
                                             
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</Table>

                             EXCELSIOR FUNDS, INC.

                             EXCELSIOR FUNDS TRUST

                        EXCELSIOR TAX-EXEMPT FUNDS, INC.

    (Name of Person(s) Filing Proxy Statement if other than the Registrant)

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Letter to Shareholders

March 31,2006

Dear Valued Excelsior Fund Shareholder,

I am pleased to bring you the annual report for the year ended March 31, 2006
for the Excelsior Funds. The funds in this report are part of the Excelsior Fund
family which had over $18 billion in assets as of the end of the report period
and includes a wide array of asset classes and investment strategies designed to
meet the individual investor's needs for performance and tax sensitivity.

By now, you would have received information about changes to the administrative
and non-advisory services provided to the Excelsior Funds. As a result, the
Excelsior Funds and the Laudus Funds, an affiliated fund family, now share
certain complex-wide administrative, compliance, marketing and other functions.

We are pleased with the transition, and remain optimistic that shareholders will
approve the board of directors' recommendation to elect members to jointly
oversee the two fund families. It is anticipated that the new unified board will
strengthen the oversight provided on behalf of fund shareholders and may result
in certain long-term cost and operating efficiencies. All votes are important,
so I encourage you to vote your shares as soon as possible if you haven't
already done so.

Given these changes, I want to assure you that the most important aspects of the
Excelsior Funds will remain the same. Specifically, the fund management and
investment process provided by U.S. Trust, as advisor to the Funds, as well as
the funds' emphasis on enduring performance, will not change.

In closing, we at Excelsior Funds remain committed to helping you reach your
long-term investment goals. Thank you for investing with us.


Sincerely,


Evelyn Dilsaver
President