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 811-04088

Excelsior Funds, Inc.

(Exact name of registrant as specified in charter)

One Financial Center, Boston, Massachusetts 02111

(Address of principal executive offices) (Zip code)

James R. Bordewick, Jr., Esq.

Columbia Management Advisors, LLC

One Financial Center

Boston, MA 02111

(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-617-426-3750

Date of fiscal year end: March 31, 2008

Date of reporting period: September 30, 2007

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

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

Item 1. Reports to Stockholders.

EQUITY FUNDS

SEMI ANNUAL REPORT

September 30, 2007

NOT FDIC INSURED	May Lose Value
NOT BANK ISSUED	No Bank Guarantee

TABLE OF CONTENTS

	PAGE
LETTER TO SHAREHOLDERS	2
UNDERSTANDING YOUR EXPENSES
Blended Equity Fund	4
Energy and Natural Resources Fund	5
Equity Income Fund	6
Equity Opportunities Fund	7
Large Cap Growth Fund	8
Mid Cap Value and Restructuring Fund	9
Real Estate Fund	10
Small Cap Fund	11
Value and Restructuring Fund	12
Emerging Markets Fund	13
International Fund	14
Pacific/Asia Fund	15
PORTFOLIOS OF INVESTMENTS
Blended Equity Fund	16
Energy and Natural Resources Fund	19
Equity Income Fund	21
Equity Opportunities Fund	23
Large Cap Growth Fund	25
Mid Cap Value and Restructuring Fund	27
Real Estate Fund	29
Small Cap Fund	31
Value and Restructuring Fund	33
Emerging Markets Fund	37
International Fund	40
Pacific/Asia Fund	43
STATEMENTS OF ASSETS AND LIABILITIES	46
STATEMENTS OF OPERATIONS	54
STATEMENTS OF CHANGES IN NET ASSETS	56
FINANCIAL HIGHLIGHTS	70
NOTES TO FINANCIAL STATEMENTS	94
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS	113
PROXY VOTING RESULTS	117
IMPORTANT INFORMATION ABOUT THIS REPORT	117

The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for an Excelsior Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Excelsior Fund. References to specific securities should not be construed as a recommendation or investment advice.

Investment in equity securities are subject to sudden and unpredictable drops in value and periods of lackluster performance.

Funds which concentrate their investments in one economic sector or geographical region may expose an investor to greater volatility. When used as part of a broader investment portfolio, these funds may serve to reduce overall portfolio volatility. Currency fluctuations, differences in security regulation, financial accounting standards, and foreign taxation regulations are among the risks associated with foreign investing, as well as political risk. Investing in emerging markets may accentuate these risks.

Small-cap stocks may be less liquid and subject to greater price volatility.

Value-based investments are subject to the risk that the broad market may not recognize their intrinsic value.

1

LETTER TO SHAREHOLDERS

Dear Shareholder:

Allow me to take this opportunity to formally welcome you to the Columbia Funds family. In July, U.S. Trust Advisors was acquired by Bank of America (parent company of Columbia Management Group). The Excelsior Funds are now distributed by Columbia Management Distributors, Inc. The combined organization is committed to delivering unparalleled wealth management solutions and building deep, lasting relationships with our shareholders.

Your Excelsior Funds account will be serviced by Columbia Management Services, Inc., an experienced service provider in the industry. This team will process transactions, generate account statements and support your ongoing servicing needs.

As we complete the integration over the next several months, you will gain access to a broad array of investment choices including money market investments, mutual funds and 529 plans. Throughout this period of change, our goal is to ensure a smooth transition and provide services that we hope will exceed your expectations. We recommend you visit our website: www.columbiafunds.com for more information about our products and services. Those of you who receive your statements directly from Columbia Management can also register for on-line account access, which allows you to check your account balance, change your distribution options and make other account transactions. If you receive statements from your brokerage firm, please check with your financial advisor for service availability.

There’s a lot to know about Columbia Management

With $709.9 billion under management and a history that dates to the early 1900s, Columbia Management and its affiliates make up one of the nation’s largest and most experienced asset management companies.¹ We offer a comprehensive array of investment solutions, including equity, fixed-income and cash strategies. Our diverse investment solutions and our focus on the needs of our clients make Columbia Management the advisor of choice for individual, institutional and high-net-worth investors.

Welcome to Columbia Management. Thank you for your business — we’re pleased to have you as a customer.

Sincerely,

Christopher L. Wilson

President, Excelsior Funds

2

About Christopher L. Wilson

Chris Wilson is head of mutual funds for Columbia Management, responsible for the day-to-day delivery of mutual fund products and services to the firm’s investors. With the exception of distribution, Mr. Wilson oversees all aspects of the mutual fund services operation including treasury, investment accounting, product development and shareholder and broker services. Mr. Wilson serves as Columbia Management’s chief liaison to the mutual fund boards of trustees. He joined Columbia Management in 2004 and has been a member of the investment community since 1980.

Columbia Management Group, LLC (“Columbia Management”) is the investment management arm of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member FINRA and SIPC. Columbia Management Distributors, Inc. is part of Columbia Management and an affiliate of Bank of America Corporation.

¹ Columbia Management and its affiliates comprise the wealth and investment management division of Bank of America Corporation. As of September 30, 2007, Columbia Management and its affiliates managed assets of $709.9 billion. Columbia Management and its affiliates’ managed assets consist of assets under the discretionary management of the registered investment advisors, Columbia Management Advisors, LLC ($377.9 billion), Columbia Wanger Asset Management, L.P. ($38.5 billion) and Marsico Capital Management, LLC ($103.4 billion); U.S. Trust, Bank of America Private Wealth Management; Banc of America Investment Services, Inc.; Banc of America Investment Advisors, Inc.; Bank of America Capital Advisors, LLC; Premier Banking & Investments, and United States Trust, National Association, including its subsidiary, UST Advisers, Inc. ($116.5 billion).

3

Understanding Your Expenses — Blended Equity Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,103.50	1,019.50	5.78	5.55	1.10

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

4

Understanding Your Expenses — Energy and Natural Resources Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)			Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual		Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,183.70	1,019.60	5.90		5.45	1.08
Class A	1,000.00	1,000.00	996.70	1,017.55	0.12	*	7.52	1.49
Class C	1,000.00	1,000.00	996.70	1,013.80	0.18	*	11.28	2.24

* For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007.

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

5

Understanding Your Expenses — Equity Income Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,063.30	1,019.50	5.67	5.55	1.10

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

6

Understanding Your Expenses — Equity Opportunities Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)			Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual		Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,121.60	1,019.75	5.57		5.30	1.05
Class A	1,000.00	1,000.00	1,001.30	1,019.20	0.10	*	5.86	1.16
Class C	1,000.00	1,000.00	1,001.30	1,015.45	0.16	*	9.62	1.91

* For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007.

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

7

Understanding Your Expenses — Large Cap Growth Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)			Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual		Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,146.20	1,019.05	6.38		6.01	1.19
Class A	1,000.00	1,000.00	997.50	1,017.90	0.12	*	7.16	1.42
Class C	1,000.00	1,000.00	997.50	1,014.15	0.18	*	10.93	2.17

* For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007.

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

8

Understanding Your Expenses — Mid Cap Value and Restructuring Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,077.70	1,019.40	5.82	5.65	1.12

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

9

Understanding Your Expenses — Real Estate Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	917.50	1,018.75	5.99	6.31	1.25

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

10

Understanding Your Expenses — Small Cap Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)			Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual		Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,089.00	1,018.95	6.32		6.11	1.21
Class A	1,000.00	1,000.00	991.50	1,018.20	0.11	*	6.86	1.36
Class C	1,000.00	1,000.00	991.50	1,014.45	0.17	*	10.63	2.11

* For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007.

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

11

Understanding Your Expenses — Value and Restructuring Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)			Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual		Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,083.40	1,019.85	5.36		5.20	1.03
Class A	1,000.00	1,000.00	999.99	1,018.80	0.10	*	6.26	1.24
Class C	1,000.00	1,000.00	999.99	1,015.05	0.16	*	10.02	1.99

* For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007.

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

12

Understanding Your Expenses — Emerging Markets Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)			Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual		Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,260.70	1,015.75	10.46		9.32	1.85
Class A	1,000.00	1,000.00	993.80	1,017.50	0.12	*	7.57	1.50
Class C	1,000.00	1,000.00	993.80	1,013.75	0.18	*	11.33	2.25

* For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007.

Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

13

Understanding Your Expenses — International Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,092.70	1,017.50	7.85	7.57	1.50

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

14

Understanding Your Expenses — Pacific/Asia Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,156.10	1,017.00	8.62	8.07	1.60

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

15

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Blended Equity Fund

Shares		Value
COMMON STOCKS — 96.21%
	CONSUMER DISCRETIONARY — 9.55%
74,000	BorgWarner, Inc.	$	6,773,220
36,000	Dillard’s, Inc., Class A		785,880
98,800	eBay, Inc.(a)		3,855,176
1,155	Interpublic Group of Companies, Inc.(a)		11,989
130,000	John Wiley & Sons, Class A		5,840,900
118,000	Life Time Fitness, Inc.(a)		7,238,120
61,500	Sotheby’s Holdings, Inc., Class A		2,939,085
176,400	Target Corp.		11,213,748
			38,658,118
	CONSUMER STAPLES — 6.22%
88,200	Altria Group, Inc.		6,132,546
113,750	Anheuser-Busch Cos., Inc.		5,686,363
61,036	Kraft Foods, Inc., Class A		2,106,352
156,100	Wal-Mart Stores, Inc.		6,813,765
68,974	Wm. Wrigley Jr. Co., Class B		4,430,200
			25,169,226
	ENERGY — 11.26%
84,250	Apache Corp.		7,587,555
37,100	Chevron Corp.		3,471,818
117,800	Cimarex Energy Co.		4,388,050
478,201	El Paso Corp.		8,115,071
145,772	Exxon Mobil Corp.		13,492,656
13,200	Royal Dutch Shell PLC, ADR		1,084,776
78,500	Suncor Energy, Inc., ADR		7,442,585
			45,582,511
	FINANCIAL — 20.04%
236,022	Aegon N.V.		4,491,499
129,250	American Capital Strategies Ltd.		5,522,853
92,600	American Express Co.		5,497,662
56,591	American International Group, Inc.		3,828,381
18,520	Ameriprise Financial, Inc.		1,168,797
168,520	Bank of America Corp.(b)		8,471,500
62	Berkshire Hathaway, Inc., Class A(a)		7,347,620
198,500	Leucadia National Corp.		9,571,670
49,088	Mellon Financial Corp.		2,166,744
45,400	Merrill Lynch & Co., Inc.		3,236,112
88,750	NYSE Euronext		7,026,337
112,173	Progressive Corp.		2,177,278
93,000	RenaissanceRe Holdings Ltd.		6,083,130

Shares		Value
COMMON STOCKS — (continued)
	FINANCIAL — (continued)
213,100	State Street Corp.	$	14,524,896
			81,114,479
	HEALTH CARE — 10.95%
180,800	Abbott Laboratories		9,694,496
22,100	Genzyme Corp. — General Division(a)		1,369,316
18,100	Hospira, Inc.(a)		750,245
181,061	Johnson & Johnson		11,895,708
98,500	Medtronic, Inc.		5,556,385
75,000	Novo-Nordisk A/S, ADR		9,078,000
97,058	Pfizer, Inc.		2,371,127
51,100	Schering-Plough Corp.		1,616,293
163,657	Senomyx, Inc.(a)		2,004,798
			44,336,368
	INDUSTRIALS — 13.12%
1,840,000	Bombardier, Inc., Class B(a)		10,932,891
115,000	Canadian National Railway Co.		6,555,000
51,100	Dover Corp.		2,603,545
86,000	Expeditors International of Washington, Inc.		4,067,800
261,869	General Electric Co.		10,841,377
2,200,000	Noble Group Ltd.		3,206,673
124,000	Quanta Services, Inc.(a)		3,279,800
118,000	Rolls-Royce Group PLC, ADR		6,301,200
96,858	Simpson Manufacturing Co., Inc.		3,084,927
59,100	Waste Management, Inc.		2,230,434
			53,103,647
	INFORMATION TECHNOLOGY — 11.34%
635,000	3com Corp.(a)		3,136,900
432,065	Cisco Systems, Inc.(a)		14,305,672
112,000	Microchip Technology, Inc.		4,067,840
316,700	Microsoft Corp.		9,329,982
154,400	National Instruments Corp.		5,300,552
141,200	NCR Corp.(a)		7,031,760
75,000	Nvidia Corp.(a)		2,718,000
			45,890,706
	MATERIALS — 5.90%
114,500	Aracruz Celulose SA, ADR		8,426,055
104,500	Bowater, Inc.		1,559,140
127,500	Nucor Corp.		7,582,425
70,750	Vulcan Materials Co.		6,307,363
			23,874,983

See Notes to Financial Statements.

16

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Blended Equity Fund — (continued)

Shares		Value
COMMON STOCKS — (continued)
	REAL ESTATE — 0.89%
107,500	St. Joe Co.	$	3,613,075
			3,613,075
	UTILITIES — 6.94%
331,500	AES Corp.(a)		6,643,260
288,000	Sierra Pacific Resources		4,530,240
247,000	TXU Corp.		16,912,090
			28,085,590
	TOTAL COMMON STOCKS (Cost $192,976,491)		389,428,703
FOREIGN COMMON STOCKS — 3.43%
	BELGIUM — 0.69%
153,500	RHJ International(a)		2,787,664
			2,787,664
	GERMANY — 1.27%
80,000	Bayerische Motoren Werke AG		5,150,741
			5,150,741
	SINGAPORE — 1.47%
1,250,000	Olam International Ltd.		2,640,015
383,500	Singapore Exchange Ltd.		3,319,356
			5,959,371
	TOTAL FOREIGN COMMON STOCKS (Cost $10,989,717)		13,897,776

Principal Amount			Value
REPURCHASE AGREEMENT — 0.03%
$	110,000	Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Government Obligation maturing 08/15/22, market value $113,513 (repurchase proceeds $110,033)	$	110,000
		TOTAL REPURCHASE AGREEMENT (Cost $110,000)		110,000

TOTAL INVESTMENTS (Cost $204,076,208)(c)	99.67	%	$	403,436,479
OTHER ASSETS IN EXCESS OF LIABILITIES	0.33			1,352,056
NET ASSETS	100.00	%	$	404,788,535

(a) Non-income producing security.

(b) Bank of America Corp. became an affiliate on July 1, 2007. Investments in affiliates during the six months ended September 30, 2007:

Security name:	Bank of America Corp.
Shares as of 03/31/07:		168,520
Shares purchased:		—
Shares sold:		—
Shares as of 09/30/07		168,520
Net realized gain/loss	$	—
Dividend income earned	$	107,853
Value at end of period	$	8,471,500

(c) Cost for federal income tax purposes is $204,076,208.

ADR—American Depository Receipt

Ltd.—Limited

PLC—Public Limited Company

See Notes to Financial Statements.

17

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Blended Equity Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets	Value
Financial	21.51	$	87,221,499
Industrials	13.12		53,103,647
Information Technology	11.34		45,890,706
Energy	11.26		45,582,511
Health Care	10.95		44,336,368
Consumer Discretionary	10.82		43,808,859
Utilities	6.94		28,085,590
Consumer Staples	6.91		27,809,241
Materials	5.90		23,874,983
Real Estate	0.89		3,613,075
Repurchase Agreement	0.03		110,000
Total Investments	99.67	$	403,436,479
Other Assets in Excess of Liabilities	0.33		1,352,056
Net Assets	100.00	$	404,788,535

See Notes to Financial Statements.

18

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Energy and Natural Resources Fund

Shares		Value
COMMON STOCKS — 95.19%
	ENERGY — 59.66%
300,000	Arch Coal, Inc.	$	10,122,000
175,000	Arena Resources, Inc.(a)		11,462,500
150,000	Atwood Oceanics, Inc.(a)		11,484,000
162,740	BP PLC ADR		11,286,019
125,000	Chevron Corp.		11,697,500
150,000	ConocoPhillips		13,165,500
156,388	Devon Energy Corp.		13,011,482
100,000	Diamond Offshore Drilling, Inc.		11,329,000
850,000	El Paso Corp.		14,424,500
300,000	Exxon Mobil Corp.		27,768,000
4,000,000	Gasco Energy, Inc.(a)		7,400,000
160,000	GlobalSantaFe Corp.		12,163,200
150,000	Grant Prideco, Inc.(a)		8,178,000
500,000	Halliburton Co.		19,200,000
2,297,700	Kodiak Oil & Gas Corp. ADR(a)		7,582,410
325,000	Marathon Oil Corp.		18,531,500
100,000	National-Oilwell, Inc.(a)		14,450,000
500,000	Nova Biosource Fuels, Inc.(a)		1,405,000
600,000	Parallel Petroleum Corp.(a)		10,194,000
350,000	Plains Exploration & Production Co.(a)		15,477,000
300,000	Pride Intl Inc Del Com(a)		10,965,000
150,000	Quicksilver Resources, Inc.(a)		7,057,500
297,000	Range Resources Corp.		12,076,020
131,000	Schlumberger Ltd.		13,755,000
75,000	Smith International, Inc.		5,355,000
352,600	Southwestern Energy Co.(a)		14,756,310
162,800	Suncor Energy, Inc. ADR		15,435,068
200,000	Tenaris S.A. ADR		10,524,000
675,000	Teton Energy Corp.(a)		3,145,500
562,400	TETRA Technologies, Inc.(a)		11,889,136
225,000	Total S.A. ADR		18,231,750
175,000	Transocean Sedco Forex, Inc.(a)		19,783,750
163,400	Ultra Petroleum Corp.(a)		10,137,336
400,000	VeraSun Energy Corp.(a)		4,400,000
266,666	XTO Energy, Inc.		16,490,625
			424,333,606
	INDUSTRIALS — 10.50%
19,900	Aegean Marine Petroleum Network, Inc.		721,574
100,000	Deere & Co.		14,842,000
107,200	Dryships, Inc.		9,739,120
34,300	Excel Maritime Carriers Ltd.		1,913,940
375,000	Genco Shipping & Trading Ltd.		24,573,750
425,000	General Electric Co.		17,595,000
100,000	Granite Construction, Inc.		5,302,000
			74,687,384

Shares			Value
COMMON STOCKS — (continued)
		MATERIALS — 17.51%
	50,000	Allegheny Technologies, Inc.	$	5,497,500
	200,800	Aracruz Cellulose S.A. ADR		14,776,872
	580,000	Claymont Steel Holdings, Inc.(a)		11,745,000
	400,000	Companhia Vale do Rio Doce ADR		13,572,000
	86,496	Freeport-McMoRan Copper & Gold, Inc. ADR		9,072,565
	600,000	Goldcorp, Inc.		18,336,000
	600,000	HudBay Minerals, Inc. ADR(a)		15,540,000
	356,500	Ivanhoe Mines Ltd.(a)		4,652,325
	600,000	Kinross Gold Corp.(a)		8,988,000
	65,000	Rio Tinto PLC ADR		22,321,000
				124,501,262
		UTILITIES — 7.52%
	550,000	Aqua America, Inc.		12,474,000
	186,500	Calpine Corp.(a)		279,750
	125,000	Entergy Corp.		13,536,250
	225,000	FPL Group, Inc.		13,698,000
	397,000	Williams Cos., Inc.		13,521,820
				53,509,820
		TOTAL COMMON STOCKS (Cost $588,453,136)		677,032,072
Principal Amount
REPURCHASE AGREEMENT — 7.40%
$	52,642,000	Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $53,697,938 (repurchase proceeds $52,658,012)		52,642,000
		TOTAL REPURCHASE AGREEMENT (Cost $52,642,000)		52,642,000

TOTAL INVESTMENTS (Cost $641,095,136)(b)	102.59	%	$	729,674,072
OTHER LIABILITIES IN EXCESS OF ASSETS	(2.59	)		(18,413,361	)
NET ASSETS	100.00	%	$	711,260,711

See Notes to Financial Statements.

19

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Energy and Natural Resources Fund — (continued)

(a) Non-income producing security.

(b) Cost for federal income tax purposes is $641,095,136.

ADR—American Depository Receipt

Ltd.—Limited

PLC—Public Limited Company

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets		Value
Energy	59.66		$	424,333,606
Materials	17.51			124,501,262
Industrials	10.50			74,687,384
Utilities	7.52			53,509,820
Repurchase Agreement	7.40			52,642,000
Total Investments	102.59		$	729,674,072
Other Liabilities in Excess of Assets	(2.59	)		(18,413,361	)
Net Assets	100.00		$	711,260,711

See Notes to Financial Statements.

20

Excelsior Funds Trust

Portfolio of Investments — September 30, 2007 (Unaudited)

Equity Income Fund

Shares		Value
COMMON STOCKS — 93.00%
	CONSUMER DISCRETIONARY — 6.78%
105,000	CBS Corp., Class B	$	3,307,500
100,000	Circuit City Stores, Inc.		791,000
90,000	Home Depot, Inc.		2,919,600
225,000	Newell Rubbermaid, Inc.		6,484,500
135,000	Time Warner, Inc.		2,478,600
			15,981,200
	CONSUMER STAPLES — 7.38%
70,000	Altria Group, Inc.		4,867,100
60,000	H.J. Heinz Co.		2,772,000
50,000	Kimberly-Clark Corp.		3,513,000
160,000	SUPERVALU, Inc.		6,241,600
			17,393,700
	ENERGY — 10.25%
65,000	BP PLC ADR		4,507,750
85,000	Chevron Corp.		7,954,300
195,000	Halliburton Co.		7,488,000
135,000	Penn West Energy Trust		4,194,450
			24,144,500
	FINANCIAL — 18.46%
285,000	Arthur J. Gallagher & Co.		8,256,450
185,000	Bank of New York Mellon Corp.		8,165,900
113,000	Citigroup, Inc.		5,273,710
105,000	Freddie Mac		6,196,050
75,000	Morgan Stanley		4,725,000
90,000	RenaissanceRe Holdings Ltd.		5,886,900
153,000	U.S. BanCorp.		4,977,090
			43,481,100
	HEALTH CARE — 5.94%
70,000	Eli Lilly & Co.		3,985,100
75,000	Medtronic, Inc.		4,230,750
105,000	Novartis AG ADR		5,770,800
			13,986,650
	INDUSTRIALS — 12.70%
160,000	Dover Corp.		8,152,000
195,000	General Electric Co.		8,073,000
125,000	Honeywell International, Inc.		7,433,750
60,000	Hubbell, Inc., Class B		3,427,200
75,000	Waste Management, Inc.		2,830,500
			29,916,450
	INFORMATION TECHNOLOGY — 11.83%
225,000	Electronic Data Systems Corp.		4,914,000
145,000	Linear Technology Corp.		5,073,550

Shares		Value
COMMON STOCKS — (continued)
	INFORMATION TECHNOLOGY — (continued)
210,000	Microsoft Corp.	$	6,186,600
150,000	Nokia Oyj ADR		5,689,500
230,000	Xilinx, Inc.		6,012,200
			27,875,850
	MATERIALS — 14.01%
280,000	Domtar Corp.(a)		2,296,000
67,000	Eastman Chemical Co.		4,470,910
235,000	Packaging Corp. of America		6,831,450
45,000	Pope Resources Ltd.		1,907,550
32,000	Rayonier, Inc.		1,537,280
395,000	RPM, Inc.		9,460,250
90,000	Weyerhaeuser Co.		6,507,000
			33,010,440
	TELECOMMUNICATION SERVICES — 5.65%
147,000	AT&T, Inc.		6,219,570
160,000	Verizon Communications, Inc.		7,084,800
			13,304,370
	TOTAL COMMON STOCKS (Cost $173,037,098)		219,094,260
FOREIGN COMMON STOCKS — 3.02%
	UNITED KINGDOM — 3.02%
460,000	Pearson PLC		7,118,102
	TOTAL FOREIGN COMMON STOCKS (Cost $5,471,204)		7,118,102
CONVERTIBLE PREFERRED STOCKS — 1.68%
	CONSUMER DISCRETIONARY — 1.68%
66,000	Ford Motor Co. Capital Trust II, Preferred Exchange, 6.50%		2,491,500
60,000	General Motors Corp., Series C, Preferred Exchange, 6.25%		1,469,400
	TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $3,098,578)		3,960,900

TOTAL INVESTMENTS (Cost $181,606,880)(b)	97.70	%	$	230,173,262
OTHER ASSETS IN EXCESS OF LIABILITIES	2.30			5,422,787
NET ASSETS	100.00	%	$	235,596,049

See Notes to Financial Statements.

21

Excelsior Funds Trust

Portfolio of Investments — September 30, 2007 (Unaudited)

Equity Income Fund — (continued)

(a) Non-income producing security.

(b) Cost for federal income tax purposes is $181,606,880.

ADR—American Depository Receipt

Ltd.—Limited

PLC—Public Limited Company

For the six months ended September 30, 2007, transactions in written option contracts were as follows:

	Number of contracts		Premium received
Options outstanding at March 31, 2007	—			—
Options written	(500	)	$	98,498
Options terminated in closing purchase transactions	—			—
Options exercised	—			—
Options expired	500			(98,498	)
Options outstanding at September 30, 2007	—			—

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets	Value
Financial	18.46	$	43,481,100
Materials	14.01		33,010,440
Industrials	12.70		29,916,450
Information Technology	11.83		27,875,850
Consumer Discretionary	11.48		27,060,202
Energy	10.25		24,144,500
Consumer Staples	7.38		17,393,700
Health Care	5.94		13,986,650
Telecommunication Services	5.65		13,304,370
Total Investments	97.70	$	230,173,262
Other Assets in Excess of Liabilities	2.30		5,422,787
Net Assets	100.00	$	235,596,049

See Notes to Financial Statements.

22

Excelsior Funds Trust

Portfolio of Investments — September 30, 2007 (Unaudited)

Equity Opportunities Fund

Shares		Value
COMMON STOCKS — 88.28%
	CONSUMER DISCRETIONARY — 9.64%
128,250	BorgWarner, Inc.	$	11,738,722
188,500	Dillard’s, Inc., Class A		4,114,955
145,000	John Wiley & Sons, Class A		6,514,850
180,200	Life Time Fitness, Inc.(a)		11,053,468
127,400	Sotheby’s Holdings, Inc., Class A		6,088,446
			39,510,441
	CONSUMER STAPLES — 3.71%
166,400	Anheuser-Busch Cos., Inc.		8,318,336
106,900	Wm. Wrigley Jr. Co.		6,866,187
			15,184,523
	ENERGY — 10.38%
96,300	Apache Corp.		8,672,778
187,000	Cimarex Energy Co.		6,965,750
616,000	El Paso Corp.		10,453,520
86,000	Exxon Mobil Corp.		7,960,160
89,400	Suncor Energy, Inc., ADR		8,476,014
			42,528,222
	FINANCIAL — 15.65%
184,897	Aegon N.V.		3,518,590
201,900	American Capital Strategies Ltd.		8,627,187
97	Berkshire Hathaway, Inc., Class A(a)		11,495,470
307,200	Leucadia National Corp.		14,813,184
142,500	NYSE Euronext		11,281,725
292,000	Progressive Corp.		5,667,720
133,000	RenaissanceRe Holdings Ltd.		8,699,530
			64,103,406
	HEALTH CARE — 7.29%
115,000	Johnson & Johnson		7,555,500
113,000	Medtronic, Inc.		6,374,330
101,900	Novo-Nordisk A/S, ADR		12,333,976
294,000	Senomyx, Inc.(a)		3,601,500
			29,865,306
	INDUSTRIALS — 18.75%
3,222,000	Bombardier, Inc., Class B(a)(b)		19,144,443
141,000	Canadian National Railway Co.		8,037,000
171,000	Expeditors International of Washington,, Inc.		8,088,300
181,500	General Electric Co.		7,514,100

Shares		Value
COMMON STOCKS — (continued)
	INDUSTRIALS — (continued)
80,300	Granite Construction, Inc.	$	4,257,506
454,600	Quanta Services, Inc.(a)		12,024,170
213,200	Rolls-Royce Group PLC, ADR		11,384,880
200,000	Simpson Manufacturing Co., Inc.		6,370,000
			76,820,399
	INFORMATION TECHNOLOGY — 4.47%
1,180,000	3com Corp.(a)		5,829,200
162,300	Microchip Technology, Inc.		5,894,736
192,500	National Instruments Corp.		6,608,525
			18,332,461
	MATERIALS — 12.98%
130,000	Aracruz Celulose SA, ADR		9,566,700
242,000	Bowater, Inc.		3,610,640
221,000	Monsanto Co.		18,948,540
166,600	Nucor Corp.		9,907,702
124,900	Vulcan Materials Co.		11,134,836
			53,168,418
	REAL ESTATE — 0.99%
121,000	St. Joe Co.		4,066,810
	UTILITIES — 4.42%
542,000	AES Corp.(a)		10,861,680
461,000	Sierra Pacific Resources		7,251,530
			18,113,210
	TOTAL COMMON STOCKS (Cost $289,235,618)		361,693,196
FOREIGN COMMON STOCKS — 9.10%
	BELGIUM — 1.43%
323,000	RHJ International(a)		5,865,899
	GERMANY — 1.34%
85,200	Bayerische Motoren Werke AG		5,485,539
	SINGAPORE — 6.33%
6,097,000	Noble Group Ltd.		8,886,856
3,143,000	Olam International Ltd.		6,638,054
1,203,385	Singapore Exchange Ltd.		10,415,811
			25,940,721
	TOTAL FOREIGN COMMON STOCKS (Cost $22,615,223)		37,292,159

See Notes to Financial Statements.

23

Excelsior Funds Trust

Portfolio of Investments — September 30, 2007 (Unaudited)

Equity Opportunities Fund — (continued)

Principal Amount			Value
REPURCHASE AGREEMENT — 1.52%
$	6,231,000	Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $6,358,500 (repurchase proceeds $6,232,895)	$	6,231,000
		TOTAL REPURCHASE AGREEMENT (Cost $6,231,000)		6,231,000

TOTAL INVESTMENTS (Cost $318,081,841)(c)	98.90	%	$	405,216,355
OTHER ASSETS IN EXCESS OF LIABILITIES	1.10			4,520,017
NET ASSETS	100.00	%	$	409,736,372

(a) Non-income producing security.

(b) Represents fair value as determined in good faith under procedures approved by the Board of Trustees.

(c) Cost for federal income tax purposes is $318,081,841.

ADR—American Depository Receipt

Ltd.—Limited

PLC—Public Limited Company

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets	Value
Industrials	20.92	$	85,707,255
Financial	19.62		80,385,116
Materials	12.98		53,168,418
Consumer Discretionary	10.98		44,995,980
Energy	10.38		42,528,222
Health Care	7.29		29,865,306
Consumer Staples	5.33		21,822,577
Information Technology	4.47		18,332,461
Utilities	4.42		18,113,210
Repurchase Agreement	1.52		6,231,000
Real Estate	0.99		4,066,810
Total Investments	98.90	$	405,216,355
Other Assets in Excess of Liabilities	1.10		4,520,017
Net Assets	100.00	$	409,736,372

See Notes to Financial Statements.

24

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Large Cap Growth Fund

Shares		Value
COMMON STOCKS — 99.18%
	CONSUMER DISCRETIONARY — 14.13%
476,700	Coach, Inc.(a)	$	22,533,609
658,114	eBay, Inc.(a)		25,679,608
191,212	Las Vegas Sands Corp.(a)		25,511,505
663,300	Lowe’s Companies, Inc.		18,585,666
1,201,000	Starbucks Corp.(a)		31,466,200
			123,776,588
	FINANCIAL — 6.95%
64,800	Chicago Mercantile Exchange		38,060,280
368,300	Lehman Brothers Holdings, Inc.		22,735,159
			60,795,439
	HEALTH CARE — 29.69%
195,155	Alcon, Inc.		28,086,707
546,400	Allergan, Inc.		35,226,408
523,100	Celgene Corp.(a)		37,302,261
364,900	Covance, Inc.(a)		28,425,710
473,296	Genentech, Inc.(a)		36,926,554
892,316	Gilead Sciences, Inc.(a)		36,468,955
111,637	Intuitive Surgical, Inc.(a)		25,676,510
394,512	Zimmer Holdings, Inc.(a)		31,951,527
			260,064,632
	INDUSTRIALS — 6.03%
510,000	Expeditors International of Washington, Inc.		24,123,000
243,694	First Solar, Inc.(a)		28,692,532
			52,815,532
	INFORMATION TECHNOLOGY — 38.17%
572,500	Adobe Systems, Inc.(a)		24,995,350
1,240,400	Akamai Technologies, Inc.(a)		35,636,692
227,800	Apple Computer, Inc.(a)		34,976,412
820,587	Broadcom Corp., Class A(a)		29,902,190
1,083,500	Corning, Inc.		26,708,275
431,815	Electronic Arts, Inc.(a)		24,177,322
60,538	Google, Inc., Class A(a)		34,341,391
513,306	Infosys Technologies Ltd., ADR		24,838,878
809,100	Qualcomm, Inc.		34,192,566
278,183	Research In Motion Ltd.(a)		27,414,935
436,625	VMware, Inc., Class A(a)		37,113,125
			334,297,136

Shares			Value
COMMON STOCKS — (continued)
		TELECOMMUNICATION SERVICES — 4.21%
	575,900	America Movil S.A. de C.V., Series Lg, ADR	$	36,857,600
		TOTAL COMMON STOCKS (Cost $662,920,678)		868,606,927
Principal Amount
REPURCHASE AGREEMENT — 1.53%
$	13,397,000	Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $13,668,313 (repurchase proceeds $13,401,075)		13,397,000
		TOTAL REPURCHASE AGREEMENT (Cost $13,397,000)		13,397,000

TOTAL INVESTMENTS (Cost $676,317,678)(b)	100.71	%	$	882,003,927
OTHER LIABILITIES IN EXCESS OF ASSETS	(0.71	)		(6,198,688	)
NET ASSETS	100.00	%	$	875,805,239

(a) Non-income producing security.

(b) Cost for federal income tax purposes is $676,317,678.

ADR—American Depository Receipt

Ltd. —Limited

See Notes to Financial Statements.

25

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Large Cap Growth Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets		Value
Information Technology	38.17		$	334,297,136
Health Care	29.69			260,064,632
Consumer Discretionary	14.13			123,776,588
Financial	6.95			60,795,439
Industrials	6.03			52,815,532
Telecommunication Services	4.21			36,857,600
Repurchase Agreement	1.53			13,397,000
Total Investments	100.71		$	882,003,927
Other Liabilities in Excess of Assets	(0.71	)		(6,198,688	)
Net Assets	100.00		$	875,805,239

See Notes to Financial Statements.

26

Excelsior Funds Trust

Portfolio of Investments — September 30, 2007 (Unaudited)

Mid Cap Value and Restructuring Fund

Shares		Value
COMMON STOCKS — 98.00%
	CONSUMER DISCRETIONARY — 22.87%
39,400	Autozone, Inc.(a)	$	4,575,913
91,000	Black & Decker Corp.		7,580,299
112,900	Centex Corp.		2,999,753
360,000	Constellation Brands, Inc.(a)		8,715,600
185,000	EchoStar Communications, Inc.(a)		8,659,851
160,000	Limited Brands		3,662,400
323,200	Onex Corp.		11,876,499
167,700	Sherwin-Williams Co.		11,019,567
378,200	Tempur-Pedic International, Inc.		13,520,649
295,000	TJX Cos., Inc.		8,575,650
			81,186,181
	CONSUMER STAPLES — 1.66%
230,000	Dean Foods Co.		5,883,400
	ENERGY — 11.78%
86,000	Cimarex Energy Co.		3,203,500
133,300	Devon Energy Corp.		11,090,560
349,800	El Paso Corp.		5,936,106
260,000	Noble Corp.		12,753,000
137,800	Occidental Petroleum Corp.		8,830,227
			41,813,393
	FINANCIAL — 21.03%
94,000	Ace Ltd.		5,693,580
260,000	CIT Group, Inc.		10,452,000
470,000	E*TRADE Group, Inc.(a)		6,138,200
245,000	First Marblehead Corp.		9,292,850
141,600	Lehman Brothers Holding, Inc.		8,740,967
160,000	Leucadia National Corp.		7,715,200
61,400	Mastercard, Inc., Class A		9,085,358
150,000	Progressive Corp.		2,911,500
83,000	RenaissanceRe Holdings Ltd.		5,429,029
310,000	W.R. Berkley Corp.		9,185,300
			74,643,984
	HEALTH CARE — 3.68%
176,700	Shire Pharmaceuticals PLC ADR		13,072,266
	INDUSTRIALS — 20.31%
130,000	Autoliv, Inc.		7,767,500
193,000	Brink’s Co.		10,784,840
247,000	Empresa Brasileira de Aeronautica S.A. ADR		10,848,240
150,000	Kennametal, Inc.		12,597,000

Shares		Value
COMMON STOCKS — (continued)
	INDUSTRIALS — (continued)
22,900	Lincoln Electric Holdings, Inc.	$	1,777,269
172,000	Mueller Industries, Inc.		6,216,080
185,000	Oshkosh Truck Corp.		11,464,450
330,300	United Rentals, Inc.(a)		10,625,751
			72,081,130
	INFORMATION TECHNOLOGY — 4.47%
130,000	Electronic Data Systems Corp.		2,839,200
225,000	Harris Corp.		13,002,748
			15,841,948
	MATERIALS — 7.91%
210,700	Aracruz Cellulose S.A. ADR		15,505,417
129,700	Cabot Microelectronics Corp.(a)		5,544,675
380,000	Sterlite Industries (India) Ltd. ADS(a)		7,030,000
			28,080,092
	REAL ESTATE — 0.98%
103,800	St. Joe Co.		3,488,719
	UTILITIES — 3.31%
345,000	Williams Cos., Inc.		11,750,700
	TOTAL COMMON STOCKS (Cost $214,592,502)		347,841,813
FOREIGN COMMON STOCKS — 2.00%
	NETHERLANDS — 2.00%
79,500	Hunter Douglas NV		7,114,787
	TOTAL FOREIGN COMMON STOCKS (Cost $2,926,238)		7,114,787

TOTAL INVESTMENTS (Cost $217,518,740)(b)	100.00	%	$	354,956,600
OTHER LIABILITIES IN EXCESS OF ASSETS	0.00	*		(15,811	)
NET ASSETS	100.00	%	$	354,940,789

(a) Non-income producing security.

(b) Cost for federal income tax purposes is $217,518,740.

* Rounds to less than 0.01%.

ADR—American Depository Receipt

ADS—American Depository Shares

Ltd.—Limited

PLC—Public Limited Company

See Notes to Financial Statements.

27

Excelsior Funds Trust

Portfolio of Investments — September 30, 2007 (Unaudited)

Mid Cap Value and Restructuring Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets		Value
Consumer Discretionary	24.87		$	88,300,968
Financial	21.03			74,643,984
Industrials	20.31			72,081,130
Energy	11.78			41,813,393
Materials	7.91			28,080,092
Information Technology	4.47			15,841,948
Health Care	3.68			13,072,266
Utilities	3.31			11,750,700
Consumer Staples	1.66			5,883,400
Real Estate	0.98			3,488,719
Total Investments	100.00		$	354,956,600
Other Liabilities in Excess of Assets	0.00	*		(15,811	)
Net Assets	100.00		$	354,940,789

* Rounds to less than 0.01%.

See Notes to Financial Statements.

28

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Real Estate Fund

Shares		Value
COMMON STOCKS — 94.60%
	CONSUMER DISCRETIONARY — 4.99%
32,891	Gaylord Entertainment Co.(a)	$	1,750,459
45,000	Starwood Hotels & Resorts Worldwide, Inc.		2,733,750
			4,484,209
	FINANCIAL — 2.19%
57,998	iStar Financial, Inc.		1,971,352
			1,971,352
	HEALTH CARE — 0.96%
21,698	Brookdale Senior Living, Inc.		863,797
			863,797
	INDUSTRIALS — 0.56%
10,073	Alexander & Baldwin, Inc.		504,960
			504,960
	REAL ESTATE — 85.90%
48,426	Alexandria Real Estate Equities, Inc.		4,661,487
63,387	American Campus Communities, Inc.		1,856,605
88,087	Apartment Investment & Management Co., Class A		3,975,366
28,784	AvalonBay Communities, Inc.		3,398,239
105,667	Corporate Office Properties Trust		4,398,917
68,863	Developers Diversified Realty Corp.		3,847,376
35,000	Digital Realty Trust, Inc.		1,378,650
75,000	Douglas Emmett, Inc.		1,854,750
25,636	Essex Property Trust, Inc.		3,014,024
109,190	Extra Space Storage, Inc.		1,680,434
10,000	Federal Realty Investment Trust		886,000
75,000	Health Care REIT, Inc.		3,318,000
5,000	Host Hotels & Resorts, Inc.		112,200
105,800	Kimco Realty Corp.		4,783,218
130,000	Kite Realty Group Trust		2,444,000
54,694	LaSalle Hotel Properties		2,301,524
85,491	Lexington Realty Trust		1,710,675
28,368	Macerich Co.		2,484,469
74,783	Mid-America Apartment Communities, Inc.		3,727,933
71,243	Plum Creek Timber Co., Inc.		3,188,837
20,473	Potlatch Corp.		921,899
94,497	Prologis		6,269,876

Shares			Value
COMMON STOCKS — (continued)
		REAL ESTATE — (continued)
	40,000	Public Storage, Inc.	$	3,146,000
	67,321	Simon Property Group, Inc.		6,732,100
	19,225	SL Green Realty Corp.		2,244,903
	77,332	Sun Communities, Inc.		2,326,147
	10,000	Taubman Centers, Inc.		547,500
				77,211,129
		TOTAL COMMON STOCKS (Cost $70,195,999)		85,035,447
Principal Amount
REPURCHASE AGREEMENT — 4.62%
$	4,155,000	Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Government Obligation maturing 05/15/07, market value $4,242,375 (repurchase proceeds $4,156,264)		4,155,000
		TOTAL REPURCHASE AGREEMENT (Cost $4,155,000)		4,155,000

TOTAL INVESTMENTS (Cost $74,350,999)(b)	99.22	%	$	89,190,447
OTHER ASSETS IN EXCESS OF LIABILITIES	0.78			701,657
NET ASSETS	100.00	%	$	89,892,104

(a) Non-income producing security.

(b) Cost for federal income tax purposes is $74,350,999.

REIT—Real Estate Investment Trust

See Notes to Financial Statements.

29

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Real Estate Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets	Value
Real Estate	85.90	$	77,211,129
Consumer Discretionary	4.99		4,484,209
Repurchase Agreement	4.62		4,155,000
Financial	2.19		1,971,352
Health Care	0.96		863,797
Industrials	0.56		504,960
Total Investments	99.22	$	89,190,447
Other Assets in Excess of Liabilities	0.78		701,657
Net Assets	100.00	$	89,892,104

See Notes to Financial Statements.

30

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Small Cap Fund

Shares		Value
COMMON STOCKS — 98.08%
	CONSUMER DISCRETIONARY — 12.83%
1,000,000	Cabelas, Inc.(a)	$	23,650,000
300,000	Columbia Sportswear Co.		16,593,000
200,000	iRobot Corp.(a)		3,976,000
460,000	Modine Manufacturing Co.		12,245,200
780,000	Nautilus, Inc.		6,216,600
200,000	Sotheby’s Holdings, Inc., Class A		9,558,000
660,000	Talbots, Inc.		11,880,000
400,000	Thor Industries, Inc.		17,996,000
200,000	Urban Outfitters, Inc.(a)		4,360,000
			106,474,800
	ENERGY — 4.60%
600,000	Helix Energy Solutions Group, Inc.(a)		25,476,000
600,000	TETRA Technologies, Inc.(a)		12,684,000
			38,160,000
	FINANCIAL — 11.75%
380,000	GFI Group, Inc.(a)		32,725,600
350,000	Greenhill & Co., Inc.		21,367,500
360,000	Jefferies Group, Inc.		10,018,800
640,000	Philadelphia Consolidated Holdings Corp.(a)		26,457,600
300,000	Radian Group, Inc.		6,984,000
			97,553,500
	HEALTH CARE — 5.38%
40,000	Kensey Nash Corp.(a)		1,044,400
600,000	Molina Healthcare, Inc.(a)		21,762,000
880,000	Orthovita, Inc.(a)		2,666,400
660,000	Pharmanet Development Group, Inc.(a)		19,159,800
			44,632,600
	INDUSTRIALS — 29.26%
150,000	EDO Corp.		8,401,500
480,000	FLIR Systems, Inc.(a)		26,587,200
620,000	FTI Consulting, Inc.(a)		31,192,200
740,000	Hewitt Associates, Inc., Class A(a)		25,937,000
1,000,000	Innovative Solutions & Support, Inc.(a)		18,970,000
660,000	Kansas City Southern(a)		21,232,200

Shares		Value
COMMON STOCKS — (continued)
	INDUSTRIALS — (continued)
1,240,000	MPS Group, Inc.(a)	$	13,826,000
800,000	Quanta Services, Inc.(a)		21,160,000
500,000	Shaw Group, Inc.(a)		29,050,000
740,000	Simpson Manufacturing Co., Inc.		23,569,000
280,000	Triumph Group, Inc.		22,878,800
			242,803,900
	INFORMATION TECHNOLOGY — 29.57%
300,000	CACI International, Inc., Class A(a)		15,327,000
480,000	CommScope, Inc.(a)		24,115,200
720,000	Forrester Research, Inc.(a)		16,970,400
320,000	Hutchinson Technology, Inc.(a)		7,872,000
2,200,000	Kulicke & Soffa Industries, Inc.(a)		18,656,000
900,000	Manhattan Associates, Inc.(a)		24,669,000
1,400,000	Palm, Inc.(a)		22,778,000
840,000	Plantronics, Inc.		23,982,000
500,000	Power Integrations(a)		14,855,000
400,000	Rogers Corp.(a)		16,476,000
1,000,000	Secure Computing Corp.(a)		9,730,000
900,000	Technitrol, Inc.		24,255,000
480,000	Varian Semiconductor Equipment Associates, Inc.(a)		25,689,600
			245,375,200
	MATERIALS — 1.75%
340,000	Cabot Microelectronics Corp.(a)		14,535,000
	REAL ESTATE — 1.30%
320,000	St. Joe Co.		10,755,200
	UTILITIES — 1.64%
600,000	Aqua America, Inc.		13,608,000
	TOTAL COMMON STOCKS (Cost $586,014,469)		813,898,200

See Notes to Financial Statements.

31

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Small Cap Fund — (continued)

Principal Amount			Value
		REPURCHASE AGREEMENT — 0.27%
$	2,218,000	Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $2,264,488 (repurchase proceeds $2,218,675)	$	2,218,000
		TOTAL REPURCHASE AGREEMENT (Cost $2,218,000)		2,218,000

TOTAL INVESTMENTS (Cost $588,232,469)(b)	98.35	%	$	816,116,200
OTHER ASSETS IN EXCESS OF LIABILITIES	1.65			13,737,915
NET ASSETS	100.00	%	$	829,854,115

(a) Non-income producing security.

(b) Cost for federal income tax purposes is $588,232,469.

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets	Value
Information Technology	29.57	$	245,375,200
Industrials	29.26		242,803,900
Consumer Discretionary	12.83		106,474,800
Financial	11.75		97,553,500
Health Care	5.38		44,632,600
Energy	4.60		38,160,000
Materials	1.75		14,535,000
Utilities	1.64		13,608,000
Real Estate	1.30		10,755,200
Repurchase Agreement	0.27		2,218,000
Total Investments	98.35	$	816,116,200
Other Assets in Excess of Liabilities	1.65		13,737,915
Net Assets	100.00	$	829,854,115

See Notes to Financial Statements.

32

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Value and Restructuring Fund

Shares		Value
COMMON STOCKS — 95.57%
	CONSUMER DISCRETIONARY — 10.36%
2,625,000	Black & Decker Corp.	$	218,662,500
2,850,000	CBS Corp., Class B		89,775,000
3,500,000	Centex Corp.		92,995,000
1,800,000	EchoStar Communications, Inc.(a)		84,258,000
1,000,000	Harman International Industries, Inc.		86,520,000
1,350,000	J.C. Penney Co., Inc.		85,549,500
3,200,000	Leggett & Platt, Inc.		61,312,000
3,000,000	Newell Rubbermaid, Inc.		86,460,000
3,300,000	TJX Cos., Inc.		95,931,000
2,700,000	Zale Corp.(a)		62,478,000
			963,941,000
	CONSUMER STAPLES — 3.94%
2,550,000	Avon Products, Inc.		95,701,500
1,000,000	ConAgra Foods, Inc.		26,130,000
2,500,000	Dean Foods Co.		63,950,000
2,200,000	Loews Corp. — Carolina Group		180,906,000
			366,687,500
	ENERGY — 19.49%
2,400,000	Anadarko Petroleum Corp.		129,000,000
2,900,000	ConocoPhillips		254,533,000
4,600,000	CONSOL Energy, Inc.		214,360,000
2,600,000	Devon Energy Corp.		216,320,000
6,100,000	El Paso Corp.		103,517,000
3,850,000	Hercules Offshore, Inc.(a)		100,523,500
1,500,000	Murphy Oil Corp.		104,835,000
2,150,000	Noble Energy, Inc.		150,586,000
4,000,000	Petrobras ADR		302,000,000
4,300,000	PetroHawk Energy Corp.(a)		70,606,000
944,900	Pinnacle Gas Resources, Inc.(a)(b)		4,422,132
2,900,000	Rossetta Resources, Inc.(a)(b)		53,186,000
2,000,000	Spectra Energy Corp.		48,960,000
2,500,000	W&T Offshore, Inc.		60,950,000
			1,813,798,632
	FINANCIAL — 21.53%
2,800,000	Ace Ltd.		169,596,000
3,300,000	AerCap Holdings NV ADR(a)		82,137,000
1,400,000	Ambac Financial Group, Inc.		88,074,000
3,300,000	Apollo Investment Corp.(c)		68,640,000

Shares		Value
COMMON STOCKS — (continued)
	FINANCIAL — (continued)
1,500,000	Capital One Financial Corp.	$	99,645,000
2,711,260	CastlePoint Holdings Ltd.		31,179,490
2,200,000	CIT Group, Inc.		88,440,000
2,600,000	Citigroup, Inc.		121,342,005
1,050,000	Discover Financial Services		21,840,000
1,300,000	Freddie Mac		76,713,000
1,800,000	Genworth Financial, Inc.		55,314,000
4,100,000	Invesco PLC ADR		111,930,000
6,188,900	JHFS Participacoes S.A. ADR(a)(b)		32,861,821
2,350,000	JP Morgan Chase & Co.		107,677,000
2,050,000	Lehman Brothers Holdings, Inc.		126,546,500
2,850,000	Loews Corp.		137,797,500
2,961,200	MCG Capital Corp.		42,611,668
1,950,000	MetLife, Inc.		135,973,500
2,350,000	Morgan Stanley		148,050,000
2,300,000	People’s United Financial, Inc.		39,744,000
1,450,000	PNC Financial Services Group, Inc.		98,745,000
4,265,364	Primus Guaranty Ltd.(a)		44,871,629
2,100,000	Washington Mutual, Inc.		74,151,000
			2,003,880,113
	HEALTH CARE — 3.14%
1,900,000	AmerisourceBergen Corp.		86,127,000
2,031,818	Baxter International, Inc.		114,350,717
2,000,000	Bristol-Myers Squibb Co.		57,640,000
825,000	Covidien Ltd.		34,237,493
			292,355,210
	INDUSTRIALS — 13.44%
708,544	Aecom Technology Corp.(a)		24,749,442
2,900,000	AGCO Corp.(a)		147,233,000
1,050,181	Arlington Tankers		25,865,958
2,200,000	Copa Holdings S.A., Class A		88,110,000
2,750,000	Empresa Brasileira de Aeronautica S.A. ADR		120,780,000
3,650,000	Gol Linhas Aereas Inteligentes S.A. ADR		87,600,000
1,000,000	Omega Navigation Enterprises, Inc., Class A ADR		19,930,000
1,100,000	Rockwell Automation, Inc.		76,461,000
3,300,000	RSC Holdings, Inc.(a)		54,120,000

See Notes to Financial Statements.

33

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Value and Restructuring Fund — (continued)

Shares		Value
COMMON STOCKS — (continued)
	INDUSTRIALS — (continued)
2,000,000	Ryder Systems, Inc.	$	98,000,000
825,000	Tyco International Ltd.		36,580,492
1,750,000	Union Pacific Corp.		197,855,000
4,250,000	United Rentals, Inc.(a)		136,722,500
1,700,000	United Technologies Corp.		136,816,000
			1,250,823,392
	INFORMATION TECHNOLOGY — 6.16%
4,300,000	Harris Corp.		248,497,000
975,000	International Business Machines Corp.		114,855,000
3,850,000	Nokia Oyj ADR		146,030,500
1,200,000	Plantronics, Inc.		34,260,000
825,000	Tyco Electronics Ltd.		29,229,744
			572,872,244
	MATERIALS — 11.42%
3,650,000	Alpha Natural Resources, Inc.(a)		84,789,500
4,050,000	Celanese Corp., Class A		157,869,000
1,300,000	Eagle Materials, Inc.		46,462,000
1,625,000	Foundation Coal Holdings, Inc.		63,700,000
1,000,000	Freeport-McMoRan Copper & Gold, Inc. ADR		104,890,000
1,485,000	Horsehead Holding Corp.(a)(b)		33,293,700
1,461,198	International Coal Group, Inc.(a)		6,487,719
1,550,000	PPG Industries, Inc.		117,102,500
1,700,000	Schnitzer Steel Industries, Inc.		124,593,000
4,200,000	Smurfit-Stone Container Corp.(a)		49,056,000
1,800,000	Southern Copper Corp.		222,894,000
2,250,000	Sterlite Industries (India) Ltd. ADS(a)		41,625,000
1,084,319	Tronox, Inc.		10,084,167
			1,062,846,586
	REAL ESTATE — 1.87%
4,120,000	Diamondrock Hospitality Co.(b)		71,729,200
1,000,000	FBR Capital Markets Corp.(a)(b)		12,880,000
2,450,000	Host Marriot Corp.		54,978,000
3,000,000	Peoples Choice Financial Corp.(a)(b)(d)(e)		0

Shares		Value
COMMON STOCKS — (continued)
	REAL ESTATE — (continued)
489,579	Ventas, Inc.	$	20,268,570
2,140,500	Vintage Wine Trust, Inc.(b)		13,913,250
			173,769,020
	TELECOMMUNICATION SERVICES — 4.22%
5,225,000	America Movil S.A. de C.V., Series L ADR(f)		334,400,000
1,842,000	Datapath, Inc.(a)(b)		9,210,000
3,500,000	Windstream Corp.		49,420,000
			393,030,000
	TOTAL COMMON STOCKS (Cost $5,752,339,067)		8,894,003,697
FOREIGN COMMON STOCKS — 3.63%
	BRAZIL — 0.03%
500,000	JHSF Participacoes S.A.(a)		2,665,030
	GERMANY — 0.87%
1,700,000	Lanxess AG		80,619,189
	ITALY — 0.60%
5,000,000	Enel S.p.A.		56,422,485
	MEXICO — 0.85%
11,000,000	Grupo Mexico S.A.B. de C.V., Series B		78,949,293
	SWITZERLAND — 1.28%
1,350,000	Petroplus Holdings AG(a)		119,351,404
	TOTAL FOREIGN COMMON STOCKS (Cost $238,048,710)		338,007,401
CONVERTIBLE PREFERRED STOCKS — 0.27%
	MATERIALS — 0.27%
500,000	Celanese Corp., Preferred Exchange, 4.25%		25,070,000
	TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $11,789,117)		25,070,000

See Notes to Financial Statements.

34

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Value and Restructuring Fund — (continued)

Principal Amount			Value
REPURCHASE AGREEMENT — 0.74%
$	68,863,000	Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $70,242,188 (repurchase proceeds $68,883,946)	$	68,863,000
		TOTAL REPURCHASE AGREEMENT (Cost $68,863,000)		68,863,000

TOTAL INVESTMENTS (Cost $6,071,039,894)(g)	100.21	%	$	9,325,944,098
OTHER LIABILITIES IN EXCESS OF ASSETS	(0.21	)		(19,894,286	)
NET ASSETS	100.00	%	$	9,306,049,812

At September 30, 2007 the Fund had entered into the following written option contracts:

Contracts		Value
CALL OPTIONS WRITTEN:
(5,400)	America Movil S.A. de C.V., Expires 11/17/07 strike price 60 (Premiums received $2,113,212)	$	(3,186,000	)

(a) Non-income producing security.

(b) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $231,496,103, which represents 2.49% of net assets.

(c) Closed-end Management Investment Company.

(d) Security has no value.

(e) Represents fair value as determined in good faith under procedures approved by the Board of Directors.

(f) All or a portion of this security is pledged as collateral for written option contracts.

(g) Cost for federal income tax purposes is $6,071,039,894.

ADR—American Depository Receipt

ADS—American Depository Shares

Ltd.—Limited

PLC—Public Limited Company

For the six months ended September 30, 2007, transactions in written option contracts were as follows:

	Number of contracts		Premium received
Options outstanding at March 31, 2007	(23,000	)	$	6,678,258
Options written	(22,400	)		9,630,069
Options terminated in closing purchase transactions	28,183			(9,791,478	)
Options exercised	6,817			(3,909,273	)
Options expired	5,000			(494,364	)
Options outstanding at September 30, 2007	(5,400	)	$	2,113,212

See Notes to Financial Statements.

35

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Value and Restructuring Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets		Value
Financial	21.56		$	2,006,545,143
Energy	20.77			1,933,150,036
Industrials	14.31			1,331,442,581
Materials	12.54			1,166,865,879
Consumer Discretionary	10.36			963,941,000
Information Technology	6.16			572,872,244
Consumer Staples	4.54			423,109,985
Telecommunication Services	4.22			393,030,000
Health Care	3.14			292,355,210
Real Estate	1.87			173,769,020
Repurchase Agreement	0.74			68,863,000
Total Investments	100.21		$	9,325,944,098
Other Liabilities in Excess of Assets	(0.21	)		(19,894,286	)
Net Assets	100.00		$	9,306,049,812

See Notes to Financial Statements.

36

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Emerging Markets Fund

Shares		Value
COMMON STOCKS — 91.84%
	ARGENTINA — 1.66%
931,800	Telecom Argentina SA, ADR(a)	$	22,875,690
	BRAZIL — 7.46%
862,800	Companhia Vale do Rio Doce SA		29,160,098
516,832	Diagnosticos da America SA		11,842,304
210,000	Gafisa SA, ADR(a)		7,085,400
398,800	Gol Linhas Aereas Inteligentes SA, ADR		9,571,200
1,467,400	Industrias Romi SA		16,915,528
215,400	Uniao de Bancos Brasileiros SA, GDR		28,335,870
			102,910,400
	CHILE — 1.56%
424,200	Banco Santander Chile SA, ADR		21,451,794
	CHINA — 15.08%
11,637,000	Bank of Communications Ltd., Class H (Hong Kong)		14,033,245
27,271,300	Chaoda Modern Agriculture Holdings Ltd. (Hong Kong)		22,010,247
42,614,000	China Construction Bank Corp, Class H (Hong Kong)		38,860,146
620,797	China Mobile Ltd., ADR (Hong Kong)		50,930,186
20,961,000	China Petroleum & Chemical Corp., Class H (Hong Kong)		25,729,037
18,267,722	Far East Consortium International Ltd. (Hong Kong)		8,203,952
2,647,000	Industrial & Commercial Bank of China (Hong Kong)		1,845,595
15,539,400	People’s Food Holdings Ltd.		14,967,910
131,700	PetroChina Co., Ltd., ADR		24,378,987
8,447,000	Texwinca Holdings Ltd. (Hong Kong)		7,010,204
			207,969,509
	COLUMBIA — 0.99%
392,800	BanColombia SA, ADR		13,610,520
	INDIA — 4.43%
339,350	ICICI Bank Ltd., ADR		17,890,532
222,900	State Bank of India, GDR(b)		24,964,800
501,781	Suzlon Energy Ltd.		18,207,245
			61,062,577

Shares		Value
COMMON STOCKS — (continued)
	INDONESIA — 2.45%
14,051,700	PT Indocement Tunggal Prakarsa Tbk	$	9,365,883
20,227,700	PT Telekomunikasi Indonesia Tbk, Series B		24,461,478
			33,827,361
	MALAYSIA — 4.88%
9,413,000	Genting Berhad		22,206,453
6,454,950	Public Bank Berhad, Foreign Market Shares		19,862,702
4,404,300	Telekom Malaysia Berhad		12,718,507
4,517,200	Tenaga Nasional Berhad		12,508,446
			67,296,108
	MEXICO — 7.58%
324,700	America Movil SAB de C.V., Series L, ADR		20,780,800
366,144	Cemex SAB de C.V., ADR		10,955,028
262,600	Grupo Aeroportuario del Pacifico SA de C.V., ADR		14,337,960
718,155	Grupo Elektra SA de C.V.		14,648,854
2,124,100	Grupo Televisa SA		10,205,483
331,580	Telefonos de Mexico SAB de C.V., Series L, ADR		10,899,035
2,903,429	Urbi Desarrollos Urbanos SA de C.V.(a)		10,432,531
3,330,082	Wal-Mart de Mexico SAB de C.V., Series V		12,209,144
			104,468,835
	RUSSIA — 6.50%
297,500	OAO Gazprom, ADR		13,119,750
210,200	Lukoil Co., ADR		17,467,620
82,700	MMC Norilsk Nickel, ADR		22,494,400
315,800	Mobile TeleSystems, OJSC, ADR		21,888,098
464,000	RBC Information Systems, ADR(a)		14,606,720
			89,576,588
	SOUTH AFRICA — 6.43%
2,911,042	African Bank Investments Ltd.		13,250,085
704,600	Gold Fields Ltd., ADR		12,746,214
43,478	Mondi Ltd.		431,669
1,522,224	MTN Group Ltd.		23,078,233

See Notes to Financial Statements.

37

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Emerging Markets Fund — (continued)

Shares		Value
COMMON STOCKS — (continued)
	SOUTH AFRICA — (continued)
405,500	Sasol Ltd.	$	17,411,073
861,916	Telkom South Africa Ltd.		21,712,749
			88,630,023
	SOUTH KOREA — 16.17%
337,802	Hana Financial Group, Inc.		15,890,702
137,500	Kookmin Bank		11,340,966
650,638	KT Corp., ADR		16,298,482
328,470	LS Cable Ltd.		40,743,999
187,914	GS Home Shopping, Inc.		16,563,883
14,231	Lotte Chilsung Beverage Co., Ltd.		21,659,083
166,329	NCSoft Corp.(a)		14,726,302
119,757	Pacific Corp.		24,927,139
67,879	Samsung Electronics Co., Ltd.		42,474,502
614,685	SK Telecom Co., Ltd., ADR		18,256,145
			222,881,203
	TAIWAN — 9.73%
899,690	Chunghwa Telecom Co., Ltd., ADR		16,626,271
3,737,365	HON HAI Precision Industry Co., Ltd.		28,151,280
6,673,453	President Chain Store Corp.		18,769,871
12,369,406	Synnex Technology International Corp.		34,785,278
234,872	Taiwan Semiconductor Manufacturing Co., Ltd.		452,745
1,218,324	Taiwan Semiconductor Manufacturing Co., Ltd., ADR		12,329,439
12,814,552	Wistron Corp.		23,098,927
			134,213,811
	THAILAND — 1.09%
5,867,900	Advanced Info Service Public Co., Ltd., Foreign Shares		15,042,902
	TURKEY — 2.37%
1,090,262	Akbank T.A.S., ADR(b)		16,561,407
1,112,582	Arcelik A.S.		9,018,180
2,081,704	Turkiye Vakiflar Bankasi T.A.O., Class D		7,082,093
			32,661,680

Shares			Value
	COMMON STOCKS — (continued)
		UNITED KINGDOM — 3.46%
	395,650	Anglo American PLC (South Africa Shares)	$	26,260,213
	712,500	Kazakhmys PLC		20,394,325
	108,695	Mondi PLC		1,025,529
				47,680,067
		TOTAL COMMON STOCKS (Cost $714,270,319)		1,266,159,068
PREFERRED STOCKS — 4.30%
		BRAZIL — 3.59%
	947,262	Companhia Energetica de Minas Gerais		20,154,511
	906,800	Petroleo Brasileiro SA		29,286,721
				49,441,232
		SOUTH KOREA — 0.71%
	246,300	Hyundai Motor Co., Ltd.		9,860,492
				9,860,492
		TOTAL PREFERRED STOCKS (Cost $23,369,005)		59,301,724
REGISTERED INVESTMENT COMPANY — 0.95%
	240,400	India Fund, Inc.		13,053,720
		TOTAL REGISTERED INVESTMENT COMPANY (Cost $5,731,063)		13,053,720
Principal Amount
REPURCHASE AGREEMENT — 2.54%
$	35,043,000	Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $35,746,313 (repurchase proceeds $35,053,659)		35,043,000
		TOTAL REPURCHASE AGREEMENT (Cost $35,043,000)		35,043,000

TOTAL INVESTMENTS (Cost $778,413,387)(c)	99.63	%	$	1,373,557,512
OTHER ASSETS IN EXCESS OF LIABILITIES	0.37			5,154,025
NET ASSETS	100.00	%	$	1,378,711,537

See Notes to Financial Statements.

38

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Emerging Markets Fund — (continued)

(a) Non-income producing security.

(b) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $41,526,207, which represents 3.01% of net assets.

(c) Cost for federal income tax purposes is $778,413,387.

ADR—American Depository Receipt

GDR—Global Depository Receipt

Ltd.—Limited

PLC—Public Limited Company

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets	Value
Telecommunication Services	19.99	$	275,568,577
Financial	18.36		253,184,409
Information Technology	11.32		156,018,473
Materials	9.63		132,833,358
Energy	9.24		127,393,188
Consumer Discretionary	8.82		121,638,201
Consumer Staples	8.31		114,543,394
Industrials	7.24		99,775,932
Repurchase Agreement	2.54		35,043,000
Utilities	2.37		32,662,956
Registered Investment Company	0.95		13,053,720
Health Care	0.86		11,842,304
Total Investments	99.63	$	1,373,557,512
Other Assets in Excess of Liabilities	0.37		5,154,025
Net Assets	100.00	$	1,378,711,537

See Notes to Financial Statements.

39

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

International Fund

Shares		Value
COMMON STOCKS — 95.47%
	AUSTRALIA — 4.26%
172,500	CSL Ltd.	$	16,367,274
151,213	Rio Tinto Ltd.		14,450,613
			30,817,887
	BELGIUM — 1.50%
45,400	Umicore		10,831,652
	CANADA — 2.36%
186,100	Canadian National Railway Co.		10,619,852
162,600	Gildan Activewear, Inc.(a)		6,439,264
			17,059,116
	CHINA — 4.87%
10,378,000	Chaoda Modern Agriculture Holdings Ltd. (Hong Kong)		8,375,925
4,754,000	Dongfeng Motor Group Co., Ltd., Class H		4,151,531
59,400	PetroChina Co., Ltd., ADR		10,995,534
47,000	Sino-Ocean Land Holdings Ltd.(a)		66,505
690,000	Sun Hung Kai Properties Ltd. (Hong Kong)		11,607,677
			35,197,172
	FINLAND — 4.44%
259,400	Fortum Oyj		9,516,690
391,100	Nokia Oyj		14,839,723
347,100	Tietoenator Oyj		7,785,630
			32,142,043
	FRANCE — 7.34%
218,728	AXA SA		9,795,588
69,950	BNP Paribas		7,655,035
125,056	Carrefour SA		8,754,107
34,034	Compagnie Generale de Geophysique — Veritas(a)		11,068,536
73,000	Peugeot SA		6,035,879
120,756	Total SA		9,785,250
			53,094,395
	GERMANY — 6.57%
164,100	Adidas AG		10,758,348
140,200	Bayerische Motoren Werke AG		9,026,673
320,600	Rhoen-Klinikum AG		10,255,020
148,200	SGL Carbon AG(a)		8,474,481
401,500	United Internet AG, Registered Shares		9,026,250
			47,540,772

Shares		Value
COMMON STOCKS — (continued)
	GREECE — 1.12%
369,500	Greek Postal Savings Bank	$	8,099,030
	INDONESIA — 1.31%
7,838,100	PT Telekomunikasi Indonesia Tbk, Series B		9,478,661
	IRELAND — 1.14%
443,137	Bank of Ireland		8,260,131
	ITALY — 2.29%
249,890	ENI S.p.A		9,227,877
280,336	Permasteelisa S.p.A		7,318,032
			16,545,909
	JAPAN — 19.75%
179,000	Canon, Inc.		9,713,497
428,963	Chiyoda Corp.		7,688,518
340,200	Don Quijote Co., Ltd.		6,997,099
104,500	FANUC Ltd.		10,608,684
181,500	FUJIFILM Holdings Corp.		8,338,856
1,130,700	Fukuoka Financial Group, Inc.		6,591,540
662,300	Itochu Corp.		7,995,531
700	Japan Tobacco, Inc.		3,838,981
32,400	Keyence Corp.		7,170,472
103,600	Kyocera Corp.		9,660,294
640,000	Mitsubishi UFJ Financial Group, Inc.(b)		5,811,200
276,000	Nikon Corp.		9,432,534
17,700	Nintendo Co., Ltd.		9,138,583
4,500	NTT DoCoMo, Inc.		6,396,491
113,000	Shin-Etsu Chemical Co., Ltd.		7,774,339
1,027,000	Sumitomo Trust & Banking Co., Ltd.		7,732,390
160,000	Takeda Pharmaceutical Co., Ltd.		11,220,950
68,300	Yamada Denki Co., Ltd.		6,726,437
			142,836,396
	MALAYSIA — 0.55%
1,449,300	Tenaga Nasional Berhad		4,013,214
	MEXICO — 2.42%
153,100	America Movil SAB de C.V., Series L, ADR		9,798,400
256,524	Cemex SAB de C.V., ADR		7,675,198
			17,473,598

See Notes to Financial Statements.

40

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

International Fund — (continued)

Shares		Value
COMMON STOCKS — (continued)
	NETHERLANDS — 0.70%
94,154	Randstad Holding NV	$	5,096,762
	NORWAY — 3.11%
444,200	Tandberg ASA		10,663,073
591,800	Telenor ASA(a)		11,815,044
			22,478,117
	SINGAPORE — 1.51%
752,000	DBS Group Holdings Ltd.		10,895,672
	SPAIN — 3.11%
555,300	Banco Santander SA		10,814,917
418,146	Telefonica SA		11,682,251
			22,497,168
	SWEDEN — 2.08%
102,800	SSAB Svenskt Stal AB, Series A		3,788,737
606,300	Svenska Cellulosa AB, B Shares		11,278,459
			15,067,196
	SWITZERLAND — 5.41%
68,300	Credit Suisse Group, Registered Shares		4,539,486
252,400	Micronas Semiconductor Holdings AG, Registered Shares(a)		3,318,130
11,437	Rieter Holdings AG, Registered Shares		6,204,464
49,310	Roche Holding AG, Genusschein Shares		8,928,662
80,000	Synthes, Inc.		8,952,204
133,000	UBS AG, Registered Shares		7,145,778
			39,088,724
	TAIWAN — 2.92%
1,563,889	HON HAI Precision Industry Co., Ltd.		11,779,818
920,989	Taiwan Semiconductor Manufacturing Co., Ltd., ADR		9,320,409
			21,100,227
	THAILAND — 1.07%
3,226,800	Kasikornbank Public Co., Ltd. (Foreign Shares)		7,751,909
	TURKEY — 0.40%
352,936	Arcelik A.S.		2,860,769
	UNITED KINGDOM — 15.24%
692,600	BG Group PLC		11,965,547
219,700	BHP Billiton PLC		7,859,610

Shares			Value
COMMON STOCKS — (continued)
		UNITED KINGDOM — (continued)
	804,700	Cadbury Schweppes PLC	$	9,358,799
	317,737	GlaxoSmithKline PLC		8,427,366
	488,600	HSBC Holdings PLC		9,023,223
	671,500	Paragon Group Companies PLC		4,116,601
	174,357	Reckitt Benckiser PLC		10,221,726
	793,368	Reed Elsevier PLC		10,029,592
	743,454	Royal Bank of Scotland Group PLC		8,021,748
	467,600	Sage Group PLC		2,380,113
	1,182,879	Serco Group PLC		10,007,311
	357,000	Shire PLC		8,750,464
	1,748,652	WM Morrison Supermarkets PLC		10,092,805
				110,254,905
		TOTAL COMMON STOCKS (Cost $511,621,226)		690,481,425
REGISTERED INVESTMENT COMPANY — 1.99%
	174,600	iShares MSCI EAFE Index Fund		14,414,976
		TOTAL REGISTERED INVESTMENT COMPANY (Cost $14,476,261)		14,414,976
Principal Amount
REPURCHASE AGREEMENT — 2.62%
$	18,940,000	Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $19,323,563 (repurchase proceeds $18,945,761)		18,940,000
		TOTAL REPURCHASE AGREEMENT (Cost $18,940,000)		18,940,000

TOTAL INVESTMENTS (Cost $545,037,487)(c)	100.08	%	$	723,836,401
OTHER LIABILITIES IN EXCESS OF ASSETS	(0.08	)		(552,856	)
NET ASSETS	100.00	%	$	723,283,545

See Notes to Financial Statements.

41

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

International Fund — (continued)

(a) Non-income producing security.

(b) Represents fair value as determined in good faith under procedures approved by the Board of Directors.

(c) Cost for federal income tax purposes is $545,037,487.

ADR—American Depository Receipt

Ltd.—Limited

PLC—Public Limited Company

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets		Value
Financial	17.69		$	127,928,429
Information Technology	15.64			113,134,848
Consumer Discretionary	10.88			78,662,590
Health Care	10.08			72,901,940
Industrials	9.38			67,809,172
Materials	8.80			63,658,609
Energy	7.33			53,042,744
Consumer Staples	7.00			50,642,342
Telecommunication Services	6.80			49,170,846
Repurchase Agreement	2.62			18,940,000
Registered Investment Company	1.99			14,414,976
Utilities	1.87			13,529,905
Total Investments	100.08		$	723,836,401
Other Liabilities in Excess of Assets	(0.08	)		(552,856	)
Net Assets	100.00		$	723,283,545

See Notes to Financial Statements.

42

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Pacific/Asia Fund

Shares		Value
COMMON STOCKS — 96.92%
	AUSTRALIA — 15.54%
43,000	BHP Billiton Ltd.	$	1,679,071
318,500	Brambles Ltd.		4,162,116
81,423	Commonwealth Bank of Australia		4,060,088
43,000	CSL Ltd.		4,079,958
60,800	Incitec Pivot Ltd.		4,595,257
42,875	Rio Tinto Ltd.		4,097,333
108,700	St. George Bank Ltd.		3,403,573
161,700	Woolworths Ltd.		4,253,282
166,100	Zinifex Ltd.		2,605,661
			32,936,339
	CAMBODIA — 1.31%
8,817,000	NagaCorp Ltd. (Hong Kong)		2,767,459
	CHINA — 9.33%
47,800	Aluminum Corp. of China Ltd., ADR		3,347,434
463,540	Bank of East Asia Ltd. (Hong Kong)		2,606,510
4,123,000	Chaoda Modern Agriculture Holdings Ltd. (Hong Kong)		3,327,610
64,600	China Mobile Ltd., ADR (Hong Kong)		5,299,784
1,410,000	Dongfeng Motor Group Co., Ltd., Class H		1,231,312
13,500	Sino-Ocean Land Holdings Ltd.(a)		19,102
134,500	Swire Pacific Ltd., Class A		1,627,597
1,671,000	Synear Food Holdings Ltd.		2,323,643
			19,782,992
	INDIA — 1.19%
107,200	Bharti Airtel Ltd.(a)		2,520,989
	INDONESIA — 3.43%
38,000	Freeport-McMoRan Copper & Gold, Inc.		3,985,820
2,720,800	PT Telekomunikasi Indonesia Tbk, Series B		3,290,280
			7,276,100
	JAPAN — 46.55%
73,000	Canon, Inc.		3,961,370
184,145	Chiyoda Corp.		3,300,523
700	Dena Co., Ltd.		3,076,713
154,800	Don Quijote Co., Ltd.		3,183,865
49,400	FANUC Ltd.		5,015,014

Shares		Value
COMMON STOCKS — (continued)
	JAPAN — (continued)
60,100	FUJIFILM Holdings Corp.	$	2,761,241
571,700	Fukuoka Financial Group, Inc.		3,332,788
1,024	Funai Zaisan Consultants Co., Ltd.		2,171,125
45,700	Glory Ltd.		1,447,720
68,300	Hogy Medical Co., Ltd.		3,211,335
45,600	Hoya Corp.		1,549,577
321,700	Itochu Corp.		3,883,681
12,500	Keyence Corp.		2,766,386
147,600	Komatsu Ltd.		4,920,393
114,100	Kurita Water Industries Ltd.		3,847,826
36,400	Kyocera Corp.		3,394,157
256,000	Mitsubishi UFJ Financial Group, Inc.(b)		2,324,480
116,000	Nikon Corp.		3,964,398
11,100	Nintendo Co., Ltd.		5,730,976
79,000	Nomura Holdings, Inc.		1,314,251
9,500	ORIX Corp.		2,152,963
61,900	Shin-Etsu Chemical Co., Ltd.		4,258,687
63,000	Sumitomo Realty & Development Co., Ltd.		2,205,464
458,200	Sumitomo Trust & Banking Co., Ltd.		3,449,836
89,800	Takata Corp.		3,489,767
58,900	Takeda Pharmaceutical Co., Ltd.		4,130,712
161,000	Tokuyama Corp.		2,429,133
34,500	Tokyo Electron Ltd.		2,176,085
325,000	Toshiba Corp.		3,020,053
67,500	Toyota Motor Corp.		3,948,906
216,500	Yamaguchi Financial Group, Inc.		2,252,580
			98,672,005
	MALAYSIA — 0.96%
4,232,000	Silverlake Axis Ltd.		2,046,106
	PHILIPPINES — 4.21%
95,500	Globe Telecom, Inc.		3,108,925
12,358,625	SM Prime Holdings, Inc.		3,275,387
7,078,300	Universal Robina Corp.		2,541,834
			8,926,146
	SINGAPORE — 4.10%
279,000	DBS Group Holdings Ltd.		4,042,410
372,000	Keppel Corp. Ltd.		3,599,640
70,000	United Overseas Bank Ltd.		1,039,329
			8,681,379

See Notes to Financial Statements.

43

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Pacific/Asia Fund — (continued)

Shares		Value
COMMON STOCKS — (continued)
	SOUTH KOREA — 3.38%
44,900	Kookmin Bank	$	3,703,341
122,700	Woori Investment & Securities Co., Ltd.		3,449,481
			7,152,822
	TAIWAN — 4.90%
1,855,000	Chang Hwa Commercial Bank		1,221,270
723,593	HON HAI Precision Industry Co., Ltd.		5,450,381
366,480	Taiwan Semiconductor Manufacturing Co., Ltd., ADR		3,708,777
			10,380,428
	THAILAND — 2.02%
3,391,400	Amata Corp. Public Co., Ltd., Foreign Shares(b)		1,523,780
1,198,900	Siam Commercial Bank Public Co., Ltd., Foreign Shares (b)		2,763,329
			4,287,109
	TOTAL COMMON STOCKS (Cost $166,565,315)		205,429,874
REGISTERED INVESTMENT COMPANY — 2.16%
384,700	iShares MSCI Malaysia Index Fund		4,574,083
	TOTAL REGISTERED INVESTMENT COMPANY (Cost $3,400,687)		4,574,083

Principal Amount			Value
REPURCHASE AGREEMENT — 1.44%
$	3,056,000	Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $3,118,500 (repurchase proceeds $3,056,930)	$	3,056,000
		TOTAL REPURCHASE AGREEMENT (Cost $3,056,000)		3,056,000

TOTAL INVESTMENTS (Cost $173,022,002)(c)	100.52	%	$	213,059,957
OTHER LIABILITIES IN EXCESS OF ASSETS	(0.52	)		(1,096,664	)
NET ASSETS	100.00	%	$	211,963,293

(a) Non-income producing security.

(b) Represents fair value as determined in good faith under procedures approved by the Board of Directors.

(c) Cost for federal income tax purposes is $173,022,002.

ADR—American Depository Receipt

Ltd.—Limited

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets		Value
Financial	24.50		$	51,938,684
Information Technology	17.25			36,565,108
Industrials	14.24			30,176,914
Materials	12.74			26,998,396
Consumer Discretionary	10.22			21,662,421
Telecommunication Services	6.71			14,219,977
Consumer Staples	5.87			12,446,368
Health Care	5.39			11,422,006
Registered Investment Company	2.16			4,574,083
Repurchase Agreement	1.44			3,056,000
Total Investments	100.52		$	213,059,957
Other Liabilities in Excess of Assets	(0.52	)		(1,096,664	)
Net Assets	100.00		$	211,963,293

See Notes to Financial Statements

44

[THIS PAGE INTENTIONALLY LEFT BLANK]

45

Excelsior Funds

Statements of Assets and Liabilities

September 30, 2007 (Unaudited)

	Blended Equity Fund		Energy and Natural Resources Fund
ASSETS
Unaffiliated investments, at identified cost	$	200,705,731	$	641,095,136
Affiliated investments, at identified cost		3,370,477		—
Total investments, at identified cost		204,076,208		641,095,136
Unaffiliated investments, at value		394,964,979		729,674,072
Affiliated investments, at value		8,471,500		—
Total investments, at value	$	403,436,479	$	729,674,072
Cash		840		4,846,706
Foreign currency (cost of $2,072, $-, $-, $-, $- and $-, respectively)		2,101		—
Receivable for:
Investments sold		1,179,035		6,694,675
Fund shares sold		2,959		877,892
Dividends		797,626		396,008
Interest		33		16,012
Expense reimbursement due from Investment Advisor		40,101		—
Foreign tax reclaims		5,136		—
Prepaid expenses		23,026		37,178
Total assets	$	405,487,336	$	742,542,543
LIABILITIES
Payable to custodian bank		—		—
Payable for:
Investments purchased		—		30,147,317
Fund shares repurchased		152,298		445,869
Investment advisory fee		242,442		337,549
Administration fee		28,855		51,659
Transfer agent fee		27,212		71,950
Pricing and bookkeeping fees		4,529		6,264
Audit fee		16,912		15,520
Custody fee		798		14,923
Shareholder servicing fee		142,202		155,807
Distribution and service fees		—		1
Principal on loan		—		—
Interest fee		—		—
Other liabilities		83,553		34,973
Total liabilities	$	698,801	$	31,281,832
NET ASSETS	$	404,788,535	$	711,260,711
NET ASSETS CONSIST OF
Par value	$	10,424	$	25,821
Paid-in capital in excess of par value		152,136,761		530,623,186
Undistributed (overdistributed) net investment income		147,648		53,515
Accumulated net realized gain (loss)		53,132,316		91,979,253
Net unrealized appreciation on:
Investments		199,360,271		88,578,936
Foreign currency translations		1,115		—
NET ASSETS	$	404,788,535	$	711,260,711

See Notes to Financial Statements.

46

Equity Income Fund		Equity Opportunities Fund		Large Cap Growth Fund			Mid Cap Value and Restructuring Fund
$	181,606,880	$	318,081,841	$	676,317,678		$	217,518,740
	—		—		—			—
	181,606,880		318,081,841		676,317,678			217,518,740
	230,173,262		405,216,355		882,003,927			354,956,600
	—		—		—			—
$	230,173,262	$	405,216,355	$	882,003,927		$	354,956,600
	—		—		1,201,247			—
	—		—		—			—
	6,409,449		5,399,189		2,982,911			80,737
	38,555		135,622		1,129,424			64,952
	572,880		601,266		167,449			373,711
	—		1,899		4,075			—
	11,964		56,482		—			961
	—		12,302		80,213			—
	13,730		21,818		37,214			20,147
$	237,219,840	$	411,444,933	$	887,606,460		$	355,497,108
	241,861		1,037		—			63,464
	—		1,063,603		10,641,468			—
	99,589		166,867		255,797			59,126
	144,094		241,010		516,604			185,100
	16,438		28,600		65,079			25,245
	19,154		25,462		12,104			11,742
	3,676		4,390		6,101			6,430
	16,526		15,171		14,040			22,653
	638		8,066		24,416			15,249
	48,049		68,500		198,333			101,133
	—		1		4			717
	1,000,000		—		—			—
	767		—		—			—
	32,999		85,854		67,275			65,460
$	1,623,791	$	1,708,561	$	11,801,221		$	556,319
$	235,596,049	$	409,736,372	$	875,805,239		$	354,940,789
$	236	$	259	$	72,052		$	154
	181,007,111		316,753,335		765,610,429			208,533,466
	125,115		144,193		(2,969,869	)		2,828,263
	5,896,815		5,697,874		(92,593,622	)		6,141,046
	48,566,382		87,134,514		205,686,249			137,437,860
	390		6,197		—			—
$	235,596,049	$	409,736,372	$	875,805,239		$	354,940,789

See Notes to Financial Statements.

47

Excelsior Funds

Statements of Assets and Liabilities — (continued)

September 30, 2007 (Unaudited)

	Blended Equity Fund		Energy and Natural Resources Fund
Shares
Net assets	$	404,788,535	$	711,240,777
Shares outstanding		10,424,149		25,819,818
Net asset value and offering price per share	$	38.83	$	27.55
Institutional Shares
Net assets		—		—
Shares outstanding		—		—
Net asset value and offering price per share		—		—
Retirement Shares
Net assets		—		—
Shares outstanding		—		—
Net asset value and offering price per share		—		—
Class A
Net assets		—	$	9,966
Shares outstanding		—		362
Net asset value per share(a)		—	$	27.55	(b)
Maximum sales charge		—		5.75	%
Maximum offering price per share(c)		—	$	29.23
Class C
Net assets		—	$	9,968
Shares outstanding		—		362
Net asset value and offering price per share(a)		—	$	27.55	(b)

(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

(b) Net asset value per share rounds due to fractional shares outstanding.

(c) On sales of $50,000 or more the offering price is reduced.

See Notes to Financial Statements.

48

Equity Income Fund			Equity Opportunities Fund			Large Cap Growth Fund			Mid Cap Value and Restructuring Fund
$	235,594,830		$	350,541,967		$	849,897,194		$	321,635,768
	23,603,051			22,152,657			69,924,817			13,946,642
$	9.98		$	15.82		$	12.15		$	23.06
	—		$	59,174,383		$	25,876,593		$	31,454,182
	—			3,736,977			2,124,311			1,360,218
	—		$	15.83		$	12.18		$	23.12
$	1,219			—		$	11,500		$	1,850,839
	122			—			962			80,968
$	10.03	(b)		—		$	11.95		$	22.86
	—		$	10,011		$	9,976			—
	—			633			821			—
	—		$	15.82		$	12.15			—
	—			5.75	%		5.75	%		—
	—		$	16.78		$	12.89			—
	—		$	10,011		$	9,976			—
	—			633			821			—
	—		$	15.82		$	12.15			—

See Notes to Financial Statements.

49

Excelsior Funds

Statements of Assets and Liabilities — (continued)

September 30, 2007 (Unaudited)

	Real Estate Fund		Small Cap Fund
ASSETS
Investments, at identified cost	$	74,350,999	$	588,232,469
Investments, at value	$	89,190,447	$	816,116,200
Cash		20,883		962,975
Foreign currency (cost of $-, $-, $-, $2,964,540, $2,617,471 and $-, respectively)		—		—
Receivable for:
Investments sold		603,030		13,148,838
Fund shares sold		2,215		889,649
Dividends		306,028		856,837
Interest		1,263		675
Expense reimbursement due from Investment Advisor		47,698		—
Foreign tax reclaims		—		—
Prepaid expenses		5,775		43,700
Total assets	$	90,177,339	$	832,018,874
LIABILITIES
Payable to custodian bank		—		—
Written options at value (premiums of $-, $-, $2,113,212, $-, $- and $-, respectively)		—		—
Payable for:
Investments purchased		—		942,959
Fund shares repurchased		129,734		242,980
Investment advisory fee		72,283		502,629
Administration fee		5,266		62,411
Transfer agent fee		17,213		37,790
Pricing and bookkeeping fees		2,725		6,202
Trustees’/Directors’ fees		—		—
Audit fee		22,242		14,789
Custody fee		820		10,594
Shareholder servicing fee		24,534		254,485
Distribution and service fees		—		2,134
Interest fee		—		—
Other liabilities		10,418		87,786
Total liabilities	$	285,235	$	2,164,759
NET ASSETS	$	89,892,104	$	829,854,115
NET ASSETS CONSIST OF
Par value	$	8,504	$	39,657
Paid-in capital in excess of par value		39,933,010		549,407,922
Undistributed (overdistributed) net investment income		1,168,448		(2,108,086	)
Accumulated net realized gain (loss)		33,942,694		54,630,891
Net unrealized appreciation (depreciation) on:
Investments		14,839,448		227,883,731
Foreign currency translations		—		—
Written options		—		—
NET ASSETS	$	89,892,104	$	829,854,115

See Notes to Financial Statements.

50

Value and Restructuring Fund			Emerging Markets Fund		International Fund			Pacific/Asia Fund
$	6,071,039,894		$	778,413,387	$	545,037,487		$	173,022,002
$	9,325,944,098		$	1,373,557,512	$	723,836,401		$	213,059,957
	1,294,794			11,378		87,509			—
	—			2,990,442		2,630,389			—
	18,443,910			—		5,572,706			11,847,297
	8,906,387			966,323		368,732			21,763
	12,500,329			4,346,097		1,554,660			727,189
	20,946			10,659		5,761			930
	—			18,679		—			—
	32,618			2,842		301,854			—
	510,432			71,544		38,600			12,246
$	9,367,653,514		$	1,381,975,476	$	734,396,612		$	225,669,382
	—			—		—			286,595
	3,186,000			—		—			—
	43,470,158			183,417		9,993,937			12,970,244
	4,927,604			500,633		84,437			74,172
	4,439,243			1,315,612		566,487			166,189
	751,022			151,554		79,192			21,828
	336,408			51,745		25,379			11,105
	7,011			7,056		8,070			5,319
	55,084			53		—			—
	—			5,457		14,768			17,427
	99,688			504,503		95,321			67,443
	3,512,732			420,014		156,841			53,803
	3,011			1		—			—
	—			—		—			729
	815,741			123,894		88,635			31,235
$	61,603,702		$	3,263,939	$	11,113,067		$	13,706,089
$	9,306,049,812		$	1,378,711,537	$	723,283,545		$	211,963,293
$	159,088		$	78,060	$	34,880		$	15,644
	5,957,888,237			693,565,206		567,034,691			136,719,266
	37,254,923			4,095,292		1,648			330,368
	56,914,288			85,689,248		(22,605,977	)		34,843,427
	3,254,904,204			595,144,125		178,798,914			40,037,955
	1,860			139,606		19,389			16,633
	(1,072,788	)		—		—			—
$	9,306,049,812		$	1,378,711,537	$	723,283,545		$	211,963,293

See Notes to Financial Statements.

51

Excelsior Funds

Statements of Assets and Liabilities — (continued)

September 30, 2007 (Unaudited)

	Real Estate Fund		Small Cap Fund
Shares
Net assets	$	89,892,104	$	823,979,966
Shares outstanding		8,504,056		39,372,053
Net asset value and offering price per share	$	10.57	$	20.93
Institutional Shares
Net assets		—		—
Shares outstanding		—		—
Net asset value and offering price per share		—		—
Retirement Shares
Net assets		—	$	5,854,323
Shares outstanding		—		283,849
Net asset value and offering price per share		—	$	20.62
Class A
Net assets		—	$	9,913
Shares outstanding		—		474
Net asset value per share(a)		—	$	20.93	(b)
Maximum sales charge		—		5.75	%
Maximum offering price per share(c)		—	$	22.21
Class C
Net assets		—	$	9,913
Shares outstanding		—		474
Net asset value and offering price per share(a)		—	$	20.93	(b)

(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

(b) Net asset value per share rounds due to fractional shares outstanding.

(c) On sales of $50,000 or more the offering price is reduced.

See Notes to Financial Statements.

52

Value and Restructuring Fund			Emerging Markets Fund			International Fund		Pacific/Asia Fund
$	8,951,377,336		$	1,316,884,816		$	723,283,545	$	211,963,293
	153,023,496			74,569,830			34,880,218		15,643,508
$	58.50		$	17.66		$	20.74	$	13.55
$	346,400,817		$	61,806,841			—		—
	5,923,241			3,489,079			—		—
$	58.48		$	17.71			—		—
$	8,251,685			—			—		—
	141,164			—			—		—
$	58.45			—			—		—
$	9,987		$	9,940			—		—
	171			563			—		—
$	58.50	(b)	$	17.66			—		—
	5.75	%		5.75	%		—		—
$	62.07		$	18.74			—		—
$	9,987		$	9,940			—		—
	171			563			—		—
$	58.50	(b)	$	17.66			—		—

See Notes to Financial Statements.

53

Excelsior Funds

Statements of Operations

For the Six Months Ended September 30, 2007 (Unaudited)

	Blended Equity Fund			Energy and Natural Resources Fund			Equity Income Fund			Equity Opportunities Fund
INVESTMENT INCOME
Dividends	$	3,546,857		$	3,831,992		$	3,658,645		$	3,349,272
Dividends from affiliates		107,853			—			—			—
Interest		5,788			242,007			5,113			25,148
Foreign withholding tax		(10,153	)		(26,783	)		(64,299	)		(38,831	)
Total Investment Income		3,650,345			4,047,216			3,599,459			3,335,589
EXPENSES
Investment advisory fee		1,523,411			1,910,845			911,144			1,438,456
Administration fee		302,265			474,658			179,995			285,185
Distribution fee:
Retirement Shares		—			—			3			—
Class C		—			1			—			1
Shareholder servicing fee:
Shares		489,019			767,023			286,415			395,026
Institutional Shares		—			—			—			—
Retirement Shares		—			—			1			—
Class A		—			—	*		—			—	*
Class C		—			—	*		—			—	*
Transfer agent fee		76,435			229,156			37,821			44,673
Pricing and bookkeeping fees		6,176			7,574			4,869			5,799
Trustees’/Directors’ fees		10,049			12,068			10,117			10,698
Custody fees		20,301			53,592			7,926			43,410
Other expenses		49,534			92,982			32,136			63,366
Expenses before interest expense		2,477,190			3,547,899			1,470,427			2,286,614
Interest expense		—			—			767			—
Total Expenses		2,477,190			3,547,899			1,471,194			2,286,614
Fees waived/reimbursed by:
Investment Advisor		(192,494	)		—			(103,496	)		(307,056	)
Administrator		(50,003	)		(84,361	)		(29,942	)		(49,310	)
Custody earnings credit		(709	)		(24,631	)		(2,686	)		(167	)
Net Expenses		2,233,984			3,438,907			1,335,070			1,930,081
NET INVESTMENT INCOME (LOSS)		1,416,361			608,309			2,264,389			1,405,508
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY AND WRITTEN OPTIONS
Net realized gain (loss) on:
Investments		22,797,514			62,876,823			6,277,732			9,770,059
Foreign currency transactions		2,139			489			6,499			(78	)
Written options		—			—			(819,151	)		—
Net realized gain (loss)		22,799,653			62,877,312			5,465,080			9,769,981
Net change in unrealized appreciation (depreciation) on:
Investments		15,881,664			36,758,500			7,191,091			31,489,584
Foreign currency translations		480			—			256			5,707
Written options		—			—			—			—
Net change in unrealized appreciation (depreciation)		15,882,144			36,758,500			7,191,347			31,495,291
Net Gain (Loss)		38,681,797			99,635,812			12,656,427			41,265,272
Net Increase (Decrease) Resulting from Operations	$	40,098,158		$	100,244,121		$	14,920,816		$	42,670,780

* Rounds to less than $1.

See Notes to Financial Statements.

54

Large Cap Growth Fund			Mid Cap Value and Restructuring Fund			Real Estate Fund			Small Cap Fund			Value and Restructuring Fund			Emerging Markets Fund			International Fund			Pacific/ Asia Fund
$	1,695,781		$	5,207,492		$	1,285,928		$	2,314,004		$	121,552,689		$	23,243,411		$	8,434,736		$	2,263,740
	—			—			—			—			—			—			—			—
	78,291			7,827			12,209			256,593			230,202			140,597			71,467			5,490
	(65,616	)		(59,725	)		—			—			(978,162	)		(3,316,927	)		(719,668	)		(249,995	)
	1,708,456			5,155,594			1,298,137			2,570,597			120,804,729			20,067,081			7,786,535			2,019,235
	2,975,452			1,155,038			527,108			2,909,308			26,841,299			7,795,574			3,448,165			1,056,264
	592,719			264,171			77,050			579,409			6,744,653			1,241,343			683,688			208,095
	18			3,920			—			9,248			10,720			—			—			—
	1			—			—			1			1			1			—			—
	952,487			402,319			131,777			965,145			10,337,292			1,463,927			862,038			264,051
	—			—			—			—			53,483			—			—			—
	9			1,960			—			4,460			5,177			—			—			—
	—	*		—			—			—	*		—	*		—	*		—			—
	—	*		—			—			—	*		—	*		—	*		—			—
	85,663			80,945			51,436			168,792			1,294,761			270,112			61,977			30,034
	7,095			6,543			3,787			7,370			7,277			31,422			19,679			16,763
	14,224			9,525			8,715			13,818			108,782			19,930			13,187			9,179
	24,052			15,269			17,513			32,593			299,009			862,950			180,987			87,509
	133,015			61,804			39,017			96,998			910,134			192,035			92,359			45,030
	4,784,735			2,001,494			856,403			4,787,142			46,612,588			11,877,294			5,362,080			1,716,925
	—			—			—			—			—			—			—			729
	4,784,735			2,001,494			856,403			4,787,142			46,612,588			11,877,294			5,362,080			1,717,654
	—			—			(185,528	)		—			—			(209,969	)		(97,225	)		—
	(101,901	)		(44,647	)		(11,519	)		(101,031	)		(1,134,346	)		(160,676	)		(87,154	)		(26,109	)
	(4,509	)		(6,679	)		(472	)		(7,428	)		(39,177	)		(28,826	)		(1,999	)		(2,678	)
	4,678,325			1,950,168			658,884			4,678,683			45,439,065			11,477,823			5,175,702			1,688,867
	(2,969,869	)		3,205,426			639,253			(2,108,086	)		75,365,664			8,589,258			2,610,833			330,368
	31,509,475			(470,779	)		28,350,567			47,099,972			109,640,328			82,638,997			35,391,883			15,968,514
	—			(160	)		—			—			89,300			200,809			(51,306	)		31,994
	—			—			—			—			(3,139,781	)		—			—			—
	31,509,475			(470,939	)		28,350,567			47,099,972			106,589,847			82,839,806			35,340,577			16,000,508
	81,732,156			22,415,661			(37,721,175	)		18,990,141			502,250,047			195,136,022			21,835,390			13,859,636
	—			—			—			—			8,579			108,288			(2,407	)		212,194
	—			—			—			—			(3,916,046	)		—			—			—
	81,732,156			22,415,661			(37,721,175	)		18,990,141			498,342,580			195,244,310			21,832,983			14,071,830
	113,241,631			21,944,722			(9,370,608	)		66,090,113			604,932,427			278,084,116			57,173,560			30,072,338
$	110,271,762		$	25,150,148		$	(8,731,355	)	$	63,982,027		$	680,298,091		$	286,673,374		$	59,784,393		$	30,402,706

See Notes to Financial Statements.

55

Excelsior Funds

Statements of Changes in Net Assets

	Blended Equity Fund						Energy and Natural Resources Fund
Increase (Decrease) in Net Assets	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
Operations
Net investment income	$	1,416,361		$	2,888,780		$	608,309		$	1,256,040
Net realized gain (loss) on investments, foreign currency transactions and written options		22,799,653			50,141,770			62,877,312			49,290,030
Net change in unrealized appreciation (depreciation) on investments, foreign currency translations and written options		15,882,144			(8,774,573	)		36,758,500			(6,347,488	)
Net increase resulting from operations		40,098,158			44,255,977			100,244,121			44,198,582
Distributions to Shareholders
From net investment income:
Shares		(1,986,751	)		(2,741,626	)		(692,460	)		(1,125,652	)
Institutional Shares		—			—			—			—
Retirement Shares		—			—			—			—
From net realized gains:
Shares		—			(62,158,929	)		—			(96,892,494	)
Total Distributions to Shareholders		(1,986,751	)		(64,900,555	)		(692,460	)		(98,018,146	)
Net Capital Share Transactions		(34,345,677	)		(38,641,827	)		114,033,169			28,989,505
Net increase (decrease) in net assets		3,765,730			(59,286,405	)		213,584,830			(24,830,059	)
NET ASSETS
Beginning of period	$	401,022,805		$	460,309,210		$	497,675,881		$	522,505,940
End of period	$	404,788,535		$	401,022,805		$	711,260,711		$	497,675,881
Undistributed net investment income, at end of period	$	147,648		$	718,038		$	53,515		$	137,666

See Notes to Financial Statements.

56

Equity Income Fund						Equity Opportunities Fund
(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
$	2,264,389		$	3,898,080		$	1,405,508		$	1,493,522
	5,465,080			6,722,840			9,769,981			(1,525,507	)
	7,191,347			16,574,010			31,495,291			31,286,902
	14,920,816			27,194,930			42,670,780			31,254,917
	(3,156,052	)		(4,109,886	)		(1,455,114	)		(851,918	)
	—			—			(381,460	)		(425,370	)
	(10	)		(15	)		—			—
	—			—			—			—
	(3,156,062	)		(4,109,901	)		(1,836,574	)		(1,277,288	)
	(13,172,423	)		8,064,710			30,922,416			121,147,723
	(1,407,669	)		31,149,739			71,756,622			151,125,352
$	237,003,718		$	205,853,979		$	337,979,750		$	186,854,398
$	235,596,049		$	237,003,718		$	409,736,372		$	337,979,750
$	125,115		$	1,016,788		$	144,193		$	575,259

See Notes to Financial Statements.

57

Excelsior Funds

Statements of Changes in Net Assets — (continued)

	Large Cap Growth Fund						Mid Cap Value and Restructuring Fund
Increase (Decrease) in Net Assets	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
Operations
Net investment income (loss)	$	(2,969,869	)	$	(4,255,930	)	$	3,205,426		$	3,160,394
Net realized gain (loss) on investments and foreign currency transactions		31,509,475			11,805,044			(470,939	)		8,602,300
Net realized gains from redemptions in-kind		—			—			—			23,046,664
Net change in unrealized appreciation (depreciation) on investments		81,732,156			37,708,433			22,415,661			(10,315,446	)
Net increase (decrease) resulting from operations		110,271,762			45,257,547			25,150,148			24,493,912
Distributions to Shareholders
From net investment income:
Shares		—			—			(3,023,143	)		(69,200	)
Institutional Shares		—			—			(409,234	)		(28,083	)
Retirement Shares		—			—			(11,004	)		—
Return of Capital:
Shares		—			—			—			—
From net realized gains:
Shares		—			—			—			(6,735	)
Institutional Shares		—			—			—			(812	)
Retirement Shares		—			—			—			—
Total Distributions to Shareholders		—			—			(3,443,381	)		(104,830	)
Net Capital Share Transactions		31,097,354			136,983,006			6,117,253			(36,769,439	)
Net increase (decrease) in net assets		141,369,116			182,240,553			27,824,020			(12,380,357	)
NET ASSETS
Beginning of period	$	734,436,123		$	552,195,570		$	327,116,769		$	339,497,126
End of period	$	875,805,239		$	734,436,123		$	354,940,789		$	327,116,769
Undistributed (overdistributed) net investment income, at end of period	$	(2,969,869	)	$	—		$	2,828,263		$	3,066,218

See Notes to Financial Statements.

58

Real Estate Fund						Small Cap Fund
(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
$	639,253		$	960,048		$	(2,108,086	)	$	(4,043,832	)
	28,350,567			18,405,693			47,099,972			32,537,688
	—			—			—			—
	(37,721,175	)		2,835,641			18,990,141			18,105,369
	(8,731,355	)		22,201,382			63,982,027			46,599,225
	—			(1,161,313	)		—			—
	—			—			—			—
	—			—			—			—
	—			(640,355	)		—			—
	—			(18,263,524	)		—			(43,578,479	)
	—			—			—			—
	—			—			—			(3,801	)
	—			(20,065,192	)		—			(43,582,280	)
	(53,402,517	)		22,261,378			69,279,781			94,185,168
	(62,133,872	)		24,397,568			133,261,808			97,202,113
$	152,025,976		$	127,628,408		$	696,592,307		$	599,390,194
$	89,892,104		$	152,025,976		$	829,854,115		$	696,592,307
$	1,168,448		$	529,195		$	(2,108,086	)	$	—

See Notes to Financial Statements.

59

Excelsior Funds

Statements of Changes in Net Assets — (continued)

	Value and Restructuring Fund						Emerging Markets Fund
Increase (Decrease) in Net Assets	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
Operations
Net investment income (loss)	$	75,365,664		$	66,434,678		$	8,589,258		$	5,214,247
Net realized gain on investments, foreign currency transactions and written options		106,589,847			96,756,036			82,839,806			48,869,293
Net change in unrealized appreciation (depreciation) on investments, foreign currency translations and written options		498,342,580			645,371,791			195,244,310			100,008,846
Net increase resulting from operations		680,298,091			808,562,505			286,673,374			154,092,386
Distributions to Shareholders
From net investment income:
Shares		(52,036,862	)		(64,324,804	)		(4,453,377	)		(5,716,045	)
Institutional Shares		(2,703,852	)		(3,526,597	)		(204,395	)		(252,640	)
Retirement Shares		(18,993	)		(4,928	)		—			—
From net realized gains:
Shares		—			—			—			(51,272,417	)
Institutional Shares		—			—			—			(1,858,765	)
Total Distributions to Shareholders		(54,759,707	)		(67,856,329	)		(4,657,772	)		(59,099,867	)
Net Capital Share Transactions		539,354,612			918,433,748			(37,717,544	)		17,298,560
Net increase (decrease) in net assets		1,164,892,996			1,659,139,924			244,298,058			112,291,079
NET ASSETS
Beginning of period	$	8,141,156,816		$	6,482,016,892		$	1,134,413,479		$	1,022,122,400
End of period	$	9,306,049,812		$	8,141,156,816		$	1,378,711,537		$	1,134,413,479
Undistributed net investment income, at end of period	$	37,254,923		$	16,648,966		$	4,095,292		$	163,806

See Notes to Financial Statements.

60

International Fund						Pacific/Asia Fund
(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
$	2,610,833		$	2,767,357		$	330,368		$	(95,162	)
	35,340,577			25,080,151			16,000,508			29,682,511
	21,832,983			54,216,954			14,071,830			(22,701,298	)
	59,784,393			82,064,462			30,402,706			6,886,051
	(2,909,679	)		(2,551,050	)		—			—
	—			—			—			—
	—			—			—			—
	—			—			—			(7,507,933	)
	—			—			—			—
	(2,909,679	)		(2,551,050	)		—			(7,507,933	)
	29,467,684			35,143,298			(31,571,856	)		(30,209,902	)
	86,342,398			114,656,710			(1,169,150	)		(30,831,784	)
$	636,941,147		$	522,284,437		$	213,132,443		$	243,964,227
$	723,283,545		$	636,941,147		$	211,963,293		$	213,132,443
$	1,648		$	300,494		$	330,368		$	—

See Notes to Financial Statements.

61

Excelsior Funds

Statements of Changes in Net Assets — Capital Stock Activity

	Blended Equity Fund
	(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
	Shares		Dollars ($)		Shares		Dollars ($)
Changes in Shares
Shares
Subscriptions	113,793		4,241,494		756,712		27,714,455
Subscriptions-in-kind	—		—		—		—
Distributions reinvested	22,057		820,980		748,017		26,093,797
Redemptions	(1,052,003	)	(39,408,245	)	(2,516,153	)	(92,450,787	)
Net increase (decrease)	(916,153	)	(34,345,771	)	(1,011,424	)	(38,642,535	)
Retirement Shares
Distributions reinvested	—		—		—		—
Class A
Subscriptions	—		—		—		—
Class C
Subscriptions	—		—		—		—
Redemption Fees	—		94		—		708

See Notes to Financial Statements.

62

Energy and Natural Resources Fund								Equity Income Fund
(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007				(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)
8,707,393		225,076,874		7,858,261		196,905,145		966,389		9,544,654		4,666,621		41,851,327
—		—		—		—		—		—		526,198		4,483,204
20,786		543,368		3,247,628		72,274,154		53,793		527,860		77,298		675,808
(4,269,836	)	(111,611,403	)	(9,844,958	)	(240,193,110	)	(2,345,303	)	(23,244,947	)	(4,395,745	)	(38,945,714	)
4,458,343		114,008,839		1,260,931		28,986,189		(1,325,121	)	(13,172,433	)	874,372		8,064,625
—		—		—		—		2		10		1		15
362		10,000		—		—		—		—		—		—
362		10,000		—		—		—		—		—		—
—		4,330		—		3,316		—		—		—		70

See Notes to Financial Statements.

63

Excelsior Funds

Statements of Changes in Net Assets — Capital Stock Activity — (continued)

	Equity Opportunities Fund
	(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
	Shares		Dollars ($)		Shares		Dollars ($)
Changes in Shares
Shares
Subscriptions	3,925,144		59,329,430		11,404,243		151,491,788
Distributions reinvested	22,381		338,329		12,057		154,087
Redemptions	(1,407,877	)	(21,193,858	)	(2,227,805	)	(29,659,176	)
Net increase	2,539,648		38,473,901		9,188,495		121,986,699
Institutional Shares
Subscriptions	72,851		1,075,963		944,747		12,184,733
Distributions reinvested	3,270		49,371		3,799		48,632
Redemptions	(576,382	)	(8,696,843	)	(992,875	)	(13,081,976	)
Redemptions-in-kind	—		—		—		—
Net increase (decrease)	(500,261	)	(7,571,509	)	(44,329	)	(848,611	)
Retirement Shares
Subscriptions	—		—		—		—
Distributions reinvested	—		—		—		—
Redemptions	—		—		—		—
Net increase	—		—		—		—
Class A
Subscriptions	633		10,000		—		—
Class C
Subscriptions	633		10,000		—		—
Redemption Fees	—		24		—		9,635

See Notes to Financial Statements.

64

Large Cap Growth Fund								Mid Cap Value and Restructuring Fund
(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007				(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)
8,464,143		94,946,565		26,983,018		268,887,660		1,559,841		35,513,246		3,915,673		81,532,520
—		—		—		—		59,014		1,299,594		1,544		28,679
(6,290,633	)	(70,638,170	)	(14,969,954	)	(147,806,621	)	(1,296,696	)	(29,206,361	)	(2,387,520	)	(47,782,321	)
2,173,510		24,308,395		12,013,064		121,081,039		322,159		7,606,479		1,529,697		33,778,878
639,159		7,008,651		1,518,333		15,997,075		87,974		2,059,041		174,817		3,499,002
—		—		—		—		2,915		64,589		211		3,893
(23,086	)	(255,856	)	(10,095	)	(106,750	)	(184,991	)	(4,291,248	)	(435,896	)	(8,797,430	)
—		—		—		—		—		—		(3,464,185	)	(66,339,150	)
616,073		6,752,795		1,508,238		15,890,325		(94,102	)	(2,167,618	)	(3,725,053	)	(71,633,685	)
745		8,171		172		1,807		36,280		821,293		51,153		1,086,065
—		—		—		—		506		11,004		—		—
(77	)	(822	)	—		—		(6,911	)	(153,942	)	(118	)	(2,475	)
668		7,349		172		1,807		29,875		678,355		51,035		1,083,590
821		10,000		—		—		—		—		—		—
821		10,000		—		—		—		—		—		—
—		8,815		—		9,835		—		37		—		1,778

See Notes to Financial Statements.

65

Excelsior Funds

Statements of Changes in Net Assets — Capital Stock Activity — (continued)

	Real Estate Fund
	(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
	Shares		Dollars ($)		Shares		Dollars ($)
Changes in Shares
Shares
Subscriptions	693,818		6,807,191		6,066,112		67,240,470
Distributions reinvested	—		—		910,832		9,232,819
Redemptions	(5,381,002	)	(60,209,720	)	(4,921,193	)	(54,217,167	)
Net increase (decrease)	(4,687,184	)	(53,402,529	)	2,055,751		22,256,122
Institutional Shares
Subscriptions	—		—		—		—
Distributions reinvested	—		—		—		—
Redemptions	—		—		—		—
Net increase (decrease)	—		—		—		—
Retirement Shares
Subscriptions	—		—		—		—
Distributions reinvested	—		—		—		—
Redemptions	—		—		—		—
Net increase	—		—		—		—
Class A
Subscriptions	—		—		—		—
Class C
Subscriptions	—		—		—		—
Redemption Fees	—		12		—		5,256

See Notes to Financial Statements.

66

Small Cap Fund								Value and Restructuring Fund
(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007				(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)
7,113,887		144,947,132		11,007,156		202,519,992		20,544,409		1,192,492,183		40,342,962		2,018,418,152
—		—		873,688		15,909,286		737,965		42,355,044		1,056,240		51,956,233
(3,914,296	)	(79,465,976	)	(6,873,489	)	(126,011,173	)	(11,223,117	)	(646,514,862	)	(24,661,734	)	(1,238,518,628	)
3,199,591		65,481,156		5,007,355		92,418,105		10,059,257		588,332,365		16,737,468		831,855,757
—		—		—		—		1,060,844		62,185,075		2,608,744		127,478,205
—		—		—		—		39,759		2,272,698		59,732		2,938,434
—		—		—		—		(1,996,347	)	(118,375,818	)	(921,391	)	(45,845,721	)
—		—		—		—		(895,744	)	(53,918,045	)	1,747,085		84,570,918
235,936		4,746,659		100,714		1,845,960		92,865		5,225,317		62,302		3,214,887
—		—		211		3,801		331		18,993		99		4,928
(48,373	)	(968,034	)	(4,702	)	(85,527	)	(5,912	)	(339,933	)	(26,673	)	(1,242,118	)
187,563		3,778,625		96,223		1,764,234		87,284		4,904,377		35,728		1,977,697
474		10,000		—		—		171		10,000		—		—
474		10,000		—		—		171		10,000		—		—
—		—		—		2,829		—		15,915		—		29,376

See Notes to Financial Statements.

67

Excelsior Funds

Statements of Changes in Net Assets — Capital Stock Activity — (continued)

	Emerging Markets Fund
	(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
	Shares		Dollars ($)		Shares		Dollars ($)
Changes in Shares
Shares
Subscriptions	6,757,305		107,664,154		28,426,163		377,247,582
Distributions reinvested	182,628		2,891,003		2,899,020		39,144,568
Redemptions	(10,051,799	)	(156,851,513	)	(32,751,548	)	(412,372,175	)
Net increase (decrease)	(3,111,866	)	(46,296,356	)	(1,426,365	)	4,019,975
Institutional Shares
Subscriptions	794,138		13,112,540		889,054		12,242,049
Distributions reinvested	2,566		40,715		104,377		1,425,589
Redemptions	(282,072	)	(4,597,514	)	(35,905	)	(493,380	)
Net increase	514,632		8,555,741		957,526		13,174,258
Class A
Subscriptions	563		10,000		—		—
Class C
Subscriptions	563		10,000		—		—
Redemption Fees	—		3,071		—		104,327

See Notes to Financial Statements.

68

International Fund								Pacific / Asia Fund
(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007				(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)
3,614,402		72,232,863		12,392,725		216,269,580		373,873		4,683,328		3,211,949		36,092,669
34,970		698,358		53,302		824,056		—		—		244,088		2,750,870
(2,181,567	)	(43,463,758	)	(10,667,987	)	(182,002,787	)	(2,916,521	)	(36,255,186	)	(6,281,359	)	(69,083,541	)
1,467,805		29,467,463		1,778,040		35,090,849		(2,542,648	)	(31,571,858	)	(2,825,322	)	(30,240,002	)
—		—		—		—		—		—		—		—
—		—		—		—		—		—		—		—
—		—		—		—		—		—		—		—
—		—		—		—		—		—		—		—
—		—		—		—		—		—		—		—
—		—		—		—		—		—		—		—
—		221		—		52,449		—		2		—		30,100

See Notes to Financial Statements.

69

Financial Highlights – Blended Equity Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	35.36		$	37.27		$	36.12		$	33.64		$	25.67		$	35.17
Income from Investment Operations:
Net investment income		0.14	(a)		0.25	(a)		0.19	(a)		0.30	(a)		0.14			0.17
Net realized and unrealized gain (loss) on investments and foreign currency		3.51			3.61			3.67			2.66			7.99			(7.97	)
Total from Investment Operations		3.65			3.86			3.86			2.96			8.13			(7.80	)
Less Distributions to Shareholders:
From net investment income		(0.18	)		(0.23	)		(0.21	)		(0.28	)		(0.16	)		(0.15	)
From net realized gains		—			(5.54	)		(2.50	)		(0.20	)		—			(1.55	)
Total Distributions to Shareholders		(0.18	)		(5.77	)		(2.71	)		(0.48	)		(0.16	)		(1.70	)
Net Asset Value, End of Period	$	38.83		$	35.36		$	37.27		$	36.12		$	33.64		$	25.67
Total return (b)(c)		10.35	%(d)		10.66	%		11.10	%		8.85	%		31.75	%		(22.45	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		1.10	%(f)		1.10	%		1.08	%		1.05	%		0.99	%		0.96	%
Waiver/Reimbursement		0.12	%(f)		0.11	%		0.13	%		0.19	%		0.11	%		0.15	%
Net investment income (e)		0.70	%(f)		0.68	%		0.53	%		0.86	%		0.45	%		0.59	%
Portfolio turnover rate		4	%(d)		10	%		22	%		19	%		24	%		36	%
Net assets, end of period (000’s)	$	404,789		$	401,023		$	460,309		$	466,903		$	573,242		$	469,013

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

70

Financial Highlights – Energy and Natural Resources Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	23.30		$	25.99		$	22.34		$	16.45		$	11.72		$	14.40
Income from Investment Operations:
Net investment income (loss)		0.02	(a)		0.06	(a)		—	(a)(b)		0.02	(a)		0.06			0.04
Net realized and unrealized gain (loss) on investments and foreign currency		4.26			2.50			9.04			6.99			4.71			(2.67	)
Total from Investment Operations		4.28			2.56			9.04			7.01			4.77			(2.63	)
Less Distributions to Shareholders:
From net investment income		(0.03	)		(0.06	)		—			(0.05	)		(0.04	)		(0.05	)
From net realized gains		—			(5.19	)		(5.39	)		(1.07	)		—			—
Total Distributions to Shareholders		(0.03	)		(5.25	)		(5.39	)		(1.12	)		(0.04	)		(0.05	)
Net Asset Value, End of Period	$	27.55		$	23.30		$	25.99		$	22.34		$	16.45		$	11.72
Total return (c)		18.37	%(d)(e)		10.84	%(d)		41.42	%		43.97	%(d)		40.84	%(d)		(18.30	)%(d)
Ratios to Average Net Assets/Supplemental Data:
Net expenses (f)		1.08	%(g)		1.12	%		1.13	%		1.10	%		0.99	%		1.01	%
Waiver/Reimbursement		0.03	%(g)		0.01	%		—			0.05	%		0.14	%		0.18	%
Net investment income (loss)(f)		0.19	%(g)		0.25	%		(0.01	)%		0.12	%		0.45	%		0.35	%
Portfolio turnover rate		99	%(e)		279	%		234	%		111	%		91	%		78	%
Net assets, end of period (000’s)	$	711,241		$	497,676		$	522,506		$	292,333		$	150,035		$	92,440

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Amount represents less than $0.01 per share.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) The benefits derived from custody credits had an impact of less than 0.01%, except for the year ended March 31, 2007, which had an impact of 0.01%.

(g) Annualized.

See Notes to Financial Statements.

71

Financial Highlights– Energy and Natural Resources Fund

Selected data for a share outstanding throughout the period is as follows:

Class A Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	27.64
Income from Investment Operations:
Net investment loss (b)		—	(c)
Net realized and unrealized loss on investments and foreign currency		(0.09	)
Total from Investment Operations		(0.09	)
Net Asset Value, End of Period	$	27.55
Total return (d)(e)(f)		(0.33	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (g)(h)		1.49	%
Waiver/Reimbursement (h)		0.05	%
Net investment loss (g)(h)		(1.21	)%
Portfolio turnover rate (e)		99	%
Net assets, end of period (000’s)	$	10

(a) Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Amount represents less than $0.01 per share.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge.

(g) The benefits derived from custody credits had an impact of less than 0.01%.

(h) Annualized.

See Notes to Financial Statements.

72

Financial Highlights– Energy and Natural Resources Fund

Selected data for a share outstanding throughout the period is as follows:

Class C Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	27.64
Income from Investment Operations:
Net investment loss (b)		(0.01	)
Net realized and unrealized loss on investments and foreign currency		(0.08	)
Total from Investment Operations		(0.09	)
Net Asset Value, End of Period	$	27.55
Total return (c)(d)(e)		(0.33	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (f)(g)		2.24	%
Waiver/Reimbursement (g)		0.05	%
Net investment loss (f)(g)		(1.96	)%
Portfolio turnover rate (d)		99	%
Net assets, end of period (000’s)	$	10

(a) Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(d) Not annualized.

(e) Total return at net asset value assuming no contingent deferred sales charge.

(f) The benefits derived from custody credits had an impact of less than 0.01%.

(g) Annualized.

See Notes to Financial Statements.

73

Financial Highlights– Equity Income Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,									Period Ended March 31, 2004 (a)
Shares				2007			2006			2005
Net Asset Value, Beginning of Period	$	9.51		$	8.56		$	8.39		$	7.76		$	7.00
Income from Investment Operations:
Net investment income		0.09	(b)		0.16	(b)		0.20	(b)		0.19	(b)		0.07
Net realized and unrealized gain on investments, foreign currency and written options		0.51			0.96			0.17			0.63			0.73
Total from Investment Operations		0.60			1.12			0.37			0.82			0.80
Less Distributions to Shareholders:
From net investment income		(0.13	)		(0.17	)		(0.18	)		(0.17	)		(0.04	)
From net realized gains		—			—			(0.02	)		(0.02	)		—
Total Distributions to Shareholders		(0.13	)		(0.17	)		(0.20	)		(0.19	)		(0.04	)
Net Asset Value, End of Period	$	9.98		$	9.51		$	8.56		$	8.39		$	7.76
Total return (c)(d)		6.33	%(e)		13.29	%		4.62	%		10.73	%		11.48	%(e)
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense (f)		1.10	%(g)		1.10	%		1.06	%		1.05	%		1.05	%(g)
Interest expense		—	%(g)(h)		—			—			—			—
Net expenses (f)		1.10	%(g)		1.10	%		1.06	%		1.05	%		1.05	%(g)
Waiver/Reimbursement		0.11	%(g)		0.11	%		0.16	%		0.21	%		0.12	%(g)
Net investment income (f)		1.87	%(g)		1.80	%		2.41	%		2.35	%		2.44	%(g)
Portfolio turnover rate		6	%(e)		27	%		46	%		19	%		6	%(e)
Net assets, end of period (000’s)	$	235,595		$	237,003		$	205,853		$	195,668		$	100,024

(a) Shares commenced operations on September 30, 2003. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(d) Total return at net asset value assuming all distributions reinvested.

(e) Not annualized.

(f) The benefits derived from custody credits had an impact of less than 0.01%.

(g) Annualized.

(h) Rounds to less than 0.01%.

See Notes to Financial Statements.

74

Financial Highlights– Equity Opportunities Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005
Net Asset Value, Beginning of Period	$	14.17		$	12.70		$	10.98		$	10.00
Income from Investment Operations:
Net investment income (a)		0.05			0.07			0.07			0.08
Net realized and unrealized gain on investments and foreign currency		1.67			1.47			1.70			0.95
Total from Investment Operations		1.72			1.54			1.77			1.03
Less Distributions to Shareholders:
From net investment income		(0.07	)		(0.07	)		(0.05	)		(0.04	)
From net realized gains		—			—			—			(0.01	)
Total Distributions to Shareholders		(0.07	)		(0.07	)		(0.05	)		(0.05	)
Net Asset Value, End of Period	$	15.82		$	14.17		$	12.70		$	10.98
Total return (b)(c)		12.16	%(d)		12.18	%		16.16	%		10.30	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		1.05	%(f)		1.04	%		1.05	%		1.05	%
Waiver/Reimbursement		0.19	%(f)		0.20	%		0.26	%		0.54	%
Net investment income (e)		0.70	%(f)		0.56	%		0.57	%		0.74	%
Portfolio turnover rate		12	%(d)		11	%		17	%		13	%
Net assets, end of period (000’s)	$	350,542		$	277,877		$	132,406		$	43,579

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%, except for the year ended March 31, 2007, which had an impact of 0.01%.

(f) Annualized.

See Notes to Financial Statements.

75

Financial Highlights – Equity Opportunities Fund

Selected data for a share outstanding throughout the period is as follows:

Class A Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	15.80
Income from Investment Operations:
Net investment loss (b)		—	(c)
Net realized and unrealized gain on investments and foreign currency		0.02
Total from Investment Operations		0.02
Net Asset Value, End of Period	$	15.82
Total return (d)(e)(f)		0.13	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (g)(h)		1.16	%
Waiver/Reimbursement (h)		0.05	%
Net investment loss (g)(h)		(0.63	)%
Portfolio turnover rate (e)		12	%
Net assets, end of period (000’s)	$	10

(a) Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Amount represents less than $0.01 per share.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge.

(g) The benefits derived from custody credits had an impact of less than 0.01%.

(h) Annualized.

See Notes to Financial Statements.

76

Financial Highlights – Equity Opportunities Fund

Selected data for a share outstanding throughout the period is as follows:

Class C Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	15.80
Income from Investment Operations:
Net investment loss (b)		—	(c)
Net realized and unrealized gain on investments and foreign currency		0.02
Total from Investment Operations		0.02
Net Asset Value, End of Period	$	15.82
Total return (d)(e)(f)		0.13	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (g)(h)		1.91	%
Waiver/Reimbursement (h)		0.05	%
Net investment loss (g)(h)		(1.39	)%
Portfolio turnover rate (e)		12	%
Net assets, end of period (000’s)	$	10

(a) Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Amount represents less than $0.01 per share.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) Total return at net asset value assuming no contingent deferred sales charge.

(g) The benefits derived from custody credits had an impact of less than 0.01%.

(h) Annualized.

See Notes to Financial Statements.

77

Financial Highlights – Large Cap Growth Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	10.60		$	9.91		$	8.04		$	7.71		$	5.79		$	8.83
Income from Investment Operations:
Net investment loss (a)		(0.04	)		(0.07	)		(0.04	)		(0.05	)		(0.05	)		(0.01	)
Net realized and unrealized gain (loss) on investments		1.59			0.76			1.91			0.38			1.97			(3.03	)
Total from Investment Operations		1.55			0.69			1.87			0.33			1.92			(3.04	)
Net Asset Value, End of Period	$	12.15		$	10.60		$	9.91		$	8.04		$	7.71		$	5.79
Total return (b)(c)		14.62	%(d)		6.96	%		23.26	%		4.28	%		33.16	%		(34.43	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		1.19	%(f)		1.20	%		1.10	%		1.05	%		1.05	%		1.04	%
Waiver/Reimbursement		0.03	%(f)		—			0.13	%		0.23	%		0.13	%		0.17	%
Net investment loss (e)		(0.76	)%(f)		(0.68	)%		(0.48	)%		(0.59	)%		(0.74	)%		(0.21	)%
Portfolio turnover rate		23	%(d)		33	%		24	%		25	%		79	%		56	%
Net assets, end of period (000’s)	$	849,897		$	718,424		$	552,194		$	210,060		$	127,231		$	73,894

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

78

Financial Highlights – Large Cap Growth Fund

Selected data for a share outstanding throughout the period is as follows:

Class A Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	12.18
Income from Investment Operations:
Net investment loss (b)		—	(c)
Net realized and unrealized loss on investments		(0.03	)
Total from Investment Operations		(0.03	)
Net Asset Value, End of Period	$	12.15
Total return (d)(e)(f)		(0.25	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (g)(h)		1.42	%
Waiver/Reimbursement (h)		0.05	%
Net investment loss (g)(h)		(1.36	)%
Portfolio turnover rate (e)		23	%
Net assets, end of period (000’s)	$	10

(a) Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Amount represents less than $0.01 per share.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge.

(g) The benefits derived from custody credits had an impact of less than 0.01%.

(h) Annualized.

See Notes to Financial Statements.

79

Financial Highlights – Large Cap Growth Fund

Selected data for a share outstanding throughout the period is as follows:

Class C Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	12.18
Income from Investment Operations:
Net investment loss (b)		—	(c)
Net realized and unrealized loss on investments		(0.03	)
Total from Investment Operations		(0.03	)
Net Asset Value, End of Period	$	12.15
Total return (d)(e)(f)		(0.25	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (g)(h)		2.17	%
Waiver/Reimbursement (h)		0.05	%
Net investment loss (g)(h)		(2.12	)%
Portfolio turnover rate (e)		23	%
Net assets, end of period (000’s)	$	10

(a) Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Amount represents less than $0.01.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) Total return at net asset value assuming no contingent deferred sales charge.

(g) The benefits derived from custody credits had an impact of less than 0.01%.

(h) Annualized.

See Notes to Financial Statements.

80

Financial Highlights – Mid Cap Value and Restructuring Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	21.61		$	19.64		$	16.77		$	15.75		$	10.24		$	13.29
Income from Investment Operations:
Net investment income (a)		0.20			0.23			—	(b)		0.23			0.03			0.02
Net realized and unrealized gain (loss) on investments and foreign currency		1.47			1.75			2.90			1.02			5.51			(3.05	)
Total from Investment Operations		1.67			1.98			2.90			1.25			5.54			(3.03	)
Less Distributions to Shareholders:
From net investment income		(0.22	)		(0.01	)		(0.03	)		(0.23	)		(0.03	)		(0.02	)
From net realized gains		—			—	(b)		—			—			—			—
Total Distributions to Shareholders		(0.22	)		(0.01	)		(0.03	)		(0.23	)		(0.03	)		(0.02	)
Net Asset Value, End of Period	$	23.06		$	21.61		$	19.64		$	16.77		$	15.75		$	10.24
Total return (c)		7.77	%(d)(e)		10.07	%		17.32	%		7.93	%(d)		54.21	%(d)		(22.81	)%(d)
Ratios to Average Net Assets/Supplemental Data:
Net expenses (f)		1.12	%(g)		1.13	%		1.13	%		1.06	%		0.99	%		1.01	%
Waiver/Reimbursement		0.03	%(g)		—			—			0.10	%		0.24	%		0.14	%
Net investment income (f)		1.78	%(g)		1.12	%		0.02	%		1.42	%		0.24	%		0.20	%
Portfolio turnover rate		4	%(e)		25	%		23	%		28	%		13	%		28	%
Net assets, end of period (000’s)	$	321,636		$	294,452		$	237,531		$	214,844		$	186,720		$	81,146

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Amount represents less than $0.01 per share.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) The benefits derived from custody credits had an impact of less than 0.01%.

(g) Annualized.

See Notes to Financial Statements.

81

Financial Highlights – Real Estate Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	11.52		$	11.46		$	9.30		$	9.17		$	6.61		$	7.10
Income from Investment Operations:
Net investment income (a)		0.07			0.08			0.08			0.17			0.29			0.28
Net realized and unrealized gain (loss) on investments		(1.02	)		1.78			3.10			0.68			2.64			(0.52	)
Total from Investment Operations		(0.95	)		1.86			3.18			0.85			2.93			(0.24	)
Less Distributions to Shareholders:
From net investment income		—			(0.08	)		(0.19	)		(0.22	)		(0.31	)		(0.25	)
From net realized gains		—			(1.66	)		(0.83	)		(0.50	)		(0.06	)		—
Return of capital		—			(0.06	)		—			—			—			—
Total Distributions to Shareholders		—			(1.80	)		(1.02	)		(0.72	)		(0.37	)		(0.25	)
Net Asset Value, End of Period	$	10.57		$	11.52		$	11.46		$	9.30		$	9.17		$	6.61
Total return (b)(c)		(8.25	)%(d)		19.36	%		36.03	%		9.90	%		45.65	%		(3.49	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		1.25	%(f)		1.25	%		1.23	%		1.20	%		1.20	%		1.17	%
Waiver/Reimbursement		0.38	%(f)		0.28	%		0.29	%		0.36	%		0.15	%		0.06	%
Net investment income (e)		1.22	%(f)		0.71	%		0.77	%		1.89	%		3.67	%		4.09	%
Portfolio turnover rate		41	%(d)		38	%		14	%		17	%		38	%		23	%
Net assets, end of period (000’s)	$	89,892		$	152,026		$	127,628		$	112,889		$	122,874		$	79,374

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

82

Financial Highlights – Small Cap Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	19.21		$	19.23		$	16.14		$	14.59		$	8.47		$	12.19
Income from Investment Operations:
Net investment loss (a)		(0.06	)		(0.12	)		(0.11	)		(0.10	)		(0.02	)		(0.03	)
Net realized and unrealized gain (loss) on investments		1.78			1.36			4.09			1.65			6.14			(3.69	)
Total from Investment Operations		1.72			1.24			3.98			1.55			6.12			(3.72	)
Less Distributions to Shareholders:
From net realized gains		—			(1.26	)		(0.89	)		—			—			—
Net Asset Value, End of Period	$	20.93		$	19.21		$	19.23		$	16.14		$	14.59		$	8.47
Total return (b)		8.95	%(c)(d)		6.83	%		25.37	%(d)		10.62	%(d)		72.26	%(d)		(30.52	)%(d)
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		1.21	%(f)		1.22	%		1.09	%		1.05	%		0.83	%		0.83	%
Waiver/Reimbursement		0.03	%(f)		—			0.02	%		0.03	%		0.15	%		0.22	%
Net investment loss (e)		(0.54	)%(f)		(0.66	)%		(0.64	)%		(0.64	)%		(0.20	)%		(0.31	)%
Portfolio turnover rate		35	%(c)		52	%		65	%		61	%		82	%		105	%
Net assets, end of period (000’s)	$	823,980		$	694,765		$	599,389		$	488,221		$	352,457		$	156,324

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Total return at net asset value assuming all distributions reinvested.

(c) Not annualized.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

83

Financial Highlights – Small Cap Fund

Selected data for a share outstanding throughout the period is as follows:

Class A Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	21.11
Income from Investment Operations:
Net investment loss (b)		—	(c)
Net realized and unrealized loss on investments		(0.18	)
Total from Investment Operations		(0.18	)
Net Asset Value, End of Period	$	20.93
Total return (d)(e)(f)		(0.85	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (g)(h)		1.36	%
Waiver/Reimbursement (h)		0.05	%
Net investment loss (g)(h)		(1.34	)%
Portfolio turnover rate (e)		35	%
Net assets, end of period (000’s)	$	10

(a) Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Amount represents less than $0.01 per share.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge.

(g) The benefits derived from custody credits had an impact of less than 0.01%.

(h) Annualized.

See Notes to Financial Statements.

84

Financial Highlights – Small Cap Fund

Selected data for a share outstanding throughout the period is as follows:

Class C Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	21.11
Income from Investment Operations:
Net investment loss (b)		—	(c)
Net realized and unrealized loss on investments		(0.18	)
Total from Investment Operations		(0.18	)
Net Asset Value, End of Period	$	20.93
Total return (d)(e)(f)		(0.85	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (g)(h)		2.11	%
Waiver/Reimbursement (h)		0.05	%
Net investment loss (g)(h)		(2.09	)%
Portfolio turnover rate (e)		35	%
Net assets, end of period (000’s)	$	10

(a) Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Amount represents less than $0.01 per share.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) Total return at net asset value assuming no contingent deferred sales charge.

(g) The benefits derived from custody credits had an impact of less than 0.01%.

(h) Annualized.

See Notes to Financial Statements.

85

Financial Highlights – Value and Restructuring Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	54.33		$	49.36		$	41.40		$	37.57		$	23.66		$	32.63
Income from Investment Operations:
Net investment income		0.49	(a)		0.45	(a)		0.53	(a)		0.34	(a)		0.24			0.17
Net realized and unrealized gain (loss) on investments, foreign currency and written options		4.03			5.00			7.88			3.83			13.90			(9.01	)
Total from Investment Operations		4.52			5.45			8.41			4.17			14.14			(8.84	)
Less Distributions to Shareholders:
From net investment income		(0.35	)		(0.48	)		(0.45	)		(0.34	)		(0.23	)		(0.13	)
Net Asset Value, End of Period	$	58.50		$	54.33		$	49.36		$	41.40		$	37.57		$	23.66
Total return (b)		8.34	(c)(d)		11.14	%		20.45	%		11.16	%(c)		60.06	%(c)		(27.13	)%(c)
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		1.03	%(f)		1.05	%		1.05	%		1.07	%		0.99	%		0.99	%
Waiver/Reimbursement		0.03	%(f)		—			—			0.02	%		0.15	%		0.13	%
Net investment income (e)		1.68	%(f)		0.90	%		1.18	%		0.87	%		0.78	%		0.65	%
Portfolio turnover rate		5	%(d)		13	%		12	%		8	%		4	%		16	%
Net assets, end of period (000’s)	$	8,951,377		$	7,767,713		$	6,230,754		$	4,469,075		$	3,244,851		$	1,558,721

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Total return at net asset value assuming all distributions reinvested.

(c) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

86

Financial Highlights – Value and Restructuring Fund

Selected data for a share outstanding throughout the period is as follows:

Class A Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	58.58
Income from Investment Operations:
Net investment loss (b)		—	(c)
Net realized and unrealized loss on investments, foreign currency and written options		(0.08	)
Total from Investment Operations		(0.08	)
Net Asset Value, End of Period	$	58.50
Total return (d)(e)(f)		(0.13	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (g)(h)		1.24	%
Waiver/Reimbursement (h)		0.05	%
Net investment loss (g)(h)		(0.10	)%
Portfolio turnover rate (e)		5	%
Net assets, end of period (000’s)	$	10

(a) Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Amount represents less than $0.01 per share.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge.

(g) The benefits derived from custody credits had an impact of less than 0.01%.

(h) Annualized.

See Notes to Financial Statements.

87

Financial Highlights – Value and Restructuring Fund

Selected data for a share outstanding throughout the period is as follows:

Class C Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	58.58
Income from Investment Operations:
Net investment loss (b)		—	(c)
Net realized and unrealized loss on investments, foreign currency and written options		(0.08	)
Total from Investment Operations		(0.08	)
Net Asset Value, End of Period	$	58.50
Total return (d)(e)(f)		(0.13	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (g)(h)		1.99	%
Waiver/Reimbursement (h)		0.05	%
Net investment loss (g)(h)		(0.86	)%
Portfolio turnover rate (e)		5	%
Net assets, end of period (000’s)	$	10

(a) Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Amount represents less than $0.01 per share.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) Total return at net asset value assuming no contingent deferred sales charge.

(g) The benefits derived from custody credits had an impact of less than 0.01%.

(h) Annualized.

See Notes to Financial Statements.

88

Financial Highlights – Emerging Markets Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	14.06		$	12.60		$	8.73		$	7.67		$	4.12		$	4.95
Income from Investment Operations:
Net investment income		0.11	(a)		0.07	(a)		0.10	(a)		0.12	(a)		0.05			0.02
Net realized and unrealized gain (loss) on investments and foreign currency		3.55			2.16			3.87			1.18			3.55			(0.84	)
Total from Investment Operations		3.66			2.23			3.97			1.30			3.60			(0.82	)
Less Distributions to Shareholders:
From net investment income		(0.06	)		(0.08	)		(0.10	)		(0.08	)		(0.05	)		(0.01	)
From net realized gains		—			(0.69	)		—			(0.16	)		—			—
Total Distributions to Shareholders		(0.06	)		(0.77	)		(0.10	)		(0.24	)		(0.05	)		(0.01	)
Net Asset Value, End of Period	$	17.66		$	14.06		$	12.60		$	8.73		$	7.67		$	4.12
Total return (b)(c)		26.07	%(d)		17.98	%		45.85	%		17.07	%		87.57	%		(16.62	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		1.85	%(f)		1.85	%		1.81	%		1.70	%		1.65	%		1.61	%
Waiver/Reimbursement		0.06	%(f)		0.05	%		0.11	%		0.20	%		0.27	%		0.23	%
Net investment income (e)		1.37	%(f)		0.50	%		1.00	%		1.44	%		0.81	%		0.51	%
Portfolio turnover rate		9	%(d)		16	%		7	%		21	%		14	%		43	%
Net assets, end of period (000’s)	$	1,316,885		$	1,092,481		$	996,666		$	433,168		$	209,161		$	30,049

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

89

Financial Highlights – Emerging Markets Fund

Selected data for a share outstanding throughout the period is as follows:

Class A Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	17.77
Income from Investment Operations:
Net investment income (b)		—	(c)
Net realized and unrealized loss on investments and foreign currency		(0.11	)
Total from Investment Operations		(0.11	)
Net Asset Value, End of Period	$	17.66
Total return (d)(e)(f)		(0.62	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (g)(h)		1.50	%
Waiver/Reimbursement (h)		0.05	%
Net investment income (g)(h)		0.85	%
Portfolio turnover rate (e)		9	%
Net assets, end of period (000’s)	$	10

(a) Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Amount represents less than $0.01 per share.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge.

(g) The benefits derived from custody credits had an impact of less than 0.01%.

(h) Annualized.

See Notes to Financial Statements.

90

Financial Highlights – Emerging Markets Fund

Selected data for a share outstanding throughout the period is as follows:

Class C Shares	(Unaudited) Period Ended September 30, 2007 (a)
Net Asset Value, Beginning of Period	$	17.77
Income from Investment Operations:
Net investment loss (b)		—	(c)
Net realized and unrealized loss on investments and foreign currency		(0.11	)
Total from Investment Operations		(0.11	)
Net Asset Value, End of Period	$	17.66
Total return (d)(e)(f)		(0.62	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (g)(h)		2.25	%
Waiver/Reimbursement (h)		0.05	%
Net investment loss (g)(h)		(0.10	)%
Portfolio turnover rate (e)		9	%
Net assets, end of period (000’s)	$	10

(a) Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date.

(b) Per share data was calculated using the average shares outstanding during the period.

(c) Amount represents less than $0.01 per share.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) Total return at net asset value assuming no contingent deferred sales charge.

(g) The benefits derived from custody credits had an impact of less than 0.01%.

(h) Annualized.

See Notes to Financial Statements.

91

Financial Highlights – International Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	19.06		$	16.51		$	13.05		$	11.28		$	6.83		$	9.75
Income from Investment Operations:
Net investment income		0.08	(a)		0.09	(a)		0.07	(a)		0.06	(a)		0.09			0.10
Net realized and unrealized gain (loss) on investments and foreign currency		1.68			2.54			3.51			1.71			4.44			(2.99	)
Total from Investment Operations		1.76			2.63			3.58			1.77			4.53			(2.89	)
Less Distributions to Shareholders:
From net investment income		(0.08	)		(0.08	)		(0.12	)		—	(b)		(0.08	)		(0.03	)
Net Asset Value, End of Period	$	20.74		$	19.06		$	16.51		$	13.05		$	11.28		$	6.83
Total return (c)(d)		9.27	%(e)		16.03	%		27.70	%		15.71	%		66.51	%		(29.72	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (f)		1.50	%(g)		1.50	%		1.50	%		1.50	%		1.38	%		1.40	%
Waiver/Reimbursement		0.06	%(g)		0.06	%		0.08	%		0.11	%		0.11	%		0.17	%
Net investment income (f)		0.76	%(g)		0.49	%		0.52	%		0.52	%		0.92	%		0.55	%
Portfolio turnover rate		17	%(e)		28	%		26	%		66	%		58	%		73	%
Net assets, end of period (000’s)	$	723,284		$	636,941		$	522,284		$	240,322		$	130,143		$	89,679

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Amount represents less than $0.01 per share.

(c) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(d) Total return at net asset value assuming all distributions reinvested.

(e) Not annualized.

(f) The benefits derived from custody credits had an impact of less than 0.01%.

(g) Annualized.

See Notes to Financial Statements.

92

Financial Highlights – Pacific/Asia Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	11.72		$	11.61		$	8.88		$	8.44		$	5.21		$	6.68
Income from Investment Operations:
Net investment income (loss)		0.02	(a)		—	(a)(b)		0.02	(a)		0.03	(a)		0.01			0.01
Net realized and unrealized gain (loss) on investments and foreign currency		1.81			0.50			2.82			0.42			3.22			(1.43	)
Total from Investment Operations		1.83			0.50			2.84			0.45			3.23			(1.42	)
Less Distributions to Shareholders:
From net investment income		—			—			(0.11	)		(0.01	)		—			(0.05	)
From net realized gains		—			(0.39	)		—			—			—			—
Total Distributions to Shareholders		—			(0.39	)		(0.11	)		(0.01	)		—			(0.05	)
Net Asset Value, End of Period	$	13.55		$	11.72		$	11.61		$	8.88		$	8.44		$	5.21
Total return (c)		15.61	%(d)(e)		4.40	%		32.35	%(d)		5.32	%(d)		62.00	%(d)		(21.44	)%(d)
Ratios to Average Net Assets/Supplemental Data:
Net expenses before interest expense (f)		1.60	%(g)		1.61	%		1.59	%		1.50	%		1.45	%		1.51	%
Interest expense		—	%(g)(h)		—			—			—			—			—
Net expenses (f)		1.60	%(g)		1.61	%		1.59	%		1.50	%		1.45	%		1.51	%
Waiver/Reimbursement		0.03	%(g)		—			0.03	%		0.14	%		0.13	%		0.15	%
Net investment income (loss) (f)		0.31	%(g)		(0.04	)%		0.22	%		0.35	%		0.20	%		0.15	%
Portfolio turnover rate		20	%(e)		92	%		68	%		90	%		58	%		73	%
Net assets, end of period (000’s)	$	211,963		$	213,132		$	243,964		$	134,579		$	114,830		$	27,330

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Amount represents less than $0.01 per share.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(e) Not annualized.

(f) The benefits derived from custody credits had an impact of less than 0.01%.

(g) Annualized.

(h) Rounds to less than 0.01%.

See Notes to Financial Statements.

93

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS

September 30, 2007 (Unaudited)

Note 1. Organization

Excelsior Funds, Inc. (“Excelsior Fund”) is organized as a Maryland Corporation. Excelsior Funds Trust (the “Trust”) is organized as a Delaware business trust. Excelsior Fund and the Trust are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as open-end management investment companies. Information presented in these financial statements pertains to the following funds (individually referred to as a “Fund”, collectively referred to as the “Funds”):

Excelsior Fund:

Blended Equity Fund

Energy and Natural Resources Fund

Large Cap Growth Fund

Real Estate Fund

Small Cap Fund

Value and Restructuring Fund

Emerging Markets Fund

International Fund

Pacific/Asia Fund

The Trust:

Equity Income Fund

Equity Opportunities Fund

Mid Cap Value and Restructuring Fund

Each Fund is diversified, with the exception of Energy and Natural Resources Fund and Real Estate Fund, each of which is non-diversified.

Investment Objectives

Blended Equity Fund seeks long-term capital appreciation by investing in companies that represent good, long-term values not currently recognized in the market prices of their securities. Energy and Natural Resources Fund seeks long-term capital appreciation by investing primarily in companies that are in the energy and other natural resources groups of industries. The Fund may also invest, to a more limited extent, in gold and other precious metal bullion and coins. Equity Income Fund seeks total return on its assets through capital appreciation and income. Equity Opportunities Fund and International Fund each seeks total return on its assets through long-term capital appreciation. Large Cap Growth Fund seeks superior, long-term capital appreciation by investing in larger companies whose growth prospects, in the opinion of the Advisor, appear to exceed that of the overall market. Mid Cap Value and Restructuring Fund and Value and Restructuring Fund each seeks long-term capital appreciation by investing in companies that will benefit from their restructuring or redeployment of assets and operations in order to become more competitive or profitable. Real Estate Fund seeks current income and long-term capital appreciation by investing in real estate investment trusts (REITs) and

94

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

other companies principally engaged in the real estate business. Small Cap Fund, Emerging Markets Fund and Pacific/Asia Fund each seeks long-term capital appreciation.

Fund Shares

Excelsior Fund is authorized to issue up to 42.5 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 2.25 billion shares of Blended Equity Fund; 3.0 billion shares each of Large Cap Growth Fund and Emerging Markets Fund; 2.5 billion shares each of Energy and Natural Resources Fund and Small Cap Fund; 3.5 billion shares of Value and Restructuring Fund; 1.0 billion shares of Pacific/Asia Fund; 1.375 billion shares of International Fund; and 500 million shares of Real Estate Fund. The Trust may issue an unlimited number of shares of beneficial interest of each class of each Fund, with a par value of $0.00001.

Blended Equity Fund, Real Estate Fund, International Fund and Pacific/Asia Fund each offers one class of shares: Shares. Equity Income Fund offers two classes of shares: Shares and Retirement Shares. Energy and Natural Resources Fund offers three classes of shares: Shares, Class A Shares and Class C Shares. Mid Cap Value and Restructuring Fund offers three classes of shares: Shares, Institutional Shares and Retirement Shares. Equity Opportunities Fund and Emerging Markets Fund offer four classes of shares: Shares, Class A Shares, Class C Shares and Institutional Shares. Small Cap Fund offers four classes of shares: Shares, Class A Shares, Class C Shares and Retirement Shares. Large Cap Growth Fund and Value and Restructuring Fund offer five classes of shares: Shares, Class A Shares, Class C Shares, Institutional Shares and Retirement Shares. The Class A Shares and Class C Shares commenced operations on September 28, 2007 and commenced public offering of shares on October 1, 2007. The financial highlights of the Institutional Shares and Retirement Shares of the Funds are presented separately.

Shares, Institutional Shares and Retirement Shares are offered continuously at net asset value. There are certain restrictions on the purchase of Institutional Shares and Retirement Shares, as described in the Funds’ prospectuses. Class A Shares are subject to a maximum front-end sales charge of 5.75% based on the amount of initial investment. Class A Shares purchased without an initial sales charge in accounts aggregating from $1 million up to $50 million at the time of purchase are subject to a 1.00% contingent deferred sales charge (“CDSC”) if the shares are sold within twelve months after purchase. Class C Shares are subject to a 1.00% CDSC on shares sold within twelve months after purchase.

Note 2. Significant Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain ratios have been reclassified on the Financial Highlights to conform to the current period presentation. The changes have no effect on the ratios. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements.

95

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Security Valuation

Equity securities and exchange traded funds are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.

Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.

Investments in other open-end investment companies are valued at net asset value.

Options are valued at the last reported sale price, or in the absence of a sale, the mean between the last quoted bid and ask price.

Forward foreign currency exchange contracts are valued at the prevailing forward exchange rate of the underlying currencies.

Foreign securities are generally valued at the last sale price on the foreign exchange or market on which they trade. If any foreign share prices are not readily available as a result of limited share activity, the securities are valued at the last sale price of the local shares in the principal market in which such securities are normally traded.

Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange (“NYSE”). The values of such securities used in computing the net asset value of the Funds’ shares are determined as of such times. Foreign currency exchange rates are generally determined at 4:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the values of such foreign securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE, which would not be reflected in the computation of the Funds’ net asset value. If events materially affecting the values of such foreign securities occur and it is determined that market quotations are not reliable, then these foreign securities will be valued at their “fair value” using procedures approved by the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust. Certain Funds may use a systematic fair valuation model provided by an independent third party to value securities principally traded in foreign markets in order to adjust for possible stale pricing that may occur between the close of the foreign exchanges and the time for valuation.

Investments for which market quotations are not readily available, or that have quotations which management believes are not reliable, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust. If a security is valued at fair value such value is likely to be different from the last quoted market price for the security.

96

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), was issued. SFAS 157 is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is evaluating the impact the application of SFAS 157 will have on the Funds’ financial statement disclosures.

Security Transactions

Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.

Options

Certain Funds may write call and put options on securities they own or in which they may invest. Writing put options tends to increase the Funds’ exposure to the underlying instrument. Writing call options tends to decrease the Funds’ exposure to the underlying instrument. When the Funds write a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked-to-market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against the amounts paid on the underlying transaction to determine the realized gain or loss. Each Fund as a writer of an option has no control over whether the underlying security may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option. There is the risk that the Funds may not be able to enter into a closing transaction because of an illiquid market. The Funds’ custodian will set aside cash or liquid portfolio securities equal to the amount of the written options contract commitment in a separate account.

Each Fund may also purchase put and call options. Purchasing call options tends to increase the Funds’ exposure to the underlying instrument. Purchasing put options tends to decrease the Funds’ exposure to the underlying instrument. Each Fund may pay a premium, which is included in the Funds’ Statements of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying transaction to determine the realized gain or loss.

Forward Foreign Currency Exchange Contracts

Forward foreign currency exchange contracts are agreements to exchange one currency for another at a future date at a specified price. These contracts are used to minimize the exposure to foreign exchange rate fluctuations during the period between trade and settlement date of the contract. Certain Funds may utilize forward foreign currency exchange contracts in connection with the settlement of purchases

97

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

and sales of securities. Certain Funds may also enter into these contracts to hedge certain other foreign currency denominated assets. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge the Funds’ investments against currency fluctuations. Forward foreign currency exchange contracts are valued daily at the current exchange rate of the underlying currency, resulting in unrealized gains (losses) which become realized at the time the forward foreign currency exchange contracts are closed or mature. Realized and unrealized gains (losses) arising from such transactions are included in net realized and unrealized gains (losses) on foreign currency transactions. The use of forward foreign currency exchange contracts does not eliminate fluctuations in the prices of the Funds’ portfolio securities. While the maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened, exposure is typically limited to the change in value of the contract (in U.S. dollars) over the period it remains open. The Funds are also exposed to risk if the counterparties of the contracts are unable to fulfill the terms of the contracts.

Repurchase Agreements

Each Fund may engage in repurchase agreement transactions with institutions that the Funds’ investment advisor has determined are creditworthy. Each Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. The investment advisor is responsible for determining that collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon each Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.

Income Recognition

Interest income is recorded on the accrual basis. Corporate actions and dividend income are recorded on the ex-date except for certain foreign securities which are recorded as soon after the ex-date as the Fund becomes aware of such, net of any non-reclaimable tax withholdings. Distributions received from real estate investment trusts (REITs) in excess of their income are recorded as a reduction of the cost of the related investments and/or realized gains as applicable. If the Fund no longer owns the applicable securities, any distributions received in excess of income are recorded as realized gains.

Foreign Currency Transactions

The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day’s exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.

98

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

For financial statement purposes, the Funds do not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments in the Statements of Operations.

Determination of Class Net Asset Value

All income, expenses (other than class-specific expenses, as shown on the Statements of Operations), and realized and unrealized gains (losses), are allocated to each class of a Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

Federal Income Tax Status

Each Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.

Foreign Capital Gains Taxes

Realized gains in certain countries may be subject to foreign taxes at the fund level, at rates ranging from approximately 10% to 15%. The Funds accrue for such foreign taxes on net realized and unrealized gains at the appropriate rate for each jurisdiction.

Distributions to Shareholders

Dividends from net investment income are declared and paid quarterly for each Fund except Emerging Markets Fund, International Fund and Pacific/Asia Fund, which declare and pay dividends semi-annually. Net realized capital gains, if any, are distributed at least annually for all Funds. Distributions to shareholders are recorded on the ex-date.

Indemnification

In the normal course of business, each Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. A Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the organizational documents of Excelsior Fund and the Trust, and by contract, the Board of Directors with regard to Excelsior Fund, and the Board of Trustees with regard to the Trust, are indemnified against certain liabilities that may arise out of actions relating to their duties to Excelsior Fund and the Trust. However, based on experience, the Funds expect the risk of loss due to these representations, warranties and indemnities to be minimal.

99

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Note 3. Federal Income Tax Information

The tax character of distributions paid during the year ended March 31, 2007 was as follows:

	Ordinary Income*		Long-Term Capital Gains		Return of Capital
Blended Equity Fund	$	3,124,137	$	61,776,418	$	—
Energy and Natural Resources Fund		39,548,106		58,470,040		—
Equity Income Fund		4,109,901		—		—
Equity Opportunities Fund		1,277,288		—		—
Large Cap Growth Fund		—		—		—
Mid Cap Value and Restructuring Fund		97,283		7,547		—
Real Estate Fund		950,031		18,297,188		817,973
Small Cap Fund		2,271,022		41,311,258		—
Value and Restructuring Fund		67,856,329		—		—
Emerging Markets Fund		7,542,032		51,557,835		—
International Fund		2,551,050		—		—
Pacific/Asia Fund		—		7,507,933		—

* For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions.

Unrealized appreciation and depreciation at September 30, 2007, based on cost of investments for federal income tax purposes, excluding any unrealized appreciation and depreciation from changes in the value of other assets and liabilities resulting from changes in exchange rates, was:

	Unrealized Appreciation		Unrealized Depreciation			Net Unrealized Appreciation
Blended Equity Fund	$	202,175,600	$	(2,815,329	)	$	199,360,271
Energy and Natural Resources Fund		98,251,168		(9,672,232	)		88,578,936
Equity Income Fund		50,172,694		(1,606,312	)		48,566,382
Equity Opportunities Fund		98,827,567		(11,693,053	)		87,134,514
Large Cap Growth Fund		229,089,580		(23,403,331	)		205,686,249
Mid Cap Value and Restructuring Fund		148,178,220		(10,740,360	)		137,437,860
Real Estate Fund		16,134,694		(1,295,246	)		14,839,448
Small Cap Fund		244,409,519		(16,525,788	)		227,883,731
Value and Restructuring Fund		3,535,111,311		(280,207,107	)		3,254,904,204
Emerging Markets Fund		606,755,147		(11,611,022	)		595,144,125
International Fund		203,419,865		(24,620,951	)		178,798,914
Pacific/Asia Fund		49,076,614		(9,038,659	)		40,037,955

100

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

The following capital loss carryforwards, determined as of March 31, 2007, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:

	Expires March 31,
	2010		2011		2012		2013		2014		2015		Total
Equity Opportunities Fund	$	—	$	—	$	—	$	—	$	880,333	$	2,193,825	$	3,074,158
Large Cap Growth Fund		18,217,588		83,374,895		22,030,449		480,165		—		—		124,103,097
Value and Restructuring Fund		—		19,930,042		27,363,534		—		—		—		47,293,576
Emerging Markets Fund		—		—		1,247,253		—		36,739		—		1,283,992
International Fund		—		41,230,170		15,141,185		—		—		—		56,371,355

The Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an Interpretation of FASB Statement No. 109 (“FIN 48”) effective September 28, 2007. FIN 48 requires management to determine whether a tax position of a Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that exceeds fifty percent of the amount likely to be realized upon ultimate settlement. FIN 48 must be applied to all existing tax positions upon initial adoption and the cumulative effect, if any, is to be reported as an adjustment to net assets. Management has evaluated the known implications of FIN 48 on its computation of net assets for each Fund. As a result of this evaluation, management believes that FIN 48 will not have any effect on the Funds’ financial statements. However, management’s conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations, and administrative interpretations (including relevant court decisions).

Note 4. Fees and Compensation Paid to Affiliates

Investment Advisory Fee

United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Effective July 1, 2007, U.S. Trust became a wholly owned subsidiary of the Bank of America Corporation (“BOA”). Prior to July 1, 2007, U.S. Trust was a wholly owned subsidiary of The Charles Schwab Corporation.

101

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

For its services, the Advisor receives an investment advisory fee, computed daily and paid monthly, based on each Fund’s average daily net assets at the following annual rates:

	Annual Fee Rate
Blended Equity Fund	0.75%
Energy and Natural Resources Fund	0.60%
Equity Income Fund	0.75%
Equity Opportunities Fund	0.75%
Large Cap Growth Fund	0.75%
Mid Cap Value and Restructuring Fund	0.65%
Real Estate Fund	1.00%
Small Cap Fund	0.75%
Value and Restructuring Fund	0.60%
Emerging Markets Fund	1.25%
International Fund	1.00%
Pacific/Asia Fund	1.00%

Administration Fee

Effective July 1, 2007, Columbia Management Advisors, LLC (“Columbia”) serves as the administrator of the Funds. Columbia is an indirect, wholly owned subsidiary of BOA. Prior to July 1, 2007, USTA and BISYS Fund Services Ohio, Inc. (“BISYS”) served as the administrators of the Funds under the same fee structure.

Columbia is entitled to an administration fee, computed daily and paid monthly, based on the combined aggregate average daily net assets of Excelsior Fund, the Trust and Excelsior Tax-Exempt Funds, Inc. (excluding Emerging Markets Fund, International Fund, International Equity Fund and Pacific/Asia Fund, series of Excelsior Fund or the Trust), at the following annual rates:

Average Daily Net Assets	Annual Fee Rate
First $200 million	0.200%
Next $200 million	0.175%
In excess of $400 million	0.150%

Columbia is entitled to an administration fee, computed daily and paid monthly, at the annual rate of 0.20% of the average daily net assets of Emerging Markets Fund, International Fund, Pacific/Asia Fund (each a separate series of Excelsior Fund) (collectively, the “international equity series”).

Effective September 17, 2007, Columbia received an administration fee at the annual rates listed above less the fees payable by the Funds as described under the Pricing and Bookkeeping Fees note below.

Effective July 1, 2007, Columbia voluntarily agreed to waive administration fees for each Fund at the annual rate of 0.05% of average daily net assets. Columbia, at its discretion, may revise or discontinue

102

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

this arrangement at any time. For the six months ended September 30, 2007, the effective administration fee rate before the reduction for pricing and bookkeeping fees and net of voluntary expense waivers, as a percentage of each Fund’s average net assets, was 0.13% for each Fund with the exception of the international equity series of Excelsior Fund and the Trust, which was 0.18%.

For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:

	Amounts Paid to Affiliates		Amounts Payable to Affiliates
Blended Equity Fund	$	224,558	$	24,825
Energy and Natural Resources Fund		345,989		43,624
Equity Income Fund		133,872		14,343
Equity Opportunities Fund		209,320		24,218
Large Cap Growth Fund		434,339		53,449
Mid Cap Value and Restructuring Fund		195,276		21,615
Real Estate Fund		58,311		4,017
Small Cap Fund		424,975		53,659
Value and Restructuring Fund		4,990,424		648,811
Emerging Markets Fund		994,812		138,116
International Fund		549,244		72,182
Pacific/Asia Fund		167,503		19,791

Pricing and Bookkeeping Fees

Effective September 17, 2007, the Funds entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank & Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Funds. Also effective September 17, 2007, the Funds entered into an Accounting Services Agreement with State Street and Columbia (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) pursuant to which State Street provides accounting services to the Funds. Under the State Street Agreements, each Fund pays State Street an annual fee of $38,000 paid monthly, plus a monthly fee based on an annualized percentage rate of average daily net assets of each Fund for the month. The aggregate fee for each Fund will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Funds also reimburse State Street for certain out-of-pocket expenses and charges.

Effective September 17, 2007, the Funds entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. The Funds reimburse Columbia for out-of-pocket expenses and direct internal costs relating to accounting oversight and for services relating to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002.

103

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Prior to July 1, 2007, BISYS was responsible for providing fund accounting and financial reporting services to the Funds, and USTA was responsible for oversight of these functions. On July 1, 2007, Columbia assumed responsibility from USTA for oversight of the activities performed by BISYS. BISYS was responsible for providing services to the Funds through September 16, 2007.

For the six months ended September 30, 2007, the total amounts paid and payable to affiliates for each Fund under these agreements were $505 and $505, respectively.

Transfer Agent Fee

Effective September 17, 2007, Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. Prior to September 17, 2007, BFDS served as the transfer agent for the Funds’ shares.

The Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $17.00 per open account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Funds. The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcript fees due the Transfer Agent from shareholders of the Funds and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Funds. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.

For the period September 17, 2007 through September 30, 2007, the total amounts paid and payable to affiliates by the Funds under this agreement were as follows:

	Amounts Paid to Affiliates		Amounts Payable to Affiliates
Blended Equity Fund	$	2,740	$	2,740
Energy and Natural Resources Fund		13,501		13,501
Equity Income Fund		319		319
Equity Opportunities Fund		413		413
Large Cap Growth Fund		3,167		3,167
Mid Cap Value and Restructuring Fund		3,057		3,057
Real Estate Fund		1,364		1,364
Small Cap Fund		9,364		9,364
Value and Restructuring Fund		79,159		79,159
Emerging Markets Fund		14,044		14,044
International Fund		2,721		2,721
Pacific/Asia Fund		846		846

104

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Shareholder Servicing Fee

The Funds have entered into shareholder servicing agreements with various service organizations which include USTA. The Funds are permitted to pay a fee of up to 0.25% of the average daily net assets of the Funds’ shares held by each service organization’s customers to such organizations for providing shareholder and administrative services to their customers who hold shares of the Funds.

For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:

	Amounts Paid to Affiliates		Amounts Payable to Affiliates
Blended Equity Fund	$	376,465	$	59,726
Energy and Natural Resources Fund		177,243		29,735
Equity Income Fund		284,949		44,682
Equity Opportunities Fund		365,923		61,307
Large Cap Growth Fund		778,970		132,290
Mid Cap Value and Restructuring Fund		245,599		38,544
Real Estate Fund		79,233		11,298
Small Cap Fund		654,098		110,912
Value and Restructuring Fund		1,585,978		253,339
Emerging Markets Fund		499,316		83,024
International Fund		756,281		123,363
Pacific/Asia Fund		219,171		33,938

Distribution and Service Fees

Effective September 17, 2007, Columbia Management Distributors, Inc. (the “Distributor”) serves as distributor of the Funds’ shares. Through July 31, 2007, BISYS Fund Services Limited Partnership (“BISYS Fund Services”) served as distributor of the Funds’ shares. On August 1, 2007, Foreside Distribution Services, L.P. served as distributor until September 16, 2007.

Certain Funds have adopted a Distribution Plan (the “Distribution Plan”) pursuant to Rule 12b-1 under the 1940 Act, which permits the Funds to compensate and/or reimburse the Distributor monthly for services that are intended to result in the sale of certain classes’ shares. Equity Income Fund, Equity Opportunities Fund and Mid Cap Value and Restructuring Fund, which have adopted a Distribution Plan for the Shares Class of the Funds, may pay distribution fees in an amount not to exceed the annual rate of 0.25% of the average daily net assets applicable to each Fund’s Shares Class. Fees are not currently being paid under the Distribution Plan with respect to the Shares Class. Equity Income Fund, Large Cap Growth Fund, Mid Cap Value and Restructuring Fund, Small Cap Fund and Value and Restructuring Fund, which have adopted a Distribution Plan for the Retirement Shares of the Funds, may pay distribution fees in an amount not to exceed the annual rate at 0.50% of the average daily net assets applicable to each Fund’s Retirement Shares.

105

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

The Funds have adopted a combined shareholder servicing and distribution plan for the Class A Shares of the Funds. Fees are calculated at an annual rate of 0.25% of the average daily net assets of the Class A Shares of each Fund. The Funds have also adopted a shareholder servicing plan and a Distribution Plan for the Class C Shares of the Funds. Fees are calculated at the annual rates of 0.25% and 0.75%, respectively, of the average daily net assets of the Class C Shares of each Fund.

Fees Paid to Officers and Trustees

The Board of Trustees/Directors may include people who are officers and/or trustees of other fund families affiliated with the investment advisor. The Funds did not pay any of the interested persons for their service as Trustees/Directors, but did pay non-interested persons (independent trustees), as noted in the Statements of Operations.

Expense Limits and Fee Waivers

The Advisor has contractually agreed to waive fees or reimburse expenses through July 31, 2008, so that the expenses incurred by each Fund (exclusive of brokerage commissions, interest, taxes and extraordinary expenses, but inclusive of custodial charges relating to overdrafts, if any) after giving effect to any balance credits from the Funds’ custodian, will not exceed the following annual rates, based on each Fund’s average daily net assets:

	Shares		Class A Shares		Class C Shares		Institutional Shares		Retirement Shares
Blended Equity Fund	1.10	%	—		—		—		—
Energy and Natural Resources Fund	1.25	%	1.36	%	2.11	%	—		—
Equity Income Fund	1.10	%	—		—		—		1.60	%
Equity Opportunities Fund	1.05	%	1.16	%	1.91	%	0.80	%	—
Large Cap Growth Fund	1.20	%	1.31	%	2.06	%	0.95	%	1.70	%
Mid Cap Value and Restructuring Fund	1.14	%	—		—		0.89	%	1.64	%
Real Estate Fund	1.25	%	—		—		—		—
Small Cap Fund	1.25	%	1.36	%	2.11	%	—		1.75	%
Value and Restructuring Fund	1.14	%	1.25	%	2.00	%	0.89	%	1.64	%
Emerging Markets Fund	1.85	%	1.96	%	2.71	%	1.60	%	—
International Fund	1.50	%	—		—		—		—
Pacific/Asia Fund	1.65	%	—		—		—		—

Custody Credits

Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses in the Statements of Operations. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement.

106

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Note 5. Portfolio Information

For the six months ended September 30, 2007, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were as follows:

	Purchases		Sales
Blended Equity Fund	$	17,993,824	$	53,095,729
Energy and Natural Resources Fund		671,154,554		575,319,844
Equity Income Fund		14,928,429		32,254,979
Equity Opportunities Fund		79,328,993		45,219,507
Large Cap Growth Fund		206,389,492		178,370,279
Mid Cap Value and Restructuring Fund		25,982,805		13,336,796
Real Estate Fund		43,255,951		98,722,003
Small Cap Fund		318,595,424		261,032,530
Value and Restructuring Fund		957,697,128		419,229,579
Emerging Markets Fund		104,328,781		116,919,241
International Fund		144,354,480		113,223,499
Pacific/Asia Fund		42,170,107		68,017,349

Note 6. Redemption In-Kind

In certain circumstances, the Funds may distribute portfolio securities rather than cash as payment for redemption of a Fund’s shares (redemption in-kind). For financial reporting purposes, the Funds recognize a gain on the in-kind redemptions to the extent the value of the distributed securities on the date of redemption exceeds the cost of those securities; the Funds recognize a loss if cost exceeds value. Gains and losses realized on the redemptions in-kind are not recognized for tax purposes, and are reclassified from realized gain (loss) to paid-in capital in excess of par value.

Note 7. Line of Credit

Effective September 17, 2007, the Funds and other affiliated funds participate in a $150,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for temporary or emergency purposes. Interest on the uncommitted line of credit is charged to each participating fund based on the fund’s borrowings at a variable rate per annum equal to the Federal Funds Rate plus a spread, as determined and quoted by State Street at the time of the request for a loan.

Prior to September 17, 2007, the Funds participated in a $150,000,000 uncommitted line of credit provided by JPMorgan Chase, under similar borrowing terms.

107

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

For the six months ended September 30, 2007, the average daily loan balance outstanding on days where borrowing existed and the weighted average interest rates for the Fund that participated in these agreements were as follows:

	Average Borrowings		Weighted Average Interest Rates
Equity Income Fund	$	1,000,000	5.525	%
Pacific/Asia Fund	$	1,250,000	5.266	%

Note 8. Redemption Fees

Each Fund may assess, subject to limited exceptions, a 2.00% redemption fee on shares that are redeemed within 60 days of their purchase. The redemption fees, which are retained by the Funds, are accounted for as an addition to paid-in capital and are allocated to each class based on the relative net assets at the time of the redemption. Prior to August 1, 2007, the redemption fee was assessed, subject to limited exceptions, on Fund shares redeemed within 30 days of their purchase. For the six months ended September 30, 2007, the Funds assessed redemption fees as follows:

	Redemption Fees
Blended Equity Fund	$	94
Energy and Natural Resources Fund		4,330
Equity Opportunities Fund		24
Large Cap Growth Fund		8,815
Mid Cap Value and Restructuring Fund		37
Real Estate Fund		12
Value and Restructuring Fund		15,915
Emerging Markets Fund		3,071
International Fund		221
Pacific/Asia Fund		2

108

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Note 9. Concentration of Ownership

As of September 30, 2007, the Funds had shareholders that held greater than 5% of the shares outstanding. Subscription and redemption activity of these accounts may have a significant effect on the operations of the Funds. The percentage of shares of beneficial interest outstanding held therein is as follows:

	Number of Shareholders	% of Shares Outstanding
Blended Equity Fund	2	66.4
Energy and Natural Resources Fund	2	51.6
Equity Income Fund	1	92.2
Equity Opportunities Fund	2	94.7
Large Cap Growth Fund	2	85.1
Mid Cap Value and Restructuring Fund	2	74.2
Real Estate Fund	2	71.5
Small Cap Fund	2	68.2
Value and Restructuring Fund	3	52.9
Emerging Markets Fund	2	61.5
International Fund	2	90.6
Pacific/Asia Fund	2	87.6

Note 10. Significant Risks and Contingencies

Foreign Securities

There are certain additional risks involved when investing in foreign securities that are not inherent with investments in domestic securities. These risks may involve foreign currency exchange rate fluctuations, adverse political and economic developments and the possible prevention of currency exchange or other foreign governmental laws or restrictions. In addition, the liquidity of foreign securities may be more limited than that of domestic securities.

Investments in emerging market countries are subject to additional risk. The risk of foreign investments is typically increased in less developed countries. These countries are also more likely to experience high levels of inflation, deflation or currency devaluation which could hurt their economies and securities markets.

Geographic Concentration

Because the Pacific/Asia Fund’s investments are concentrated in countries located in the Pacific and Far East, events within the region will have a greater effect on the Fund than if the Fund were more geographically diversified. In addition, events in any one country within the region may impact the other countries or the region as a whole. Markets in the region can experience significant volatility due to social, regulatory and political uncertainties.

109

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Sector Focus

Certain Funds may focus their investments in certain industries, subjecting them to greater risk than funds that are less concentrated.

Issuer Focus

Certain Funds are non-diversified. These Funds may invest a greater percentage of their total assets in the securities of fewer issuers than diversified funds. The Funds may, therefore, have a greater risk of loss from a few issuers than similar funds that invests more broadly.

Note 11. Legal Proceedings

United States Trust Company of New York and U.S. Trust Company, N.A. (formerly, co-investment advisers to the Funds, together referred to herein as “U.S. Trust Company”), Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (the “Companies”), The Charles Schwab Corporation and several individuals and third parties were named in four fund shareholder class actions and two derivative actions which alleged that U.S. Trust Company, the Companies, and others allowed certain parties to engage in illegal and improper mutual fund trading practices, which allegedly caused financial injury to the shareholders of certain of the Excelsior Funds advised by U.S. Trust Company. Each plaintiff seeks unspecified monetary damages and related equitable relief.

The class and derivative actions described above were transferred to the United States District Court for the District of Maryland for coordinated and consolidated pre-trial proceedings. In November 2005, the Maryland court dismissed many of the plaintiffs’ claims in both the class and derivative actions. The court entered implementing orders on February 24, 2006. All claims against the Companies have been dismissed. Plaintiffs’ claims against U.S. Trust Company and certain individuals under Sections 10(b) and 20(a) of the Securities Exchange Act and Sections 36(b) and 48(a) of the Investment Company Act, however, have not been dismissed. Plaintiffs’ Section 48(a) claims against parent entity U.S. Trust Company and former parent entity The Charles Schwab Corporation also remain.

While the ultimate outcome of these matters cannot be predicted with any certainty at this time, based on currently available information, U.S. Trust Company believes that the likelihood is remote that the pending litigation will have a material adverse financial impact on the Companies, or materially affect the advisers’ ability to provide investment management services to the Companies.

110

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Note 12. Reorganization of the Funds

The Boards of Directors/Trustees of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (the “Board”) have approved proposals, described below, that are part of a larger integration of the Excelsior Fund complex and the Columbia Funds complex. Generally, these proposals involve the reorganization of certain Excelsior Funds into newly formed Columbia Funds that will be series of a different legal entity governed by a different board than the Excelsior Funds, and will be managed by Columbia Management Advisors, LLC, an affiliate of the current advisers to the Excelsior Funds. The portfolio managers of the Excelsior Funds immediately before such reorganizations are expected to be the same portfolio managers of the newly formed Columbia Funds immediately after such reorganizations.

Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Excelsior Fund”) into a corresponding newly formed shell fund listed in the right column below (each, a “Newly Formed Fund”) as shown in the chart below, subject to approval by the shareholders of the Excelsior Fund. If the shareholders of each Excelsior Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Excelsior Fund will be transferred to the corresponding Newly Formed Fund and shareholders of the Excelsior Fund will receive shares of a designated class of the corresponding Newly Formed Fund in exchange for their shares. For each Excelsior Fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Newly Formed Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Newly Formed Fund. Shareholders of each Excelsior Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.

Excelsior Fund	Newly Formed Fund
Blended Equity Fund	Columbia Blended Equity Fund
Emerging Markets Fund	Columbia Emerging Markets Fund
Energy and Natural Resources Fund	Columbia Energy and Natural Resources Fund
International Fund	Columbia International Growth Fund
Large Cap Growth Fund	Columbia Select Growth Fund
Pacific/Asia Fund	Columbia Pacific/Asia Fund
Small Cap Fund	Columbia Select Small Cap Fund
Value & Restructuring Fund	Columbia Value and Restructuring Fund
Core Bond Fund	Columbia Bond Fund
Intermediate-Term Bond Fund	Columbia Short-Intermediate Bond Fund
Equity Opportunities Fund	Columbia Select Opportunities Fund
Mid Cap Value & Restructuring Fund	Columbia Mid Cap Value and Restructuring Fund

The Board has also approved proposals, described below, that involve the reorganization of certain Excelsior Funds into Columbia Funds that are series of different legal entities governed by a different board than the Excelsior Funds, and are managed by Columbia Management Advisors, LLC.

111

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Acquired Fund”) into a corresponding acquiring fund listed in the right column below (each, an “Acquiring Fund”) as shown in the chart below, subject to approval by the shareholders of the Acquired Fund. If the shareholders of an Acquired Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Acquired Fund will be transferred to the corresponding Acquiring Fund and shareholders of the Acquired Fund will receive shares of a designated class of the corresponding Acquiring Fund in exchange for their shares. For each Acquired Fund, except the money market funds, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Acquiring Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Acquiring Fund. For each Acquired Fund that is a money market fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Trust Class shares of the corresponding Acquiring Fund. Shareholders of each Acquired Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008, except for Intermediate-Term Tax-Exempt Fund and New York Intermediate-Term Tax-Exempt Fund which are currently expected to be held in the second quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.

Acquired Fund	Acquiring Fund
Equity Income Fund	Columbia Dividend Income Fund
Real Estate Fund	Columbia Real Estate Equity Fund
International Equity Fund	International Fund
Short-Term Government Securities Fund	Columbia Short Term Bond Fund
Short-Term Tax-Exempt Securities Fund	Columbia Short Term Municipal Bond Fund
High Yield Fund	Columbia High Yield Opportunity Fund
Long-Term Tax-Exempt Fund	Columbia Tax-Exempt Fund
Intermediate-Term Tax-Exempt Fund	Columbia Intermediate Municipal Bond Fund
New York Intermediate-Term Tax-Exempt Fund	Columbia New York Intermediate Municipal Bond Fund
California Short-Intermediate Term Tax-Exempt Income Fund	Columbia California Intermediate Municipal Bond Fund
Treasury Money Fund	Columbia Government Reserves
Government Money Fund	Columbia Government Plus Reserves
Money Fund	Columbia Cash Reserves
Tax-Exempt Money Fund	Columbia Tax-Exempt Reserves
New York Tax-Exempt Money Fund	Columbia New York Tax-Exempt Reserves

112

APPROVAL OF INVESTMENT ADVISORY AGREEMENTS

The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party to the advisory agreement (the “Independent Directors”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s board of directors or trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.

At a meeting held on September 27th and 28th 2007, the Board of Directors/Trustees (the “Board”) of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (each a “Company” and, together, the “Companies”), including a majority of the Independent Directors, approved the continuation of the Investment Advisory Agreements (the “Advisory Agreements”) by and between each Company and UST Advisers, Inc. and U.S. Trust New York Asset Management Division, a division of United States Trust Company, National Association (together, “U.S. Trust”) with respect to each series of each Company (each, a “Fund”).

In preparation for the meeting, the Board requested and reviewed a wide variety of materials provided by U.S. Trust and its affiliates, which included information about the operations and personnel of U.S. Trust, as well as the personnel and operations of its affiliates. In this regard, the Board received information about the large mutual fund business of Columbia Management Advisors, LLC and its affiliates (together, “Columbia”), which are, together with U.S. Trust, all under the control of Bank of America Corporation, and how the resources dedicated to the Columbia mutual fund business affect the Funds. The Board also received extensive information that was provided by or derived from information prepared by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Board also received a memorandum from counsel regarding the responsibilities of the Board for the approval of the Advisory Agreements. In addition, the Independent Directors received advice from independent counsel to the Independent Directors, met in executive session outside the presence of Company management and U.S. Trust personnel and participated in question and answer sessions with representatives of U.S. Trust.

The Board’s approval of the continuation of the Advisory Agreements was based on the consideration and evaluation of the information and material provided to the Board and a variety of specific factors discussed at the meetings, including:

Nature, Extent and Quality of Services.    The Board considered the nature, extent and quality of the services provided by U.S. Trust to the Funds under the Advisory Agreements and the resources of U.S. Trust and their affiliates, including Columbia, dedicated to the Funds. In this regard, the Board evaluated, among other things, U.S. Trust’s personnel, experience, performance history of various products, and compliance program. The Board considered that U.S. Trust and Columbia provide

113

substantial administrative, accounting and compliance services and provide oversight of third party service providers to the Funds. The Board considered representations of U.S. Trust that U.S. Trust and Columbia have allocated substantial resources and personnel, and have made significant financial expenditures and commitments, to the investment management and other operations of the Funds. The Board also considered the nature and quantity of additional resources that have been dedicated to the operations of the Funds since U.S. Trust had become affiliated with Columbia. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services to be provided by U.S. Trust to the Funds and the resources of the U.S. Trust and its affiliates dedicated to the Funds supported the renewal of the Advisory Agreements.

Fund Performance.    The Board considered Fund performance in determining whether to renew the Advisory Agreements. Specifically, the Board considered each Fund’s performance relative to a peer group of other mutual funds and appropriate indices/benchmarks, in light of total return, yield and market trends. As part of this review, the Board considered the composition of the peer groups, selection criteria and the reputation of third party providers who provided data for the peer group analysis. In evaluating the performance of each Fund, the Board considered both market risk and shareholder risk expectations for such Fund and whether, irrespective of relative performance, each Fund’s absolute performance was consistent with expectations for its investment methodology. The Board further considered the level of Fund performance in the context of its review of Fund expenses and U.S. Trust’s profitability discussed below. In the case of each Fund that had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Advisory Agreements. These factors varied from Fund to Fund, but included one or more of the following: (1) that the Fund’s performance, although lagging in certain recent periods, was strong over the longer term; (2) that the underperformance was attributable, to a significant extent, to investment decisions by U.S. Trust that were reasonable and consistent with the Fund’s investment objective and policies; (3) that each Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (4) that U.S. Trust has taken or is taking steps designed to help improve the Fund’s investment performance. Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of the Funds supported the renewal of the Advisory Agreements.

Fund Expenses.    With respect to the Funds’ expenses, the Board considered the rate of compensation called for by the Advisory Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of other comparable mutual funds, such peer groups and comparisons having been selected and calculated based on objective factors. The Board noted that with respect to the Funds, U.S. Trust had contractually committed to waive a portion of its fee and/or reimburse the Funds for a portion of their expenses to limit the Funds’ total operating expenses. In evaluating this information, the Board considered the nature and scope of services provided to the Funds. The Board also reviewed the fees charged by U.S. Trust to provide advisory services to other types of accounts with substantially similar investment objectives as the Funds and the differences in services and risks involved in managing such other accounts, including differences relating to compliance and regulatory burdens. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported the renewal of the Advisory Agreements.

Profitability.    With regard to profitability, the Board considered the compensation flowing to U.S. Trust and its affiliates, directly or indirectly. In this connection, the Board reviewed management’s

114

profitability analyses. The Board also considered any other benefits derived by U.S. Trust from its relationship with the Funds, such as whether, by virtue of its management of the Funds, it obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to U.S. Trust and its affiliates, the Board considered whether the varied levels of compensation and profitability under the Advisory Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of U.S. Trust is reasonable and supported the renewal of the Advisory Agreements.

Economies of Scale.    The Board considered the existence of any economies of scale and whether those economies are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by U.S. Trust. In this regard, and consistent with their consideration of fund expenses, the Board considered that U.S. Trust has previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer Funds or Funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such Funds at subsidized expense levels. The Board also reviewed asset flows in the Funds, noting that a relatively few number of Funds had experienced significant asset growth, while most of the Funds had experienced only moderate growth, if any. After reviewing such information, the Board determined not to seek advisory fee breakpoints at this time. The Board noted that it would continue to monitor the growth in assets of the Funds as compared to expenses and asked U.S. Trust and Columbia to continue to monitor the Funds’ expenses and asset sizes in connection with determining when economies of scale would dictate that advisory fee breakpoints were advisable.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including all of the Independent Directors, unanimously approved the continuation of the Advisory Agreements and concluded that the compensation under the Advisory Agreements is fair and reasonable in light of the services and expenses and such other matters as the Board considered to be relevant in the exercise of their reasonable judgment. In the course of their deliberations, the Board did not identify any particular information or factor that was all-important or controlling.

115

[THIS PAGE INTENTIONALLY LEFT BLANK]

116

PROXY VOTING RESULTS

A Special Meeting of Shareholders of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust and each of their Funds was held on March 30, 2007, for the purpose of seeking shareholder approval of the following proposal: to approve new investment advisory agreements by and among USTA, USTNA and the Companies, on behalf of the Funds. The Special Meeting for Excelsior Funds with respect to the Value and Restructuring Fund, Energy and Natural Resources and Treasury Money Funds was adjourned for the purpose of soliciting additional proxies, and subsequently held on April 30, 2007. The number of votes necessary to conduct the Special Meetings and approve the proposal was obtained. The results of the votes of shareholders are listed below:

EXCELSIOR FUNDS, INC.

Fund	For	Against	Abstain
Value and Restructuring Fund	71,659,202.229	1,308,059.398	2,313,244.343
Energy and Natural Resources Fund	10,149,963.059	261,710.922	349,760.892
Treasury Money Fund	147,661,994.420	8,327.040	953,491.100

IMPORTANT INFORMATION ABOUT THIS REPORT

Excelsior Equity Funds

The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Excelsior Equity Funds.

A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund’s voting records are available (i) on the Securities and Exchange Commission’s website at www.sec.gov, and (ii) without charge, upon request, by calling 1-800-368-0346. Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC’s website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds’ website.

Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’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.

Please consider the investment objectives, risks, charges and expenses for the fund carefully before investing. Contact your financial advisor for a prospectus, which contains this and other important information about the fund. You should read it carefully before you invest.

United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member of FINRA, SIPC, part of Columbia Management. USTA, USTNA and Columbia Management Distributor, Inc. are affiliates of Bank of America Corporation.

117

^©2007 Columbia Management Distributors, Inc.

One Financial Center, Boston, MA 02111-2621

800-345-6611 www.columbiafunds.com

SHC-44/136215-0907 (11/07) 07/46190

FIXED INCOME FUNDS

SEMI ANNUAL REPORT

September 30, 2007

NOT FDIC INSURED	May Lose Value
NOT BANK ISSUED	No Bank Guarantee

TABLE OF CONTENTS

	PAGE
LETTER TO SHAREHOLDERS	2
UNDERSTANDING YOUR EXPENSES
California Short-Intermediate Term Tax-Exempt Income Fund	4
Core Bond Fund	5
High Yield Fund	6
Intermediate-Term Bond Fund	7
Intermediate-Term Tax-Exempt Fund	8
Long-Term Tax-Exempt Fund	9
New York Intermediate-Term Tax-Exempt Fund	10
Short-Term Government Securities Fund	11
Short-Term Tax-Exempt Securities Fund	12
PORTFOLIOS OF INVESTMENTS
California Short-Intermediate Term Tax-Exempt Income Fund	13
Core Bond Fund	16
High Yield Fund	21
Intermediate-Term Bond Fund	25
Intermediate-Term Tax-Exempt Fund	29
Long-Term Tax-Exempt Fund	33
New York Intermediate-Term Tax-Exempt Fund	36
Short-Term Government Securities Fund	40
Short-Term Tax-Exempt Securities Fund	43
STATEMENTS OF ASSETS AND LIABILITIES	46
STATEMENTS OF OPERATIONS	48
STATEMENTS OF CHANGES IN NET ASSETS	50
FINANCIAL HIGHLIGHTS	62
NOTES TO FINANCIAL STATEMENTS	71
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS	91
IMPORTANT INFORMATION ABOUT THIS REPORT	97

The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for an Excelsior Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Excelsior Fund. References to specific securities should not be constructed as a recommendation or investment advice.

Investments in fixed income securities are subject to interest rate risks. The principal value of a bond falls when interest rates rise and rises when interest rates fall. During periods of rising interest rates, the value of a bond investment is at greater risk than during periods of stable or falling rates.

LETTER TO SHAREHOLDERS

Dear Shareholder:

Allow me to take this opportunity to formally welcome you to the Columbia Funds family. In July, U.S. Trust Advisors was acquired by Bank of America (parent company of Columbia Management Group). The Excelsior Funds are now distributed by Columbia Management Distributors, Inc. The combined organization is committed to delivering unparalleled wealth management solutions and building deep, lasting relationships with our shareholders.

Your Excelsior Funds account will be serviced by Columbia Management Services, Inc., an experienced service provider in the industry. This team will process transactions, generate account statements and support your ongoing servicing needs.

As we complete the integration over the next several months, you will gain access to a broad array of investment choices including money market investments, mutual funds and 529 plans. Throughout this period of change, our goal is to ensure a smooth transition and provide services that we hope will exceed your expectations. We recommend you visit our website: www.columbiafunds.com for more information about our products and services. Those of you who receive your statements directly from Columbia Management can also register for on-line account access, which allows you to check your account balance, change your distribution options and make other account transactions. If you receive statements from your brokerage firm, please check with your financial advisor for service availability.

There’s a lot to know about Columbia Management

With $709.9 billion under management and a history that dates to the early 1900s, Columbia Management and its affiliates make up one of the nation’s largest and most experienced asset management companies.¹ We offer a comprehensive array of investment solutions, including equity, fixed-income and cash strategies. Our diverse investment solutions and our focus on the needs of our clients make Columbia Management the advisor of choice for individual, institutional and high-net-worth investors.

Welcome to Columbia Management. Thank you for your business — we’re pleased to have you as a customer.

Sincerely,

Christopher L. Wilson

President, Excelsior Funds

2

About Christopher L. Wilson

Chris Wilson is head of mutual funds for Columbia Management, responsible for the day-to-day delivery of mutual fund products and services to the firm’s investors. With the exception of distribution, Mr. Wilson oversees all aspects of the mutual fund services operation including treasury, investment accounting, product development and shareholder and broker services. Mr. Wilson serves as Columbia Management’s chief liaison to the mutual fund boards of trustees. He joined Columbia Management in 2004 and has been a member of the investment community since 1980.

Columbia Management Group, LLC (“Columbia Management”) is the investment management arm of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member FINRA and SIPC. Columbia Management Distributors, Inc. is part of Columbia Management and an affiliate of Bank of America Corporation.

¹ Columbia Management and its affiliates comprise the wealth and investment management division of Bank of America Corporation. As of September 30, 2007, Columbia Management and its affiliates managed assets of $709.9 billion. Columbia Management and its affiliates’ managed assets consist of assets under the discretionary management of the registered investment advisors, Columbia Management Advisors, LLC ($377.9 billion), Columbia Wanger Asset Management, L.P. ($38.5 billion) and Marsico Capital Management, LLC ($103.4 billion); U.S. Trust, Bank of America Private Wealth Management; Banc of America Investment Services, Inc.; Banc of America Investment Advisors, Inc.; Bank of America Capital Advisors, LLC; Premier Banking & Investments, and United States Trust, National Association, including its subsidiary, UST Advisers, Inc. ($116.5 billion).

3

Understanding Your Expenses — California Short-Intermediate Term Tax-Exempt Income Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
04/01/07 – 09/30/07
Shares	1,000.00	1,000.00	1,019.30	1,022.50	2.52	2.53	0.50

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

4

Understanding Your Expenses — Core Bond Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,019.90	1,020.50	4.54	4.55	0.90

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

5

Understanding Your Expenses — High Yield Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,000.85	1,019.75	5.25	5.30	1.05

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

6

Understanding Your Expenses — Intermediate-Term Bond Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,020.80	1,021.25	3.79	3.79	0.75

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

7

Understanding Your Expenses — Intermediate-Term Tax-Exempt Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,013.10	1,021.75	3.27	3.29	0.65

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

8

Understanding Your Expenses — Long-Term Tax-Exempt Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,002.10	1,021.00	4.00	4.04	0.80

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

9

Understanding Your Expenses — New York Intermediate-Term Tax-Exempt Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,013.40	1,021.00	4.03	4.04	0.80

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

10

Understanding Your Expenses — Short-Term Government Securities Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses by share class

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,025.70	1,021.30	3.75	3.74	0.74

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the administrator not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

11

Understanding Your Expenses — Short-Term Tax-Exempt Securities Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,018.00	1,022.00	3.03	3.03	0.60

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

12

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

California Short-Intermediate Term Tax-Exempt Income Fund

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — 80.05%
$	1,500,000	Anaheim, California, Public Financing Authority Revenue Bonds, Distribution Systems, (AMBAC)	5.00	%	10/01/13	$	1,615,485
	2,000,000	Bay Area, California, Infrastructure Financing Authority State Payment Acceleration Notes, (FGIC)	5.00		08/01/17		2,148,780
	1,000,000	California State Department of Transportation Revenue Bonds, Federal Highway Grant Anticipation Bonds, Series A, (FGIC)	4.50		02/01/13		1,047,200
	1,000,000	California State Department of Water Resources Central Valley Project Revenue Bonds, Series Y	5.00		12/01/10		1,045,880
	1,500,000	California State Department of Water Resources Water Revenue Bonds, Series W, (AMBAC)	5.50		12/01/09		1,565,100
	1,000,000	California State Economic Recovery, Special Sales Tax Revenue Bonds, Series A, (FGIC)	5.25		07/01/14		1,097,520
	2,000,000	California State General Obligation Bonds,	5.00		02/01/11		2,087,960
	1,000,000	California State University Systemwide Revenue Bonds, Series A, (AMBAC)	5.00		11/01/12		1,068,410
	1,000,000	California Statewide Communities Development Authority Revenue Bonds, California Endowment	5.00		07/01/13		1,077,560
	3,000,000	California Statewide Communities Development Authority Revenue Bonds, John Muir Health, Series A	5.00		08/15/17		3,148,560

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	1,000,000	Central Valley, California, School District Financing Authority Revenue Bonds, Series A, (MBIA)	6.15	%	08/01/09	$	1,047,610
	1,000,000	Contra Costa, California, Transportation Authority Sales Tax Revenue Bonds, Series A, (FGIC)	6.00		03/01/08		1,010,620
	975,000	Foothill- De Anza, California, Community College District General Obligation Bonds, (FGIC)	5.00		08/01/14		1,035,996
	355,000	Golden State Tobacco Securitization Corporation, California, Tobacco Settlement Revenue Bonds, Enhanced-Asset Backed, Series A	5.00		06/01/15		355,334
	3,500,000	Los Angeles County, California, Metropolitan Transportation Authority Sales Tax Revenue Bonds, Series A, (FSA)	5.25		07/01/10		3,637,515
	1,000,000	Los Angeles, California, Department of Water & Power Revenue Bonds, Power System, Series A, Sub-Series A-1, (MBIA)	5.00		07/01/14		1,071,630
	1,000,000	Los Angeles, California, General Obligation Bonds, Series A, (MBIA)	4.00		09/01/13		1,024,750
	1,000,000	Los Angeles, California, Sanitation Equipment Charge Revenue Bonds, (FGIC)	5.00		02/01/13		1,071,350
	1,000,000	Los Angeles, California, Sanitation Equipment Charge Revenue Bonds, Series A, (FSA)	5.00		02/01/10		1,034,310

See Notes to Financial Statements.

13

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

California Short-Intermediate Term Tax-Exempt Income Fund — (continued)

``Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	1,000,000	Napa County, California, Flood Protection & Watershed Improvement Authority, General Obligation Bonds, (AMBAC)	4.50	%	06/15/12	$	1,044,390
	1,150,000	Orange County, California, Local Transportation Authority Sales Tax Revenue Bonds, (AMBAC)	6.20		02/14/11		1,241,735
	1,000,000	Rancho, California, Water District Financing Authority Revenue Bonds, Series A, (FSA)	5.50		08/01/10		1,054,160
	1,000,000	San Diego County, California, Certificates of Participation, (AMBAC)	5.00		11/01/11		1,055,910
	1,000,000	San Diego, California, Public Facilities Financing Authority Sewer Revenue Bonds, (FGIC)	5.20		05/15/13		1,001,340
	1,000,000	San Diego, California, Public Facilities Financing Authority Water Revenue Bonds, (MBIA)	5.00		08/01/11		1,054,170
	1,000,000	San Francisco, California, City & County Public Utilities Communication Clean Water Revenue Bond, (MBIA)	5.00		10/01/13		1,072,740
	3,000,000	San Francisco, California, State Building Authority Lease Revenue Bonds, California State & San Francisco Civic Center, Series A	5.00		12/01/12		3,190,710
	1,000,000	San Mateo, Foster City, California, School Facilities Financing Authority Revenue Bonds, (FSA)	4.00		08/15/12		1,022,220
	1,075,000	Santa Clara County, California, Financing Authority Lease Revenue Bonds, Multiple Facilities Project, Series A, (AMBAC)	4.50		05/15/12		1,091,856

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	1,000,000	Southern California Public Power Authority Revenue Bonds, Transmission Project, Series A, (MBIA)	5.25	%	07/01/09	$	1,022,820
		TOTAL TAX-EXEMPT SECURITIES (Cost $40,895,258)					41,043,621
	TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS(a) – 12.23%
	2,000,000	Riverside, California, Water Revenue Bonds, (FGIC) (Prerefunded 10/01/11 @101)	5.00		10/01/26		2,132,560
	1,000,000	Sacramento, California, City Financing Authority Revenue Bonds, City Hall, Series A, (FSA) (Prerefunded 12/01/12 @100)	5.25		12/01/17		1,083,110
	3,000,000	San Diego County, California, Water Authority Certificates of Participation, Series A, (FGIC) (Prerefunded 05/01/08 @101)	5.00		05/01/14		3,057,180
		TOTAL TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS (Cost $6,353,897)					6,272,850
Shares
	REGISTERED INVESTMENT COMPANIES – 4.78%
	1,219,510	BlackRock California Money Fund (7 day yield of 3.63%)					1,219,510
	1,232,718	Federated California Money Fund (7 day yield of 3.52%)					1,232,718
		TOTAL REGISTERED INVESTMENT COMPANIES (Cost $2,452,228)					2,452,228

TOTAL INVESTMENTS (Cost $49,701,383)(b)	97.06	%	$	49,768,699
OTHER ASSETS IN EXCESS OF LIABILITIES	2.94			1,506,274
NET ASSETS	100.00	%	$	51,274,973

(a) The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest.

(b) Cost for federal income tax purposes is $49,701,383.

AMBAC—American Municipal Bond Assurance Corp.

FGIC—Financial Guaranty Insurance Corp.

FSA—Financial Security Assurance

MBIA—Municipal Bond Insurance Association

See Notes to Financial Statements.

14

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

California Short-Intermediate Term Tax-Exempt Income Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Portfolio Diversification	% of Net Assets	Value
Revenue Bonds	67.86	$	34,794,615
Prerefunded	12.23		6,272,850
General Obligation Bonds	10.13		5,193,096
Registered Investment Companies	4.78		2,452,228
Certificates of Participation	2.06		1,055,910
Total Investments	97.06	$	49,768,699
Other Assets in Excess of Liabilities	2.94		1,506,274
Net Assets	100.00	$	51,274,973

See Notes to Financial Statements.

15

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Core Bond Fund

Principal Amount			Rate		Maturity Date	Value
	ASSET-BACKED SECURITIES — 2.34%
$	4,200,000	Capital Auto Receivables Asset Trust, 2006-SN1A B(a)	5.50	%	04/20/10	$	4,189,576
	2,015,000	Capital Auto Receivables Asset Trust, 2007-3 A4	5.00		03/17/14		2,020,575
	6,765,000	Citibank Credit Card Issuance Trust, 2003-A10	4.75		12/10/15		6,588,500
		TOTAL ASSET-BACKED SECURITIES (Cost $12,779,089)					12,798,651
	COLLATERALIZED MORTGAGE OBLIGATIONS — 6.99%
		NON-GOVERNMENTAL AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS — 6.00%
	435,193	Bear Stearns Adjustable Rate Mortgage Trust, 2004-10 15A1(b)	4.60		01/25/35		433,167
	1,794,354	Citigroup Mortgage Loan Trust, 2004-HYB4 WA(b)	4.45		12/25/34		1,768,065
	1,671,274	Countrywide Alternative Loan Trust, 2004-16CB 1A2	6.00		10/25/34		1,655,085
	2,550,697	Countrywide Alternative Loan Trust, 2004-22CB 1A1	5.50		07/25/34		2,529,217
	6,648,497	Indymac Index Mortgage Loan Trust, 2004-AR4 3A(b)	4.70		08/25/34		6,659,512
	7,238,080	JP Morgan Mortgage Trust, 2005-A6 1A1(b)	5.14		09/25/35		7,153,469
	10,195,682	Wells Fargo Mortgage Backed Securities Trust, 2004-EE 3A1(b)	3.99		12/25/34		10,079,593
	2,647,086	Wells Fargo Mortgage Backed Securities Trust, 2005-AR1 1A1(b)	4.54		02/25/35		2,616,011
							32,894,119
		FEDERAL HOME LOAN MORTGAGE CORPORATION — 0.43%
	2,306,295	2333 UZ	6.50		07/15/31		2,340,141
		FEDERAL NATIONAL MORTGAGE ASSOCIATION — 0.56%
	3,080,000	2003-17 QT	5.00		08/25/27		3,075,934
		TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $38,670,456)					38,310,194

Principal Amount			Rate		Maturity Date	Value
	COMMERCIAL MORTGAGE-BACKED SECURITIES — 16.60%
$	4,225,000	Asset Securitization Corp., 1997-D4 A4(b)	8.07	%	04/14/29	$	4,397,171
	2,497,000	Bank of America Commercial Mortgage, Inc., 2004-1 A4	4.76		11/10/39		2,409,425
	5,000,000	Bear Stearns Commercial Mortgage Securities, 2006-PW13 A3	5.52		09/11/41		5,006,421
	1,000,000	Credit Suisse First Boston Mortgage Securities Corp., 2002-CKS4 G(a)(b)	6.01		11/15/36		983,412
	6,775,000	GE Capital Commerical Mortgage Corp., 2000-1 Cl(b)	6.73		01/15/33		7,110,024
	1,781,000	GMAC Commercial Mortgage Securities, 1999-C1(b)	7.06		05/15/33		1,821,061
	3,449,000	Greenwich Capital Commercial Funding Corp., 2004-GG1 A1(b)	5.32		06/10/36		3,425,221
	13,080,000	GS Mortgage Securities Corp. II, 2007-GG10 A4(b)	5.99		08/10/45		13,302,550
	5,700,000	Merrill Lynch/Countrywide Commercial Mortgage Trust, 2007-8 A3(b)	6.16		08/12/49		5,838,328
	3,150,000	Morgan Stanley Dean Witter Capital I, 2000-LIF2 C(b)	7.50		10/15/33		3,362,340
	1,245,000	Morgan Stanley Dean Witter Capital I, 2003-TOP9 A2	4.74		11/13/36		1,215,146
	5,571,000	Nomura Asset Securities Corp., 1998-D6 A4(b)	7.62		03/15/30		6,286,130
	4,225,000	Wachovia Bank Commercial Mortgage Trust, 2002- C1 A4	6.29		04/15/34		4,408,559
	3,601,000	Wachovia Bank Commercial Mortgage Trust, 2003-C9 A3	4.61		12/15/35		3,551,734
	6,099,000	Wachovia Bank Commercial Mortgage Trust, 2004-C12 A2	5.00		07/15/41		6,091,863

See Notes to Financial Statements.

16

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Core Bond Fund — (continued)

Principal Amount			Rate		Maturity Date	Value
	COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
$	3,905,000	Wachovia Bank Commercial Mortgage Trust, 2004-C12 A3(b)	5.23	%	07/15/41	$	3,908,339
	17,926,000	Wachovia Bank Commercial Mortgage Trust, 2005-C20 A5(b)	5.09		07/15/42		17,834,208
		TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $91,058,408)					90,951,932
	CORPORATE BONDS — 18.56%
	2,615,000	America Movil S.A. de C.V.	5.50		03/01/14		2,577,595
	5,700,000	Bank One Corp.	7.88		08/01/10		6,098,567
	6,000,000	Barclays Bank PLC(a)(b)	5.93		12/31/49		5,692,542
	1,620,000	Bear Stearns Co., Inc.	5.70		11/15/14		1,586,030
	5,520,000	Bottling Group LLC	5.50		04/01/16		5,527,397
	2,300,000	British Telecommunications PLC	9.13		12/15/30		3,045,665
	2,715,000	Caterpillar Financial Services Corp.	5.85		09/01/17		2,739,723
	265,000	Caterpillar, Inc.	5.70		08/15/16		264,432
	5,715,000	Citigroup, Inc.	5.25		02/27/12		5,713,794
	2,600,000	Comcast Cable Holdings LLC	9.80		02/01/12		3,009,373
	1,441,000	Daimler Chrysler N.A. Holding Corp.	7.20		09/01/09		1,492,657
	2,000,000	Deutsche Telekom International Finance	5.38		03/23/11		2,000,464
	1,310,000	Deutsche Telekom International Finance, Multi-Coupon Bond	8.00		06/15/10		1,403,247
	1,500,000	Deutsche Telekom International Finance, Multi-Coupon Bond	8.25		06/15/30		1,836,244
	1,700,000	Ford Motor Credit Co.	8.63		11/01/10		1,685,319
	1,400,000	General Electric Capital Corp.	5.00		11/15/11		1,393,676
	1,695,000	General Electric Capital Corp.	5.88		02/15/12		1,739,592
	2,995,000	General Electric Capital Corp.	6.00		06/15/12		3,088,279
	2,710,000	General Mills, Inc.	5.65		09/10/12		2,734,127
	1,185,000	Georgia Power Co.	5.70		06/01/17		1,184,983
	5,834,000	HSBC Finance Corp.	8.00		07/15/10		6,260,979
	2,000,000	Morgan Stanley	6.75		04/15/11		2,090,260

Principal Amount			Rate		Maturity Date	Value
	CORPORATE BONDS — (continued)
$	685,000	Nisource Finance Corp.	5.25	%	09/15/17	$	635,762
	3,825,000	Oracle Corp.	5.25		01/15/16		3,724,552
	1,441,000	Prudential Financial, Inc.	5.10		09/20/14		1,389,125
	4,500,000	RBS Capital Trust III(b)(c)	5.51		09/29/49		4,210,375
	1,670,000	Sprint Capital Corp.	8.75		03/15/32		1,915,054
	4,100,000	Target Corp.	5.88		07/15/16		4,099,832
	2,183,000	Time Warner Cos., Inc.	7.25		10/15/17		2,322,247
	5,000,000	UBS Preferred Funding Trust I(b)	8.62		10/29/49		5,430,315
	1,600,000	UnitedHealth Group, Inc.(a)	6.00		06/15/17		1,598,685
	3,050,000	Virginia Electric & Power Co.	5.95		09/15/17		3,045,581
	1,735,000	Wal Mart Stores, Inc.	5.00		04/05/12		1,719,763
	2,441,000	Wal-Mart Stores, Inc.	4.13		02/15/11		2,371,334
	5,350,000	Wells Fargo & Co.	5.00		11/15/14		5,156,892
	950,000	Xerox Corp.	6.40		03/15/16		961,751
		TOTAL CORPORATE BONDS (Cost $101,964,345)					101,746,213
	TAX-EXEMPT SECURITY — 0.31%
	1,590,000	Massachusetts Bay Transportation Authority, Massachusetts Sales Tax, Revenue Bonds, Series A	5.00		07/01/31		1,712,414
		TOTAL TAX-EXEMPT SECURITY (Cost $1,751,974)					1,712,414
	U.S. GOVERNMENT AGENCY BONDS & NOTES — 0.97%
		FREDDIE MAC — 0.51%
	2,440,000		6.25		07/15/32		2,772,208
		RESOLUTION FUNDING CORPORATION — 0.46%
	4,851,000	Principal Only STRIPS(d)	0.00		07/15/20		2,541,614
		TOTAL U.S. GOVERNMENT AGENCY BONDS & NOTES (Cost $5,007,684)					5,313,822
	U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES — 41.62%
		FEDERAL HOME LOAN MORTGAGE CORPORATION — 10.35%
	6,057,871	Pool # 1G1898 ARM(b)	5.88		06/01/36		6,094,407
	2,387,637	Pool # A20105	5.00		04/01/34		2,283,536
	8,977,710	Pool # A47411	4.50		10/01/35		8,341,565
	2,071,262	Pool # A48132	7.00		12/01/35		2,139,598
	1,987,638	Pool # A58455	5.50		03/01/37		1,946,266

See Notes to Financial Statements.

17

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Core Bond Fund — (continued)

Principal Amount			Rate		Maturity Date	Value
	U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES — (continued)
		FEDERAL HOME LOAN MORTGAGE CORPORATION — (continued)
$	5,209,078	Pool # B19861	4.50	%	08/01/20	$	5,014,833
	2,583,561	Pool # C01811	5.00		04/01/34		2,470,917
	129,482	Pool # C71221	5.00		09/01/32		124,110
	18,495	Pool # C74339	5.00		12/01/32		17,727
	160,127	Pool # C74469	5.00		12/01/32		153,483
	31,925	Pool # C74676	5.00		12/01/32		30,601
	2,134,641	Pool # E96460	5.00		05/01/18		2,098,354
	4,327,452	Pool # G01842	4.50		06/01/35		4,020,816
	16,863,586	Pool # G18105	5.00		03/01/21		16,534,190
	2,322,051	Pool # J01383	5.50		03/01/21		2,315,556
	3,243,972	Pool # J02497	4.50		09/01/20		3,123,006
							56,708,965
		FEDERAL NATIONAL MORTGAGE ASSOCIATION — 29.41%
	177,052	Pool # 251502	6.50		02/01/13		181,844
	75,060	Pool # 252806	7.50		10/01/29		78,688
	1,093,661	Pool # 255896	6.50		08/01/35		1,114,884
	4,787,145	Pool # 256269	5.50		06/01/36		4,689,820
	9,803,967	Pool # 357824	5.50		06/01/35		9,614,491
	1,218,929	Pool # 387203	4.80		01/01/12		1,208,980
	1,040,831	Pool # 387204	4.80		01/01/12		1,032,336
	199,157	Pool # 443194	5.50		10/01/28		196,170
	3,847	Pool # 450846	5.50		12/01/28		3,789
	337,685	Pool # 452035	5.50		11/01/28		332,621
	2,265	Pool # 454758	5.50		12/01/28		2,231
	552,697	Pool # 561435	5.50		11/01/29		544,408
	299,509	Pool # 578543	5.50		04/01/31		294,385
	111,388	Pool # 627259	5.50		02/01/32		109,452
	953,853	Pool # 632551	5.50		02/01/32		937,275
	428,663	Pool # 632576	5.50		02/01/32		421,330
	208,532	Pool # 694655	5.50		04/01/33		204,838
	1,465,264	Pool # 702861	5.00		04/01/18		1,440,323
	1,334,444	Pool # 704440	5.00		05/01/18		1,311,729
	58,045	Pool # 710585	5.50		05/01/33		57,017
	349,465	Pool # 735224	5.50		02/01/35		343,274
	22,070,624	Pool # 745432	5.50		04/01/36		21,644,079
	949,818	Pool # 781859	4.50		12/01/34		881,642
	1,334,761	Pool # 786423 ARM(b)	4.59		07/01/34		1,324,902
	431,185	Pool # 797680	4.50		10/01/35		400,236
	647,787	Pool # 805373	4.50		01/01/35		601,290
	6,159,345	Pool # 805386 ARM(b)	4.85		01/01/35		6,095,520
	748,393	Pool # 812268	5.50		05/01/35		733,929
	1,008,991	Pool # 815479	4.50		03/01/35		936,575
	1,271,697	Pool # 819361	4.50		04/01/35		1,180,426
	535,391	Pool # 820492	5.50		05/01/35		525,044
	734,644	Pool # 820989	5.50		04/01/35		720,446
	709,774	Pool # 821567	5.50		06/01/35		696,056
	1,725,574	Pool # 822799	4.50		04/01/35		1,601,728
	6,085,226	Pool # 829321	4.50		09/01/35		5,648,482
	8,082,723	Pool # 831926	6.00		12/01/36		8,096,181
	4,904,429	Pool # 835751	4.50		08/01/35		4,552,433
	1,786,633	Pool # 835760	4.50		09/01/35		1,658,404

Principal Amount			Rate		Maturity Date	Value
	U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES — (continued)
		FEDERAL NATIONAL MORTGAGE ASSOCIATION — (continued)
$	1,610,049	Pool # 836512	4.50	%	10/01/20	$	1,550,626
	4,087,042	Pool # 839240	4.50		09/01/35		3,793,711
	2,600,373	Pool # 843510	4.50		11/01/20		2,504,400
	1,616,173	Pool # 844797	4.50		10/01/35		1,500,179
	1,793,946	Pool # 844901	4.50		10/01/20		1,727,736
	5,683,479	Pool # 867438	4.50		05/01/36		5,272,820
	4,645,441	Pool # 880084	6.00		03/01/36		4,653,176
	5,458,986	Pool # 883084	6.50		07/01/36		5,559,159
	696,437	Pool # 893426	6.00		09/01/36		697,596
	2,972,931	Pool # 895271	6.50		09/01/36		3,027,484
	4,705,343	Pool # 910390	5.00		03/01/37		4,488,299
	1,959,597	Pool # 916370	5.00		05/01/37		1,869,206
	8,071,805	Pool # 917906	5.00		05/01/37		7,699,475
	30,111,220	Pool # 937282	5.00		05/01/37		28,722,273
	6,612,962	Pool # 946450 ARM(b)	6.14		09/01/37		6,718,024
							161,201,422
		GOVERNMENT NATIONAL MORTGAGE ASSOCIATION — 1.86%
	281,198	Pool # 002562	6.00		03/20/28		283,552
	1,731,128	Pool # 003413	4.50		07/20/33		1,617,051
	329,691	Pool # 267812	8.50		06/15/17		353,978
	1,569,095	Pool # 3442	5.00		09/20/33		1,508,328
	2,732	Pool # 356873	6.50		05/15/23		2,802
	29,201	Pool # 434772	9.00		06/15/30		31,704
	46,324	Pool # 471660	7.50		03/15/28		48,645
	118,488	Pool # 472028	6.50		05/15/28		121,587
	53,263	Pool # 475847	6.50		06/15/28		54,656
	20,664	Pool # 479087	8.00		01/15/30		21,983
	296,926	Pool # 479088	8.00		01/15/30		315,878
	114,538	Pool # 503711	7.00		05/15/29		120,024
	9,599	Pool # 525556	8.00		01/15/30		10,212
	10,842	Pool # 525945	9.00		07/15/30		11,772
	106,859	Pool # 568670	6.50		04/15/32		109,470
	199,220	Pool # 575441	6.50		12/15/31		204,187
	558,400	Pool # 598127	5.50		03/15/18		559,374
	1,199,530	Pool # 607668	5.50		02/15/18		1,201,623
	757,885	Pool # 615639	4.50		09/15/33		712,679
	146,831	Pool # 780086	8.50		11/15/17		156,855
	644,617	Pool # 780548	8.50		12/15/17		688,622
	484,872	Pool # 780865	9.50		11/15/17		525,574
	163,538	Pool # 781036	8.00		10/15/17		172,399
	614,937	Pool # 781084	9.00		12/15/17		658,553
	147,181	Pool # 80185 ARM(b)	6.38		04/20/28		148,403
	155,788	Pool # 80205 ARM(b)	6.38		06/20/28		157,084
	384,378	Pool # 80311 ARM(b)	5.50		08/20/29		388,284
							10,185,279
		TOTAL U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES (Cost $229,035,737)					228,095,666

See Notes to Financial Statements.

18

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Core Bond Fund — (continued)

Principal Amount				Rate		Maturity Date	Value
	U.S. GOVERNMENT SECURITIES — 11.52%
			U.S. TREASURY INFLATION PROTECTED BONDS — 1.63%
$	1,183,718			2.00	%	01/15/14	$	1,166,701
	2,762,700			2.38		01/15/25		2,787,089
	4,916,699			2.38		01/15/27		4,976,624
								8,930,414
			U.S. TREASURY BONDS — 9.89%
	19,880,000	(e)		4.50		02/28/11		20,158,002
	21,810,000			7.63		11/15/22		28,206,459
	4,635,000			6.63		02/15/27		5,632,610
	200,000			4.75		02/15/37		197,233
								54,194,304
			TOTAL U.S. GOVERNMENT SECURITIES (Cost $62,617,784)					63,124,718
Contracts
	CALL OPTION PURCHASED — 0.00%*
	10		Euro Dollar Future, Expires 12/17/07 strike price 95.75					938
			TOTAL CALL OPTION PURCHASED (Cost $3,025)					938
Principal Amount
	REPURCHASE AGREEMENT — 0.62%
$	3,407,000		Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $3,475,725 (repurchase proceeds $3,408,036)					3,407,000
			TOTAL REPURCHASE AGREEMENT (Cost $3,407,000)					3,407,000

TOTAL INVESTMENTS (Cost $546,295,502)(f)	99.53	%	$	545,461,548
OTHER ASSETS IN EXCESS OF LIABILITIES	0.47			2,569,168
NET ASSETS	100.00	%	$	548,030,716

(a) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $12,464,215, which represents 2.27% of net assets.

(b) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(c) Perpetual Security. Stated maturity is first par call date.

(d) Zero-coupon bond.

(e) A portion of this security with market value of $253,496 is pledged as collateral for open futures contracts.

(f) Cost for federal income tax purposes is $546,295,502.

 * Rounds to less than 0.01%

ARM—Adjustable Rate Mortgage

LLC—Limited Liability Company

Multi-Coupon Bond—Coupon rate may increase or decrease in response to a change in the quality rating by an independent rating agency.

PLC—Public Limited Company

STRIPS—Separately Traded Registered Interest and Principal Securities

Contracts		Value			Unrealized Appreciation (Depreciation)
FUTURES CONTRACTS
Long —
63	U.S. 2 Year Treasury Note, expiring 12/31/07 (notional amount $12,983,079)	$	13,043,953		$	60,874
Short —
(30)	U.S. Long-Term Treasury Bond expiring 12/19/07 (notional amount $(3,339,534))		(3,340,312	)		(778	)
TOTAL FUTURES CONTRACTS					$	60,096

See Notes to Financial Statements.

19

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Core Bond Fund — (continued)

* Rounds to less than 0.01%.

INTEREST RATE SWAP AGREEMENT
Counterparty	Notional Amount		Receiving Leg		Paying Leg	Expiration	Unrealized Appreciation
Goldman Sachs	$	5,000,000	5.36	%	3-month USD LIBOR	07/24/09	$	4,451

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Portfolio Diversification	% of Net Assets		Value
U.S. Government & Agency Securities	54.11		$	296,534,206
Corporate Bonds	18.56			101,746,213
Commercial Mortgage-Backed Securities	16.60			90,951,932
Collateralized Mortgage Obligations	6.99			38,310,194
Asset-Backed Securities	2.34			12,798,651
Repurchase Agreement	0.62			3,407,000
Tax-Exempt Security	0.31			1,712,414
Call Option Purchased	0.00	*		938
Total Investments	99.53		$	545,461,548
Other Assets in Excess of Liabilities	0.47			2,569,168
Net Assets	100.00		$	548,030,716

See Notes to Financial Statements.

20

Excelsior Funds Trust

Portfolio of Investments — September 30, 2007 (Unaudited)

High Yield Fund

Principal Amount			Rate		Maturity Date	Value
	CORPORATE BONDS — 92.54%
		ADVERTISING PERIODICALS — 2.45%
$	60,000	CanWest Media Works, Inc.	8.00	%	09/15/12	$	58,800
	1,000,000	Dex Media Finance/West	8.50		08/15/10		1,027,500
	1,000,000	R.H. Donnelley Finance Corp.(a)	10.88		12/15/12		1,065,000
	40,000	R.H. Donnelley Finance Corp.	10.88		12/15/12		42,600
							2,193,900
		CABLE TV — 2.31%
	1,000,000	Echostar DBS Corp.	7.13		02/01/16		1,027,500
	1,000,000	NTL Cable PLC	9.13		08/15/16		1,037,500
							2,065,000
		CASINO HOTELS — 5.91%
	1,000,000	American Casino & Entertainment	7.85		02/01/12		1,027,500
	1,000,000	Boyd Gaming Corp.	7.13		02/01/16		967,500
	1,500,000	Majestic Star LLC	9.75		01/15/11		1,260,000
	1,000,000	MGM Mirage, Inc.	8.50		09/15/10		1,045,000
	1,000,000	MGM Mirage, Inc.	7.50		06/01/16		993,750
							5,293,750
		CELLULAR TELECOM — 1.57%
	330,000	American Cellular Corp.	10.00		08/01/11		344,850
	1,000,000	Dobson Communications Corp.	8.88		10/01/13		1,065,000
							1,409,850
		CHEMICALS - DIVERSIFIED — 2.26%
	37,000	EquiStar Chemicals LP/EquiStar Funding Corp.	10.13		09/01/08		38,203
	1,000,000	Lyondell Chemical Co.	10.50		06/01/13		1,075,000
	1,000,000	Nell AF Sarl(a)	8.38		08/15/15		912,500
							2,025,703
		CHEMICALS – PLASTICS — 0.58%
	500,000	PolyOne Corp.	8.88		05/01/12		515,000
							515,000
		CHEMICALS – SPECIALTY — 1.11%
	1,000,000	Tronox Worldwide LLC/Tronox Finance Corp.	9.50		12/01/12		997,500
							997,500
		COAL — 1.04%
	1,000,000	Massey Energy Co.	6.88		12/15/13		932,500
							932,500

Principal Amount			Rate		Maturity Date	Value
	CORPORATE BONDS — (continued)
		COMMERCIAL SERVICES — 2.24%
$	1,000,000	Iron Mountain, Inc.	8.63	%	04/01/13	$	1,012,500
	1,000,000	Iron Mountain, Inc.	7.75		01/15/15		997,500
							2,010,000
		COMPUTER SERVICES — 1.17%
	1,000,000	Sungard Data Systems, Inc.	10.25		08/15/15		1,045,000
							1,045,000
		CONTAINERS – METAL/GLASS — 2.28%
	1,000,000	Crown Americas	7.75		11/15/15		1,032,500
	1,000,000	Owens-Illinois, Inc.	7.50		05/15/10		1,007,500
							2,040,000
		CONTAINERS – PAPER/PLASTIC — 4.55%
	1,000,000	BPC Holding Corp.	8.88		09/15/14		1,022,500
	500,000	Graham Packaging Co.	8.50		10/15/12		496,250
	500,000	Graham Packaging Co.	9.88		10/15/14		495,000
	1,000,000	Pregis Corp.	12.38		10/15/13		1,080,000
	1,000,000	Stone Container	8.00		03/15/17		982,500
							4,076,250
		COSMETICS & TOILETRIES — 1.54%
	1,500,000	Del Laboratories, Inc.	8.00		02/01/12		1,380,000
							1,380,000
		DISTRIBUTION/WHOLESALE — 1.11%
	1,000,000	Nebraska Book Co.	8.63		03/15/12		997,500
							997,500
		DIVERSIFIED MANUFACTURING OPERATIONS — 2.17%
	1,000,000	Bombardier, Inc.(a)	8.00		11/15/14		1,047,500
	1,000,000	Harland Clarke Holdings Corp.	9.50		05/15/15		892,500
							1,940,000
		ELECTRONIC COMPONENTS – SEMICONDUCTORS — 2.16%
	1,000,000	Amkor Technologies, Inc.	9.25		06/01/16		1,010,000
	1,000,000	Freescale Semiconductor PIK	9.13		12/15/14		925,000
							1,935,000

See Notes to Financial Statements.

21

Excelsior Funds Trust

Portfolio of Investments — September 30, 2007 (Unaudited)

High Yield Fund — (continued)

Principal Amount			Rate		Maturity Date	Value
	CORPORATE BONDS — (continued)
		FINANCE – AUTO LOANS — 3.76%
$	1,354,000	Ford Motor Credit Co.	9.75	%	09/15/10	$	1,381,332
	2,000,000	General Motors Acceptance Corp.	7.75		01/19/10		1,983,728
							3,365,060
		FOOD & KINDRED PRODUCTS — 1.06%
	1,000,000	Pinnacle Foods Finance LLC(a)	9.25		04/01/15		952,500
							952,500
		FOOD – MISCELLANEOUS AND DIVERSIFIED — 2.25%
	1,000,000	Del Monte Corporation	8.63		12/15/12		1,015,000
	1,000,000	Del Monte Corporation	6.75		02/15/15		960,000
	40,000	Dole Foods Co.	7.25		06/15/10		37,800
							2,012,800
		FUNERAL SERVICES & RELATED ITEMS — 1.65%
	1,500,000	Service Corp. International	7.00		06/15/17		1,473,750
							1,473,750
		HEAVY CONSTRUCTION EQUIPMENT RENTAL — 1.07%
	1,000,000	Ahern Rentals, Inc.	9.25		08/15/13		962,500
							962,500
		HOME FURNISHINGS — 2.20%
	1,000,000	Sealy Mattress Co.	8.25		06/15/14		1,007,500
	1,000,000	Simmons Co.	7.88		01/15/14		960,000
							1,967,500
		MACHINERY – FARM — 1.14%
	1,000,000	Case New Holland, Inc.	7.13		03/01/14		1,025,000
							1,025,000
		MACHINERY – GENERAL INDUSTRY — 1.11%
	1,000,000	The Manitowoc Co., Inc.	7.13		11/01/13		995,000
							995,000
		MEDICAL - HOSPITALS — 0.95 %
	1,000,000	HCA, Inc.	6.50		02/15/16		850,000
							850,000
		MULTI - LINE INSURANCE — 2.47%
	2,128,000	Hanover Insurance Group	7.63		10/15/25		2,207,942
							2,207,942

Principal Amount			Rate		Maturity Date	Value
	CORPORATE BONDS — (continued)
		MUSIC — 2.04%
$	2,100,000	Warner Music Group	7.38	%	04/15/14	$	1,827,000
							1,827,000
		OFFICE AUTOMATION & EQUIPMENT — 2.25%
	1,000,000	Ikon Office Solutions	7.75		09/15/15		1,005,000
	1,000,000	Xerox Capital Trust I	8.00		02/01/27		1,008,861
							2,013,861
		PAPER & RELATED PRODUCTS — 1.09%
	1,000,000	Mercer International, Inc.	9.25		02/15/13		977,500
							977,500
		PIPELINES — 2.20%
	1,500,000	Semgroup L.P.(a)	8.75		11/15/15		1,466,250
	500,000	Williams Cos.(a)	6.38		10/01/10		502,500
							1,968,750
		RACETRACKS — 1.14%
	1,000,000	Penn National Gaming, Inc.	6.75		03/01/15		1,020,000
							1,020,000
		REAL ESTATE MANAGEMENT/SERVICES — 0.95%
	1,000,000	Realogy Corp.(a)	10.50		04/15/14		852,500
							852,500
		RENTAL AUTO/EQUIPMENT — 2.16%
	1,000,000	Avis Budget Car Rental	7.75		05/15/16		980,000
	1,000,000	Rental Service Corp.	9.50		12/01/14		955,000
							1,935,000
		RESORTS/THEME PARKS — 1.13%
	1,000,000	Universal City Florida Holdings (b)	10.11		05/01/10		1,010,000
							1,010,000
		RETAIL - APPAREL/SHOE — 1.31%
	1,250,000	Burlington Coat Factory	11.13		04/15/14		1,168,750
							1,168,750
		RETAIL - BEDDING — 0.77%
	1,000,000	Linens ‘N Things, Inc.(b)	10.99		01/15/14		686,250
							686,250
		RETAIL - DRUG STORE — 1.01%
	1,000,000	Rite Aid Corp.	8.63		03/01/15		905,000
							905,000

See Notes to Financial Statements.

22

Excelsior Funds Trust

Portfolio of Investments — September 30, 2007 (Unaudited)

High Yield Fund — (continued)

Principal Amount			Rate		Maturity Date	Value
	CORPORATE BONDS — (continued)
		RETAIL – MAJOR DEPARTMENT STORE — 2.38%
$	1,000,000	Neiman Marcus Group, Inc. PIK	9.00	%	10/15/15	$	1,065,000
	1,000,000	Saks, Inc.	9.88		10/01/11		1,065,000
							2,130,000
		RETAIL – TOY STORE — 0.45%
	500,000	Toys R Us	7.38		10/15/18		401,250
							401,250
		RETAIL – VIDEO RENTAL — 1.51%
	1,500,000	Blockbuster, Inc.	9.00		09/01/12		1,350,000
							1,350,000
		RUBBER – TIRES — 0.05%
	41,000	Goodyear Tire & Rubber Co.	9.00		07/01/15		43,767
							43,767
		SATELLITE TELECOM — 2.54%
	650,000	Inmarsat Finance PLC	7.63		06/30/12		669,500
	1,500,000	Intelsat Bermuda Ltd.	11.25		06/15/16		1,606,875
							2,276,375
		SCHOOLS — 1.63%
	1,500,000	Knowledge Learning Center(a)	7.75		02/01/15		1,455,000
							1,455,000
		SPECIAL PURPOSE ENTITY — 4.80%
	3,200,000	Targeted Return Index Securities Trust (TRAIN), Series HY-1-2006(a)	7.55		05/01/16		3,136,288
	1,500,000	Wimar OPCO LLC(a)	9.63		12/15/14		1,162,500
							4,298,788
		TELEPHONE – INTEGRATED — 9.82%
	2,000,000	Cincinnati Bell, Inc.	8.38		01/15/14		1,995,000
	1,000,000	Citizens Communications	9.25		05/15/11		1,085,000
	649,000	Consolidated Communications Holding	9.75		04/01/12		655,490
	1,500,000	Hawaiian Telcom Communication	12.50		05/01/15		1,620,000
	1,250,000	Nordic Telephone Co. Holdings(a)	8.88		05/01/16		1,318,750
	1,000,000	Valor Telecom Enterprise	7.75		02/15/15		1,048,071
	1,000,000	Windstream Corp.	8.63		08/01/16		1,066,250
							8,788,561

Principal Amount			Rate		Maturity Date	Value
	CORPORATE BONDS — (continued)
		TELEVISION — 0.03%
$	26,000	Sinclair Broadcast Group	8.00	%	03/15/12	$	26,585
							26,585
		TRAVEL SERVICES — 1.17%
	1,000,000	Travelport LLC	11.88		09/01/16		1,047,500
							1,047,500
		TOTAL CORPORATE BONDS (Cost $83,729,945)					82,851,442
	BANK LOANS — 2.15%
		COMPUTER SERVICES — 2.15%
	2,000,000	First Data Corp.(b)	7.98		09/24/14		1,927,400
		TOTAL BANK LOANS (Cost $1,940,000)					1,927,400
Shares
	COMMON STOCK — 2.70%
		METAL – ALUMINUM — 2.70%
	127,380	Ormet Corp.(c)					2,420,220
		TOTAL COMMON STOCK (Cost $1,019,040)					2,420,220
Principal Amount
	REPURCHASE AGREEMENT — 3.44%
$	3,085,000	Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $3,150,175 (repurchase proceeds $3,085,938)					3,085,000
		TOTAL REPURCHASE AGREEMENT (Cost $3,085,000)					3,085,000

TOTAL INVESTMENTS (Cost $89,773,985)(d)	100.83	%	$	90,284,062
OTHER LIABILITIES IN EXCESS OF ASSETS	(0.83	)		(746,643	)
NET ASSETS	100.00	%	$	89,537,419

(a) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $13,871,288, which represents 15.49% of net assets.

(b) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

See Notes to Financial Statements.

23

Excelsior Funds Trust

Portfolio of Investments — September 30, 2007 (Unaudited)

High Yield Fund — (continued)

(c) Non-income producing security.

(d) Cost for federal income tax purposes is $89,735,824.

LLC—Limited Liability Company

L.P.—Limited Partnership

PIK—Payment-In-Kind

PLC—Public Limited Company

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Sector Diversification	% of Net Assets		Value
Consumer Cyclical	21.05		$	18,838,267
Communications	18.72			16,760,271
Consumer Non-Cyclical	13.48			12,069,050
Financial	13.11			11,734,290
Industrials	12.32			11,038,750
Basic Materials	7.74			6,935,923
Technology	7.73			6,921,261
Repurchase Agreement	3.44			3,085,000
Energy	3.24			2,901,250
Total Investments	100.83		$	90,284,062
Other Liabilities in Excess of Assets	(0.83	)		(746,643	)
Net Assets	100.00		$	89,537,419

See Notes to Financial Statements.

24

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Intermediate-Term Bond Fund

Principal Amount			Rate		Maturity Date	Value
	ASSET-BACKED SECURITIES — 2.11%
$	2,200,000	Capital Auto Receivables Asset Trust, 2006-SN1A B(a)	5.50	%	04/20/10	$	2,194,540
	2,000,000	Capital One Master Trust, 2001-6 C(a)	6.70		06/15/11		2,037,740
	2,665,000	Capital One Multi-Asset Execution Trust, 2005-A7 A7	4.70		06/15/15		2,624,197
	194,115	Chase Funding Mortgage Loan Asset Backed Certificates, 2003-3 2A2(b)	5.40		04/25/33		189,455
	2,385,000	USAA Auto Owner Trust, 2007-2 A4(c)	5.07		06/15/13		2,384,847
		TOTAL ASSET BACKED SECURITIES (Cost $9,503,971)					9,430,779
	COLLATERALIZED MORTGAGE OBLIGATIONS — 10.89%
		NON-GOVERNMENTAL AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS — 2.28%
	1,004,433	Bear Stearns ARM, 2004-1 11A3	6.11		04/25/34		1,022,876
	2,893,018	Countrywide Alternative Loan Trust, 2004-22CB 1A1	6.00		10/25/34		2,864,993
	3,322,000	Washington Mutual, 2005-AR5 A3(b)	4.67		05/25/35		3,294,541
	3,015,668	Wells Fargo Mortgage Backed Securities Trust, 2005-AR1 1A1(b)	4.54		02/25/35		2,980,266
							10,162,676
		FEDERAL HOME LOAN MORTGAGE CORPORATION — 0.64%
	2,909,792	R001 AE	4.38		04/15/15		2,860,219
							2,860,219
		FEDERAL NATIONAL MORTGAGE ASSOCIATION —3.62%
	3,200,000	2003-17 QT	5.00		08/25/27		3,195,776
	3,995,000	2006-67 PC	5.50		03/25/33		3,959,207
	9,047,712	2007-35 DH	5.00		09/25/33		9,005,844
							16,160,827
		GOVERNMENT NATIONAL MORTGAGE ASSOCIATION — 4.35%
	10,355,000	2004-45 B	5.18		05/16/28		10,286,778
	2,800,000	2005-10 MW	4.67		09/16/25		2,736,039
	2,925,000	2005-14 B	4.48		08/16/32		2,861,865

Principal Amount			Rate		Maturity Date	Value
	COLLATERALIZED MORTGAGE OBLIGATIONS — (continued)
		GOVERNMENT NATIONAL MORTGAGE ASSOCIATION — (continued)
$	3,528,316	2006-55 AB	5.25	%	07/16/29	$	3,531,548
							19,416,230
		TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $48,870,655)					48,599,952
	COMMERCIAL MORTGAGE-BACKED SECURITIES — 17.46%
	4,350,000	Bank of America Commercial Mortgage, Inc., 2004-1 A4	4.76		11/10/39		4,197,436
	2,000,000	Commercial Mortgage Asset Trust, 1999-C1 B	7.23		01/17/32		2,186,268
	3,556,000	Commercial Mortgage Asset Trust, 1999-C2 C	7.80		11/17/32		3,993,907
	3,325,000	Credit Suisse First Boston Mortgage Securities Corp., 2002-CP5 G(a)	5.88		12/15/35		3,316,368
	5,135,000	First Union National Bank Commercial Mortgage, Inc., 2002-C1 A2	6.14		02/12/34		5,330,818
	3,900,000	GMAC Commercial Mortgage Securities, Inc., 1999-C1 C	6.59		05/15/33		3,968,510
	7,197,000	JP Morgan Chase Commercial Mortgage Securities Corp., 2005-CB12 AJ	4.99		09/12/37		6,767,641
	4,500,000	JP Morgan Chase Commercial Mortgage Securities Corp., 2005-LDP2 A4	4.74		07/15/42		4,288,098
	5,430,000	JPMorgan Chase Commercial Mortgage Securities Corp., 2005-LDP5 AJ(b)	5.47		12/15/44		5,241,852
	3,085,000	Morgan Stanley Dean Witter Capital I, 2003-TOP9 A2	4.74		11/13/36		3,011,025
	3,104,000	Morgan Stanley Dean Witter Capital I, 2005-HQ5 A4	5.17		01/14/42		3,029,427
	4,025,000	Nomura Asset Securities Corp., 1998-D6 A4(b)	7.62		03/15/30		4,541,675
	3,320,000	Salomon Brothers Mortgage Securities VII, 2002 KEY2 A3	4.87		03/18/36		3,277,143

See Notes to Financial Statements.

25

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Intermediate-Term Bond Fund — (continued)

Principal Amount			Rate		Maturity Date	Value
	COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
$	1,435,000	Wachovia Bank Commercial Mortgage Trust, 2002- C1 A4	6.29	%	04/15/34	$	1,497,345
	6,525,000	Wachovia Bank Commercial Mortgage Trust, 2003-C9 A3	4.61		12/15/35		6,435,731
	1,717,763	Wachovia Bank Commercial Mortgage Trust, 2004-C12 A2	5.00		07/15/41		1,715,753
	4,775,000	Wachovia Bank Commercial Mortgage Trust, 2004-C12 A3	5.23		07/15/41		4,779,083
	4,267,000	Wachovia Bank Commercial Mortgage Trust, 2005-C20 A5	5.09		07/15/42		4,245,150
	6,150,000	Wachovia Bank Commercial Mortgage Trust, 2005-C20 A6A	5.11		07/15/42		6,087,220
		TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $79,623,941)					77,910,450
	CORPORATE BONDS — 20.16%
	1,720,000	America Movil S.A. de C.V.	5.50		03/01/14		1,695,397
	1,675,000	Apache Corp.	5.25		04/15/13		1,665,662
	1,180,000	Bottling Group LLC	5.50		04/01/16		1,181,581
	1,785,000	Caterpillar Financial Services Corp.	5.85		09/01/17		1,801,254
	500,000	Cincinnati Bell, Inc.	8.38		01/15/14		498,750
	3,845,000	Cisco Systems, Inc.	5.50		02/22/16		3,819,292
	890,000	CIT Group, Inc.	6.10		03/15/67		734,453
	2,310,000	CIT Group, Inc.	5.80		07/28/11		2,261,758
	6,080,000	Citigroup, Inc.	5.25		02/27/12		6,078,717
	3,595,000	Comcast Cable Holdings LLC	9.80		02/01/12		4,161,036
	3,000,000	CVS Lease Pass Through Trust	6.13		08/15/16		2,998,716
	4,750,000	Deutsche Telekom International Finance	5.38		03/23/11		4,751,102
	4,000,000	Diageo Capital PLC	4.38		05/03/10		3,946,116
	2,380,000	Federal Express Corp.	5.50		08/15/09		2,406,615
	1,400,000	Ford Motor Credit Co.	8.63		11/01/10		1,387,910
	2,770,000	General Electric Capital Corp., MTN	6.00		06/15/12		2,856,272
	2,875,000	General Mills, Inc.	5.65		09/10/12		2,900,596

Principal Amount			Rate		Maturity Date	Value
	CORPORATE BONDS — (continued)
$	3,140,000	Georgia Power Co.	5.70	%	06/01/17	$	3,139,956
	2,415,000	Historic TW, Inc.	9.15		02/01/23		2,945,006
	500,000	Iron Mountain, Inc.	8.63		04/01/13		506,250
	3,080,000	John Deere Capital Corp., MTN	5.65		07/25/11		3,136,900
	3,200,000	Johnson & Johnson	5.15		08/15/12		3,252,080
	2,960,000	Lehman Brothers Holdings, Inc.	4.25		01/27/10		2,866,837
	2,645,000	Nisource Finance Corp.	5.25		09/15/17		2,454,875
	4,025,000	Oracle Corp.	5.25		01/15/16		3,919,299
	5,150,000	RBS Capital Trust III(d)	5.51		09/29/49		4,818,541
	2,050,000	Southern Co.	5.30		01/15/12		2,048,506
	1,530,000	Sprint Capital Corp.	8.38		03/15/12		1,684,584
	4,290,000	Target Corp.	5.88		07/15/16		4,289,824
	1,125,000	Telefonica Emisiones SAU	6.42		06/20/16		1,154,423
	2,105,000	United Health Group, Inc.(a)	6.00		06/15/17		2,103,270
	1,110,000	Virginia Electric Power	5.40		01/15/16		1,072,599
	1,525,000	Virginia Electric Power	5.95		09/15/17		1,522,790
	2,000,000	Wal-Mart Stores, Inc.	5.00		04/05/12		1,982,436
	1,000,000	Xerox Corp.	6.40		03/15/16		1,012,369
	975,000	Zions Bancorp	5.50		11/16/15		936,292
		TOTAL CORPORATE BONDS (Cost $90,771,629)					89,992,064
	U.S. GOVERNMENT AGENCY BONDS & NOTES — 7.59%
		FEDERAL FARM CREDIT BANK — 1.43%
	6,230,000		5.25		09/13/10		6,368,219
		FEDERAL HOME LOAN BANK — 5.39%
	15,290,000		5.13		09/29/10		15,563,400
	8,385,000		5.33		03/06/12		8,470,695
							24,034,095
		FREDDIE MAC — 0.77%
	3,355,000		5.13		07/15/12		3,429,159
		TOTAL U.S. GOVERNMENT AGENCY BONDS & NOTES (Cost $33,156,434)					33,831,473
	U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES — 16.39%
		FEDERAL HOME LOAN MORTGAGE CORPORATION — 1.72%
	3,321,776	Pool # 1G1026 ARM(b)	5.92		07/01/36		3,330,102
	3,011,017	Pool # A36827	5.00		08/01/35		2,876,927
	349,485	Pool # G18136	6.00		08/01/21		353,902
	1,103,554	Pool # J03619	6.00		10/01/21		1,117,500
							7,678,431

See Notes to Financial Statements.

26

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Intermediate-Term Bond Fund — (continued)

Principal Amount				Rate		Maturity Date	Value
	U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES — (continued)
			FEDERAL NATIONAL MORTGAGE ASSOCIATION — 12.8%
$	2,630,000		Pool # 385538	4.79	%	11/01/12	$	2,606,504
	509,639		Pool # 545290	7.50		10/01/16		527,221
	8,680,000		Pool # 00553	5.13		04/15/11		8,864,016
	2,970		Pool # 578823	5.50		04/01/31		2,919
	2,149,650		Pool # 704372 ARM(b)	4.51		05/01/33		2,121,491
	4,473,822		Pool # 805386 ARM(b)	4.85		01/01/35		4,427,462
	170,229		Pool # 872534	6.00		06/01/36		170,512
	3,755,931		Pool # 892882 ARM(b)	5.83		07/01/36		3,780,655
	34,586,051		Pool # G02884	6.00		04/01/37		34,633,380
								57,134,160
			GOVERNMENT NATIONAL MORTGAGE ASSOCIATION — 1.87%
	12,144		Pool # 195801	8.50		01/15/17		13,039
	8,048		Pool # 195833	8.50		04/15/17		8,640
	2,316,796		Pool # 3319	5.00		12/20/32		2,227,834
	1,375		Pool # 334299	8.00		05/15/23		1,460
	2,844,671		Pool # 3442	5.00		09/20/33		2,734,504
	271,263		Pool # 367412	6.00		11/15/23		274,408
	1,208,326		Pool # 604726	4.50		10/15/33		1,136,252
	2,078,210		Pool # 608288	4.50		09/15/33		1,954,251
								8,350,388
			TOTAL U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES (Cost $73,749,483)					73,162,979
	U.S. GOVERNMENT SECURITIES — 23.91%
			U.S. TREASURY NOTES — 23.91%
	10,440,000			4.00		04/15/10		10,440,814
	92,540,000	(e)		4.50		02/28/11		93,834,079
	2,465,000			4.25		11/15/14		2,441,314
			TOTAL U.S. GOVERNMENT SECURITIES (Cost $105,144,009)					106,716,207
	REPURCHASE AGREEMENT— 1.65%
	7,369,000		Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $7,517,813 (repurchase proceeds $7,371,241)					7,369,000
			TOTAL REPURCHASE AGREEMENT (Cost $7,369,000)					7,369,000

TOTAL INVESTMENTS (Cost $448,189,122)(f)	100.16	%	$	447,012,904
OTHER LIABILITIES IN EXCESS OF ASSETS	(0.16	)		(705,656	)
NET ASSETS	100.00	%	$	446,307,248

(a) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $9,651,918, which represents 2.16% of net assets.

(b) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(c) Security purchased on a delayed delivery basis.

(d) Perpetual Security. Maturity date presented represents the next call date.

(e) The security or a portion of the security is pledged as collateral for open futures contracts. At September 30, 2007, the total market value of securities pledged amounted to $253,946.

(f) Cost for federal income tax purposes is $448,189,122.

ARM—Adjustable Rate Mortgage

LLC—Limited Liability Company

MTN—Medium Term Note

PLC—Public Limited Company

Contracts			Value			Unrealized Appreciation (Depreciation)
FUTURES CONTRACTS
Long –
80		U.S. 2 Year Treasury Note, expiring 12/31/07 (notional amount $16,486,450)	$	16,563,750		$	77,300
Short –
(30	)	U.S. Long-Term Treasury Bond expiring 12/19/07 (notional amount $(3,339,534))		(3,340,312	)		(778	)
TOTAL FUTURES CONTRACTS						$	76,522

See Notes to Financial Statements.

27

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Intermediate-Term Bond Fund — (continued)

INTEREST RATE SWAP AGREEMENT
Counterparty	Notional Amount		Receiving Leg		Paying Leg	Expiration	Unrealized Appreciation
Goldman Sachs	$	5,000,000	5.36	%	3-month USD LIBOR	07/24/09	$	4,451

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Portfolio Diversification	% of Net Assets		Value
U.S. Government & Agency Securities	47.89		$	213,710,659
Corporate Bonds	20.16			89,992,064
Commercial Mortgage-Backed Securities	17.46			77,910,450
Collateralized Mortgage Obligations	10.89			48,599,952
Asset Backed Securities	2.11			9,430,779
Repurchase Agreement	1.65			7,369,000
Total Investments	100.16		$	447,012,904
Other Liabilities in Excess of Assets	(0.16	)		(705,656	)
Net Assets	100.00		$	446,307,248

See Notes to Financial Statements.

28

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Intermediate-Term Tax-Exempt Fund

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — 93.76%
$	1,000,000	Arkansas State Development Finance Authority, Tobacco Settlement Revenue Bonds, Arkansas Cancer Research Center Project, (AMBAC)(a)	0.00	%	07/01/23	$	475,020
	10,000,000	California State Bay Area Infrastructure Financing Authority Revenue Bonds, State Payment Acceleration Notes, (FGIC)	5.00		08/01/17		10,743,900
	5,000,000	California State Department of Veteran Affairs, Home Purchase Revenue Bonds, Series A	4.50		12/01/23		4,960,000
	6,000,000	California State Department of Water, Residential Power Supply Revenue Bonds, Series A, (AMBAC)	5.50		05/01/14		6,529,260
	4,740,000	California State General Obligation Bonds	5.00		06/01/08		4,787,447
	5,000,000	California State General Obligation Bonds	5.00		08/01/21		5,220,450
	10,000,000	Chicago, Illinois, O’Hare International Airport Revenue Bonds, Series B, (MBIA)	5.25		01/01/17		10,942,400
	10,000,000	Colorado Springs, Colorado, Utilities Revenue Bonds, Series A	5.25		11/15/10		10,476,400
	10,000,000	Dallas, Texas, Waterworks & Sewer Systems Revenue Bonds, (FSA)	5.38		10/01/12		10,802,000
	2,820,000	Detroit, Michigan, Sewage Disposal Revenue Bonds, Senior Lien, Series A, (FSA)	5.00		07/01/14		3,006,487
	6,200,000	Fairfax County, Virginia, Refunding & Public Improvement General Obligation Bonds, Series A	5.25		04/01/08		6,256,358

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	10,000,000	Florida State Division Board Finance Department, General Services Revenue Bonds, Department of Environmental Protection - Preservation 2000, Series A, (FSA)	6.00	%	07/01/13	$	11,204,400
	2,000,000	Florida State Seminole Indian Tribe, Series A(b)	5.75		10/01/22		2,099,300
	5,000,000	Fresno, California, Sewer Revenue Bonds, Series A-1, (AMBAC)	5.25		09/01/19		5,481,750
	3,580,000	Golden State Tobacco Securitization Corp., California, Tobacco Settlement Revenue Bonds, Series A-1	4.50		06/01/27		3,361,513
	5,535,000	Hamilton County, Ohio, Sewer System Revenue Bonds, Series A, (MBIA)	5.00		12/01/15		5,985,549
	10,000,000	Hawaii State General Obligation Bonds, Series CY, (FSA)	5.50		02/01/12		10,765,200
	5,000,000	Houston, Texas, Independent School District General Obligation Bonds, (PSF-GTD)	4.50		02/15/25		4,969,950
	2,000,000	Illinois State Toll Highway Authority Revenue Bonds, Senior Priority, Series A-1, (FSA)	5.00		01/01/18		2,146,420
	5,000,000	Indiana Health & Educational Facilities Financing Authority Revenue Bonds, Clarian Health Obligation Group, Series B	5.00		02/15/22		5,078,400
	10,375,000	Jackson County, Missouri, Special Obligation Revenue Bonds, Harry S. Truman Sports Complex, (AMBAC)	5.00		12/01/09		10,706,481
	10,000,000	Jefferson County, Colorado, School District General Obligation Bonds, (MBIA)	6.50		12/15/11		11,127,900

See Notes to Financial Statements.

29

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Intermediate-Term Tax-Exempt Fund — (continued)

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	10,000,000	Los Angeles, California, Department of Water & Power Revenue Bonds, Series B, (MBIA)	5.00	%	07/01/13	$	10,759,400
	1,000,000	Main Street Natural Gas, Inc., Georgia, Series A(c)	5.13		09/15/17		1,042,380
	1,000,000	Main Street Natural Gas, Inc., Georgia, Series A(c)	5.25		09/15/18		1,048,430
	10,000,000	Massachusetts State General Obligation Bonds(d)	4.14		11/01/25		9,751,800
	5,040,000	Miami-Dade County, Florida, Transit Sales Surtax Revenue Bonds, (XLCA)	5.00		07/01/19		5,326,927
	10,000,000	Michigan State Building Authority Revenue Bonds, Facilities Program, Series I, (FSA)	5.25		10/15/14		10,823,800
	5,720,000	Nassau County, New York, Interim Finance Authority Revenue Bonds, Sales Tax Revenue, Series B, (AMBAC)	5.00		11/15/14		6,134,013
	10,000,000	New Jersey State General Obligation Bonds, Series D	6.00		02/15/11		10,773,500
	3,000,000	New Jersey State Tobacco Settlement Financing Corporation Revenue Bonds, Series 1A	4.25		06/01/11		2,964,690
	9,300,000	New Jersey State Tobacco Settlement Financing Corporation Revenue Bonds, Series 1A	4.50		06/01/23		8,788,593
	4,000,000	New Jersey State Transportation Trust Fund Authority Revenue Bonds, (FSA-CR)	5.25		12/15/22		4,435,040
	9,530,000	New Jersey State Transportation Trust Fund Authority Revenue Bonds, Grant Anticipation Bonds, Series A, (FGIC)	5.00		06/15/10		9,891,568
	10,000,000	New York City, New York, Municipal Water Finance Authority, Water & Sewer System Revenue Bonds, Series A, (FSA)	5.38		06/15/16		10,735,800

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	6,000,000	New York State Dormitory Authority Revenue Bonds, State Court Facilities, Series A, (AMBAC)	5.25	%	05/15/18	$	6,638,520
	10,000,000	New York State Dormitory Authority Revenue Bonds, State University Educational Facilities, Series B, (FSA-CR)	5.25		05/15/11		10,570,400
	5,790,000	Palm Beach County, Florida, Public Improvement Revenue Bonds, Parking Facilities Expansion Project, (MBIA)	5.00		12/01/26		6,009,730
	5,070,000	Pennsylvania State, General Obligation Bonds, Series 4	5.00		07/01/09		5,201,820
	5,000,000	Puerto Rico Commonwealth Public Improvement General Obligation Bonds, Series B	5.25		07/01/16		5,384,900
	5,190,000	San Antonio, Texas, Electric & Gas Revenue Bonds, Series A	5.25		02/01/16		5,344,870
	7,600,000	San Joaquin Hills, California, Transportation Corridor Agency Toll Road Revenue Bonds, Series A, (MBIA)(a)	0.00		01/15/12		6,489,488
	5,000,000	South Carolina State Highway General Obligation Bonds, Series B	5.00		04/01/16		5,259,350
	10,000,000	South Carolina State Public Service Authority Revenue Bonds, Series A, (FSA)	5.50		01/01/11		10,597,600
	12,150,000	St. Louis, Missouri, Airport Revenue Bonds, Lambert International Airport, Series A, (FSA)	5.00		07/01/21		12,861,018
	2,000,000	St. Louis, Missouri, Airport Revenue Bonds, Lambert International Airport, Series A, (FSA)	5.00		07/01/25		2,094,240

See Notes to Financial Statements.

30

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Intermediate-Term Tax-Exempt Fund — (continued)

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	2,000,000	Texas Municipal Gas Acquisition & Supply Corp., Gas Supply Revenue Bonds, Senior Lien, Series A	5.25	%	12/15/23	$	2,059,440
	4,815,000	Texas State Public Finance Authority General Obligation Bonds, Series A	5.00		10/01/23		4,984,055
	3,500,000	Texas State Transportation Commission Revenue Bonds, First Tier	5.00		04/01/08		3,526,915
	10,000,000	Texas University Revenue Bonds, Series D	5.00		08/15/18		10,725,900
	6,000,000	Triborough Bridge & Tunnel Authority, New York, Highway Revenue Bonds, Series B	5.00		11/15/20		6,301,080
	6,285,000	Virginia State Public School Authority Revenue Bonds, 1997 Resolution, Series C	5.00		08/01/16		6,786,669
	3,760,000	Virginia State Residential Authority Clean Water Revenue Bonds, Clean Water State Revolving Fund	5.00		10/01/17		4,104,905
	10,000,000	Washington State Various Purposes General Obligation Bonds, Series R-03-A, (MBIA)	5.00		01/01/18		10,427,200
		TOTAL TAX-EXEMPT SECURITIES (Cost $361,940,305)					364,970,626
	TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS(e) — 5.73%
	2,810,000	San Antonio, Texas, Electric & Gas Revenue Bonds, Series A, (Prerefunded 02/01/09 @ 101)	5.25		02/01/16		2,900,595
	5,000,000	New York State Tobacco Settlement Asset Securitization Corporation Revenue Bonds, Series 1, (Prerefunded 07/15/09 @ 101)	6.38		07/15/39		5,294,950

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS(e) — (continued)
$	6,125,000	Contra Costa, California, Water District Revenue Bonds, Series J, (FGIC), (Prerefunded 10/01/09 @ 101)	5.38	%	10/01/29	$	6,413,916
	7,180,000	Detroit, Michigan, Sewage Disposal Revenue Bonds, Senior Lien, Series A, (FSA), (Prerefunded 07/01/13 @ 100)	5.00		07/01/14		7,690,498
		TOTAL TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS (Cost $22,249,040)					22,299,959
Shares
	REGISTERED INVESTMENT COMPANIES — 0.22%
	608,887	BlackRock Muni Fund (7 day yield of 3.61%)					608,887
	271,222	Dreyfus Tax-Exempt Cash Fund (7 day yield of 3.63%)					271,222
		TOTAL REGISTERED INVESTMENT COMPANIES (Cost $880,109)					880,109

TOTAL INVESTMENTS (Cost $385,069,454)(f)	99.71	%	$	388,150,694
OTHER ASSETS IN EXCESS OF LIABILITIES	0.29			1,123,136
NET ASSETS	100.00	%	$	389,273,830

(a) Zero coupon bond.

(b) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, the value of this security, which is not illiquid, represents 0.54% of net assets.

(c) Security purchased on a delayed delivery basis.

(d) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(e) The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest.

(f) Cost for federal income tax purposes is $385,069,454.

AMBAC—American Municipal Bond Assurance Corp.

FGIC—Financial Guaranty Insurance Co.

FSA—Financial Security Assurance Corp.

FSA–CR—Financial Security Assurance Custodial Receipts

MBIA—Municipal Bond Insurance Association

PSF-GTD—Public School Funds—Guaranteed

XLCA—XL Capital Assurance

See Notes to Financial Statements.

31

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Intermediate-Term Tax-Exempt Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

State Diversification	% of Net Assets	Value
California	16.63	$	64,747,123
New York	11.73		45,674,764
Texas	11.64		45,313,724
New Jersey	9.47		36,853,391
Missouri	6.59		25,661,739
Florida	6.33		24,640,358
Colorado	5.55		21,604,300
Michigan	5.53		21,520,785
Virginia	4.41		17,147,932
South Carolina	4.07		15,856,950
Illinois	3.36		13,088,820
Hawaii	2.77		10,765,200
Washington	2.68		10,427,200
Massachusetts	2.51		9,751,800
Ohio	1.54		5,985,549
Puerto Rico	1.38		5,384,900
Pennsylvania	1.34		5,201,820
Indiana	1.30		5,078,400
Georgia	0.54		2,090,810
Registered Investment Companies	0.22		880,109
Arkansas	0.12		475,020
Total Investments	99.71	$	388,150,694
Other Assets in Excess of Liabilities	0.29		1,123,136
Net Assets	100.00	$	389,273,830

See Notes to Financial Statements.

32

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Long-Term Tax-Exempt Fund

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT — 1.57%
$	1,000,000	Texas State, Southwest Higher Education Authority, (LANDESBANK HESSEN)(a)	4.05	%	07/01/15	$	1,000,000
		TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT (Cost $1,000,000)					1,000,000
	TAX-EXEMPT SECURITIES — 77.59%
	1,000,000	California State Department of Water Residential Power Supply Revenue Bonds, Series A, (AMBAC)	5.50		05/01/14		1,088,210
	2,500,000	California Statewide Communities Development Authority Revenue Bonds, Southern California Edison Co., Series A, (XLCA), (Mandatory Put 04/01/13 @ 100)	4.10		04/01/28		2,546,925
	1,000,000	Cincinnati, Ohio, City School District General Obligation Bonds, Classroom Construction & Improvements, (FGIC)	5.25		12/01/30		1,117,980
	3,000,000	Clark County, Nevada, School District General Obligation Bonds, Series A, (FSA)	5.00		06/15/15		3,217,110
	2,500,000	Detroit, Michigan, City School District General Obligation Bonds School Building & Improvement, Series A, (FSA)	5.00		05/01/17		2,669,450
	2,000,000	District Of Columbia, General Obligation Bonds, Series A, (MBIA)	5.25		06/01/27		2,036,760
	1,000,000	Florida State Hurricane Catastrophe Fund Finance Corporation Revenue Bonds, Series A	5.00		07/01/10		1,035,060
	1,800,000	Fort Bend, Texas, Independent School District General Obligation Bonds, (PSF-GTD)	5.38		02/15/24		1,835,262

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	650,000	Indiana Health & Educational Facility Financing Authority Hospital Revenue Bonds, Clarian Health Obligation, Series A	5.00	%	02/15/39	$	634,868
	3,000,000	Johnson City, Tennessee, Health & Educational Facilities Board Hospital Revenue Bonds, Mountain States Health Alliance, Series A	5.50		07/01/36		3,035,040
	1,000,000	Los Angeles, California, Unified School District General Obligation Bonds, (FSA)	5.00		07/01/19		1,079,660
	1,500,000	Mashantucket Western Pequot Tribe, Connecticut, Special Revenue Bonds	5.50		09/01/36		1,500,975
	2,000,000	Michigan State Hospital Finance Authority Revenue Bonds, Henry Ford Health Systems, Series A	5.25		11/15/32		2,052,400
	1,000,000	Montgomery, Alabama, Medical Clinic Board Health Care Facility Revenue Bonds, Jackson Hospital & Clinic	4.75		03/01/36		874,630
	500,000	New Hampshire Health & Education Facilities Authority Revenue Bonds, The Memorial Hospital	5.25		06/01/36		479,250
	980,000	New Jersey State Environmental Infrastructure Trust Revenue Bonds, Series C	5.00		09/01/18		1,065,113
	1,860,000	New Jersey State Tobacco Settlement Financing Corporation Revenue Bonds, Series 1A	4.50		06/01/23		1,757,719
	2,000,000	New York City, New York, General Obligation Bonds, Series M	5.00		04/01/22		2,077,320
	2,000,000	New York City, New York, Industrial Development Agency Revenue Bonds, Yankee Stadium, (FGIC)	5.00		03/01/46		2,046,180
	2,000,000	New York Metropolitan Transportation Authority Revenue Bonds, Series A, (AMBAC)	5.50		11/15/14		2,222,800

See Notes to Financial Statements.

33

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Long-Term Tax-Exempt Fund — (continued)

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	2,000,000	New York State Dormitory Authority Revenue Bonds, Non-State Supported Debt, New York University Hospital Center, Series A	5.00	%	07/01/20	$	1,988,660
	2,000,000	New York State Environmental Facilities Revenue Bonds, Clean Water & Drinking Revolving Foods, 2nd Resolution	5.00		06/15/26		2,078,400
	2,000,000	Purdue University, Indiana, Certificates of Participation	5.25		07/01/22		2,198,980
	2,500,000	San Joaquin Hills, California, Transportation Corridor Agency Toll Road Revenue Bonds, Series A, (MBIA)(b)	0.00		01/15/12		2,134,700
	1,000,000	Seneca Nation Indians, New York, Capital Improvements Authority, Special Obligation Revenue Bonds, Series A(c)	5.00		12/01/23		954,130
	1,500,000	St. Louis, Missouri, Airport Revenue Bonds, Lambert International Airport, Series A, (FSA)	5.00		07/01/20		1,593,930
	1,250,000	Tennessee Energy Acquisition Corp. Gas Revenue Bonds, Series A	5.25		09/01/26		1,280,187
	1,500,000	University of California Revenue Bonds, Series J, (MBIA)	5.00		05/15/12		1,594,035
	1,000,000	University of Texas Revenue Bonds, Series D	5.00		08/15/18		1,072,590
		TOTAL TAX-EXEMPT SECURITIES (Cost $49,685,232)					49,268,324
	TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS(d) — 19.47%
	2,000,000	Chicago, Illinois, General Obligation Bonds, (FGIC) (Partially Prerefunded)	5.25		01/01/28		2,057,720
	3,000,000	Houston, Texas, Water & Sewer System Revenue Bonds, Series A, (FSA) (Prerefunded 12/01/12 @ 100)	5.00		12/01/30		3,193,620

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — ESCROWED IN U.S. GOVERNMENTS(d)— (continued)
$	2,000,000	Long Island Power Authority, New York Electric System Revenue Bonds, Series A, (FSA) (Escrowed to Maturity)	5.25	%	12/01/14	$	2,205,600
	3,000,000	New Jersey State Transportation Trust Fund Authority Revenue Bonds, Transportation Systems, Series C, (Prerefunded 06/15/13 @ 100)	5.50		06/15/23		3,285,360
	1,500,000	Pennsylvania State General Obligation Bonds, 2nd Series, (FSA) (Prerefunded 05/01/12 @ 100)	5.50		05/01/16		1,620,900
		TOTAL TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS (Cost $12,140,899)					12,363,200
Shares
	REGISTERED INVESTMENT COMPANIES — 0.40%
	15,752	BlackRock Muni Fund (7 day yield of 3.61%)					15,752
	237,038	Dreyfus Tax Exempt Cash Fund (7 day yield of 3.63%)					237,038
		TOTAL REGISTERED INVESTMENT COMPANIES (Cost $252,790)					252,790

TOTAL INVESTMENTS (Cost $63,078,921)(e)	99.03	%	$	62,884,314
OTHER ASSETS IN EXCESS OF LIABILITIES	0.97			615,746
NET ASSETS	100.00	%	$	63,500,060

(a) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(b) Zero coupon bond.

(c) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, this security, which is not illiquid, amounted to $954,130, which represents 1.50% of net assets.

(d) The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest.

(e) Cost for federal income tax purposes is $63,078,921.

See Notes to Financial Statements.

34

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Long-Term Tax-Exempt Fund — (continued)

AMBAC—American Municipal Bond Assurance Corp.

FGIC—Financial Guaranty Insurance Corp.

FSA—Financial Security Assurance

MBIA—Municipal Bond Insurance Association

PSF-GTD—Public School Fund — Guaranteed

XLCA—XL Capital Assurance

The summary of the Fund’s investments as of September 30, 2007 is as follows:

State Diversification	% of Net Assets	Value
New York	21.37	$	13,573,090
California	13.30		8,443,530
Texas	11.18		7,101,472
New Jersey	9.62		6,108,192
Michigan	7.44		4,721,850
Tennessee	6.80		4,315,227
Nevada	5.07		3,217,110
Indiana	4.46		2,833,848
Illinois	3.24		2,057,720
District of Columbia	3.21		2,036,760
Pennsylvania	2.55		1,620,900
Missouri	2.51		1,593,930
Connecticut	2.36		1,500,975
Ohio	1.76		1,117,980
Florida	1.63		1,035,060
Alabama	1.38		874,630
New Hampshire	0.75		479,250
Registered Investment Companies	0.40		252,790
Total Investments	99.03	$	62,884,314
Other Assets in Excess of Liabilities	0.97		615,746
Net Assets	100.00	$	63,500,060

See Notes to Financial Statements.

35

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

New York Intermediate-Term Tax-Exempt Fund

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT CASH EQUIVALENT SECURITIES — 3.86%
$	3,800,000	Port Authority of New York & New Jersey, Special Obligation Revenue Bonds, Versatile Structure Obligation, Series 2, (SPA: JPMorgan Chase & Co.)(a)	3.89	%	05/01/19	$	3,800,000
	1,650,000	New York State Triborough Bridge & Tunnel Authority Revenue Bonds, Series A, (SPA: Dexia Credit Local)(a)	3.77		11/01/35		1,650,000
		TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES (Cost $5,450,000)					5,450,000
	TAX-EXEMPT SECURITIES — 77.00%
	2,565,000	Babylon, New York, General Obligation Bonds, (AMBAC)	5.00		01/01/13		2,732,956
	5,000,000	Nassau County, New York, Interim Finance Authority, Sales Tax Revenue Bonds, Series H, (AMBAC)	5.25		11/15/15		5,459,650
	4,000,000	New York City, New York, General Obligation Bonds, Series C	5.00		01/01/15		4,293,880
	2,430,000	New York City, New York, General Obligation Bonds, Series G	5.00		12/01/19		2,563,067
	850,000	New York City, New York, Industrial Development Agency Revenue Bonds, Queens Baseball Stadium, (AMBAC)	5.00		01/01/19		911,098
	1,000,000	New York City, New York, Industrial Development Agency Revenue Bonds, Queens Baseball Stadium, (AMBAC)	5.00		01/01/20		1,066,310
	1,150,000	New York City, New York, Industrial Development Agency Revenue Bonds, Yankee Stadium Project, (MBIA)	5.00		03/01/15		1,241,839

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	2,280,000	New York City, New York, Metropolitan Transportation Authority Revenue Bonds, (CIFG)	5.00	%	11/15/22	$	2,413,494
	5,000,000	New York City, New York, Municipal Water Finance Authority, Water & Sewer System Revenue Bonds, Series A, (FSA)	5.38	%	06/15/16		5,367,900
	4,000,000	New York City, New York, Municipal Water Finance Authority, Water & Sewer System Revenue Bonds, Series D	5.13		06/15/19		4,215,080
	2,150,000	New York City, New York, Transitional Finance Authority Revenue Bonds, Series A	5.25		11/01/10		2,257,995
	3,000,000	New York City, New York, Transitional Finance Authority Revenue Bonds, Series A-1	5.00		11/01/19		3,187,560
	2,000,000	New York City, New York, Transitional Finance Authority Revenue Bonds, Series B	5.25		08/01/17		2,160,320
	3,000,000	New York City, New York, Transitional Finance Authority Revenue Bonds, Series S-1	5.00		07/15/11		3,153,090
	4,300,000	New York City, New York, Transitional Finance Authority Revenue Bonds, Series S-2	5.00		01/15/21		4,575,888
	1,000,000	New York State Dormitory Authority Revenue Bonds, New York University, Series A	5.00		07/01/10		1,015,100
	1,000,000	New York State Dormitory Authority Revenue Bonds, New York University, Series A	5.00		07/01/12		1,020,280

See Notes to Financial Statements.

36

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

New York Intermediate-Term Tax-Exempt Fund — (continued)

Principal Amount			Rate	Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	5,000,000	New York State Dormitory Authority Revenue Bonds, New York University, Series A, (AMBAC)	5.75	07/01/12	$	5,475,100
	4,720,000	New York State Dormitory Authority Revenue Bonds, State Personal Income Tax, Series D, (FGIC)	5.00	03/15/09		4,824,170
	3,525,000	New York State Energy Research & Development Authority, Pollution Control Revenue Bonds, Niagara Mohawk Power Project, Series A, (AMBAC)	5.15	11/01/25		3,640,373
	6,000,000	New York State Environmental Facilities Revenue Bonds, NYC Municipal Water Project, Series K	5.00	06/15/12		6,371,880
	5,000,000	New York State Local Government Assistance Corporation Revenue Bonds, Series A-1, (FSA)	5.00	04/01/12		5,294,250
	6,500,000	New York State Sales Tax Asset Receivable Corporation Revenue Bonds, Series A, (MBIA)	5.00	10/15/22		6,837,805
	2,500,000	New York State Tollway Authority, Highway & Bridge Trust Fund Revenue Bonds, Series B, (AMBAC)	5.00	04/01/19		2,654,025
	2,015,000	New York State Triborough Bridge & Tunnel Authority Revenue Bonds, Series B	5.25	11/15/13		2,194,033
	500,000	Oneida County, New York Industrial Development Agency, Civic Facility Revenue Bonds, Hamilton College, PJ-Series A(b)	0.00	07/01/18		316,500

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	895,000	Onondaga County, New York, Water Authority Water Revenue Bonds, Series A, (AMBAC)	5.00	%	09/15/22	$	941,334
	940,000	Onondaga County, New York, Water Authority Water Revenue Bonds, Series A, (AMBAC)	5.00		09/15/23		988,495
	5,000,000	Puerto Rico Electric Power Authority Revenue Bonds, Series BB, (MBIA)	6.00		07/01/11		5,430,800
	1,500,000	Puerto Rico Public Improvement General Obligation Bonds, Series A	5.25		07/01/22		1,568,430
	2,500,000	Seneca Nation Indians, New York, Capital Improvements Authority, Special Obligation Revenue Bonds, Series A(c)	5.00		12/01/23		2,385,325
	1,000,000	Seneca Nation Indians, New York, Capital Improvements Authority, Special Obligation Revenue Bonds, Series A(c)	5.25		12/01/16		1,015,200
	2,000,000	Suffolk County, New York, Public Improvement General Obligation Bonds, Series A, (CIFG)	5.00		05/01/08		2,018,760
	3,750,000	Troy, New York, Industrial Development Authority Civic Facility Revenue Bonds, Rensselaer Polytech, Series E, (XLCA) (Mandatory Put 09/01/11 @ 100)	4.05		04/01/37		3,800,175
	2,425,000	Yonkers, New York, General Obligation Bonds, Series B, (MBIA)	5.00		08/01/21		2,551,682
	2,545,000	Yonkers, New York, General Obligation Bonds, Series B, (MBIA)	5.00		08/01/22		2,669,298
		TOTAL TAX-EXEMPT SECURITIES (Cost $107,716,689)					108,613,142

See Notes to Financial Statements.

37

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

New York Intermediate-Term Tax-Exempt Fund — (continued)

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS(d) — 17.83%
$	5,000,000	Long Island Power Authority, New York Electric Systems Revenue Bonds, Series A, (FSA) (Escrowed to Maturity)	5.25	%	12/01/14	$	5,514,000
	3,300,000	Metropolitan Transportation Authority New York Dedicated Tax Revenue Bonds, Series A, (FGIC) (Prerefunded 04/01/10 @ 100)	5.88		04/01/21		3,487,440
	6,000,000	New York State Metropolitan Transportation Authority Revenue Bonds, Service Contract, Series 8, (FSA) (Prerefunded 07/01/13 @ 100)	5.38		07/01/21		6,558,840
	4,210,000	New York State Tobacco Settlement Asset Securitization Corporation Revenue Bonds, Series 1, (Prerefunded 07/15/09 @ 101)	6.38		07/15/39		4,458,348
	5,000,000	New York State Tollway Authority, Highway & Bridge Trust Fund Revenue Bonds, Series B, (AMBAC) (Prerefunded 04/01/09 @ 100)	5.25		04/01/24		5,133,400
		TOTAL TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS (Cost $25,119,218)					25,152,028

Shares				Value
REGISTERED INVESTMENT COMPANIES — 0.21%
295,663	BlackRock Muni Fund (7 day yield of 3.61%)			$	295,663
1	Dreyfus New York Tax Exempt Cash Fund (7 day yield of 3.17%)				1
	TOTAL REGISTERED INVESTMENT COMPANIES (Cost $295,664)				295,664
TOTAL INVESTMENTS (Cost $138,581,571)(e)		98.9	%	$	139,510,834
OTHER ASSETS IN EXCESS OF LIABILITIES		1.1			1,547,073
NET ASSETS		100.0	%	$	141,057,907

(a) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(b) Zero coupon bond.

(c) Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $3,400,525 or 2.41% of net assets.

(d) The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest.

(e) Cost for federal income tax purposes is $138,581,571.

AMBAC—American Municipal Bond Assurance Corp.

CIFG—CDC Ixis Financial Guaranty

FGIC—Financial Guaranty Insurance Co.

FSA—Financial Security Assurance Corp.

MBIA—Municipal Bond Insurance Association

SPA—Standby Purchase Agreement

XLCA—XL Capital Assurance

See Notes to Financial Statements.

38

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

New York Intermediate-Term Tax-Exempt Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Portfolio Diversification	% of Net Assets	Value
Revenue Bonds	67.82	$	95,665,069
Prerefunded	13.92		19,638,028
General Obligation Bonds	13.04		18,398,073
Escrowed to Maturity	3.91		5,514,000
Registered Investment Companies	0.21		295,664
Total Investments	98.90	$	139,510,834
Other Assets in Excess of Liabilities	1.10		1,547,073
Net Assets	100.00	$	141,057,907

See Notes to Financial Statements.

39

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Short-Term Government Securities Fund

Principal Amount			Rate		Maturity Date	Value
	ASSET-BACKED SECURITIES — 2.77%
$	800,000	Capital Auto Receivables Asset Trust, 2007-# A3A	5.00	%	09/15/11	$	800,771
	2,500,000	Capital One Multi-Asset Execution Trust, 2005-A2 A2	4.05		02/15/11		2,486,341
	1,310,195	Countrywide Home Equity Loan Trust, 2005-G 2A(a)	5.98		12/15/35		1,296,729
	2,500,000	USAA Auto Owner Trust, 2007-2 A3(b)	4.90		02/15/12		2,499,664
		TOTAL ASSET-BACKED SECURITIES (Cost $7,093,871)					7,083,505
	COLLATERALIZED MORTGAGE OBLIGATIONS — 15.11%
		NON-GOVERNMENTAL AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS — 8.83%
	4,696,270	Bank of America Mortgage Securities, 2004-B 2A2	4.09		03/25/34		4,698,590
	2,369,508	Bank of America Mortgage Securities, 2005-J 2A3(a)	5.09		11/25/35		2,355,187
	1,160,252	Bear Stearns, ARM, 2004-1 11A3(a)	6.11		04/25/34		1,181,557
	2,036,347	Bear Stearns, ARM, 2004-9 3A1(a)	5.22		09/25/34		2,032,835
	2,421,547	Countrywide Alternative Loan Trust, 2004-16CB 1A2(a)	5.50		07/25/34		2,401,155
	1,512,454	IMPAC CMB Trust, 2005-5 A4(a)	5.51		08/25/35		1,511,342
	1,721,776	Indymac Index Mortgage Loan Trust, 2004-AR4 3A(a)	4.67		08/25/34		1,724,628
	1,626,297	Washington Mutual Mortgage Securities Corp., 2005-AR5 A2(a)	4.68		05/25/35		1,619,848
	2,694,889	Wells Fargo Mortgage Backed Securities Trust, 2004-AA A2(a)	4.99		12/25/34		2,673,607
	2,435,000	Wells Fargo Mortgage Backed Securities Trust, 2004-N A6	4.00		08/25/34		2,394,967
							22,593,716
		FEDERAL HOME LOAN MORTGAGE CORPORATION — 3.52%
	2,735,000	2534 VH	6.00		03/15/19		2,773,306
	1,974,399	2608 GK	4.50		03/15/17		1,948,743
	3,305,734	2836 TA	5.00		10/15/27		3,315,883
	975,802	3197 AB	5.50		08/15/13		978,289
							9,016,221

Principal Amount			Rate		Maturity Date	Value
	COLLATERALIZED MORTGAGE OBLIGATIONS — (continued)
		FEDERAL NATIONAL MORTGAGE ASSOCIATION — 2.76%
$	2,323,687	2002-89 CA	5.00	%	04/25/16	$	2,319,234
	4,749,423	2007-35 DH	5.00		09/25/33		4,727,446
							7,046,680
		TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $38,687,764)					38,656,617
	COMMERCIAL MORTGAGE-BACKED SECURITIES — 4.03%
	3,175,000	First Union National Bank Commercial Mortgage, Inc., 2002-C1 A2	6.14		02/12/34		3,296,075
	3,152,281	GE Capital Commercial Mortgage Corp., Series 2002-2A, Class A2	4.97		08/11/36		3,154,883
	132,025	Greenwich Capital Commercial Funding Corp., 2004-GG1 A2	3.84		06/10/36		131,831
	947,746	JP Morgan Chase Commercial Mortgage Securities Corp., 2005-LDP2 A1	4.33		07/15/42		938,891
	1,567,349	Morgan Stanley Cap I, 2005-HQ5 A1	4.52		01/14/42		1,555,828
	1,200,000	Salomon Brothers Mortgage Securities VII, 2001-C1 A3	6.43		12/18/35		1,245,408
		TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $10,267,778)					10,322,916
	U.S. GOVERNMENT AGENCY BONDS & NOTES — 22.39%
		FEDERAL FARM CREDIT BANK — 2.49%
	6,230,000		5.25		09/13/10		6,368,219
		FEDERAL HOME LOAN BANK — 16.05%
	2,500,000		3.88		02/15/08		2,490,228
	15,500,000		4.75		06/11/08		15,497,101
	4,500,000		5.13		07/30/08		4,515,561
	3,570,000		5.25		06/10/11		3,658,218
	5,200,000		5.33		03/06/12		5,253,144
	9,500,000		5.38		07/17/09		9,655,211
							41,069,463
		FREDDIE MAC — 3.03%
	6,000,000		4.88		02/09/10		6,061,170
	1,600,000		7.00		03/15/10		1,695,107
							7,756,277
		FANNIE MAE— 0.82%
	2,100,000		3.55		01/17/08		2,091,430
		TOTAL U.S. GOVERNMENT AGENCY BONDS & NOTES (Cost $56,710,001)					57,285,389

See Notes to Financial Statements.

40

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Short-Term Government Securities Fund — (continued)

Principal Amount			Rate		Maturity Date	Value
	U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES — 36.44%
		FEDERAL HOME LOAN MORTGAGE CORPORATION — 16.14%
$	962,429	Pool # 1B2846, ARM(a)	4.90	%	04/01/35	$	989,755
	3,111,691	Pool # 1G0688, ARM(a)	5.63		01/01/36		3,132,089
	142,334	Pool # 1G1026, ARM(a)	5.92		07/01/36		142,691
	7,192,635	Pool # 1G1471, ARM(a)	5.49		01/01/37		7,219,680
	6,731,120	Pool # 782645, ARM(a)	5.42		02/01/36		6,805,435
	2,774,380	Pool # 847248, ARM(a)	5.46		03/01/34		2,812,430
	412,845	Pool # C68593	7.00		11/01/28		429,294
	2,691,596	Pool # G18136	6.00		08/01/21		2,725,610
	8,457,158	Pool # J00617	5.50		12/01/20		8,435,452
	8,499,124	Pool # J03619	6.00		10/01/21		8,606,529
							41,298,965
		FEDERAL NATIONAL MORTGAGE ASSOCIATION — 19.85%
	3,793,929	Pool # 256651	6.00		03/01/37		3,768,872
	656,888	Pool # 323572	7.50		01/01/29		689,576
	2,655,674	Pool # 375575	6.60		12/01/07		2,646,164
	13,101	Pool # 517390	8.00		11/01/11		13,499
	233,920	Pool # 535981	8.00		01/01/16		245,323
	108,689	Pool # 545362, ARM(a)	5.96		12/01/31		108,123
	1,648,434	Pool # 634195	7.50		10/01/28		1,730,463
	2,904,217	Pool # 693018, ARM(a)	4.33		06/01/33		2,957,251
	3,581,746	Pool # 735709, ARM(a)	4.80		06/01/35		3,517,802
	1,692,573	Pool # 745525	5.50		05/01/21		1,688,902
	2,586,173	Pool # 766684, ARM(a)	4.41		03/01/34		2,569,693
	2,937,779	Pool # 770870, ARM(a)	4.26		04/01/34		2,911,469
	1,775,222	Pool # 780840, ARM(a)	4.50		06/01/34		1,770,274
	2,964,747	Pool # 784134, ARM(a)	5.46		10/01/35		2,955,602
	3,228,150	Pool # 786076, ARM(a)	4.73		07/01/34		3,202,779
	5,824,413	Pool # 786423, ARM(a)	4.59		07/01/34		5,781,392
	2,794,900	Pool # 805386, ARM(a)	4.85		01/01/35		2,765,938
	3,483,923	Pool # 828704, ARM(a)	4.99		07/01/35		3,460,618
	5,777,556	Pool # 871499, ARM(a)	5.59		04/01/36		5,882,199
	160,948	Pool # 892882, ARM(a)	5.82		07/01/36		162,007
	1,943,044	Pool # 946450, ARM(a)	6.14		09/01/37		1,973,914
							50,801,860

Principal Amount				Rate		Maturity Date	Value
	U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES — (continued)
			GOVERNMENT NATIONAL MORTGAGE ASSOCIATION — 0.45%
$	347,843		Pool # 008378, ARM(a)	5.75	%	07/20/18	$	351,015
	84,404		Pool # 780240,	8.50		09/15/09		84,532
	17,927		Pool # 780752	8.50		04/15/10		17,965
	405,181		Pool # 781036	8.00		10/15/17		427,136
	183,988		Pool # 781181	9.00		12/15/09		186,960
	97,780		Pool # 80385, ARM(a)	6.25		03/20/30		98,729
								1,166,337
			TOTAL U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES (Cost $93,528,959)					93,267,162
	U.S. GOVERNMENT SECURITIES— 16.42%
			U.S. TREASURY NOTES — 16.42%
	10,000,000			4.63		07/31/09		10,114,840
	3,000,000			4.63		11/15/09		3,038,907
	250,000	(c)		4.88		04/30/08		251,015
	1,250,000			4.88		05/31/08		1,255,664
	22,000,000			4.88		06/30/09		22,330,000
	5,000,000			5.00		07/31/08		5,034,765
			TOTAL U.S. GOVERNMENT SECURITIES (Cost $41,499,066)					42,025,191
	REPURCHASE AGREEMENT — 3.53%
	9,026,000		Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 08/15/22, market value $9,207,125 (repurchase proceeds $9,028,745)					9,026,000
			TOTAL REPURCHASE AGREEMENT (Cost $9,026,000)					9,026,000

TOTAL INVESTMENTS (Cost $256,813,439)(d)	100.69	%	$	257,666,780
OTHER LIABILITIES IN EXCESS OF ASSETS	(0.69	)		(1,772,967	)
NET ASSETS	100.00	%	$	255,893,813

(a) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(b) Security purchased on a delayed delivery basis.

(c) Security pledged as collateral for open futures contracts.

(d) Cost for federal income tax purposes is $256,813,439.

ARM—Adjustable Rate Mortgage

See Notes to Financial Statements.

41

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Short-Term Government Securities Fund — (continued)

Contracts		Value			Unrealized Appreciation (Depreciation)
FUTURES CONTRACTS
Long —
420	U.S. 2 Year Treasury Note, expiring 12/31/07 (notional amount $86,562,300)	$	86,958,906		$	396,606
Short —
(230)	U.S. 10 Year Treasury Note expiring 12/19/07 (notional amount $(24,913,098))		(25,134,688	)		(221,590	)
(25)	U.S. Long-Term Treasury Bond expiring 12/19/07 (notional amount $(2,782,946))		(2,783,594	)		(648	)
TOTAL FUTURES CONTRACTS						$174,368

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Portfolio Diversification	% of Net Assets		Value
U.S. Government & Agency Securities	75.25		$	192,577,742
Collateralized Mortgage Obligations	15.11			38,656,617
Commercial Mortgage-Backed Securities	4.03			10,322,916
Repurchase Agreement	3.53			9,026,000
Asset-Backed Securities	2.77			7,083,505
Total Investments	100.69		$	257,666,780
Other Liabilities in Excess of Assets	(0.69	)		(1,772,967	)
Net Assets	100.00		$	255,893,813

See Notes to Financial Statements

42

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Short-Term Tax-Exempt Securities Fund

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT CASH EQUIVALENT SECURITIES — 13.41%
$	2,700,000	Columbia, Alabama, Industrial Development Board Pollution Control Revenue Bonds, Alabama Power Co. Project, Series A(a)	4.04	%	05/01/22	$	2,700,000
	2,000,000	Missouri Development Finance Board Revenue Bonds, The Nelson Gallery Foundation, Series B, (MBIA) (SPA: JPMorgan Chase Bank)(a)	4.04		12/01/31		2,000,000
	4,500,000	University of Missouri, Systems Facilities Revenue Bonds, Series B(a)	4.00		11/01/35		4,500,000
	4,300,000	Valdez, Alaska, Marine Terminal Revenue Bonds, Exxon Pipeline Co., Series B(a)	3.93		12/01/33		4,300,000
		TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES (Cost $13,500,000)					13,500,000
	TAX-EXEMPT CASH EQUIVALENT SECURITIES – BACKED BY LETTERS OF CREDIT — 1.59%
	1,600,000	Ohio State Air Quality Development Authority Revenue Bonds, Ohio Edison Co., Series C, (WACHOVIA BANK N.A.)(a)	4.00		06/01/23		1,600,000
		TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES – BACKED BY LETTERS OF CREDIT (Cost $1,600,000)					1,600,000
	TAX-EXEMPT SECURITIES — 74.95%
	6,000,000	California State General Obligation Bonds	5.00		06/01/08		6,060,060
	5,000,000	Fairfax County, Virginia, Refunding & Public Improvement General Obligation Bonds, Series A	5.25		04/01/08		5,045,450
	700,000	Gulf Coast, Texas, Waste Disposal Authority Pollution Control Revenue Bonds	4.00		10/01/17		700,000

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	890,000	Illinois State Housing Development Authority Multi-Family Revenue Bonds, Series G	3.70	%	07/01/08	$	890,160
	800,000	Illinois State Housing Development Authority Multi-Family Revenue Bonds, Series G	3.85		01/01/09		801,232
	1,810,000	Illinois State Housing Development Authority Multi-Family Revenue Bonds, Series G	3.90		01/01/10		1,813,801
	3,850,000	Jacksonville, Florida, Electric Authority Revenue Bonds, Series 18	5.00		10/01/08		3,906,710
	5,035,000	Memphis, Tennessee, General Obligation Bonds, Series B, (MBIA)	5.00		11/01/08		5,118,833
	2,000,000	Montgomery County, Texas, General Obligation Bonds, Series B, (FSA) (Mandatory Put 09/01/08 @ 100)	5.00		03/01/28		2,027,120
	2,500,000	Montgomery County, Texas, General Obligation Bonds, Series B, (FSA) (Mandatory Put 09/01/10 @ 100)	5.00		03/01/29		2,585,650
	2,000,000	New Jersey State Tobacco Settlement Financing Corporation Revenue Bonds, Series 1A	4.13		06/01/10		1,983,180
	6,000,000	New York State Metropolitan Transportation Authority Revenue Bonds, Series H	5.25		11/15/10		6,299,460
	5,000,000	New York State Triborough Bridge & Tunnel Authority Revenue Bonds, (MBIA-IBC-BNY)	6.00		01/01/11		5,371,900
	1,250,000	Puerto Rico Convention Center District Authority, Hotel Occupancy Tax Revenue Bonds, Series A	5.00		07/01/11		1,304,225
	3,000,000	Reedy Creek, Florida, Improvement District Utilities Revenue Bonds, Series 2, (MBIA)	5.25		10/01/10		3,145,170

See Notes to Financial Statements.

43

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Short-Term Tax-Exempt Securities Fund — (continued)

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES — (continued)
$	650,000	Reno, Nevada, Hospital Revenue Bonds, Renown Regional Medical Center Project, Series A	5.00	%	06/01/11	$	671,145
	815,000	Reno, Nevada, Hospital Revenue Bonds, Renown Regional Medical Center Project, Series A	5.00		06/01/12		845,872
	500,000	Reno, Nevada, Hospital Revenue Bonds, Renown Regional Medical Center Project, Series A	5.00		06/01/13		521,265
	5,000,000	San Antonio, Texas, Electric & Gas Systems Revenue Bonds, Series A	5.00		02/01/10		5,160,150
	3,995,000	South Carolina State Transportation Infrastructure, Bank Revenue Bonds, Series A, (AMBAC)	5.00		10/01/09		4,114,131
	3,000,000	Southeastern Virginia Public Services Authority Revenue Bonds, Series A, (MBIA)	5.25		07/01/10		3,135,120
	3,750,000	Tennessee State Energy Acquisition Corporation Gas Revenue Bonds, Series A	5.00		09/01/09		3,824,288
	1,500,000	Texas State Municipal Gas Acquisition & Supply Corp., Gas Supply Revenue Bonds, Senior Lien, Series A	5.00		12/15/10		1,542,900
	3,000,000	Texas State Transportation Commission Revenue Bonds, First Tier, Series A	5.00		04/01/12		3,173,340
	2,500,000	Troy, New York, Industrial Development Authority Civic Facility Revenue Bonds, Rensselaer Polytech, Series E, (XLCA) (Mandatory Put 09/01/11 @ 100)	4.05		04/01/37		2,533,450
	2,890,000	University of Delaware Revenue Bonds, Series B	4.12		11/01/26		2,890,000
		TOTAL TAX-EXEMPT SECURITIES (Cost $75,367,042)					75,464,612

Principal Amount			Rate		Maturity Date	Value
	TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS(b) — 8.69%
$	4,565,000	Chicago, Illinois, Sales Tax Revenue Bonds, (FGIC) (Prerefunded 01/01/09 @ 101)	5.38	%	01/01/30	$	4,714,640
	4,030,000	New York City, New York, Transitional Finance Authority Revenue Bonds, Series A, (Escrowed to Maturity)	5.00		11/01/07		4,034,796
		TOTAL TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS (Cost $8,752,992)					8,749,436
Shares
	REGISTERED INVESTMENT COMPANIES — 0.10%
	97,163	BlackRock Muni Fund (7 day yield of 3.61%)					97,163
	1	Dreyfus Tax Exempt Cash Fund (7 day yield of 3.63%)					1
		TOTAL REGISTERED INVESTMENT COMPANIES (Cost $97,164)					97,164

TOTAL INVESTMENTS (Cost $99,317,198)(c)	98.74	%	$	99,411,212
OTHER ASSETS IN EXCESS OF LIABILITIES	1.26			1,270,316
NET ASSETS	100.00	%	$	100,681,528

(a) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(b) The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest.

(c) Cost for federal income tax purposes is $99,317,198.

AMBAC—American Municipal Bond Assurance Corp.

BNY—Bank of New York

FGIC—Financial Guaranty Insurance Corp.

FSA—Financial Security Assurance

IBC—Insured Bond Certificates

MBIA—Municipal Bond Insurance Association

SPA—Standby Purchase Agreement

XLCA—XL Capital Assurance

See Notes to Financial Statements.

44

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Short-Term Tax-Exempt Securities Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

State Diversification	% of Net Assets	Value
New York	18.12	$	18,239,606
Texas	15.09		15,189,160
Tennessee	8.88		8,943,121
Illinois	8.16		8,219,833
Virginia	8.12		8,180,570
Florida	7.00		7,051,880
Missouri	6.46		6,500,000
California	6.02		6,060,060
Alaska	4.27		4,300,000
South Carolina	4.09		4,114,131
Delaware	2.87		2,890,000
Alabama	2.68		2,700,000
Nevada	2.02		2,038,282
New Jersey	1.97		1,983,180
Ohio	1.59		1,600,000
Puerto Rico	1.30		1,304,225
Registered Investment Companies	0.10		97,164
Total Investments	98.74	$	99,411,212
Other Assets in Excess of Liabilities	1.26		1,270,316
Net Assets	100.00	$	100,681,528

See Notes to Financial Statements.

45

Excelsior Funds

Statements of Assets and Liabilities

September 30, 2007 (Unaudited)

	California Short-Intermediate Term Tax-Exempt Income Fund		Core Bond Fund		High Yield Fund
ASSETS
Investments, at identified cost	$49,701,383		$546,295,502		$89,773,985
Investments, at value	$49,768,699		$545,461,548		$90,284,062
Cash	—		—		841
Unrealized appreciation on swap contracts	—		4,451		—
Receivable for:
Investments sold	—		6,879,231		—
Investments sold on a delayed delivery basis	—		—		—
Fund shares sold	1,120,000		364,686		3,627
Dividends	4,928		—		—
Interest	617,774		4,200,974		2,006,826
Futures variation margin	—		63,984		—
Expense reimbursement due from Investment Advisor and/or its affiliates	17,063		91,636		68,726
Prepaid expenses	2,858		31,199		5,647
Total assets	$51,531,322		$557,097,709		$92,369,729
LIABILITIES
Payable to custodian bank	—		773,896		—
Payable for:
Investments purchased	—		5,832,662		1,940,000
Investments purchased on a delayed delivery basis	—		—		—
Fund shares repurchased	90,662		383,097		28,675
Distributions	103,496		1,409,074		437,961
Investment advisory fee	20,116		296,242		57,921
Administration fee	1,898		41,689		5,194
Transfer agent fee	2,695		34,483		3,801
Pricing and bookkeeping fees	2,852		8,256		3,412
Trustees’/Directors’ fees	—		—		54
Custody fee	695		16,073		12,920
Legal fee	3,609		38,010		285,741
Registration fee	4,936		53,262		19,899
Shareholder servicing fee	10,058		99,490		23,519
Distribution and service fees	—		—	*	—
Other liabilities	15,332		80,759		13,213
Total liabilities	$256,349		$9,066,993		$2,832,310
NET ASSETS	$51,274,973		$548,030,716		$89,537,419
NET ASSETS CONSIST OF
Par value	$7,142		$61,166		$193
Paid-in capital in excess of par value	51,239,846		549,903,000		154,830,582
Undistributed (overdistributed) net investment income	494		194,985		(686,734	)
Accumulated net realized gain (loss)	(39,825	)	(1,359,028	)	(65,116,699	)
Net unrealized appreciation (depreciation) on:
Investments	67,316		(833,954	)	510,077
Futures contracts	—		60,096		—
Swap contracts	—		4,451		—
NET ASSETS	$51,274,973		$548,030,716		$89,537,419
Shares
Net assets	$51,274,973		$329,082,914		$85,790,883
Shares outstanding	7,142,087		36,733,338		18,518,456
Net asset value and offering price per share	$7.18		$8.96		$4.63
Institutional Shares
Net assets	—		$218,946,712		$3,746,536
Shares outstanding	—		24,432,425		809,273
Net asset value and offering price per share	—		$8.96		$4.63
Retirement Shares
Net assets	—		$1,090		—
Shares outstanding	—		122		—
Net asset value and offering price per share	—		$8.96	(a)	—

(a) Net asset value per share rounds due to fractional shares outstanding.

* Rounds to less than $1.

See Notes to Financial Statements.

46

Intermediate- Term Bond Fund		Intermediate-Term Tax-Exempt Fund		Long-Term Tax-Exempt Fund		New York Intermediate-Term Tax-Exempt Fund		Short-Term Government Securities Fund		Short-Term Tax-Exempt Securities Fund
$448,189,122		$385,069,454		$63,078,921		$138,581,571		$256,813,439		$99,317,198
$447,012,904		$388,150,694		$62,884,314		$139 510,834		$257,666,780		$99,411,212
882		—		—		—		—		—
4,451		—		—		—		—		—
—		—		1,056,660		—		252,681		—
—		4,226,640		—		—		—		—
307,328		285,448		—		101,033		52,976		250,812
—		1,102		699		5,379		—		1,322
3,211,071		5,344,187		845,168		2,023,281		1,676,364		1,334,024
76,130		—		—		—		121,406		—
5,203		38,765		17,357		6,929		9,051		22,584
25,143		21,677		3,614		7,752		13,982		5,552
$450,643,112		$398,068,513		$64,807,812		$141,655,208		$259,793,240		$101,025,506
—		—		—		—		285,138		—
—		—		1,032,340		—		2,499,665		—
2,384,792		6,188,310		—		—		—		—
183,903		1,221,859		6,414		137,311		214,069		9,361
1,398,883		1,042,320		166,978		319,053		608,598		224,605
128,014		112,275		26,015		57,630		62,792		24,798
33,022		28,676		3,021		9,039		18,039		5,987
5,584		15,483		18,329		4,248		16,388		2,887
5,901		4,766		2,417		3,303		3,983		2,689
—		—		—		—		—		—
9,688		6,211		756		2,853		14,532		304
36,553		23,846		3,468		9,768		25,660		14,626
17,857		22,356		18,985		2,943		15,789		8,579
86,477		80,196		12,097		28,815		98,107		25,833
—		—		—		—		—		—
45,190		48,385		16,932		22,338		36,667		24,309
$4,335,864		$8,794,683		$1,307,752		$597,301		$3,899,427		$343,978
$446,307,248		$389,273,830		$63,500,060		$141,057,907		$255,893,813		$100,681,528
$62,918		$41,841		$6,362		$16,374		$36,581		$14,149
451,715,712		387,231,825		63,387,496		141,057,419		270,726,831		103,420,698
18,876		(47,083	)	(25,460	)	16		(101,043	)	—
(4,395,013	)	(1,033,993	)	326,269		(945,165	)	(15,796,265	)	(2,847,333	)
(1,176,218	)	3,081,240		(194,607	)	929,263		853,341		94,014
76,522		—		—		—		174,368		—
4,451		—		—		—		—		—
$446,307,248		$389,273,830		$63,500,060		$141,057,907		$255,893,813		$100,681,528
$446,307,248		$389,273,830		$63,500,060		$141,057,907		$255,893,813		$100,681,528
62,917,957		41,841,310		6,362,050		16 ,374,018		36,581,050		14,148,747
$7.09		$9.30		$9.98		$8.61		$7.00		$7.12
—		—		—		—		—		—
—		—		—		—		—		—
—		—		—		—		—		—
—		—		—		—		—		—
—		—		—		—		—		—
—		—		—		—		—		—

See Notes to Financial Statements.

47

Excelsior Funds

Statements of Operations

For the Six Months Ended September 30, 2007 (Unaudited)

	California Short-Intermediate Term Tax-Exempt Income Fund			Core Bond Fund			High Yield Fund
INVESTMENT INCOME
Interest	$	944,581		$	14,432,791		$	4,245,939
Dividends		26,286			347,439			—
Total Investment Income		970,867			14,780,230			4,245,939
EXPENSES
Investment advisory fee		129,389			1,796,450			425,759
Administration fee		36,769			411,888			77,818
Distribution fee—Retirement Shares		—			2			—
Shareholder servicing fee:
Shares		62,464			400,341			127,908
Retirement Shares		—			2			—
Transfer agent fee		9,183			91,821			23,259
Pricing and bookkeeping fees		5,293			15,922			8,464
Trustees’/Directors’ fees		8,419			10,771			12,614
Legal fee		1,908			13,909			283,020
Custody fees		2,225			20,331			9,605
Other expenses		16,034			64,185			59,631
Total Expenses		271,684			2,825,622			1,028,078
Fees waived/reimbursed by:
Investment Advisor		(137,227	)		(557,634	)		(455,059	)
Administrator		(6,199	)		(69,483	)		(11,856	)
Custody earnings credit		(8	)		(1,706	)		(7,497	)
Net Expenses		128,250			2,196,799			553,666
NET INVESTMENT INCOME		842,617			12,583,431			3,692,273
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FUTURES CONTRACTS AND SWAP CONTRACTS
Net realized gain (loss) on:
Investments		(10,222	)		438,269			364,010
Futures contracts		—			64,303			—
Swap contracts		—			5,699			—
Net realized gain (loss)		(10,222	)		508,271			364,010
Net change in unrealized appreciation (depreciation) on:
Investments		84,028			(1,889,913	)		(4,023,073	)
Futures contracts		—			19,368			—
Swap contracts		—			4,451			—
Net change in unrealized appreciation (depreciation)		84,028			(1,866,094	)		(4,023,073	)
Net Gain (Loss)		73,806			(1,357,823	)		(3,659,063	)
Net Increase Resulting from Operations	$	916,423		$	11,225,608		$	33,210

See Notes to Financial Statements.

48

Intermediate- Term Bond Fund			Intermediate- Term Tax- Exempt Fund			Long-Term Tax- Exempt Fund			New York Intermediate- Term Tax- Exempt Fund			Short-Term Government Securities Fund			Short-Term Tax-Exempt Securities Fund
$	11,325,192		$	7,972,265		$	1,351,075		$	2,746,463		$	6,241,821		$	1,826,158
	423,987			15,774			3,540			11,963			—			4,103
	11,749,179			7,988,039			1,354,615			2,758,426			6,241,821			1,830,261
	795,470			687,768			160,399			350,780			381,588			152,767
	338,422			292,303			46,063			103,077			188,493			74,280
	—			—			—			—			—			—
	568,194			481,829			69,555			166,980			317,989			143,533
	—			—			—			—			—			—
	17,932			25,375			28,599			11,733			56,319			11,213
	11,736			8,757			5,414			6,540			8,617			5,398
	10,594			11,113			8,563			9,026			9,400			9,061
	31,824			13,855			2,855			2,822			1,845			273
	14,867			12,718			3,145			3,541			10,096			5,624
	41,566			38,190			16,586			17,362			32,995			10,659
	1,830,605			1,571,908			341,179			671,861			1,007,342			412,808
	(68,107	)		(245,385	)		(76,526	)		(93,145	)		—			(94,553	)
	(56,216	)		(49,153	)		(8,003	)		(17,469	)		(64,084	)		(12,723	)
	(1,768	)		(83	)		(4	)		(2	)		(230	)		(15	)
	1,704,514			1,277,287			256,646			561,245			943,028			305,517
	10,044,665			6,710,752			1,097,969			2,197,181			5,298,793			1,524,744
	698,061			(244,445	)		57,514			(198,872	)		(559,126	)		(3,342	)
	130,882			—			—			—			(58,128	)		—
	5,699			—			—			—			—			—
	834,642			(244,445	)		57,514			(198,872	)		(617,254	)		(3,342	)
	(1,538,619	)		(1,167,184	)		(1,003,023	)		(30,120	)		1,382,131			168,508
	7,828			—			—			—			133,400			—
	4,451			—			—			—			—			—
	(1,526,340	)		(1,167,184	)		(1,003,023	)		(30,120	)		1,515,531			168,508
	(691,698	)		(1,411,629	)		(945,509	)		(228,992	)		898,277			165,166
$	9,352,967		$	5,299,123		$	152,460		$	1,968,189		$	6,197,070		$	1,689,910

See Notes to Financial Statements.

49

Excelsior Funds

Statements of Changes in Net Assets

	California Short-Intermediate Term Tax-Exempt Income Fund
Increase (Decrease) in Net Assets	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
Operations
Net investment income	$	842,617		$	1,939,999
Net realized gain (loss) on investments, futures contracts and swap contracts		(10,222	)		12,011
Net change in unrealized appreciation (depreciation) on investments, futures contracts and swap contracts		84,028			335,549
Net increase resulting from operations		916,423			2,287,559
Distributions to Shareholders
From net investment income:
Shares		(842,864	)		(1,939,807	)
Institutional Shares		—			—
Retirement Shares		—			—
From net realized gains:
Shares		—			(255,808	)
Total Distributions to Shareholders		(842,864	)		(2,195,615	)
Net Capital Share Transactions		(5,403,813	)		(9,841,880	)
Net increase (decrease) in net assets		(5,330,254	)		(9,749,936	)
NET ASSETS
Beginning of period	$	56,605,227		$	66,355,163
End of period	$	51,274,973		$	56,605,227
Undistributed (overdistributed) net investment income, at end of period	$	494		$	741

See Notes to Financial Statements.

50

Core Bond Fund						High Yield Fund
(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
	$12,583,431		$	18,645,393		$	3,692,273		$	8,511,823
	508,271			(67,050	)		364,010			(309,422	)
	(1,866,094	)		5,359,028			(4,023,073	)		6,524,399
	11,225,608			23,937,371			33,210			14,726,800
	(7,026,663	)		(12,851,594	)		(3,727,258	)		(7,813,910	)
	(5,385,011	)		(5,693,159	)		(154,811	)		(539,707	)
	(22	)		(40	)		—			—
	—			—			—			—
	(12,411,696	)		(18,544,793	)		(3,882,069	)		(8,353,617	)
	(2,502,969	)		263,311,270			(22,610,627	)		(39,412,117	)
	(3,689,057	)		268,703,848			(26,459,486	)		(33,038,934	)
$	551,719,773		$	283,015,925		$	115,996,905		$	149,035,839
$	548,030,716		$	551,719,773		$	89,537,419		$	115,996,905
$	194,985		$	23,250		$	(686,734	)	$	(496,938	)

See Notes to Financial Statements.

51

Excelsior Funds

Statements of Changes in Net Assets — (continued)

	Intermediate-Term Bond Fund
Increase (Decrease) in Net Assets	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
Operations
Net investment income	$	10,044,665		$	19,677,927
Net realized gain (loss) on investments, futures contracts and swap contracts		834,642			(3,129,379	)
Net change in unrealized appreciation (depreciation) on investments, futures contracts and swap contracts		(1,526,340	)		8,596,210
Net increase resulting from operations		9,352,967			25,144,758
Distributions to Shareholders
From net investment income:
Shares		(9,979,815	)		(19,642,311	)
From net realized gains:
Shares		—			—
Total Distributions to Shareholders		(9,979,815	)		(19,642,311	)
Net Capital Share Transactions		(20,341,747	)		24,700,690
Net increase (decrease) in net assets		(20,968,595	)		30,203,137
NET ASSETS
Beginning of period	$	467,275,843		$	437,072,706
End of period	$	446,307,248		$	467,275,843
Undistributed (overdistributed) net investment income, at end of period	$	18,876		$	(45,974	)

See Notes to Financial Statements.

52

Intermediate-Term Tax-Exempt Fund						Long-Term Tax-Exempt Fund
(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
$	6,710,752		$	12,410,191		$	1,097,969		$	2,140,473
	(244,445	)		(789,548	)		57,514			267,714
	(1,167,184	)		3,456,392			(1,003,023	)		768,194
	5,299,123			15,077,035			152,460			3,176,381
	(6,806,535	)		(12,408,623	)		(1,150,559	)		(2,140,560	)
	—			(730,446	)		—			(392,493	)
	(6,806,535	)		(13,139,069	)		(1,150,559	)		(2,533,053	)
	(1,681,783	)		37,829,303			(878,091	)		3,475,678
	(3,189,195	)		39,767,269			(1,876,190	)		4,119,006
$	392,463,025		$	352,695,756		$	65,376,250		$	61,257,244
$	389,273,830		$	392,463,025		$	63,500,060		$	65,376,250
$	(47,083	)	$	48,700		$	(25,460	)	$	27,130

See Notes to Financial Statements.

53

Excelsior Funds

Statements of Changes in Net Assets — (continued)

	New York Intermediate-Term Tax-Exempt Fund
Increase (Decrease) in Net Assets	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
Operations
Net investment income	$	2,197,181		$	4,174,262
Net realized loss on investments and futures contracts		(198,872	)		(221,768	)
Net change in unrealized appreciation (depreciation) on investments and futures contracts		(30,120	)		1,496,004
Net increase resulting from operations		1,968,189			5,448,498
Distributions to Shareholders
From net investment income:
Shares		(2,198,354	)		(4,173,194	)
Net Capital Share Transactions		(166,179	)		9,152,946
Net increase (decrease) in net assets		(396,344	)		10,428,250
NET ASSETS
Beginning of period	$	141,454,251		$	131,026,001
End of period	$	141,057,907		$	141,454,251
Undistributed (overdistributed) net investment income, at end of period	$	16		$	1,189

See Notes to Financial Statements.

54

Short-Term Government Securities Fund						Short-Term Tax-Exempt Securities Fund
(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
$	5,298,793		$	10,346,642		$	1,524,744		$	3,390,028
	(617,254	)		(1,599,140	)		(3,342	)		(202,111	)
	1,515,531			4,796,996			168,508			589,130
	6,197,070			13,544,498			1,689,910			3,777,047
	(5,372,430	)		(11,425,192	)		(1,527,805	)		(3,386,967	)
	(2,949,694	)		(83,267,253	)		(3,576,048	)		(29,506,088	)
	(2,125,054	)		(81,147,947	)		(3,413,943	)		(29,116,008	)
$	258,018,867		$	339,166,814		$	104,095,471		$	133,211,479
$	255,893,813		$	258,018,867		$	100,681,528		$	104,095,471
$	(101,043	)	$	(27,406	)	$	—		$	3,061

See Notes to Financial Statements.

55

Excelsior Funds

Statements of Changes in Net Assets — Capital Stock Activity

	California Short-Intermediate Term Tax-Exempt Income Fund
	(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Changes in Shares	Shares		Dollars ($)		Shares		Dollars ($)
Shares
Subscriptions	869,820		6,214,732		2,429,521		17,401,512
Distributions reinvested	32,746		233,744		92,381		662,564
Redemptions	(1,664,350	)	(11,852,289	)	(3,890,655	)	(27,905,956	)
Net increase (decrease)	(761,784	)	(5,403,813	)	(1,368,753	)	(9,841,880	)
Institutional Shares
Subscriptions	—		—		—		—
Proceeds received in connection with merger	—		—		—		—
Distributions reinvested	—		—		—		—
Redemptions	—		—		—		—
Net increase (decrease)	—		—		—		—
Retirement Shares
Distributions reinvested	—		—		—		—
Redemption Fees	—		—		—		—

See Notes to Financial Statements.

56

Core Bond Fund								High Yield Fund
(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007				(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)
4,131,808		36,758,471		9,986,679		88,776,364		2,917,638		14,543,339		6,072,661		28,550,138
408,792		3,642,395		673,001		5,989,211		157,785		746,752		217,741		1,004,402
(2,772,989	)	(24,631,216	)	(7,567,445	)	(67,312,972	)	(7,804,531	)	(36,607,846	)	(13,302,993	)	(60,913,343	)
1,767,611		15,769,650		3,092,235		27,452,603		(4,729,108	)	(21,317,755	)	(7,012,591	)	(31,358,803	)
1,608,329		14,318,071		2,772,888		24,623,459		250,685		321,444		155,243		699,379
—		—		25,148,666		225,504,856		—		—		—		—
129,411		1,153,959		113,170		1,016,339		6,306		30,076		32,619		149,603
(3,775,194	)	(33,744,674	)	(1,706,058	)	(15,286,027	)	(345,344	)	(1,644,392	)	(1,952,444	)	(8,902,311	)
(2,037,454	)	(18,272,644	)	26,328,666		235,858,627		(88,353	)	(1,292,872	)	(1,764,582	)	(8,053,329	)
3		25		4		40		—		—		—		—
—		—		—		—		—		—		—		15

See Notes to Financial Statements.

57

Excelsior Funds

Statements of Changes in Net Assets — Capital Stock Activity — (continued)

	Intermediate-Term Bond Fund
	(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Changes in Shares	Shares		Dollars ($)		Shares		Dollars ($)
Shares
Subscriptions	5,256,125		37,025,907		18,049,503		127,159,970
Distributions reinvested	224,431		1,582,395		362,756		2,558,710
Redemptions	(8,393,897	)	(58,950,049	)	(14,921,064	)	(105,017,990	)
Net increase (decrease)	(2,913,341	)	(20,341,747	)	3,491,195		24,700,690

See Notes to Financial Statements.

58

Intermediate-Term Tax-Exempt Fund								Long-Term Tax-Exempt Fund
(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007				(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)
4,088,759		37,848,587		12,042,682		112,338,953		444,274		4,413,850		912,996		9,224,461
65,510		607,312		126,628		1,181,763		25,100		251,159		49,954		506,450
(4,344,405	)	(40,137,682	)	(8,123,028	)	(75,691,413	)	(555,949	)	(5,543,100	)	(619,542	)	(6,255,233	)
(190,136	)	(1,681,783	)	4,046,282		37,829,303		(86,575	)	(878,091	)	343,408		3,475,678

See Notes to Financial Statements.

59

Excelsior Funds

Statements of Changes in Net Assets — Capital Stock Activity — (continued)

	New York Intermediate-Term Tax-Exempt Fund
Changes in Shares	(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
	Shares		Dollars ($)		Shares		Dollars ($)
Shares
Subscriptions	1,983,018		17,003,915		4,902,368		42,183,360
Distributions reinvested	34,353		294,714		62,837		540,239
Redemptions	(2,041,763	)	(17,464,808	)	(3,898,713	)	(33,570,653	)
Net increase (decrease)	(24,392	)	(166,179	)	1,066,492		9,152,946

See Notes to Financial Statements.

60

Short-Term Government Securities Fund								Short-Term Tax-Exempt Securities Fund
(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007				(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)
4,337,844		30,157,772		6,885,151		47,777,743		1,469,626		10,412,934		2,756,608		19,549,512
280,134		1,949,112		430,742		2,989,949		27,084		192,104		44,926		318,627
(5,045,277	)	(35,056,578	)	(19,339,995	)	(134,034,945	)	(2,000,526	)	(14,181,086	)	(6,961,351	)	(49,374,227	)
(427,299	)	(2,949,694	)	(12,024,102	)	(83,267,253	)	(503,816	)	(3,576,048	)	(4,159,817	)	(29,506,088	)

See Notes to Financial Statements.

61

Financial Highlights – California Short-Intermediate Term Tax-Exempt Income Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	7.16		$	7.16		$	7.27		$	7.49		$	7.49		$	7.27
Income from Investment Operations:
Net investment income		0.12	(a)		0.23	(a)		0.23	(a)		0.23	(a)		0.24			0.25
Net realized and unrealized gain (loss) on investments		0.02			0.03			(0.11	)		(0.22	)		—			0.22
Total from Investment Operations		0.14			0.26			0.12			0.01			0.24			0.47
Less Distributions to Shareholders:
From net investment income		(0.12	)		(0.23	)		(0.23	)		(0.23	)		(0.24	)		(0.25	)
From net realized gains		—			(0.03	)		—			—			—			—	(b)
Total Distributions to Shareholders		(0.12	)		(0.26	)		(0.23	)		(0.23	)		(0.24	)		(0.25	)
Net Asset Value, End of Period	$	7.18		$	7.16		$	7.16		$	7.27		$	7.49		$	7.49
Total return (c)(d)		1.93	(e)		3.65	%		1.60	%		0.20	%		3.19	%		6.59	%
Ratios to Average Net Assets/ Supplemental Data:
Net expenses (f)		0.50	%(g)		0.50	%		0.50	%		0.50	%		0.50	%		0.46	%
Waiver/Reimbursement		0.55	%(g)		0.55	%		0.53	%		0.55	%		0.40	%		0.04	%
Net investment income (f)		3.26	%(g)		3.16	%		3.11	%		3.18	%		3.14	%		3.36	%
Portfolio turnover rate		4	%(e)		7	%		48	%		10	%		15	%		9	%
Net assets, end of period (000’s)	$	51,275		$	56,605		$	66,355		$	62,949		$	66,894		$	66,194

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Amount represents less than $0.01 per share.

(c) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(d) Total return at net asset value assuming all distributions reinvested.

(e) Not annualized.

(f) The benefits derived from custody credits had an impact of less than 0.01%.

(g) Annualized.

See Notes to Financial Statements.

62

Financial Highlights – Core Bond Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	8.98		$	8.84		$	9.15		$	9.43		$	9.43		$	8.95
Income from Investment Operations:
Net investment income		0.20	(a)		0.39	(a)		0.37	(a)		0.37	(a)		0.38			0.47
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts		(0.02	)		0.14			(0.18	)		(0.23	)		0.14			0.50
Total from Investment Operations		0.18			0.53			0.19			0.14			0.52			0.97
Less Distributions to Shareholders:
From net investment income		(0.20	)		(0.39	)		(0.38	)		(0.37	)		(0.38	)		(0.48	)
From net realized gains		—			—			(0.12	)		(0.05	)		(0.14	)		(0.01	)
Total Distributions to Shareholders		(0.20	)		(0.39	)		(0.50	)		(0.42	)		(0.52	)		(0.49	)
Net Asset Value, End of Period	$	8.96		$	8.98		$	8.84		$	9.15		$	9.43		$	9.43
Total return (b)(c)		1.99	%(d)		6.08	%		2.00	%		1.55	%		5.74	%		11.07	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		0.90	%(f)		0.90	%		0.90	%		0.90	%		0.87	%		0.84	%
Waiver/Reimbursement		0.23	%(f)		0.30	%		0.40	%		0.37	%		0.24	%		0.11	%
Net investment income (e)		4.46	%(f)		4.36	%		4.05	%		3.99	%		4.06	%		5.10	%
Portfolio turnover rate		29	%(d)		49	%		95	%		90	%		84	%		120	%
Net assets, end of period (000’s)	$	329,083		$	313,967		$	281,767		$	211,932		$	269,027		$	293,182

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

63

Financial Highlights – High Yield Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	4.80		$	4.53		$	4.67		$	4.71		$	3.99		$	6.20
Income from Investment Operations:
Net investment income (a)		0.16			0.32			0.31			0.34			0.35			0.88
Net realized and unrealized gain (loss) on investments		(0.16	)		0.26			(0.14	)		(0.08	)		0.71			(1.54	)
Total from Investment Operations		—			0.58			0.17			0.26			1.06			(0.66	)
Less Distributions to Shareholders:
From net investment income		(0.17	)		(0.31	)		(0.30	)		(0.30	)		(0.26	)		(1.04	)
Return of capital		—			—			(0.01	)		—			(0.08	)		(0.51	)
Total Distributions to Shareholders		(0.17	)		(0.31	)		(0.31	)		(0.30	)		(0.34	)		(1.55	)
Net Asset Value, End of Period	$	4.63		$	4.80		$	4.53		$	4.67		$	4.71		$	3.99
Total return (b)(c)		0.05	%(d)		13.41	%		3.72	%		5.54	%		27.45	%		(10.49	)%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		1.05	%(f)		1.05	%		1.05	%		1.04	%		1.05	%		1.08	%
Waiver/Reimbursement		0.88	%(f)		0.64	%		0.24	%		0.26	%		0.31	%		0.27	%
Net investment income (e)		6.94	%(f)		6.95	%		6.84	%		6.50	%		7.79	%		18.06	%
Portfolio turnover rate		25	%(d)		75	%		62	%		70	%		170	%		153	%
Net assets, end of period (000’s)	$	85,791		$	111,687		$	136,991		$	156,139		$	151,476		$	131,342

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

64

Financial Highlights – Intermediate-Term Bond Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	7.10		$	7.01		$	7.16		$	7.40		$	7.39		$	7.10
Income from Investment Operations:
Net investment income		0.16	(a)		0.31	(a)		0.27	(a)		0.26	(a)		0.26			0.37
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts		(0.02	)		0.09			(0.12	)		(0.22	)		0.11			0.36
Total from Investment Operations		0.14			0.40			0.15			0.03			0.37			0.73
Less Distributions to Shareholders:
From net investment income		(0.15	)		(0.31	)		(0.28	)		(0.26	)		(0.26	)		(0.40	)
From net realized gains		—			—			(0.02	)		(0.01	)		(0.10	)		(0.04	)
Total Distributions to Shareholders		(0.15	)		(0.31	)		(0.30	)		(0.27	)		(0.36	)		(0.44	)
Net Asset Value, End of Period	$	7.09		$	7.10		$	7.01		$	7.16		$	7.40		$	7.39
Total return (b)(c)		2.08	%(d)		5.79	%		2.06	%		0.45	%		5.25	%		10.50	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		0.75	%(f)		0.75	%		0.72	%		0.60	%		0.56	%		0.53	%
Waiver/Reimbursement		0.06	%(f)		0.05	%		0.09	%		0.21	%		0.13	%		0.16	%
Net investment income (e)		4.44	%(f)		4.38	%		3.74	%		3.53	%		3.56	%		4.56	%
Portfolio turnover rate		45	%(d)		70	%		75	%		59	%		85	%		98	%
Net assets, end of period (000’s)	$	446,307		$	467,276		$	437,073		$	410,392		$	413,267		$	404,627

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

65

Financial Highlights – Intermediate-Term Tax-Exempt Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	9.34		$	9.29		$	9.41		$	9.69		$	9.88		$	9.39
Income from Investment Operations:
Net investment income		0.16	(a)		0.31	(a)		0.29	(a)		0.26	(a)		0.26			0.31
Net realized and unrealized gain (loss) on investments		(0.04	)		0.07			(0.11	)		(0.24	)		0.15			0.55
Total from Investment Operations		0.12			0.38			0.18			0.02			0.41			0.86
Less Distributions to Shareholders:
From net investment income		(0.16	)		(0.31	)		(0.29	)		(0.26	)		(0.26	)		(0.31	)
From net realized gains		—			(0.02	)		(0.01	)		(0.04	)		(0.34	)		(0.06	)
Total Distributions Declared to Shareholders		(0.16	)		(0.33	)		(0.30	)		(0.30	)		(0.60	)		(0.37	)
Net Asset Value, End of Period	$	9.30		$	9.34		$	9.29		$	9.41		$	9.69		$	9.88
Total return (b)(c)		1.31	%(d)		4.15	%		1.93	%		0.20	%		4.19	%		9.31	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		0.65	%(f)		0.65	%		0.65	%		0.65	%		0.56	%		0.51	%
Waiver/Reimbursement		0.15	%(f)		0.15	%		0.15	%		0.16	%		0.07	%		0.08	%
Net investment income (e)		3.42	%(f)		3.36	%		3.09	%		2.69	%		2.60	%		3.15	%
Portfolio turnover rate		14	%(d)		39	%		69	%		—			31	%		48	%
Net assets, end of period (000’s)	$	389,274		$	392,463		$	352,696		$	349,540		$	387,624		$	407,102

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

66

Financial Highlights – Long-Term Tax-Exempt Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	10.14		$	10.03		$	10.07		$	10.08		$	9.95		$	9.48
Income from Investment Operations:
Net investment income		0.17	(a)		0.35	(a)		0.31	(a)		0.27	(a)		0.26			0.29
Net realized and unrealized gain (loss) on investments		(0.15	)		0.16			(0.04	)		(0.01	)		0.13			0.47
Total from Investment Operations		0.02			0.51			0.27			0.27			0.39			0.76
Less Distributions to Shareholders:
From net investment income		(0.18	)		(0.34	)		(0.31	)		(0.28	)		(0.26	)		(0.29	)
From net realized gains		—			(0.06	)		—			—			—			—
Total Distributions to Shareholders		(0.18	)		(0.40	)		(0.31	)		(0.28	)		(0.26	)		(0.29	)
Net Asset Value, End of Period	$	9.98		$	10.14		$	10.03		$	10.07		$	10.08		$	9.95
Total return (b)(c)		0.21	%(d)		5.21	%		2.64	%		2.68	%		4.01	%		8.12	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		0.80	%(f)		0.80	%		0.80	%		0.80	%		0.73	%		0.70	%
Waiver/Reimbursement		0.26	%(f)		0.26	%		0.22	%		0.25	%		0.07	%		0.07	%
Net investment income (e)		3.43	%(f)		3.39	%		3.01	%		2.74	%		2.64	%		2.99	%
Portfolio turnover rate		11	%(d)		92	%		88	%		87	%		111	%		51	%
Net assets, end of period (000’s)	$	63,500		$	65,376		$	61,257		$	62,817		$	72,783		$	94,965

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

67

Financial Highlights – New York Intermediate-Term Tax-Exempt Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	8.63		$	8.55		$	8.71		$	8.97		$	9.12		$	8.74
Income from Investment Operations:
Net investment income		0.13	(a)		0.27	(a)		0.24	(a)		0.22	(a)		0.22			0.27
Net realized and unrealized gain (loss) on investments		(0.02	)		0.08			(0.04	)		(0.17	)		0.14			0.51
Total from Investment Operations		0.11			0.35			0.20			0.05			0.36			0.78
Less Distributions to Shareholders:
From net investment income		(0.13	)		(0.27	)		(0.24	)		(0.22	)		(0.22	)		(0.27	)
From net realized gains		—			—			(0.12	)		(0.09	)		(0.29	)		(0.13	)
Total Distributions to Shareholders		(0.13	)		(0.27	)		(0.36	)		(0.31	)		(0.51	)		(0.40	)
Net Asset Value, End of Period	$	8.61		$	8.63		$	8.55		$	8.71		$	8.97		$	9.12
Total return (b)(c)		1.34	(d)		4.09	%		2.25	%		0.52	%		4.06	%		8.96	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		0.80	%(f)		0.80	%		0.80	%		0.80	%		0.68	%		0.67	%
Waiver/Reimbursement		0.16	%(f)		0.19	%		0.18	%		0.18	%		0.05	%		0.05	%
Net investment income (e)		3.14	%(f)		3.09	%		2.71	%		2.46	%		2.41	%		2.96	%
Portfolio turnover rate		4	%(d)		51	%		83	%		15	%		42	%		43	%
Net assets, end of period (000’s)	$	141,058		$	141,454		$	131,026		$	138,253		$	178,107		$	187,400

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

68

Financial Highlights – Short-Term Government Securities Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	6.97		$	6.92		$	7.00		$	7.22		$	7.31		$	7.11
Income from Investment Operations:
Net investment income		0.15	(a)		0.25	(a)		0.20	(a)		0.18	(a)		0.16			0.26
Net realized and unrealized gain (loss) on investments and futures contracts		0.03			0.08			(0.04	)		(0.18	)		(0.03	)		0.25
Total from Investment Operations		0.18			0.33			0.16			—			0.13			0.51
Less Distributions to Shareholders:
From net investment income		(0.15	)		(0.28	)		(0.24	)		(0.22	)		(0.20	)		(0.26	)
From net realized gains		—			—			—			—			(0.02	)		(0.05	)
Total Distributions to Shareholders		(0.15	)		(0.28	)		(0.24	)		(0.22	)		(0.22	)		(0.31	)
Net Asset Value, End of Period	$	7.00		$	6.97		$	6.92		$	7.00		$	7.22		$	7.31
Total return (b)(c)		2.57	%(d)		4.88	%		2.36	%		0.01	%		1.90	%		7.27	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		0.74	%(f)		0.75	%		0.65	%		0.60	%		0.53	%		0.49	%
Waiver/Reimbursement		0.05	%(f)		0.04	%		0.12	%		0.19	%		0.14	%		0.15	%
Net investment income (e)		4.17	%(f)		3.65	%		2.83	%		2.57	%		2.26	%		3.22	%
Portfolio turnover rate		34	%(d)		128	%		118	%		106	%		231	%		170	%
Net assets, end of period (000’s)	$	255,894		$	258,019		$	339,167		$	402,518		$	469,218		$	499,519

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

69

Financial Highlights – Short-Term Tax-Exempt Securities Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
Shares				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	7.10		$	7.08		$	7.13		$	7.22		$	7.20		$	7.17
Income from Investment Operations:
Net investment income		0.11	(a)		0.21	(a)		0.14	(a)		0.09	(a)		0.08			0.12
Net realized and unrealized gain (loss) on investments		0.02			0.02			(0.05	)		(0.09	)		0.02			0.03
Total from Investment Operations		0.13			0.23			0.09			—			0.10			0.15
Less Distributions to Shareholders:
From net investment income		(0.11	)		(0.21	)		(0.14	)		(0.09	)		(0.08	)		(0.12	)
From net realized gains		—			—			—			—	(b)		—			—
Total Distributions to Shareholders		(0.11	)		(0.21	)		(0.14	)		(0.09	)		(0.08	)		(0.12	)
Net Asset Value, End of Period	$	7.12		$	7.10		$	7.08		$	7.13		$	7.22		$	7.20
Total return (c)(d)		1.80	%(e)		3.22	%		1.33	%		(0.01	)%		1.40	%		2.04	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (f)		0.60	%(g)		0.60	%		0.60	%		0.60	%		0.47	%		0.46	%
Waiver/Reimbursement		0.21	%(g)		0.20	%		0.17	%		0.16	%		0.12	%		0.12	%
Net investment income (f)		3.00	%(g)		2.89	%		1.97	%		1.21	%		1.12	%		1.57	%
Portfolio turnover rate		4	%(e)		38	%		111	%		10	%		99	%		31	%
Net assets, end of period (000’s)	$	100,682		$	104,095		$	133,211		$	239,060		$	360,604		$	291,282

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Amount represents less than $0.01 per share.

(c) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(d) Total return at net asset value assuming all distributions reinvested.

(e) Not annualized.

(f) The benefits derived from custody credits had an impact of less than 0.01%.

(g) Annualized.

See Notes to Financial Statements.

70

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS

September 30, 2007 (Unaudited)

Note 1. Organization

Excelsior Funds, Inc. (“Excelsior Fund”) and Excelsior Tax-Exempt Funds, Inc. (“Excelsior Tax-Exempt Fund”) are each organized as a Maryland Corporation. Excelsior Funds Trust (the “Trust”) is organized as a Delaware business trust. Excelsior Fund, Excelsior Tax-Exempt Fund and the Trust are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as open-end management investment companies. Information presented in these financial statements pertains to the following funds (individually referred to as a “Fund”, collectively referred to as the “Funds”):

Excelsior Fund:

Core Bond Fund

Intermediate-Term Bond Fund

Short-Term Government Securities Fund

Excelsior Tax-Exempt Fund:

California Short-Intermediate Term Tax-Exempt Income Fund

Intermediate-Term Tax-Exempt Fund

Long-Term Tax-Exempt Fund

New York Intermediate-Term Tax-Exempt Fund

Short-Term Tax-Exempt Securities Fund

The Trust:

High Yield Fund

Each Fund is diversified, with the exception of California Short-Intermediate Term Tax-Exempt Income Fund and New York Intermediate-Term Tax-Exempt Fund, each of which is non-diversified.

Investment Objectives

California Short-Intermediate Term Tax-Exempt Income Fund seeks to provide California investors with as high a level of current interest income exempt from federal income tax and, to the extent possible, from California state personal income tax as is consistent with the preservation of capital and relative stability of principal. Core Bond Fund seeks high current income consistent with what is believed to be prudent risk of capital. High Yield Fund seeks a high level of current income as its primary objective and may also consider the potential for capital appreciation as a secondary objective when consistent with its primary objective. Intermediate-Term Bond Fund seeks as high a level of current interest income as is consistent with relative stability of principal. Intermediate-Term Tax-Exempt Fund seeks as high a level of current interest income exempt from federal income taxes as is consistent with relative stability of principal. Long-Term Tax-Exempt Fund seeks to maximize current interest income exempt from federal income taxes. New York Intermediate-Term Tax-Exempt Fund seeks to provide New York investors with as high a level of current interest income exempt from federal income tax and, to the extent possible, from New York State and New York City personal income taxes as is consistent with relative stability of principal. Short-Term Government Securities Fund seeks a high level of current income consistent with stability of principal. Short-Term Tax-Exempt Securities Fund seeks as high a level of current interest income exempt from federal income taxes as is consistent with relative stability of principal.

71

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Fund Shares

Excelsior Fund is authorized to issue up to 42.5 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 1.5 billion shares of Intermediate-Term Bond Fund; 1.0 billion shares of Short-Term Government Securities Fund; and 1.25 billion shares of Core Bond Fund.

Excelsior Tax-Exempt Fund is authorized to issue up to 24 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 1.5 billion shares each of California Short-Intermediate Term Tax-Exempt Income Fund, Intermediate-Term Tax-Exempt Fund, Long-Term Tax-Exempt Fund, New York Intermediate-Term Tax-Exempt Fund and Short-Term Tax-Exempt Securities Fund.

The Trust may issue an unlimited number of shares of beneficial interest of each class of each Fund, with a par value of $0.00001.

California Short-Intermediate Term Tax-Exempt Income Fund, Intermediate-Term Bond Fund, Intermediate-Term Tax-Exempt Fund, Long-Term Tax-Exempt Fund, New York Intermediate-Term Tax-Exempt Fund, Short-Term Government Securities Fund and Short-Term Tax-Exempt Securities Fund offer one class of shares: Shares. High Yield Fund offers two classes of shares: Shares and Institutional Shares. Core Bond Fund offers three classes of shares: Shares, Institutional Shares and Retirement Shares. The financial highlights of the Institutional Shares and Retirement Shares of the Funds are presented separately.

Shares, Institutional Shares and Retirement Shares are offered continuously at net asset value. There are certain restrictions on the purchase of Institutional Shares and Retirement Shares, as described in the Funds’ prospectuses.

Note 2. Significant Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain ratios have been reclassified on the Financial Highlights to conform to the current period presentation. The changes have no effect on the ratios. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements.

Security Valuation

Debt securities generally are valued by pricing services approved by the Board of Directors with regard to Excelsior Fund and Excelsior Tax-Exempt Fund, and the Board of Trustees with regard to the Trust, based upon market transactions for normal, institutional-size trading units of similar securities.

72

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Debt securities for which quotations are readily available are valued at an over-the-counter or exchange bid quotation. Certain debt securities, which tend to be more thinly traded and of lesser quality, are priced based on fundamental analysis of the financial condition of the issuer and the estimated value of any collateral. Valuations developed through pricing techniques may vary from the actual amounts realized upon sale of the securities, and the potential variation may be greater for those securities valued using fundamental analysis.

Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.

Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.

Investments in other open-end investment companies are valued at net asset value.

Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.

Options are valued at the last reported sale price, or in the absence of a sale, the mean between the last quoted bid and ask price.

Swap agreements are stated at fair value.

Investments for which market quotations are not readily available, or quotations which management believes are not appropriate are valued at “fair value” as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Directors with regard to Excelsior Fund and Excelsior Tax-Exempt Fund, and the Board of Trustees with regard to the Trust. If a security is valued at fair value such value is likely to be different from the last quoted market price for the security.

In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), was issued. SFAS 157 is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is evaluating the impact the application of SFAS 157 will have on the Funds’ financial statement disclosures.

Security Transactions

Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.

73

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Futures Contracts

Each Fund may invest in futures contracts to gain or reduce exposure to particular securities or segments of the bond markets. Futures contracts are financial instruments whose values depend on, or are derived from, the value of the underlying security, index or currency. The Funds may use futures contracts for both hedging and non-hedging purposes, such as to adjust the Funds’ sensitivity to changes in interest rates, or to offset a potential loss in one position by establishing an opposite position. The Funds typically use futures contracts in an effort to achieve economic exposure similar to that which they could have achieved through the purchase and sale of fixed income securities more efficiently.

The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities, and (3) an inaccurate prediction by the Funds’ investment advisor of the future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Funds’ Statements of Assets and Liabilities at any given time.

Upon entering into a futures contract, a Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by the Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. A Fund recognizes a realized gain or loss when the contract is closed or expires.

Options

Certain Funds may write call and put options on securities they own or in which they may invest. Writing put options tends to increase the Funds’ exposure to the underlying instrument. Writing call options tends to decrease the Funds’ exposure to the underlying instrument. When Funds write a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked-to-market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against the amounts paid on the underlying transaction to determine the realized gain or loss. Each Fund as a writer of an option has no control over whether the underlying security may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option. There is the risk that the Funds may not be able to enter into a closing transaction because of an illiquid market. The Funds’ custodian will set aside cash or liquid portfolio securities equal to the amount of the written options contract commitment in a separate account.

Certain Funds may also purchase put and call options. Purchasing call options tends to increase the Funds’ exposure to the underlying instrument. Purchasing put options tends to decrease the Funds’ exposure to the underlying instrument. The Funds may pay a premium, which is included in the Funds’ Statements of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the

74

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

premium paid. Premiums paid for purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying transaction to determine the realized gain or loss.

Repurchase Agreements

Each Fund may engage in repurchase agreement transactions with institutions that the Funds’ investment advisor has determined are creditworthy. Each Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. The investment advisor is responsible for determining that collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon each Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.

Swap Contracts

Certain Funds may engage in swap transactions such as interest rate swaps, consistent with their investment objectives and policies, to obtain a desired return at a lower cost than if the Funds had invested directly in the asset that yielded the desired return.

Swaps involve the exchange by a Fund with another party of their respective commitments to pay or receive interest or total return throughout the lives of the agreements. The interest to be paid or received on swaps is included in realized gain (loss) on investments. Unrealized gains are reported as an asset and unrealized losses are reported as a liability on the Statements of Assets and Liabilities. A realized gain or loss is recorded upon termination of swap agreements and is equal to the difference between the Fund’s basis in the swap and the proceeds from (or cost of) the closing transaction. Swap agreements are stated at fair value. Notional principal amounts are used to express the extent of involvement in these transactions, but the amounts potentially subject to credit risk are much smaller.

If there is a default by the counterparty to a swap contract, a Fund will be limited to contractual remedies pursuant to the agreements related to the transaction. There is no assurance that the swap contract counterparties will be able to meet their obligations pursuant to the swap contracts or that, in the event of default, a Fund will succeed in pursuing contractual remedies. A Fund thus assumes the risk that it may be delayed in or prevented from obtaining payments owed to it pursuant to the swap contracts.

The use of derivative instruments involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statements of Assets and Liabilities.

Delayed Delivery Securities

Certain Funds may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” basis. This may increase the risk if the other party to the

75

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

transaction fails to deliver and causes the Funds to subsequently invest at less advantageous prices. Each Fund holds until settlement date, in a segregated account, cash or liquid securities in an amount equal to the delayed delivery commitment.

Treasury Inflation Protected Securities

Certain Funds may invest in Treasury Inflation Protected Securities (“TIPS”). The principal amount of TIPS is adjusted periodically for inflation based on a monthly published index. Interest payments are based on the inflation-adjusted principal at the time the interest is paid.

Loan Participations and Commitments

Certain Funds may invest in loan participations. When a Fund purchases a Loan Participation, the Fund typically enters into a contractual relationship with the lender or third party selling such Participation (“Selling Participant”), but not the Borrower. As a result, the Fund assumes the credit risk of the Borrower, Selling Participant and any other persons interpositioned between the Fund and the Borrower (“Intermediate Participants”). The Fund may not directly benefit from the collateral supporting the Senior Loan which it has purchased from the Selling Participant.

Income Recognition

Interest income is recorded on the accrual basis. Original issue discount is accreted to interest income over the life of the security with a corresponding increase in the cost basis. Premium and discount are amortized and accreted, respectively, on debt securities. Corporate actions and dividend income are recorded on the ex-date. The value of additional securities received as an income payment is recorded as income and as the cost basis of such securities.

Determination of Class Net Asset Value

All income, expenses (other than class-specific expenses, as shown on the Statements of Operations) and realized and unrealized gains (losses) are allocated to each class of a Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.

Federal Income Tax Status

Each Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable or tax-exempt income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.

76

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Distributions to Shareholders

Dividends from net investment income are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually for all Funds. Certain Funds are managed using investment strategies that are designed to reduce (but not eliminate) the Funds’ payment of taxable distributions to shareholders. From time to time, these Funds expect to distribute taxable income and capital gains. Distributions to shareholders are recorded on ex-date.

Indemnification

In the normal course of business, each Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. A Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the organizational documents of Excelsior Fund, Excelsior Tax-Exempt Fund, and the Trust, and by contract, the Board of Directors with regard to Excelsior Fund and Excelsior Tax-Exempt Fund, and the Board of Trustees with regard to the Trust, are indemnified against certain liabilities that may arise out of actions relating to their duties to Excelsior Fund, Excelsior Tax-Exempt Fund, and the Trust. However, based on experience, the Funds expect the risk of loss due to these representations, warranties and indemnities to be minimal.

Note 3. Federal Income Tax Information

The tax character of distributions paid during the year ended March 31, 2007 was as follows:

	Tax-Exempt Income		Ordinary Income*		Long-Term Capital Gains
California Short-Intermediate Term Tax-Exempt Income Fund	$	1,958,947	$	—	$	255,865
Core Bond Fund		—		17,474,254		—
High Yield Fund		—		8,535,124		—
Intermediate-Term Bond Fund		—		19,470,592		—
Intermediate-Term Tax-Exempt Fund		12,244,881		40,388		730,630
Long-Term Tax-Exempt Fund		2,109,421		22,291		392,494
New York Intermediate-Term Tax-Exempt Fund		4,137,826		—		—
Short-Term Government Securities Fund		—		11,619,856		—
Short-Term Tax-Exempt Securities Fund		3,424,308		—		—

* For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions.

77

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Unrealized appreciation and depreciation at September 30, 2007, based on cost of investments for federal income tax purposes, was:

	Unrealized Appreciation		Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
California Short-Intermediate Term Tax-Exempt Income Fund	$	245,815	$	(178,499	)	$	67,316
Core Bond Fund		9,116,518		(9,950,472	)		(833,954	)
High Yield Fund		2,941,577		(2,393,339	)		548,238
Intermediate-Term Bond Fund		8,342,924		(9,519,142	)		(1,176,218	)
Intermediate-Term Tax-Exempt Fund		4,860,342		(1,779,102	)		3,081,240
Long-Term Tax-Exempt Fund		450,910		(645,517	)		(194,607	)
New York Intermediate-Term Tax-Exempt Fund		1,128,422		(199,159	)		929,263
Short-Term Government Securities Fund		1,780,367		(927,026	)		853,341
Short-Term Tax-Exempt Securities Fund		158,979		(64,965	)		94,014

The following capital loss carryforwards, determined as of March 31, 2007, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:

	Expires March 31,
	2010		2011		2012		2013		2014		2015		Total
Core Bond Fund	$	—	$	—	$	—	$	—	$	1,303,908	$	330,101	$	1,634,009
High Yield Fund		440,234		17,456,849		40,103,941		1,461,417		6,017,018		—		65,479,459
Intermediate-Term Bond Fund		—		—		—		—		481,322		4,646,979		5,128,301
Intermediate-Term Tax-Exempt Fund		—		—		—		—		—		789,548		789,548
New York Intermediate-Term Tax-Exempt Fund		—		—		—		—		165,776		580,517		746,293
Short-Term Government Securities Fund		—		—		1,481,228		4,260,524		4,970,323		4,357,008		15,069,083
Short-Term Tax-Exempt Securities Fund		—		—		—		287,228		518,076		1,968,777		2,774,081

The Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an Interpretation of FASB Statement No. 109 (“FIN 48”) effective September 28, 2007. FIN 48 requires management to determine whether a tax position of a Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that exceeds fifty percent of the amount likely to be realized upon ultimate settlement. FIN 48 must be applied to all existing tax positions upon initial adoption and the cumulative effect, if any, is to be reported as an adjustment to net assets. Management has evaluated the known implications of FIN 48 on its computation of net assets for each

78

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Fund. As a result of this evaluation, management believes that FIN 48 will not have any effect on the Funds’ financial statements. However, management’s conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations, and administrative interpretations (including relevant court decisions).

Note 4. Fees and Compensation Paid to Affiliates

Investment Advisory Fee

United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Effective July 1, 2007, U.S. Trust became a wholly owned subsidiary of the Bank of America Corporation (“BOA”). Prior to July 1, 2007, U.S. Trust was a wholly owned subsidiary of The Charles Schwab Corporation.

For its services, the Advisor receives an investment advisory fee, computed daily and paid monthly, based on each Fund’s average daily net assets at the following annual rates:

	Annual Fee Rate
California Short-Intermediate Term Tax-Exempt Income Fund	0.50%
Core Bond Fund	0.65%
High Yield Fund	0.80%
Intermediate-Term Bond Fund	0.35%
Intermediate-Term Tax-Exempt Fund	0.35%
Long-Term Tax-Exempt Fund	0.50%
New York Intermediate-Term Tax-Exempt Fund	0.50%
Short-Term Government Securities Fund	0.30%
Short-Term Tax-Exempt Securities Fund	0.30%

Administration Fee

Effective July 1, 2007, Columbia Management Advisors, LLC (“Columbia”) serves as the administrator of the Funds. Columbia is an indirect, wholly owned subsidiary of BOA. Prior to July 1, 2007, USTA and BISYS Fund Services Ohio, Inc. (“BISYS”) served as the administrators of the Funds under the same fee structure.

79

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Columbia is entitled to an administration fee, computed daily and paid monthly, based on the combined aggregate average daily net assets of Excelsior Fund, Excelsior Tax-Exempt Fund and the Trust (excluding Emerging Markets Fund, International Fund, International Equity Fund and Pacific/Asia Fund, series of Excelsior Fund or the Trust), at the following annual rates:

Average Daily Net Assets	Annual Fee Rate
First $200 million	0.200%
Next $200 million	0.175%
In excess of $400 million	0.150%

Effective September 17, 2007, Columbia received an administration fee at the annual rates listed above less the fees payable by the Funds as described under the Pricing and Bookkeeping Fees note below.

Effective July 1, 2007, Columbia voluntarily agreed to waive administration fees for each Fund at the annual rate of 0.05% of average daily net assets. Columbia, at its discretion, may revise or discontinue this arrangement at any time. For the six months ended September 30, 2007, the effective administration fee rate was 0.13% of each Fund’s average daily net assets before the reduction for pricing and bookkeeping fees and net of voluntary expense waivers.

For the six months ended September 30, 2007, the total amounts paid and payable to affiliates under this agreement were as follows:

	Amounts Paid to Affiliates		Amounts Payable to Affiliates
California Short-Intermediate Term Tax-Exempt Income Fund	$	27,034	$	1,335
Core Bond Fund		305,789		36,851
High Yield Fund		58,800		4,158
Intermediate-Term Bond Fund		251,722		28,740
Intermediate-Term Tax-Exempt Fund		216,922		25,173
Long-Term Tax-Exempt Fund		33,792		2,437
New York Intermediate-Term Tax-Exempt Fund		76,201		7,727
Short-Term Government Securities Fund		139,537		15,560
Short-Term Tax-Exempt Securities Fund		54,770		5,028

Pricing and Bookkeeping Fees

Effective September 17, 2007, the Funds entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank & Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Funds. Also effective September 17, 2007, the Funds entered into an Accounting Services Agreement with State Street and Columbia (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) pursuant to which State Street provides accounting services to the Funds. Under the State Street

80

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Agreements, each Fund pays State Street an annual fee of $38,000 paid monthly, plus a monthly fee based on an annualized percentage rate of average daily net assets of each Fund for the month. The aggregate fee for each fund will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Funds also reimburse State Street for certain out-of-pocket expenses and charges.

Effective September 17, 2007, the Funds entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. The Funds reimburse Columbia for out-of-pocket expenses and direct internal costs relating to accounting oversight and for services relating to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002.

Prior to July 1, 2007, BISYS was responsible for providing fund accounting and financial reporting services to the Funds, and USTA was responsible for oversight of these functions. On July 1, 2007 Columbia assumed responsibility from USTA for oversight of the activities performed by BISYS. BISYS was responsible for providing services to the Funds through September 16, 2007.

For the six months ended September 30, 2007, the total amounts paid and payable to affiliates for each Fund under these agreements were $505 and $505, respectively.

Transfer Agent Fee

Effective September 17, 2007, Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. Prior to September 17, 2007, BFDS served as the transfer agent for the Funds’ shares.

The Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $17.00 per open account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Funds. The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcript fees due the Transfer Agent from shareholders of the Funds and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Funds. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.

81

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

For the period September 17, 2007 through September 30, 2007, the total amounts paid and payable to affiliates by the Funds under this agreement were as follows:

	Amounts Paid to Affiliates		Amounts Payable to Affiliates
California Short-Intermediate Term Tax-Exempt Income Fund	$	45	$	45
Core Bond Fund		4,165		4,165
High Yield Fund		511		511
Intermediate-Term Bond Fund		428		428
Intermediate-Term Tax-Exempt Fund		216		216
Long-Term Tax-Exempt Fund		259		259
New York Intermediate-Term Tax-Exempt Fund		72		72
Short-Term Government Securities Fund		2,888		2,888
Short-Term Tax-Exempt Securities Fund		80		80

Shareholder Servicing Fee

The Funds have entered into shareholder servicing agreements with various service organizations which include USTA. The Funds are permitted to pay a fee of up to 0.25% of the average daily net assets of the Funds’ shares held by each service organization’s customers to such organizations for providing shareholder and administrative services to their customers who hold shares of the Funds.

For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:

	Amounts Paid to Affiliates		Amounts Payable to Affiliates
California Short-Intermediate Term Tax-Exempt Income Fund	$	55,552	$	8,619
Core Bond Fund		242,575		40,453
High Yield Fund		110,021		14,769
Intermediate-Term Bond Fund		529,244		85,340
Intermediate-Term Tax-Exempt Fund		475,307		77,441
Long-Term Tax-Exempt Fund		66,976		10,900
New York Intermediate-Term Tax-Exempt Fund		166,745		27,372
Short-Term Government Securities Fund		229,938		36,808
Short-Term Tax-Exempt Securities Fund		120,790		19,574

Distribution and Service Fees

Effective September 17, 2007, Columbia Management Distributors, Inc. (the “Distributor”) serves as distributor of the Funds’ shares. Through July 31, 2007, BISYS Fund Services Limited Partnership (“BISYS Fund Services”) served as distributor of the Funds’ shares. On August 1, 2007, Foreside Distribution Services, L.P. served as distributor until September 16, 2007.

82

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Certain Funds have adopted a Distribution Plan (the “Distribution Plan”) pursuant to Rule 12b-1 under the 1940 Act, which permits the Funds to compensate and/or reimburse the Distributor monthly for services that are intended to result in the sale of certain classes’ shares. High Yield Fund, which has adopted a Distribution Plan for the Shares Class of the Fund, may pay distribution fees in an amount not to exceed the annual rate of 0.25% of the average daily net assets applicable to the Shares Class. Fees are not currently being paid under the Distribution Plan with respect to the Shares Class. Core Bond Fund, which has adopted a Distribution Plan for the Retirement Shares of the Fund, may pay distribution fees in an amount not to exceed the annual rate at 0.50% of the average daily net assets applicable to the Fund’s Retirement Shares.

Fees Paid to Officers and Trustees

The Board of Trustees/Directors may include people who are officers and/or trustees of other fund families affiliated with the investment advisor. The Funds did not pay any of the interested persons for their service as Trustees/Directors, but did pay non-interested persons (independent trustees), as noted in the Statements of Operations.

Expense Limits and Fee Waivers

The Advisor has contractually agreed to waive fees or reimburse expenses through July 31, 2008, so that the expenses incurred by each Fund (exclusive of brokerage commissions, interest, taxes and extraordinary expenses, but inclusive of custodial charges relating to overdrafts, if any), after giving effect to any balance credits from the Funds’ custodian, will not exceed the following annual rates, based on each Fund’s average daily net assets:

	Shares		Institutional Shares		Retirement Shares
California Short-Intermediate Term Tax-Exempt Income Fund	0.50	%	—		—
Core Bond Fund	0.90	%	0.65	%	1.40	%
High Yield Fund	1.05	%	0.80	%	—
Intermediate-Term Bond Fund	0.75	%	—		—
Intermediate-Term Tax-Exempt Fund	0.65	%	—		—
Long-Term Tax-Exempt Fund	0.80	%	—		—
New York Intermediate-Term Tax-Exempt Fund	0.80	%	—		—
Short-Term Government Securities Fund	0.75	%	—		—
Short-Term Tax-Exempt Securities Fund	0.60	%	—		—

On June 12, 2006, High Yield Fund and Intermediate-Term Bond Fund filed a lawsuit in connection with the bankruptcy of a security in which the Funds had invested. The ongoing legal expenses associated with the lawsuit are paid for by the Funds, but due to the expense limitation agreements currently in place, a significant portion of these legal expenses are being reimbursed by the Advisor. The Board has agreed that, should the Funds be successful in the lawsuit or otherwise receive compensation

83

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

related to settling the case, the Advisor may request and receive reimbursement for such legal expenses that have been reimbursed to the Funds, to the extent that proceeds are available to cover such expenses. At this time, the outcome of the lawsuit cannot be determined.

Custody Credits

Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses in the Statements of Operations. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement.

Note 5. Portfolio Information

For the six months ended September 30, 2007, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were as follows:

	U.S. Government Securities				Other Investment Securities
	Purchases		Sales		Purchases		Sales
California Short-Intermediate Term Tax-Exempt Income Fund	$	—	$	—	$	2,107,940	$	9,122,917
Core Bond Fund		158,631,256		133,547,501		89,571,636		26,305,748
High Yield Fund		—		—		26,290,368		43,102,055
Intermediate-Term Bond Fund		250,897,271		181,259,002		42,418,407		19,915,784
Intermediate-Term Tax-Exempt Fund		—		—		65,440,238		53,391,030
Long-Term Tax-Exempt Fund		—		—		7,281,510		8,214,190
New York Intermediate-Term Tax-Exempt Fund		—		—		13,068,865		5,700,385
Short-Term Government Securities Fund		113,879,464		77,247,568		10,256,903		7,292,932
Short-Term Tax-Exempt Securities Fund		—		—		6,442,021		4,276,520

Note 6. Line of Credit

Effective September 17, 2007, the Funds and other affiliated funds participate in a $150,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for temporary or emergency purposes. Interest on the uncommitted line of credit is charged to each participating fund based on the fund’s borrowings at a variable rate per annum equal to the Federal Funds Rate plus a spread, as determined and quoted by State Street at the time of the request for a loan.

84

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Prior to September 17, 2007, the Funds participated in a $150,000,000 uncommitted line of credit provided by JPMorgan Chase, under similar borrowing terms.

For the six months ended September 30, 2007, the Funds did not borrow under this agreement.

Note 7. Redemption Fees

High Yield Fund may assess, subject to limited exceptions, a 2.00% redemption fee on shares that are redeemed within 60 days of their purchase. The redemption fees, which are retained by the Fund, are accounted for as an addition to paid-in capital and are allocated to each class based on the relative net assets at the time of the redemption. Prior to August 1, 2007, the redemption fee was assessed, subject to limited exceptions, on Fund shares redeemed within 30 days of their purchase. For the six months ended September 30, 2007, High Yield Fund did not assess redemption fees.

Note 8. Concentration of Ownership

As of September 30, 2007, the Funds had shareholders that held greater than 5% of the shares outstanding. Subscription and redemption activity of these accounts may have a significant effect on the operations of the Funds. The percentage of shares of beneficial interest outstanding held therein are as follows:

	Number Of Shareholders	% of Shares Outstanding Held
California Short-Intermediate Term Tax-Exempt Income Fund	2	88.7
Core Bond Fund	1	61.1
High Yield Fund	2	88.7
Intermediate-Term Bond Fund	1	92.3
Intermediate-Term Tax-Exempt Fund	1	90.7
Long-Term Tax-Exempt Fund	1	74.6
New York Intermediate-Term Tax-Exempt Fund	1	84.5
Short-Term Government Securities Fund	2	70.0
Short-Term Tax-Exempt Securities Fund	1	91.7

Note 9. Significant Risks and Contingencies

Municipal Bond Tax Status

Certain Funds purchase municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued. As a shareholder of the Funds, you may be required to file an amended tax return as a result.

85

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Tax Development Risk

The U.S. Supreme Court has heard an appeal of a state-court decision that might significantly affect how states tax in-state and out-of-state municipal bonds. If the Supreme Court determines that the U.S. Constitution prohibits states from treating the interest income on in-state municipal bonds differently from the income on out-of-state municipal bonds for state income tax purposes, most states likely will revisit the way in which they treat the interest on municipal bonds. This has the potential to increase significantly the amount of state tax paid by shareholders on exempt-interest dividends. This also has the potential to cause decline in the value of the municipal securities held by California Short-Intermediate Term Tax-Exempt Income Fund, Intermediate-Term Tax-Exempt Fund, Long-Term Tax-Exempt Fund, New York Intermediate-Term Tax-Exempt Fund and Short-Term Tax-Exempt Securities Fund which, in turn, would reduce the value of these Funds’ shares. You should consult your tax advisor to discuss the tax consequences of your investment in these Funds.

Concentration of Credit Risk

Certain Funds holds investments that are insured by private insurers who guarantee the payment of principal and interest in the event of default or that are supported by a letter of credit. Each of the Fund’s insurers is rated Aaa by Moody’s Investors Services, Inc. (“Moody’s) or rated AAA by Standard & Poor’s. At September 30, 2007, investments supported by private insurers that represent greater than 5% of the total investments of each Fund were as follows:

	Agency	% of Total Investments
California Short-Intermediate Term Tax-Exempt Income Fund	AMBAC	16.93
	FGIC	16.41
	FSA	13.16
	MBIA	12.27
Intermediate-Term Tax-Exempt Fund	FSA	27.68
	MBIA	15.86
	AMBAC	9.24
	FGIC	6.95
Long-Term Tax-Exempt Fund	FSA	24.78
	MBIA	9.17
	FGIC	8.30
	AMBAC	5.27
New York Intermediate-Term Tax-Exempt Fund	AMBAC	20.56
	FSA	16.12
	MBIA	13.28
	FGIC	5.89
Short-Term Tax-Exempt Securities Fund	MBIA	18.88

86

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Geographic Concentration

Certain Funds have greater than 5% of their total investments on September 30, 2007 invested in debt obligations issued by an individual state and its political subdivisions, agencies and public authorities and instrumentalities. These Funds are more susceptible to economic and political factors adversely affecting issuers of the state’s or territory’s municipal securities than are municipal bond funds that are not concentrated to the same extent in these issuers.

High Yield Securities

Investing in high-yield securities may involve greater credit risk and considerations not typically associated with investing in U.S. Government bonds and other higher quality fixed income securities. These securities are non-investment grade securities, often referred to as “junk” bonds. Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high-yield securities may be less liquid to the extent that there is no established secondary market.

Note 10. Legal Proceedings

United States Trust Company of New York and U.S. Trust Company, N.A. (formerly, co-investment advisers to the Funds, together referred to herein as “U.S. Trust Company”), Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (the “Companies”), The Charles Schwab Corporation and several individuals and third parties were named in four fund shareholder class actions and two derivative actions which alleged that U.S. Trust Company, the Companies, and others allowed certain parties to engage in illegal and improper mutual fund trading practices, which allegedly caused financial injury to the shareholders of certain of the Excelsior Funds advised by U.S. Trust Company. Each plaintiff seeks unspecified monetary damages and related equitable relief.

The class and derivative actions described above were transferred to the United States District Court for the District of Maryland for coordinated and consolidated pre-trial proceedings. In November 2005, the Maryland court dismissed many of the plaintiffs’ claims in both the class and derivative actions. The court entered implementing orders on February 24, 2006. All claims against the Companies have been dismissed. Plaintiffs’ claims against U.S. Trust Company and certain individuals under Sections 10(b) and 20(a) of the Securities Exchange Act and Sections 36(b) and 48(a) of the Investment Company Act, however, have not been dismissed. Plaintiffs’ Section 48(a) claims against parent entity U.S. Trust Company and former parent entity The Charles Schwab Corporation also remain.

While the ultimate outcome of these matters cannot be predicted with any certainty at this time, based on currently available information, U.S. Trust Company believes that the likelihood is remote that the pending litigation will have a material adverse financial impact on the Companies, or materially affect the advisers’ ability to provide investment management services to the Companies.

87

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

Note 11. Business Combinations and Mergers

Under a plan of reorganization adopted by the Trust, all of the assets and liabilities of the Income Fund and Total Return Bond Fund were transferred to the Institutional Shares of Core Bond Fund. The reorganization, which qualified as a tax-free exchange for federal income tax purposes, was completed at the close of business on September 27, 2006. The following is a summary of the shares outstanding, net assets, net asset value per share issued, and unrealized appreciation/depreciation immediately before and after the reorganization.

	Before Reorganization							After Reorganization
	Income Fund			Total Return Bond Fund		Core Bond Fund		Core Bond Fund
Shares:
Shares		—			—		32,810,661		32,810,661
Institutional Shares		13,965,104			18,165,949		1,824,521		26,973,187
Retirement Shares		—			—		117		117
Net Assets:
Shares	$	—		$	—	$	294,116,361	$	294,116,361
Institutional Shares		96,434,781			129,070,075		16,360,288		241,865,144
Retirement Shares		—			—		1,046		1,046
Net Asset Value:
Shares	$	—		$	—	$	8.96	$	8.96
Institutional Shares		6.91			7.11		8.97		8.97
Retirement Shares		—			—		8.97		8.97
Net unrealized appreciation (depreciation)	$	(248,669	)	$	617,540	$	740,329	$	1,109,200

Note 12. Reorganization of the Funds

The Boards of Directors/Trustees of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (the “Board”) have approved proposals, described below, that are part of a larger integration of the Excelsior Fund complex and the Columbia Funds complex. Generally, these proposals involve the reorganization of certain Excelsior Funds into newly formed Columbia Funds that will be series of a different legal entity governed by a different board than the Excelsior Funds, and will be managed by Columbia Management Advisors, LLC, an affiliate of the current advisers to the Excelsior Funds. The portfolio managers of the Excelsior Funds immediately before such reorganizations are expected to be the same portfolio managers of the newly formed Columbia Funds immediately after such reorganizations.

Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Excelsior Fund”) into a corresponding newly formed shell fund listed in the right column below (each, a “Newly Formed Fund”) as shown in the chart below, subject to approval by the shareholders of the Excelsior Fund. If the shareholders of each Excelsior Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Excelsior Fund will be transferred to

88

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

the corresponding Newly Formed Fund and shareholders of the Excelsior Fund will receive shares of a designated class of the corresponding Newly Formed Fund in exchange for their shares. For each Excelsior Fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Newly Formed Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Newly Formed Fund. Shareholders of each Excelsior Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.

Excelsior Fund	Newly Formed Fund
Blended Equity Fund	Columbia Blended Equity Fund
Emerging Markets Fund	Columbia Emerging Markets Fund
Energy and Natural Resources Fund	Columbia Energy and Natural Resources Fund
International Fund	Columbia International Growth Fund
Large Cap Growth Fund	Columbia Select Growth Fund
Pacific/Asia Fund	Columbia Pacific/Asia Fund
Small Cap Fund	Columbia Select Small Cap Fund
Value & Restructuring Fund	Columbia Value and Restructuring Fund
Core Bond Fund	Columbia Bond Fund
Intermediate-Term Bond Fund	Columbia Short-Intermediate Bond Fund
Equity Opportunities Fund	Columbia Select Opportunities Fund
Mid Cap Value & Restructuring Fund	Columbia Mid Cap Value and Restructuring Fund

The Board has also approved proposals, described below, that involve the reorganization of certain Excelsior Funds into Columbia Funds that are series of different legal entities governed by a different board than the Excelsior Funds, and are managed by Columbia Management Advisors, LLC.

Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Acquired Fund”) into a corresponding acquiring fund listed in the right column below (each, an “Acquiring Fund”) as shown in the chart below, subject to approval by the shareholders of the Acquired Fund. If the shareholders of an Acquired Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Acquired Fund will be transferred to the corresponding Acquiring Fund and shareholders of the Acquired Fund will receive shares of a designated class of the corresponding Acquiring Fund in exchange for their shares. For each Acquired Fund, except the money market funds, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Acquiring Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Acquiring Fund. For each Acquired Fund that is a money market fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Trust Class shares of the corresponding Acquiring Fund. Shareholders of each Acquired Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008, except for Intermediate-Term Tax-Exempt Fund and New York Intermediate-Term Tax-Exempt Fund which are

89

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS—(continued)

September 30, 2007 (Unaudited)

currently expected to be held in the second quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.

Acquired Fund	Acquiring Fund
Equity Income Fund	Columbia Dividend Income Fund
Real Estate Fund	Columbia Real Estate Equity Fund
International Equity Fund	International Fund
Short-Term Government Securities Fund	Columbia Short Term Bond Fund
Short-Term Tax-Exempt Securities Fund	Columbia Short Term Municipal Bond Fund
High Yield Fund	Columbia High Yield Opportunity Fund
Long-Term Tax-Exempt Fund	Columbia Tax-Exempt Fund
Intermediate-Term Tax-Exempt Fund	Columbia Intermediate Municipal Bond Fund
New York Intermediate-Term Tax-Exempt Fund	Columbia New York Intermediate Municipal Bond Fund
California Short-Intermediate Term Tax-Exempt Income Fund	Columbia California Intermediate Municipal Bond Fund
Treasury Money Fund	Columbia Government Reserves
Government Money Fund	Columbia Government Plus Reserves
Money Fund	Columbia Cash Reserves
Tax-Exempt Money Fund	Columbia Tax-Exempt Reserves
New York Tax-Exempt Money Fund	Columbia New York Tax-Exempt Reserves

90

APPROVAL OF INVESTMENT ADVISORY AGREEMENTS

The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party to the advisory agreement (the “Independent Directors”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s board of directors or trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.

At a meeting held on September 27th and 28th 2007, the Board of Directors/Trustees (the “Board”) of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (each a “Company” and, together, the “Companies”), including a majority of the Independent Directors, approved the continuation of the Investment Advisory Agreements (the “Advisory Agreements”) by and between each Company and UST Advisers, Inc. and U.S. Trust New York Asset Management Division, a division of United States Trust Company, National Association (together, “U.S. Trust”) with respect to each series of each Company (each, a “Fund”).

In preparation for the meeting, the Board requested and reviewed a wide variety of materials provided by U.S. Trust and its affiliates, which included information about the operations and personnel of U.S. Trust, as well as the personnel and operations of its affiliates. In this regard, the Board received information about the large mutual fund business of Columbia Management Advisors, LLC and its affiliates (together, “Columbia”), which are, together with U.S. Trust, all under the control of Bank of America Corporation, and how the resources dedicated to the Columbia mutual fund business affect the Funds. The Board also received extensive information that was provided by or derived from information prepared by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Board also received a memorandum from counsel regarding the responsibilities of the Board for the approval of the Advisory Agreements. In addition, the Independent Directors received advice from independent counsel to the Independent Directors, met in executive session outside the presence of Company management and U.S. Trust personnel and participated in question and answer sessions with representatives of U.S. Trust.

The Board’s approval of the continuation of the Advisory Agreements was based on the consideration and evaluation of the information and material provided to the Board and a variety of specific factors discussed at the meetings, including:

Nature, Extent and Quality of Services.    The Board considered the nature, extent and quality of the services provided by U.S. Trust to the Funds under the Advisory Agreements and the resources of U.S. Trust and their affiliates, including Columbia, dedicated to the Funds. In this regard, the Board evaluated, among other things, U.S. Trust’s personnel, experience, performance history of various products, and compliance program. The Board considered that U.S. Trust and Columbia provide

91

APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (Continued)

substantial administrative, accounting and compliance services and provide oversight of third party service providers to the Funds. The Board considered representations of U.S. Trust that U.S. Trust and Columbia have allocated substantial resources and personnel, and have made significant financial expenditures and commitments, to the investment management and other operations of the Funds. The Board also considered the nature and quantity of additional resources that have been dedicated to the operations of the Funds since U.S. Trust had become affiliated with Columbia. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services to be provided by U.S. Trust to the Funds and the resources of the U.S. Trust and its affiliates dedicated to the Funds supported the renewal of the Advisory Agreements.

Fund Performance.    The Board considered Fund performance in determining whether to renew the Advisory Agreements. Specifically, the Board considered each Fund’s performance relative to a peer group of other mutual funds and appropriate indices/benchmarks, in light of total return, yield and market trends. As part of this review, the Board considered the composition of the peer groups, selection criteria and the reputation of third party providers who provided data for the peer group analysis. In evaluating the performance of each Fund, the Board considered both market risk and shareholder risk expectations for such Fund and whether, irrespective of relative performance, each Fund’s absolute performance was consistent with expectations for its investment methodology. The Board further considered the level of Fund performance in the context of its review of Fund expenses and U.S. Trust’s profitability discussed below. In the case of each Fund that had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Advisory Agreements. These factors varied from Fund to Fund, but included one or more of the following: (1) that the Fund’s performance, although lagging in certain recent periods, was strong over the longer term; (2) that the underperformance was attributable, to a significant extent, to investment decisions by U.S. Trust that were reasonable and consistent with the Fund’s investment objective and policies; (3) that each Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (4) that U.S. Trust has taken or is taking steps designed to help improve the Fund’s investment performance. Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of the Funds supported the renewal of the Advisory Agreements.

Fund Expenses.    With respect to the Funds’ expenses, the Board considered the rate of compensation called for by the Advisory Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of other comparable mutual funds, such peer groups and comparisons having been selected and calculated based on objective factors. The Board noted that with respect to the Funds, U.S. Trust had contractually committed to waive a portion of its fee and/or reimburse the Funds for a portion of their expenses to limit the Funds’ total operating expenses. In evaluating this information, the Board considered the nature and scope of services provided to the Funds. The Board also reviewed the fees charged by U.S. Trust to provide advisory services to other types of accounts with substantially similar investment objectives as the Funds and the differences in services and risks involved in managing such other accounts, including differences relating to compliance and regulatory burdens. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported the renewal of the Advisory Agreements.

92

APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (Continued)

Profitability.    With regard to profitability, the Board considered the compensation flowing to U.S. Trust and its affiliates, directly or indirectly. In this connection, the Board reviewed management’s profitability analyses. The Board also considered any other benefits derived by U.S. Trust from its relationship with the Funds, such as whether, by virtue of its management of the Funds, it obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to U.S. Trust and its affiliates, the Board considered whether the varied levels of compensation and profitability under the Advisory Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of U.S. Trust is reasonable and supported the renewal of the Advisory Agreements.

Economies of Scale.    The Board considered the existence of any economies of scale and whether those economies are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by U.S. Trust. In this regard, and consistent with their consideration of fund expenses, the Board considered that U.S. Trust has previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer Funds or Funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such Funds at subsidized expense levels. The Board also reviewed asset flows in the Funds, noting that a relatively few number of Funds had experienced significant asset growth, while most of the Funds had experienced only moderate growth, if any. After reviewing such information, the Board determined not to seek advisory fee breakpoints at this time. The Board noted that it would continue to monitor the growth in assets of the Funds as compared to expenses and asked U.S. Trust and Columbia to continue to monitor the Funds’ expenses and asset sizes in connection with determining when economies of scale would dictate that advisory fee breakpoints were advisable.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including all of the Independent Directors, unanimously approved the continuation of the Advisory Agreements and concluded that the compensation under the Advisory Agreements is fair and reasonable in light of the services and expenses and such other matters as the Board considered to be relevant in the exercise of their reasonable judgment. In the course of their deliberations, the Board did not identify any particular information or factor that was all-important or controlling.

93

[THIS PAGE INTENTIONALLY LEFT BLANK]

94

[THIS PAGE INTENTIONALLY LEFT BLANK]

95

[THIS PAGE INTENTIONALLY LEFT BLANK]

96

IMPORTANT INFORMATION ABOUT THIS REPORT

Excelsior Fixed Income Funds

The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Excelsior Fixed Income Funds.

A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund’s voting records are available (i) on the Securities and Exchange Commission’s website at www.sec.gov, and (ii) without charge, upon request, by calling 1-800-368-0346. Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC’s website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds’ website.

Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’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.

Please consider the investment objectives, risks, charges and expenses for a fund carefully before investing. Contact your financial advisor for a prospectus, which contains this and other important information about a fund. You should read it carefully before you invest.

United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member of FINRA, SIPC, part of Columbia Management. USTA, USTNA and Columbia Management Distributor, Inc. are affiliates of Bank of America Corporation.

97

^©2007 Columbia Management Distributors, Inc.

One Financial Center, Boston, MA 02111-2621

800-345-6611 www.columbiafunds.com

SHC-44/136415-0907 (11/07) 07/46204

MONEY MARKET

FUNDS

SEMI ANNUAL REPORT

September 30, 2007

NOT FDIC INSURED	May Lose Value
NOT BANK ISSUED	No Bank Guarantee

TABLE OF CONTENTS

	PAGE
LETTER TO SHAREHOLDERS	2
UNDERSTANDING YOUR EXPENSES
Government Money Fund	4
Money Fund	5
New York Tax-Exempt Money Fund	6
Tax-Exempt Money Fund	7
Treasury Money Fund	8
PORTFOLIOS OF INVESTMENTS
Government Money Fund	9
Money Fund	11
New York Tax-Exempt Money Fund	13
Tax-Exempt Money Fund	18
Treasury Money Fund	26
STATEMENTS OF ASSETS AND LIABILITIES	27
STATEMENTS OF OPERATIONS	28
STATEMENTS OF CHANGES IN NET ASSETS	30
FINANCIAL HIGHLIGHTS	36
NOTES TO FINANCIAL STATEMENTS	41
APPROVAL OF INVESTMENTS ADVISORY AGREEMENTS	53
PROXY VOTING RESULTS	57
IMPORTANT INFORMATION ABOUT THIS REPORT	57

An investment in money market mutual funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds. Please see the prospectus for a complete discussion of investments in money market funds.

The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for an Excelsior Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Excelsior Fund. References to specific securities should not be construed as a recommendation or investment advice.

LETTER TO SHAREHOLDERS

Dear Shareholder:

Allow me to take this opportunity to formally welcome you to the Columbia Funds family. In July, U.S. Trust Advisors was acquired by Bank of America (parent company of Columbia Management Group). The Excelsior Funds are now distributed by Columbia Management Distributors, Inc. The combined organization is committed to delivering unparalleled wealth management solutions and building deep, lasting relationships with our shareholders.

Your Excelsior Funds account will be serviced by Columbia Management Services, Inc., an experienced service provider in the industry. This team will process transactions, generate account statements and support your ongoing servicing needs.

As we complete the integration over the next several months, you will gain access to a broad array of investment choices including money market investments, mutual funds and 529 plans. Throughout this period of change, our goal is to ensure a smooth transition and provide services that we hope will exceed your expectations. We recommend you visit our website: www.columbiafunds.com for more information about our products and services. Those of you who receive your statements directly from Columbia Management can also register for on-line account access, which allows you to check your account balance, change your distribution options and make other account transactions. If you receive statements from your brokerage firm, please check with your financial advisor for service availability.

There’s a lot to know about Columbia Management

With $709.9 billion under management and a history that dates to the early 1900s, Columbia Management and its affiliates make up one of the nation’s largest and most experienced asset management companies.¹ We offer a comprehensive array of investment solutions, including equity, fixed-income and cash strategies. Our diverse investment solutions and our focus on the needs of our clients make Columbia Management the advisor of choice for individual, institutional and high-net-worth investors.

Welcome to Columbia Management. Thank you for your business — we’re pleased to have you as a customer.

Sincerely,

Christopher L. Wilson

President, Excelsior Funds

2

About Christopher L. Wilson

Chris Wilson is head of mutual funds for Columbia Management, responsible for the day-to-day delivery of mutual fund products and services to the firm’s investors. With the exception of distribution, Mr. Wilson oversees all aspects of the mutual fund services operation including treasury, investment accounting, product development and shareholder and broker services. Mr. Wilson serves as Columbia Management’s chief liaison to the mutual fund boards of trustees. He joined Columbia Management in 2004 and has been a member of the investment community since 1980.

Columbia Management Group, LLC (“Columbia Management”) is the investment management arm of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member FINRA and SIPC. Columbia Management Distributors, Inc. is part of Columbia Management and an affiliate of Bank of America Corporation.

¹ Columbia Management and its affiliates comprise the wealth and investment management division of Bank of America Corporation. As of September 30, 2007, Columbia Management and its affiliates managed assets of $709.9 billion. Columbia Management and its affiliates’ managed assets consist of assets under the discretionary management of the registered investment advisors, Columbia Management Advisors, LLC ($377.9 billion), Columbia Wanger Asset Management, L.P. ($38.5 billion) and Marsico Capital Management, LLC ($103.4 billion); U.S. Trust, Bank of America Private Wealth Management; Banc of America Investment Services, Inc.; Banc of America Investment Advisors, Inc.; Bank of America Capital Advisors, LLC; Premier Banking & Investments, and United States Trust, National Association, including its subsidiary, UST Advisers, Inc. ($116.5 billion).

3

Understanding Your Expenses — Government Money Fun d

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if an account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, and ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,023.50	1,022.25	2.78	2.78	0.55

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

4

Understanding Your Expenses — Money Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if an account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, and ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,024.20	1,022.25	2.78	2.78	0.55

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

5

Understanding Your Expenses — New York Tax-Exempt Money Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if an account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, and ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,015.70	1,022.00	3.02	3.03	0.60

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

6

Understanding Your Expenses — Tax-Exempt Money Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if an account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, and ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,016.00	1,022.25	2.77	2.78	0.55

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

7

Understanding Your Expenses — Treasury Money Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if an account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs, and ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Shares	1,000.00	1,000.00	1,021.00	1,022.00	3.03	3.03	0.60

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

8

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Government Money Fund

Principal Amount			Value
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 61.56%
$	5,000,000	Federal Home Loan Bank, 4.13% 03/14/08(a)	$	5,000,000
	10,000,000	Federal Home Loan Bank, 5.13% 07/30/08		10,029,954
	8,000,000	Federal Home Loan Bank, 5.25% 11/01/07		8,000,000
	10,000,000	Federal Home Loan Bank, 5.25% 02/01/08		10,000,000
	20,000,000	Federal Home Loan Bank, 5.25% 02/13/08		19,996,452
	40,000,000	Federal Home Loan Bank, Discount Note, 4.48% 10/05/07		39,980,089
	14,000,000	Federal Home Loan Bank, Discount Note, 4.61% 10/04/07		13,994,633
	30,000,000	Federal Home Loan Bank, Discount Note, 4.73% 10/17/07		29,936,933
	30,000,000	Federal Home Loan Bank, Discount Note, 4.85% 11/15/07		29,818,125
	25,000,000	Federal Home Loan Bank, Discount Note, 5.13% 10/24/07		24,918,063
	9,856,000	Federal Home Loan Mortgage Corporation, 4.38% 11/16/07		9,845,056
	10,000,000	Federal National Mortgage Association, 5.30% 01/08/08		10,000,000
	5,000,000	Federal National Mortgage Association, 5.50% 01/15/08		5,003,986
		TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (Cost $216,523,291)		216,523,291

Shares		Value
REGISTERED INVESTMENT COMPANY — 0.44%
1,552,038	Dreyfus Treasury Prime Cash Management Fund (7 day yield of 3.92%)	$	1,552,038
	TOTAL REGISTERED INVESTMENT COMPANY (Cost $1,552,038)		1,552,038

Principal Amount
REPURCHASE AGREEMENT — 38.10%
$	134,000,000	Repurchase Agreement with Morgan Stanley, dated 09/28/07, due on 10/01/07, at 4.90%, collateralized by U.S. Government Agency Obligations with various maturities to 09/20/37, market value $136,680,000 (repurchase proceeds $134,054,717)	134,000,000
		TOTAL REPURCHASE AGREEMENT (Cost $134,000,000)	134,000,000

TOTAL INVESTMENTS (Cost $352,075,329)(b)	100.10	%	$	352,075,329
OTHER LIABILITIES IN EXCESS OF ASSETS	(0.10	)		(348,531	)
NET ASSETS	100.00	%	$	351,726,798

(a) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(b) Cost for federal income tax purposes is $352,075,329.

Discount Note—The rate reported is the discount rate at the time of purchase.

See Notes to Financial Statements.

9

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Government Money Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Portfolio Diversification	% of Net Assets		Value
U.S. Government & Agency Obligations	61.56		$	216,523,291
Repurchase Agreement	38.10			134,000,000
Registered Investment Company	0.44			1,552,038
Total Investments	100.10		$	352,075,329
Other Liabilities in Excess of Assets	(0.10	)		(348,531	)
Net Assets	100.00		$	351,726,798

See Notes to Financial Statements.

10

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Money Fund

Principal Amount			Value
COMMERCIAL PAPER — 69.46%
$	50,000,000	Abbott Laboratories, Discount Note, 4.96% 10/15/07	$	49,903,556
	50,000,000	American General Finance Co., Discount Note, 4.39% 10/04/07		49,977,292
	50,000,000	CIT Group Funding, Inc., Discount Note, 6.40% 10/05/07		49,964,445
	35,000,000	Coca-Cola Co., Discount Note, 4.65% 12/11/07		34,679,021
	30,000,000	Corporate Asset Funding Co., Inc., Discount Note, 5.10% 10/24/07		29,902,250
	20,000,000	Corporate Asset Funding Co., Inc., Discount Note, 5.20% 10/03/07		19,994,222
	25,000,000	E.I. Dupont, Discount Note, 4.75% 10/17/07		24,947,444
	25,000,000	E.I. Dupont, Discount Note, 4.77% 10/25/07		24,920,833
	25,000,000	Govco, Inc., Discount Note, 5.15% 10/01/07		25,000,000
	50,000,000	HSBC Finance Corp., Discount Note, 5.35% 10/31/07		49,777,083
	30,000,000	International Business Machines, Discount Note, 4.73% 10/03/07		29,992,117
	50,000,000	International Lease Finance Corp., Discount Note, 5.23% 10/26/07		49,818,403
	25,000,000	John Deere Capital Corp., Discount Note, 5.10% 11/19/07		24,826,458
	20,800,000	Johnson & Johnson, Discount Note, 4.72% 10/15/07		20,761,821
	40,000,000	JP Morgan Chase & Co., Discount Note, 2.82% 10/23/07		39,872,400
	50,000,000	Merrill Lynch, Discount Note, 2.06% 10/03/07		49,985,500

Principal Amount			Value
COMMERCIAL PAPER — (continued)
$	25,000,000	Morgan Stanley, Discount Note, 4.40% 11/19/07	$	24,812,847
	40,000,000	National Rural Utilities Cooperative Finance, Discount Note, 4.78% 10/25/07		39,872,533
	35,000,000	Procter & Gamble Co., Discount Note, 3.20% 10/19/07		34,908,300
	15,000,000	Procter & Gamble Co., Discount Note, 4.81% 12/11/07		14,859,183
	50,000,000	Societe Generale, Discount Note, 2.20% 10/11/07		49,927,153
	25,000,000	UBS Finance Corp., Discount Note, 4.97% 11/26/07		24,806,722
	25,000,000	UBS Finance Corp., Discount Note, 5.52% 02/11/08		24,502,174
	25,000,000	Wal-Mart Stores, Inc., Discount Note, 4.78% 12/18/07		24,744,333
		TOTAL COMMERCIAL PAPER (Cost $812,756,090)		812,756,090
CERTIFICATES OF DEPOSIT — 12.82%
	50,000,000	Barclays Bank PLC, 5.32% 10/05/07		50,000,000
	50,000,000	Citibank, 5.35% 11/08/07		50,000,000
	50,000,000	First Tennessee Bank, 5.65% 12/06/07		50,000,000
		TOTAL CERTIFICATES OF DEPOSIT (Cost $150,000,000)		150,000,000
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 4.70%
	20,000,000	Federal Home Loan Bank, 5.54% 09/17/08(a)		20,000,000
	20,000,000	Federal Home Loan Bank, 4.13% 03/14/08(a)		20,000,000

See Notes to Financial Statements.

11

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Money Fund — (continued)

Principal Amount			Value
U.S. GOVERNMENT & AGENCY OBLIGATIONS — (continued)
$	15,000,000	Federal National Mortgage Association, 5.30% 01/08/08	$	15,000,000
		TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (Cost $55,000,000)		55,000,000
CORPORATE BONDS — 2.56%
	30,000,000	Wells Fargo Bank, 4.82% 10/31/07		30,000,000
		TOTAL CORPORATE BONDS (Cost $30,000,000)		30,000,000
Shares
REGISTERED INVESTMENT COMPANY — 0.16%
	1,900,537	Dreyfus Government Cash Management Fund (7 day yield of 4.81%)		1,900,537
		TOTAL REGISTERED INVESTMENT COMPANY (Cost $1,900,537)		1,900,537

Principal Amount			Value
REPURCHASE AGREEMENT — 10.51%
$	123,000,000	Repurchase agreement with Morgan Stanley, dated 09/28/07, due on 10/01/07, at 4.90%, collateralized by U.S. Government Agency Obligations with various maturities to 08/01/37, market value $126,207,166 (repurchase proceeds $123,050,225)	$	123,000,000
		TOTAL REPURCHASE AGREEMENT (Cost $123,000,000)		123,000,000

TOTAL INVESTMENTS (Cost $1,172,656,627)(b)	100.21	%	$	1,172,656,627
OTHER LIABILITIES IN EXCESS OF ASSETS	(0.21	)		(2,468,098	)
NET ASSETS	100.00	%	$	1,170,188,529

(a) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(b) Cost for federal tax purposes is $1,172,656,627.

Discount Note—The rate reported is the discount rate at the time of purchase.

PLC—Public Limited Company

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Portfolio Diversification	% of Net Assets		Value
Commercial Paper	69.46		$	812,756,090
Certificates of Deposit	12.82			150,000,000
Repurchase Agreement	10.51			123,000,000
U.S. Government & Agency Obligations	4.70			55,000,000
Corporate Bonds	2.56			30,000,000
Registered Investment Company	0.16			1,900,537
Total Investments	100.21		$	1,172,656,627
Other Liabilities in Excess of Assets	(0.21	)		(2,468,098	)
Net Assets	100.00		$	1,170,188,529

See Notes to Financial Statements.

12

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

New York Tax-Exempt Money Fund

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — 74.31%
$	5,000,000	Albany, New York, City School District, General Obligation Tax Anticipation Notes, 3.75% 10/17/07	$	5,000,279
	5,000,000	Arlington, New York, Central School District, General Obligation Tax Anticipation Notes, 3.75% 11/02/07		5,000,249
	6,500,000	Bedford, New York, Central School District, General Obligation Tax Anticipation Notes, 3.75% 11/30/07		6,500,606
	4,000,000	Edgemont, New York, Union Free School District of Greenburgh, General Obligation Tax Bond Anticipation Notes, 3.75% 01/18/08		4,001,390
	5,000,000	Long Island, New York, Power Authority, Electrical Systems Revenue Bonds, Floating Rate Certificates, Series 1428, (FGIC/MORGAN STANLEY), 3.90% 12/01/25(a)(b)		5,000,000
	19,900,000	New York City, New York, Housing Development Corporation, Multi Family Mortgage Revenue Bonds, 201 Pearl LLC, Series A, (FNMA), 3.83% 10/15/41(a)		19,900,000
	10,300,000	New York City, New York, Municipal Water Finance Authority Commercial Paper, Series 5-B, (BAYERISCHE LANDESBANK/WESTDEUTSCHE BANK), 3.50% 12/20/07		10,300,000
	4,455,000	New York City, New York, Municipal Water Finance Authority Revenue Bonds, Water & Sewer Systems, Floating Rate Certificates, Series 726X, (MBIA/MORGAN STANLEY), 3.90% 06/15/27(a)(b)		4,455,000

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	10,000,000	New York City, New York, Municipal Water Finance Authority Revenue Bonds, Water & Sewer Systems, PFLOATS, Series 1421, 3.90% 06/15/37(a)(b)	$	10,000,000
	19,700,000	New York City, New York, Transitional Finance Authority Revenue Bonds, EAGLE, Class A, (BAYERISCHE LANDESBANK), 3.90% 11/01/30(a)(b)		19,700,000
	10,870,000	New York City, New York, Transitional Finance Authority Revenue Bonds, EAGLE, Class A, (CITIBANK N.A.), 3.92% 02/01/31(a)(b)		10,870,000
	11,315,000	New York City, New York, Transitional Finance Authority Revenue Bonds, Floating Rate Certificates, Series 536, (MBIA/MORGAN STANLEY), 3.90% 05/01/15(a)(b)		11,315,000
	3,575,000	New York City, New York, Transitional Finance Authority Revenue Bonds, Floating Rate Certificates, Series N-11, (BANK OF NEW YORK), 3.89% 02/01/14(a)(b)		3,575,000
	8,705,000	New York City, New York, Transitional Finance Authority Revenue Bonds, PUTTERS, Series 468, (MBIA/JPMORGAN CHASE BANK), 3.90% 02/01/11(a)(b)		8,705,000
	3,440,000	New York City, New York, Transitional Finance Authority Revenue Bonds, PUTTERS, Series 471, (FGIC/JPMORGAN CHASE BANK), 3.90% 02/01/11(a)(b)		3,440,000
	5,000,000	New York State, Dormitory Authority Commercial Paper, Columbia University, 3.95% 12/14/07		5,000,000

See Notes to Financial Statements.

13

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

New York Tax-Exempt Money Fund — (continued)

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	10,000,000	New York State, Dormitory Authority Commercial Paper, Cornell University, 3.92% 12/13/07	$	10,000,000
	5,125,000	New York State, Dormitory Authority Revenue Bonds, Cornell University, Series B, (JPMORGAN CHASE BANK), 3.78% 07/01/30(a)		5,125,000
	12,000,000	New York State, Dormitory Authority Revenue Bonds, Secondary Issues, EAGLE, Class A, (CITIBANK N.A.), 3.90% 03/15/37(a)(b)		12,000,000
	9,930,000	New York State, Dormitory Authority Revenue Bonds, Secondary Issues, P-Floats, Series 1330, (FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.90% 02/01/28(a)(b)		9,930,000
	11,650,000	New York State, Environmental Facilities Corporation, Clean Water Revenue Bonds, PFLOATS, Series 1165, (MERRILL LYNCH CAPITAL SERVICES), 3.90% 07/15/33(a)(b)		11,650,000
	7,720,000	New York State, Environmental Facilities Corporation, Clean Water Revenue Bonds, PUTTERS, Series 1372, (JPMORGAN CHASE BANK), 3.90% 06/15/14(a)(b)		7,720,000
	400,000	New York State, Housing Finance Agency Revenue Bonds, Barclay Street Realty LLC, Series A, (FNMA), 3.80% 11/15/37(a)		400,000
	11,283,000	New York State, Metropolitan Transportation Authority Revenue Bonds, Floating Rate Certificates, Series 848-D, (FGIC/MORGAN STANLEY), 3.90% 11/15/21(a)(b)		11,283,000

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	8,545,000	New York State, Metropolitan Transportation Authority Revenue Bonds, Series D-2, (AMBAC/WACHOVIA BANK N.A.), 3.88% 11/01/34(a)	$	8,545,000
	9,000,000	New York State, PFLOATS, Series 4227, (FSA/FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.90% 11/15/26(a)(b)		9,000,000
	13,905,000	New York State, PFLOATS, Series 486, (BNP PARIBAS), 3.88% 06/15/20(a)(b)		13,905,000
	10,000,000	New York State, Power Authority Extendible Commercial Paper, General Obligation Bonds, 3.65% 11/16/07		10,000,000
	12,000,000	New York State, Power Authority, General Obligation Bonds, (BANK OF NOVA SCOTIA), 3.64% 03/01/20(a)		12,000,000
	13,720,000	New York State, Sales Tax Asset Receivable Corporation Revenue Bonds, PUTTERS, Series 564, (MBIA/JPMORGAN CHASE BANK), 3.90% 10/15/12(a)(b)		13,720,000
	8,500,000	New York State, Thruway Authority Revenue Bonds, PUTTERS, Series 2032, (AMBAC/JPMORGAN CHASE BANK), 3.90% 10/01/13(a)(b)		8,500,000
	17,390,000	New York State, Triborough Bridge & Tunnel Authority Revenue Bonds, Series A, (DEXIA CREDIT LOCAL), 3.77% 11/01/35(a)		17,390,000

See Notes to Financial Statements.

14

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

New York Tax-Exempt Money Fund — (continued)

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	790,000	New York State, Triborough Bridge & Tunnel Authority Revenue Bonds, Series B, (AMBAC/STATE STREET BANK & TRUST CO.), 3.77% 01/01/32(a)	$	790,000
	4,325,000	New York State, Triborough Bridge & Tunnel Authority Revenue Bonds, Series B, (DEXIA CREDIT LOCAL), 3.80% 01/01/33(a)		4,325,000
	18,460,000	New York State, Urban Development Corporation Revenue Bonds, EAGLE, Class A, (CITIBANK N.A.), 3.92% 03/15/35(a)(b)		18,460,000
	4,300,000	Niagara Falls, New York, Bridge Commission Toll Authority Revenue Bonds, Series A, (FGIC/DEXIA CREDIT LOCAL), 3.76% 10/01/19(a)		4,300,000
	4,585,000	Oneida County, New York, Industrial Development Agency Revenue Bonds, Hamilton College, (MBIA/BANK OF NEW YORK), 3.80% 09/15/32(a)		4,585,000
	4,000,000	Sag Harbor, New York, School District General Obligation, Tax Anticipation Notes, 3.75% 06/30/08		4,006,693
		TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES (Cost $330,397,217)		330,397,217
TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT — 23.57%
	4,560,000	Monroe County, New York, Industrial Development Agency Revenue Bonds, Civic Facilities,Greater Rochester YMCA Project, (MANUFACTURERS & TRADERS), 3.89% 04/01/31(a)		4,560,000

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT — (continued)
$	3,690,000	New York City, New York, General Obligation Bonds, Sub-Series B-8, (BAYERISCHE LANDESBANK), 3.83% 08/15/24(a)	$	3,690,000
	8,800,000	New York City, New York, Industrial Development Agency Revenue Bonds, Civic Facilities, Jewish Community Center Project, (MANUFACTURERS & TRADERS), 3.89% 03/01/30(a)		8,800,000
	6,535,000	New York State, Dormitory Authority Revenue Bonds, Catholic Health Systems Obligations, Series C, (HSBC BANK USA N.A.), 3.88% 07/01/22(a)		6,535,000
	3,320,000	New York State, Dormitory Authority Revenue Bonds, Oxford University Press, Inc., (LANDESBANK HESSEN-THURINGEN), 4.00% 07/01/23(a)		3,320,000
	8,800,000	New York State, Environmental Facilities Corporation, Clean Water Commercial Paper, Series A, (JPMORGAN/BAYERISCHE LANDESBANK/LANDEBANK HESSEN), 3.70% 11/01/07		8,800,000
	6,800,000	New York State, Energy Research & Development Authority Facilities Revenue Bonds, Consolidated Edison Co., Sub-Series A-1, (WACHOVIA BANK N.A.), 3.77% 05/01/39(a)		6,800,000
	12,000,000	New York State, Environmental Quality General Obligation Bonds, Series G, (WESTDEUTSCHE LANDESBANK), 3.70% 11/30/18(a)		12,000,000

See Notes to Financial Statements.

15

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

New York Tax-Exempt Money Fund — (continued)

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT — (continued)
$	24,500,000	New York State, Housing Finance Agency Revenue Bonds, Series I, (LANDESBANK HESSEN-THURINGEN), 3.88% 03/15/31(a)	$	24,500,000
	6,100,000	New York State, Local Government Assistance Corporation Revenue Bonds, Series D, (SOCIETE GENERALE), 3.85% 04/01/25(a)		6,100,000
	4,100,000	New York State, Metropolitan Transportation Authority Revenue Bonds, Sub-Series E-2, (FORTIS BANK SA), 3.80% 11/01/35(a)		4,100,000
	12,000,000	New York State, Environmental Commercial Paper, Series 97A, (BAYERISCHE LANDESBANK/LANDESBANK HESSEN), 3.51% 12/06/07(c)		12,000,000
	3,600,000	New York State, Environmental Commercial Paper, Series 97A, (BAYERISCHE LANDESBANK/LANDESBANK HESSEN), 3.69% 11/08/07(c)		3,600,000
		TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT (Cost $104,805,000)		104,805,000

Shares		Value
REGISTERED INVESTMENT COMPANIES — 0.11%
482,213	BlackRock Institutional New York Money Market Fund (7 day yield of 3.65%)	$	482,213
1	Dreyfus New York Tax Exempt Fund (7 day yield of 3.17%)		1
	TOTAL REGISTERED INVESTMENT COMPANIES (Cost $482,214)		482,214

TOTAL INVESTMENTS (Cost $435,684,431)(d)	97.99	%	$	435,684,431
OTHER ASSETS IN EXCESS OF LIABILITIES	2.01			8,923,323
NET ASSETS	100.00	%	$	444,607,754

(a) Variable rate obligations maturing in more than one year. These securities are secured by letters of credit or other credit support agreements from banks. The interest rate is changed periodically and the interest rate shown reflects the rate at September 30, 2007.

(b) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $193,228,000, which represents 43.46% of net assets.

(c) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(d) Cost for federal income tax purposes is $435,684,431.

AMBAC—Ambac Assurance Corp.

FGIC—Financial Guaranty Insurance Co.

FNMA—Federal National Mortgage Association

FSA—Financial Security Assurance, Inc.

MBIA—MBIA Insurance Corp.

PFLOATS—Puttable Floating Option Tax-Exempt Receipts

PUTTERS—Puttable Tax Exempt Receipts

See Notes to Financial Statements.

16

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

New York Tax-Exempt Money Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Portfolio Diversification	% of Net Assets	Value
Revenue Bonds	68.46	$	304,373,000
General Obligation Bonds	13.99		62,199,217
Commercial Paper	10.28		45,725,000
Puttable Floating Options	5.15		22,905,000
Registered Investment Companies	0.11		482,214
Total Investments	97.99	$	435,684,431
Other Assets in Excess of Liabilities	2.01		8,923,323
Net Assets	100.00	$	444,607,754

See Notes to Financial Statements.

17

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Tax-Exempt Money Fund

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — 91.34%
$	16,425,000	Adams County, Colorado, School District Number 050 General Obligation Bonds, PFLOATS, Series 3804, (MBIA/MERRILL LYNCH CAPITAL SERVICES), 3.95% 12/01/26(a)(b)	$	16,425,000
	10,000,000	Anne Arundel County, Maryland, Commercial Paper, Series A, (WESTDEUTSCHE BANK), 3.74% 12/06/07		10,000,000
	14,880,000	Arizona State, Agricultural Improvement & Power Distribution, Electrical Systems Revenue Bonds, Salt River Project, Series 640, ROCS, (CITIBANK N.A.), 3.92% 01/01/31(a)(b)		14,880,000
	11,564,000	Arizona State, Highway Transportation Board Revenue Bonds, Floating Rate Certificates, Series 1539, (MORGAN STANLEY), 3.85% 07/01/23(a)(b)		11,564,000
	47,050,000	Austin, Texas, Water & Wastewater System Revenue Bonds, (FSA/LANDESBANK BADEN-WURTTEMBERG), 3.93% 05/15/24(a)		47,050,000
	25,900,000	Baltimore County, Maryland, Commercial Paper, Series 2002 (BNP PARIBAS), 3.63% 12/10/07		25,900,000
	31,640,000	Boulder, Larimer, & Weld County, Colorado, School District General Obligation Bonds, Floating Rate Certificates, Series 1540, (FSA/MORGAN STANLEY), 3.88% 12/15/26(a)(b)		31,640,000
	11,895,000	Brownsville, Texas, Utility Systems Revenue Bonds, PUTTERS, Series 1132, (AMBAC/JPMORGAN CHASE BANK), 3.92% 09/01/13(a)(b)		11,895,000

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	27,940,000	Chicago, Illinois, General Obligation Bonds, PUTTERS, Series 1277, (FSA/JPMORGAN CHASE BANK), 3.92% 01/01/14(a)(b)	$	27,940,000
	15,605,000	Chicago, Illinois, General Obligation Bonds, PUTTERS, Series 1288, (FSA/JPMORGAN CHASE BANK), 3.92% 01/01/14(a)(b)		15,605,000
	5,000,000	Colorado State, Regional Transportation District, Sales Tax Revenue Bonds, EAGLE, Class A, (AMBAC/CITIBANK N.A.), 3.93% 11/01/36(a)(b)		5,000,000
	20,605,000	Colorado State, Regional Transportation District, Sales Tax Revenue Bonds, ROCS, Series 10117, (AMBAC/CITIGROUP FINANCIAL PRODUCTS), 3.92% 11/01/36(a)(b)		20,605,000
	21,350,000	Colorado State, Regional Transportation District, Sales Tax Revenue Bonds, ROCS, Series 10118, (AMBAC/CITIGROUP FINANCIAL PRODUCTS), 3.92% 11/01/36(a)(b)		21,350,000
	10,410,000	Colorado State, Regional Transportation District, Sales Tax Revenue Bonds, ROCS, Series 10119, (AMBAC/CITIBANK N.A.), 3.92% 11/01/36(a)(b)		10,410,000
	5,395,000	Connecticut State, General Obligation Bonds, Municipal Securities Trust Receipts, Series JPMC4, (JPMORGAN CHASE BANK), 4.03% 06/15/15(a)(b)		5,395,000
	9,900,000	Connecticut State, Health & Educational Systems Revenue Bonds, Yale University, Series S, Commercial Paper, 3.65% 12/12/07(c)		9,900,000

See Notes to Financial Statements.

18

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Tax-Exempt Money Fund — (continued)

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	15,000,000	Dallas, Texas, Area Rapid Transit Sales Tax Commercial Paper, Series 2001 S, (STATE STREET/WESTDEUTSCHE BANK/LANDESBANK BADEN-WURTTEMBERG/BAYERISCHE LANDESBANK), 3.50% 01/14/08	$	15,000,000
	10,000,000	Dallas, Texas, Area Rapid Transit Sales Tax Commercial Paper, Series 2001, 3.65% 01/10/08		10,000,000
	10,000,000	Dallas, Texas, Area Rapid Transit Sales Tax Commercial Paper, Series 2001, (STATE STREET/WESTDEUTSCHE BANK/LANDESBANK BADEN-WURTTEMBERG/BAYERISCHE LANDESBANK), 3.63% 11/05/07		10,000,000
	19,800,000	Dallas, Texas, Area Rapid Transit Sales Tax Revenue, EAGLE, Class A, (AMBAC/BAYERISCHE LANDESBANK), 3.91% 12/01/36(a)(b)		19,800,000
	25,865,000	Detroit, Michigan, Water Supply Systems Revenue Bonds, Floating Rate Certificates, Series 1445, (FSA/MORGAN STANLEY), 3.91% 07/01/25(a)(b)		25,865,000
	11,835,000	Florida State, Board of Education Lottery Revenue Bonds, ROCS, Series 542, (AMBAC/CITIBANK N.A.), 3.92% 07/01/25(a)(b)		11,835,000
	8,860,000	Fort Myers, Florida, Improvement Revenue Bonds, Floating Rate Certificates, Series 2077, (MBIA/WELLS FARGO BANK N.A.), 3.91% 12/01/31(a)(b)		8,860,000

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	17,140,000	Fulton County, Georgia, Water & Sewage Revenue Bonds, Floating Rate Certificates, Series 1120, (FGIC/MORGAN STANLEY), 3.91% 01/01/30(a)(b)	$	17,140,000
	19,195,000	Hawaii State, General Obligation Bonds, ROCS, Series 6062, (FSA/CITIBANK), 3.92% 03/01/26(a)(b)		19,195,000
	31,000,000	Hockley County, Texas, Industrial Development Corporation, Pollution Control Revenue Bonds, Amoco Project - Standard Oil Co., 3.70% 03/01/14(a)		31,000,000
	19,300,000	3.70% 11/01/19(a)		19,300,000
	11,690,000	Honolulu City & County Waste Water, Hawaii, EAGLE, Series A, (FGIC/BANCO BILBAO VIZCAYA), 3.91% 07/01/30(a)(b)		11,690,000
	10,000,000	Houston, Texas, General Obligation Bonds, Series F, Commercial Paper, (DEPFA), 3.50% 12/06/07(c)		9,999,045
	8,000,000	Illinois State, Finance Authority Revenue Bonds, FLOATERS, Series 1489, (MORGAN STANLEY), 3.91% 12/01/42(a)(b)		8,000,000
	70,000,000	Illinois State, General Obligation Notes, 4.25% 11/09/07(c)		70,040,040
	15,000,000	Indiana State Highway Revenue, PFLOATS, PT 3980, (FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.95% 06/01/29(a)(b)		15,000,000
	63,200,000	Intermountain Power Agency, Utah, Commercial Paper, Series B-2, (BANK OF NOVA SCOTIA), 3.67% 12/14/07		63,200,000

See Notes to Financial Statements.

19

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Tax-Exempt Money Fund — (continued)

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	24,700,000	Intermountain Power Agency, Utah, Power Supply Revenue Bonds, Series E, (AMBAC/MORGAN STANLEY), 3.50% 07/01/14(a)	$	24,700,000
	14,700,000	Iowa State, Finance Authority Small Business Development Revenue Bonds, Multi Family Housing, Village Court Associates, E.I. DuPont, Series B, 3.91% 11/01/15(a)		14,700,000
	18,700,000	Jacksonville, Florida, Electrical Systems Commercial Paper, Series 2000 F, (LANDESBANK HESSEN), 3.69% 10/04/07		18,700,000
	38,000,000	3.66% 12/13/07		38,000,000
	16,110,000	Jacksonville, Florida, St. Johns River, Power Systems Revenue Bonds, PUTTERS, Series 1182, (MBIA/JPMORGAN CHASE BANK), 3.92% 04/01/13(a)(b)		16,110,000
	40,000,000	Kansas City, Missouri, Industrial Development Authority Revenue Bonds, Downtown Arena Project, Series C, (AMBAC/DEXIA CREDIT LOCAL), 3.87% 04/01/40(a)		40,000,000
	10,000,000	Kentucky State, Asset & Liability Commission Project, Series A, (CREDIT LOCAL DE FRANCE), 3.52% 12/03/07(c)		10,000,000
	13,570,000	King County, Washington, General Obligation Bonds, PUTTERS, Series 1184, (FGIC/JPMORGAN CHASE BANK), 3.92% 01/01/13(a)(b)		13,570,000

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	17,100,000	Las Vegas, Nevada, Water District General Obligation Bonds, Series 2004 A, Commercial Paper, (BNP PARIBAS), 3.55% 12/10/07(c)	$	17,100,000
	15,200,000	Lincoln County, Wyoming, Pollution Control Revenue Bonds, BP Amoco PLC, 3.60% 10/01/12(a)		15,200,000
	30,000,000	Massachusetts State, General Obligation Bonds, Series A, (DEXIA CREDIT LOCAL), 4.05% 03/01/26(a)		30,000,000
	22,200,000	Massachusetts State, General Obligation Bonds, Series C, (STATE STREET BANK & TRUST CO.), 3.85% 01/01/21(a)		22,200,000
	10,000,000	Massachusetts State, Health & Educational Harvard University Revenue Bonds, Commercial Paper, 3.67% 11/08/07(c)		9,998,428
	21,000,000	Massachusetts State, Water Resources Authority, Sub-Series D, (FGIC/DEXIA CREDIT LOCAL), 3.88% 11/01/26(a)		21,000,000
	18,660,000	Memphis, Tennessee, Electric Systems Revenue Bonds, PUTTERS, Series 378, Commercial Paper, (MBIA/JPMORGAN CHASE), 3.92% 12/01/11(a)(b)		18,660,000
	14,200,000	Michigan State, Building Authority Revenue Bonds, EAGLE, Class A, (FGIC/CITIBANK N.A.), 3.93% 10/15/36(a)(b)		14,200,000
	10,630,000	Michigan State, University Revenue Bonds, (LANDESBANK HESSEN-THURINGEN), 3.77% 02/15/34(a)		10,630,000

See Notes to Financial Statements.

20

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Tax-Exempt Money Fund — (continued)

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	15,000,000	Minnesota State, PFLOATS, Series 4145, (MERRILL LYNCH CAPITAL SERVICES), 3.93% 12/15/33(a)(b)	$	15,000,000
	4,000,000	Missouri State, Health & Educational Facilities Authority Revenue Bonds, Washington University, Series A, (MORGAN GUARANTY TRUST), 4.08% 09/01/30(a)		4,000,000
	30,500,000	Montgomery County, Maryland, Commercial Paper, Series 2002, 3.65% 12/10/07		30,500,000
	15,000,000	Nevada State, PFLOATS, Series 4221, (FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.95% 12/01/25(a)(b)		15,000,000
	9,550,000	North Carolina State, Floating Rate Certificates, Series 2005, (MORGAN STANLEY), 3.91% 03/01/23(a)(b)		9,550,000
	12,095,000	North Carolina State, General Obligation Bonds, PUTTERS, Series 465, (PNC BANK N.A.), 3.88% 05/01/11(a)(b)		12,095,000
	10,230,000	North Carolina State, General Obligation Bonds, PUTTERS, Series 466, (PNC BANK N.A.), 3.88% 03/01/12(a)(b)		10,230,000
	7,450,000	Oklahoma State, Water Resource Board Revenue Bonds, Loan Program, (STATE STREET BANK & TRUST CO.), 3.65% 09/01/24(a)		7,450,000
	19,475,000	Oregon State, Veterans Welfare General Obligation Bonds, Series 85, (DEXIA CREDIT LOCAL), 4.05% 06/01/41(a)		19,475,000

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	15,560,000	Oregon State, Veterans Welfare General Obligation Bonds, Series 86, (DEXIA CREDIT LOCAL), 4.05% 06/01/40(a)	$	15,560,000
	21,500,000	Orlando, Florida, Communication Utility Systems Revenue Bonds, PUTTERS, Series 1557, (JPMORGAN CHASE BANK), 3.92% 10/01/13(a)(b)		21,500,000
	29,555,000	Pennsylvania State, PFLOATS, Series 4160, (MERRILL LYNCH CAPITAL SERVICES), 3.91% 11/01/24(a)(b)		29,555,000
	18,040,000	Richland County, South Carolina, School District No. 002, General Obligation Bonds, PFLOATS, Series 1646, (FGIC), 3.95% 02/01/10(a)		18,040,000
	14,210,000	San Antonio, Texas, Hotel Occupancy Revenue Bonds, PUTTERS, Series 1693, (FSA/JPMORGAN CHASE BANK), 3.92% 02/15/12(a)(b)		14,210,000
	54,500,000	San Antonio, Texas, Water Revenue Bonds, EAGLE, Class A, (MBIA/CITIBANK N.A.), 3.93% 05/15/40(a)(b)		54,500,000
	10,820,000	Springfield, Illinois, Electrical Revenue, ROC, Series 11154, (MBIA/CITIBANK N.A.), 3.92% 03/01/24(a)(b)		10,820,000
	44,000,000	St. James Parish, Louisiana, Pollution Control Commercial Paper, Texaco Project, 3.73% 10/16/07		44,000,000

See Notes to Financial Statements.

21

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Tax-Exempt Money Fund — (continued)

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	17,555,000	St. Louis, Missouri, Metropolitan Sewer District Wastewater Systems Revenue, Series 2076, (MBIA/MORGAN STANLEY), 3.91% 05/01/36(a)	$	17,555,000
	18,695,000	Tarrant, Texas, Regulation Water District Revenue Bonds, PFLOATS, Series 3425, (FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.95% 03/01/28(a)(b)		18,695,000
	20,000,000	Tennessee State, School Building Authority Commercial Paper, Series A, 3.65% 11/01/07		20,000,000
	2,960,000	Texas State, General Obligation Bonds, PUTTERS, Series 1645, (BANK OF NEW YORK), 3.89% 10/01/14(a)(b)		2,960,000
	20,785,000	Texas State, PFLOATS, Series 4177, (MERRILL LYNCH CAPITAL SERVICES), 3.93% 04/01/37(a)(b)		20,785,000
	13,425,000	Texas State, Reset Optional Certificates Trust II-R, ROCS, Series 4083, (CITIGROUP FINANCIAL PRODUCTS), 3.92% 04/01/35(a)(b)		13,425,000
	30,200,000	Texas State, Southwest Higher Education Authority Revenue, Southern Methodist University, (BANK OF NEW YORK), 3.85% 10/01/36(a)(b)		30,200,000
	20,000,000	Texas State, Transportation Commission Revenue Bonds, 4.50% 08/28/08		20,143,528
	10,980,000	Texas State, Transportation Commission Revenue Bonds, PUTTERS, Series 1324, (JPMORGAN CHASE BANK), 3.92% 04/01/14(a)(b)		10,980,000

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	8,700,000	Thurston County, Washington, School District General Obligation Bonds, PUTTERS, Series 1108, (MBIA/JPMORGAN CHASE BANK), 3.92% 06/01/13(a)(b)	$	8,700,000
	10,155,000	Union County, North Carolina, ROCS, Series 11194, (MBIA/CITIBANK N.A.), 3.92% 03/01/20(a)(b)		10,155,000
	10,000,000	University of Missouri, Curators Systems Facilities Revenue, PUTTERS, Series 1978, (JPMORGAN CHASE BANK), 3.92% 05/01/15(a)(b)		10,000,000
	32,000,000	University of North Carolina, Board of Governors Commercial Paper, Series 2004-B, 3.70% 12/11/07		32,000,000
	30,400,000	University of North Carolina, Board of Governors Commercial Paper, Series A, 3.62% 10/10/07		30,394,317
	10,063,000	University of Texas, North University Revenue Bonds, Series A, 3.57% 11/08/07(c)		10,063,000
	16,700,000	University of Texas, Permanent University Fund Revenue Bonds, Floating Rate Certificates, Series 1574, (RABOBANK NEDERLAND), 3.91% 07/01/26(a)(b)		16,700,000
	19,000,000	University of Texas, University Revenue Bonds, Series A 3.65% 12/12/07(c)		19,000,000
	25,000,000	3.83% 10/02/07(c)		24,999,875
	20,760,000	Utah Transportation Authority Sales Tax, PFLOATS, PZ261, (MBIA/MERRILL LYNCH CAPITAL SERVICES), 3.96% 06/15/28(a)(b)		20,760,000

See Notes to Financial Statements.

22

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Tax-Exempt Money Fund — (continued)

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	21,170,000	Valdez, Alaska, Marine Terminal Revenue, BP Pipeline, Inc., Series A, 4.05% 06/01/37(a)	$	21,170,000
	10,000,000	Valdez, Alaska, Marine Terminal Revenue, BP Pipeline, Inc., Series B, 4.05% 07/01/37(a)		10,000,000
	14,224,500	Virginia Commonwealth, Transportation Board Revenue Bonds, Floating Rate Certificates, Series 727, (MORGAN STANLEY), 3.91% 05/15/19(a)(b)		14,224,500
	25,966,000	Washington State, General Obligation Bonds, Floating Rate Certificates, Series 1161, (AMBAC/MORGAN STANLEY), 3.91% 07/01/24(a)(b)		25,966,000
	7,590,000	Washington State, General Obligation Bonds, P-Floats, PT 3863, (AMBAC/MERRILL LYNCH), 3.95% 01/01/22(a)(b)		7,590,000
	12,145,000	Washington State, General Obligation Bonds, P-Floats, PT 3874, (FSA/MERRILL LYNCH), 3.95% 01/01/30(a)(b)		12,145,000
	9,745,000	Washoe County, Nevada, General Obligation Bonds, Floating Rate Certificates, Series 1241, (MBIA/MORGAN STANLEY), 3.91% 01/01/35(a)(b)		9,745,000
	15,170,000	Wisconsin State, Clean Water Revenue Bonds, PFLOATS, Series 1509, (JPMORGAN CHASE BANK), 3.92% 06/01/13(a)(b)		15,170,000
	6,830,000	Wisconsin State, PFLOATS, Series PT 3929, (FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.95% 07/01/26(a)(b)		6,830,000

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — (continued)
$	11,000,000	Wisconsin State, Transportation Authority Revenue Commercial Paper, Series 97 A, (STATE STREET/CALIFORNIA STATE TEACHERS RETIREMENT), 3.68% 12/06/07	$	11,000,000
	39,643,000	Wisconsin State, Transportation Authority Revenue Extendible Commercial Paper, Series 2006 B, 3.62% 10/05/07		39,643,000
	29,000,000	3.73% 10/05/07		29,000,000
	9,345,000	York County, South Carolina, School District 4 General Obligation Bonds, Fort Mill, ROCS, Series F, (GOLDMAN SACHS), 3.90% 03/09/12(a)(b)		9,345,000
		TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES (Cost $1,867,080,733)		1,867,080,733
TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT — 8.31%
	15,000,000	Atlanta, Georgia, Metropolitan Transit Authority, Sales Tax Commercial Paper, Series A, (DEXIA CREDIT LOCAL), 3.67% 12/11/07(c)		15,000,000
	30,000,000	3.63% 12/06/07(c)		30,000,000
	29,899,811	Baltimore, Maryland, Port Facilities Revenue Bonds, Occidental Petroleum Corp., (BNP PARIBAS), 3.55% 10/14/11(a)		29,899,811
	20,000,000	Colorado State, Regional Transportation District, Commercial Paper, Series 2001 A, (LOC: WESTDEUTSCHE BANK), 3.62% 10/05/07		20,000,000

See Notes to Financial Statements.

23

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Tax-Exempt Money Fund — (continued)

Principal Amount			Value
TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT — (continued)
$	18,000,000	Des Moines, Iowa, Hospital Facilities Authority Revenue Bonds, Methodist Medical Center Project, (WACHOVIA BANK N.A.), 3.88% 08/01/15(a)	$	18,000,000
	7,000,000	Kenton County, Kentucky, Industrial Building Authority Revenue Bonds, Redken Labs, Inc., Project, (MORGAN GUARANTY TRUST), 3.85% 12/01/14(a)		7,000,000
	40,000,000	Michigan State, Building Authority Revenue Bonds, Commercial Paper, Series 5, (LOC: STATE STREET BANK/BANK OF NEW YORK), 3.72% 11/20/07(c)		40,000,000
	10,000,000	New Jersey State, Economic Development Authority, Series R-1, (BANK OF NOVA SCOTIA/LLOYDS TSB BANK PLC), 4.00% 09/01/31(a)		10,000,000
		TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT (Cost $169,899,811)		169,899,811

Shares		Value
REGISTERED INVESTMENT COMPANIES — 0.04%
867,271	BlackRock Muni Fund (7 day yield of 3.61%)	$	867,271
1	Dreyfus Tax-Exempt Cash Fund (7 day yield of 3.63%)		1
	TOTAL REGISTERED INVESTMENT COMPANIES (Cost $867,272)		867,272

TOTAL INVESTMENTS (Cost $2,037,847,816)(d)	99.69	%	$	2,037,847,816
OTHER ASSETS IN EXCESS OF LIABILITIES	0.31			6,378,063
NET ASSETS	100.00	%	$	2,044,225,879

(a) Variable rate obligation maturing in more than one year. These securities are secured by letters of credit or other credit support agreements from banks. The interest rate is changed periodically and the interest rate shown reflects the rate at September 30, 2007.

(b) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $849,469,500, which represents 41.55% of net assets.

(c) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(d) Cost for federal income tax purposes is $2,037,847,816.

AMBAC—Ambac Assurance Corp.

FGIC—Financial Guaranty Insurance Co.

FSA—Financial Security Assurance, Inc.

LOC—Letter of Credit

MBIA—MBIA Insurance Corp.

PUTTERS—Puttable Tax Exempt Receipts

PFLOATS—Puttable Floating Option Tax-Exempt Receipts

ROCS—Reset Option Certificates

See Notes to Financial Statements.

24

Excelsior Tax-Exempt Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Tax-Exempt Money Fund — (continued)

The summary of the Fund’s investments as of September 30, 2007 is as follows:

State Diversification	% of Net Assets	Value
Texas	21.07	$	430,705,447
Illinois	6.48		132,405,040
Colorado	6.14		125,430,000
Florida	5.63		115,005,000
Utah	5.32		108,660,000
North Carolina	5.11		104,424,318
Wisconsin	4.97		101,643,000
Maryland	4.71		96,299,811
Michigan	4.44		90,695,000
Massachusetts	4.07		83,198,428
Missouri	3.50		71,555,000
Washington	3.33		67,971,000
Georgia	3.04		62,140,000
Louisiana	2.15		44,000,000
Nevada	2.05		41,845,000
Tennessee	1.89		38,660,000
Oregon	1.71		35,035,000
Iowa	1.60		32,700,000
Arkansas	1.52		31,170,000
Hawaii	1.51		30,885,000
Pennsylvania	1.45		29,555,000
South Carolina	1.34		27,385,000
Arizona	1.29		26,444,000
Kentucky	0.83		17,000,000
Connecticut	0.75		15,295,000
Wyoming	0.74		15,200,000
Indiana	0.73		15,000,000
Minnesota	0.73		15,000,000
Virginia	0.70		14,224,500
New Jersey	0.49		10,000,000
Oklahoma	0.36		7,450,000
Registered Investment Companies	0.04		867,272
Total Investments	99.69	$	2,037,847,816
Other Assets in Excess of Liabilities	0.31		6,378,063
Net Assets	100.00	$	2,044,225,879

See Notes to Financial Statements.

25

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Treasury Money Fund

Principal Amount			Value
U.S. GOVERNMENT & AGENCY OBLIGATION — 16.79%
$	63,000,000	Federal Home Loan Bank, Discount Note, 4.00% 10/01/07	$	63,000,000
		TOTAL U.S. GOVERNMENT & AGENCY OBLIGATION (Cost $63,000,000)		63,000,000
U.S. TREASURY OBLIGATIONS — 83.03%
	30,000,000	3.33% 10/18/07(a)		29,952,966
	50,000,000	3.45% 11/08/07(a)		49,819,791
	25,000,000	3.50% 11/29/07(a)		24,856,679
	25,000,000	3.53% 11/15/07(a)		24,892,813
	25,000,000	3.55% 11/23/07(a)		24,870,076
	25,000,000	3.55% 12/20/07(a)		24,804,167
	10,000,000	3.68% 12/27/07(a)		9,911,067
	40,000,000	3.88% 12/06/07(a)		39,700,891
	10,000,000	3.90% 12/06/07(a)		9,928,546
	13,000,000	4.04% 12/20/07(a)		12,883,433
	10,000,000	4.38% 01/31/08		10,006,808
	20,000,000	4.87% 10/04/07(a)		19,991,880
	30,000,000	4.88% 11/01/07(a)		29,904,012
		TOTAL U.S. TREASURY OBLIGATIONS (Cost $311,523,129)		311,523,129

Shares		Value
REGISTERED INVESTMENT COMPANY — 0.42%
1,583,319	Dreyfus Treasury Prime Cash Management Fund (7-day yield of 3.23%)	$	1,583,319
	TOTAL REGISTERED INVESTMENT COMPANY (Cost $1,583,319)		1,583,319

TOTAL INVESTMENTS (Cost $376,106,448)(b)	100.24	%	$	376,106,448
OTHER LIABILITIES IN EXCESS OF ASSETS	(0.24	)		(914,726	)
NET ASSETS	100.00	%	$	375,191,722

(a) The rate shown represents the annualized yield at the date of purchase.

(b) Cost for federal income tax purposes is $376,106,448.

Discount Note—The rate reported is the discount rate at the time of purchase.

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Portfolio Diversification	% of Net Assets		Value
U.S. Treasury Obligations	83.03		$	311,523,129
U.S. Government & Agency Obligation	16.79			63,000,000
Registered Investment Company	0.42			1,583,319
Total Investments	100.24		$	376,106,448
Other Liabilities in Excess of Assets	(0.24	)		(914,726	)
Net Assets	100.00		$	375,191,722

See Notes to Financial Statements.

26

Excelsior Funds

Statements of Assets and Liabilities

September 30, 2007 (Unaudited)

	Government Money Fund			Money Fund			New York Tax-Exempt Money Fund		Tax-Exempt Money Fund			Treasury Money Fund
ASSETS
Investments (including repurchase agreements), at identified cost	$	352,075,329		$	1,172,656,627		$	435,684,431	$	2,037,847,816		$	376,106,448
Investments (excluding repurchase agreements), at amortized cost approximating value		218,075,329			1,049,656,627			435,684,431		2,037,847,816			376,106,448
Repurchase agreements, at value		134,000,000			123,000,000			—		—			—
Total investments, at value	$	352,075,329		$	1,172,656,627		$	435,684,431	$	2,037,847,816		$	376,106,448
Receivable for:
Investments sold		—			—			7,414,813		—			—
Fund shares sold		5,014			99,935			4,400		500			237
Interest		929,715			1,649,427			3,483,869		14,984,946			73,695
Dividends		9,003			17,734			3,932		58,793			7,010
Expense reimbursement due from Investment Advisor		21,723			75,820			112,271		128,555			27,498
Prepaid expenses		15,797			69,664			26,034		115,797			15,590
Total assets	$	353,056,581		$	1,174,569,207		$	446,729,750	$	2,053,136,407		$	376,230,478
LIABILITIES
Payable for:
Investments purchased		—			—			673,424		723,661			—
Fund shares repurchased		—			4,365			—		1,507,272			3,453
Distributions		1,076,414			3,516,777			1,021,802		5,345,825			695,943
Investment advisory fee		64,024			239,619			188,723		429,723			94,270
Administration fee		22,846			92,735			34,080		169,326			27,880
Transfer agent fee		2,594			7,425			1,236		2,685			1,901
Pricing and bookkeeping fees		3,813			6,642			3,357		6,958			4,139
Trustees’/Directors’ fees		—			431			—		8,817			—
Custody fee		10,696			58,542			6,623		49,485			7,979
Legal fee		29,035			99,874			30,177		129,298			25,524
Registration fee		26,390			46,939			2,574		23,189			21,744
Shareholder servicing fee		66,989			210,940			136,567		449,316			138,543
Other liabilities		26,982			96,389			23,433		64,973			17,380
Total liabilities	$	1,329,783		$	4,380,678		$	2,121,996	$	8,910,528		$	1,038,756
NET ASSETS	$	351,726,798		$	1,170,188,529		$	444,607,754	$	2,044,225,879		$	375,191,722
NET ASSETS CONSIST OF
Par value	$	351,817		$	1,170,434		$	444,578	$	2,044,295		$	375,206
Paid-in capital in excess of par value		351,393,280			1,169,058,550			444,132,175		2,042,149,658			374,820,451
Undistributed (overdistributed) net investment income		—			(13	)		31,001		53,529			(6,247	)
Accumulated net realized gain (loss)		(18,299	)		(40,442	)		—		(21,603	)		2,312
NET ASSETS	$	351,726,798		$	1,170,188,529		$	444,607,754	$	2,044,225,879		$	375,191,722
Shares
Net assets	$	351,726,798		$	574,902,385		$	444,607,754	$	2,044,225,879		$	375,191,722
Shares outstanding		351,817,226			575,145,391			444,578,113		2,044,294,939			375,205,877
Net asset value and offering price per share	$	1.00		$	1.00		$	1.00	$	1.00		$	1.00
Institutional Shares
Net assets		—		$	595,286,144			—		—			—
Shares outstanding		—			595,288,155			—		—			—
Net asset value and offering price per share		—		$	1.00			—		—			—

See Notes to Financial Statements.

27

Excelsior Funds

Statements of Operations

For the Six Months Ended September 30, 2007 (Unaudited)

	Government Money Fund			Money Fund			New York Tax-Exempt Money Fund			Tax-Exempt Money Fund			Treasury Money Fund
INVESTMENT INCOME
Interest	$	7,607,265		$	31,908,244		$	8,548,372		$	37,570,580		$	7,506,662
Dividends		86,228			116,073			14,137			128,163			77,916
Total Investment Income		7,693,493			32,024,317			8,562,509			37,698,743			7,584,578
EXPENSES
Investment advisory fee		370,499			1,501,032			1,151,221			2,530,062			481,184
Administration fee		219,865			900,073			342,819			1,521,205			237,862
Shareholder servicing fee — Shares		370,499			755,691			575,611			2,530,062			401,091
Transfer agent fee		11,961			53,717			11,996			14,502			11,604
Pricing and bookkeeping fees		4,622			6,725			10,655			17,154			5,028
Trustees’/Directors’ fees		8,770			19,885			10,556			29,852			8,883
Custody fees		6,956			44,109			18,146			68,558			27,551
Other expenses		29,510			90,959			46,790			132,555			33,139
Total Expenses		1,022,682			3,372,191			2,167,794			6,843,950			1,206,342
Fees waived/reimbursed by:
Investment Advisor		(169,551	)		(646,284	)		(723,790	)		(1,004,026	)		(184,123	)
Administrator		(37,826	)		(152,658	)		(58,840	)		(259,464	)		(42,976	)
Custody earnings credit		(205	)		(16,321	)		(3,703	)		(16,196	)		(16,880	)
Net Expenses		815,100			2,556,928			1,381,461			5,564,264			962,363
NET INVESTMENT INCOME		6,878,393			29,467,389			7,181,048			32,134,479			6,622,215
NET REALIZED GAIN ON INVESTMENTS		6,384			2,996			—			27,936			2,312
Net Increase Resulting from Operations	$	6,884,777		$	29,470,385		$	7,181,048		$	32,162,415		$	6,624,527

See Notes to Financial Statements.

28

[THIS PAGE INTENTIONALLY LEFT BLANK]

29

Excelsior Funds

Statements of Changes in Net Assets

	Government Money Fund						Money Fund
Increase (Decrease) in Net Assets	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
Operations
Net investment income	$	6,878,393		$	15,053,710		$	29,467,389		$	64,755,001
Net realized gain (loss) on investments		6,384			2,904			2,996			(2,912	)
Net increase resulting from operations		6,884,777			15,056,614			29,470,385			64,752,089
Distributions to Shareholders
From net investment income:
Shares		(6,887,028	)		(15,045,075	)		(14,488,978	)		(38,623,273	)
Institutional Shares		—			—			(15,005,982	)		(26,104,170	)
Total Distributions to Shareholders		(6,887,028	)		(15,045,075	)		(29,494,960	)		(64,727,443	)
Net Capital Share Transactions		109,251,900			(167,762,345	)		(86,863,483	)		(298,083,731	)
Net increase (decrease) in net assets		109,249,649			(167,750,806	)		(86,888,058	)		(298,059,085	)
NET ASSETS
Beginning of period	$	242,477,149		$	410,227,955		$	1,257,076,587		$	1,555,135,672
End of period	$	351,726,798		$	242,477,149		$	1,170,188,529		$	1,257,076,587
Undistributed (overdistributed) net investment income at end of period	$	—		$	8,635		$	(13	)	$	27,558

See Notes to Financial Statements.

30

New York Tax-Exempt Money Fund						Tax-Exempt Money Fund						Treasury Money Fund
(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007			(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31, 2007
$	7,181,048		$	12,932,633		$	32,134,479		$	64,143,597		$	6,622,215		$	14,030,831
	—			770			27,936			(5,092	)		2,312			5,100
	7,181,048			12,933,403			32,162,415			64,138,505			6,624,527			14,035,931
	(7,160,685	)		(12,927,606	)		(32,090,389	)		(64,113,972	)		(6,631,116	)		(14,033,835	)
	—			—			—			—			—			—
	(7,160,685	)		(12,927,606	)		(32,090,389	)		(64,113,972	)		(6,631,116	)		(14,033,835	)
	(12,867,204	)		9,583,689			(66,456,899	)		(51,587,116	)		69,128,396			(59,619,992	)
	(12,846,841	)		9,589,486			(66,384,873	)		(51,562,583	)		69,121,807			(59,617,896	)
$	457,454,595		$	447,865,109		$	2,110,610,752		$	2,162,173,335		$	306,069,915		$	365,687,811
$	444,607,754		$	457,454,595		$	2,044,225,879		$	2,110,610,752		$	375,191,722		$	306,069,915
$	31,001		$	10,638		$	53,529		$	9,439		$	(6,247	)	$	2,654

See Notes to Financial Statements.

31

Excelsior Funds

Statements of Changes in Net Assets—Capital Stock Activity

	Government Money Fund
	(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Changes in Shares	Shares		Dollars ($)		Shares		Dollars ($)
Shares
Subscriptions	1,641,924,536		1,641,924,537		2,027,068,990		2,027,068,990
Distributions reinvested	386,855		386,855		697,510		697,510
Redemptions	(1,533,059,492	)	(1,533,059,492	)	(2,195,528,845	)	(2,195,528,845	)
Net increase (decrease)	109,251,899		109,251,900		(167,762,345	)	(167,762,345	)
Institutional Shares
Subscriptions	—		—		—		—
Distributions reinvested	—		—		—		—
Redemptions	—		—		—		—
Net increase (decrease)	—		—		—		—

See Notes to Financial Statements.

32

Money Fund								New York Tax-Exempt Money Fund
(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007				(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)		Shares		Dollars ($)
978,506,286		978,506,286		2,599,472,390		2,599,472,390		1,514,717,466		1,514,717,461		2,519,812,784		2,519,812,784
2,070,292		2,070,301		3,330,030		3,330,030		1,326,079		1,326,080		1,815,110		1,815,110
(1,050,175,172	)	(1,050,175,174	)	(2,990,685,747	)	(2,990,685,747	)	(1,528,910,299	)	(1,528,910,745	)	(2,512,044,205	)	(2,512,044,205	)
(69,598,594	)	(69,598,587	)	(387,883,327	)	(387,883,327	)	(12,866,754	)	(12,867,204	)	9,583,689		9,583,689
2,123,476,337		2,123,476,337		4,262,737,772		4,262,737,772		—		—		—		—
6,941,966		6,941,966		9,160,704		9,160,704		—		—		—		—
(2,147,683,199	)	(2,147,683,199	)	(4,182,098,880	)	(4,182,098,880	)	—		—		—		—
(17,264,896	)	(17,264,896	)	89,799,596		89,799,596		—		—		—		—

See Notes to Financial Statements.

33

Excelsior Funds

Statements of Changes in Net Assets—Capital Stock Activity — (continued)

	Tax-Exempt Money Fund
	(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Changes in Shares	Shares		Dollars ($)		Shares		Dollars ($)
Shares
Subscriptions	4,482,316,341		4,482,316,345		9,783,446,469		9,783,446,469
Distributions reinvested	1,372,129		1,372,129		2,484,144		2,484,144
Redemptions	(4,550,145,373	)	(4,550,145,373	)	(9,837,517,729	)	(9,837,517,729	)
Net increase (decrease)	(66,456,903	)	(66,456,899	)	(51,587,116	)	(51,587,116	)

See Notes to Financial Statements.

34

Treasury Money Fund
(Unaudited) Six Months Ended September 30, 2007				Year Ended March 31, 2007
Shares		Dollars ($)		Shares		Dollars ($)
914,539,853		914,539,853		1,744,655,262		1,744,655,262
2,786,433		2,786,433		4,178,107		4,178,107
(848,197,797	)	(848,197,890	)	(1,808,453,361	)	(1,808,453,361	)
69,128,489		69,128,396		(59,619,992	)	(59,619,992	)

See Notes to Financial Statements.

35

Financial Highlights – Government Money Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from Investment Operations:
Net investment income		0.02330	(a)		0.04610	(a)		0.03152	(a)		0.01250	(a)		0.00625			0.01199
Net realized and unrealized gain (loss) on investments		—			0.00025			0.00024			0.00003			—			(0.00039	)
Total from Investment Operations		0.02330			0.04635			0.03176			0.01253			0.00625			0.01160
Less Distributions to Shareholders:
From net investment income		(0.02330	)		(0.04635	)		(0.03176	)		(0.01253	)		(0.00625	)		(0.01160	)
Net Asset Value, End of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return (b)(c)		2.35	%(d)		4.74	%		3.22	%		1.26	%		0.63	%		1.17	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		0.55	%(f)		0.55	%		0.53	%		0.46	%		0.45	%		0.39	%
Waiver/Reimbursement		0.14	%(f)		0.15	%		0.16	%		0.25	%		0.09	%		0.08	%
Net investment income (e)		4.65	%(f)		4.61	%		3.15	%		1.25	%		0.62	%		1.21	%
Net assets, end of period (000’s)	$	351,727		$	242,477		$	410,228		$	496,027		$	544,721		$	594,496

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

36

Financial Highlights – Money Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from Investment Operations:
Net investment income		0.02474	(a)		0.04691	(a)		0.03207	(a)		0.01275	(a)		0.00662			0.01255
Net realized and unrealized gain (loss) on investments		—			0.00019			0.00015			0.00010			—			(0.00010	)
Total from Investment Operations		0.02474			0.04710			0.03222			0.01285			0.00662			0.01245
Less Distributions to Shareholders:
From net investment income		(0.02474	)		(0.04710	)		(0.03222	)		(0.01285	)		(0.00662	)		(0.01245	)
Net Asset Value, End of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return (b)(c)		2.42	%(d)		4.81	%		3.27	%		1.29	%		0.66	%		1.25	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		0.55	%(f)		0.55	%		0.53	%		0.46	%		0.45	%		0.39	%
Waiver/Reimbursement		0.13	%(f)		0.13	%		0.16	%		0.24	%		0.28	%		0.04	%
Net investment income (e)		4.80	%(f)		4.69	%		3.21	%		1.28	%		0.67	%		1.25	%
Net assets, end of period (000’s)	$	574,902		$	644,514		$	1,032,384		$	1,105,053		$	1,141,562		$	1,787,852

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

37

Financial Highlights – New York Tax-Exempt Money Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from Investment Operations:
Net investment income		0.01560	(a)		0.02948	(a)		0.02150	(a)		0.00822	(a)		0.00491			0.00884
Net realized and unrealized gain (loss) on investments		—			(0.00002	)		(0.00012	)		0.00023			0.00006			(0.00007	)
Total from Investment Operations		0.01560			0.02946			0.02138			0.00845			0.00497			0.00877
Less Distributions to Shareholders:
From net investment income		(0.01560	)		(0.02946	)		(0.02138	)		(0.00845	)		(0.00490	)		(0.00873	)
From net realized gains		—			—			—			—			(0.00007	)		(0.00004	)
Total Distributions to Shareholders		(0.01560	)		(0.02946	)		(0.02138	)		(0.00845	)		(0.00497	)		(0.00877	)
Net Asset Value, End of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return (b)(c)		1.57	%(d)		2.99	%		2.16	%		0.85	%		0.50	%		0.88	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		0.60	%(f)		0.60	%		0.60	%		0.55	%		0.50	%		0.44	%
Waiver/Reimbursement		0.34	%(f)		0.34	%		0.34	%		0.42	%		0.25	%		0.05	%
Net investment income (e)		3.13	%(f)		2.95	%		2.15	%		0.82	%		0.49	%		0.89	%
Net assets, end of period (000’s)	$	444,608		$	457,455		$	447,865		$	409,252		$	490,099		$	548,574

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

38

Financial Highlights – Tax-Exempt Money Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from Investment Operations:
Net investment income		0.01589	(a)		0.03006	(a)		0.02229	(a)		0.00966	(a)		0.00546			0.00967
Net realized and unrealized gain (loss) on investments		0.00001			(0.00001	)		—			—			0.00029			(0.00002	)
Total from Investment Operations		0.01590			0.03005			0.02229			0.00966			0.00575			0.00965
Less Distributions to Shareholders:
From net investment income		(0.01590	)		(0.03005	)		(0.02225	)		(0.00966	)		(0.00560	)		(0.00964	)
From net realized gains		—			—			(0.00004	)		—			(0.00015	)		(0.00001	)
Total Distributions to Shareholders		(0.01590	)		(0.03005	)		(0.02229	)		(0.00966	)		(0.00575	)		(0.00965	)
Net Asset Value, End of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return (b)(c)		1.60	%(d)		3.05	%		2.25	%		0.97	%		0.58	%		0.97	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		0.55	%(f)		0.55	%		0.53	%		0.46	%		0.44	%		0.39	%
Waiver/Reimbursement		0.13	%(f)		0.12	%		0.15	%		0.23	%		0.14	%		0.15	%
Net investment income (e)		3.18	%(f)		3.01	%		2.23	%		0.97	%		0.56	%		0.97	%
Net assets, end of period (000’s)	$	2,044,226		$	2,110,611		$	2,162,173		$	2,037,802		$	2,044,676		$	2,281,263

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of less than 0.01%.

(f) Annualized.

See Notes to Financial Statements.

39

Financial Highlights – Treasury Money Fund

Selected data for a share outstanding throughout each period is as follows:

	(Unaudited) Six Months Ended September 30, 2007			Year Ended March 31,
				2007			2006			2005			2004			2003
Net Asset Value, Beginning of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from Investment Operations:
Net investment income		0.02069	(a)		0.04324	(a)		0.02855	(a)		0.00988	(a)		0.00484			0.01085
Net realized and unrealized gain on investments		—			0.00013			0.00036			0.00031			0.00002			0.00004
Total from Investment Operations		0.02069			0.04337			0.02891			0.01019			0.00486			0.01089
Less Distributions to Shareholders:
From net investment income		(0.02069	)		(0.04337	)		(0.02887	)		(0.01019	)		(0.00485	)		(0.01089	)
From net realized gains		—			—			(0.00004	)		—			(0.00001	)		—
Total Distributions to Shareholders		(0.02069	)		(0.04337	)		(0.02891	)		(0.01019	)		(0.00486	)		(0.01089	)
Net Asset Value, End of Period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return (b)(c)		2.10	%(d)		4.42	%		2.93	%		1.02	%		0.49	%		1.09	%
Ratios to Average Net Assets/Supplemental Data:
Net expenses (e)		0.60	%(f)		0.60	%		0.58	%		0.55	%		0.50	%		0.45	%
Waiver/Reimbursement		0.14	%(f)		0.14	%		0.16	%		0.20	%		0.07	%		0.08	%
Net investment income (e)		4.14	%(f)		4.32	%		2.86	%		0.99	%		0.49	%		1.08	%
Net assets, end of period (000’s)	$	375,192		$	306,070		$	365,688		$	428,008		$	519,722		$	571,998

(a) Per share data was calculated using the average shares outstanding during the period.

(b) Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced.

(c) Total return at net asset value assuming all distributions reinvested.

(d) Not annualized.

(e) The benefits derived from custody credits had an impact of 0.01%.

(f) Annualized.

See Notes to Financial Statements.

40

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS

September 30, 2007 (Unaudited)

Note 1. Organization

Excelsior Funds, Inc. (“Excelsior Fund”) and Excelsior Tax-Exempt Funds, Inc. (“Excelsior Tax-Exempt Fund”) are each organized as a Maryland Corporation, and are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as open-end management investment companies. Information presented in these financial statements pertains to the following funds (individually referred to as a “Fund”, collectively referred to as the “Funds”):

Excelsior Fund:

Government Money Fund

Money Fund

Treasury Money Fund

Excelsior Tax-Exempt Fund:

New York Tax-Exempt Money Fund

Tax-Exempt Money Fund

Each Fund is diversified, with the exception of New York Tax-Exempt Money Fund, which is non-diversified.

Investment Objectives

Government Money Fund and Money Fund each seeks as high a level of current income as is consistent with liquidity and stability of principal. New York Tax-Exempt Money Fund seeks a moderate level of current interest income that is exempt from federal income tax and, to the extent possible, from New York State and New York City personal income taxes, as is consistent with liquidity and stability of principal. Tax-Exempt Money Fund seeks a moderate level of current interest income exempt from federal income taxes consistent with stability of principal. Treasury Money Fund seeks current income with liquidity and stability of principal.

Fund Shares

Excelsior Fund is authorized to issue up to 42.5 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 5 billion shares each of Government Money Fund and Money Fund; and 2.5 billion shares of Treasury Money Fund.

Excelsior Tax-Exempt Fund is authorized to issue up to 24 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 5.5 billion shares of Tax-Exempt Money Fund; and 2 billion shares of New York Tax-Exempt Money Fund.

Each Fund, with the exception of Money Fund, offers one class of shares: Shares. Money Fund offers two classes of shares: Shares and Institutional Shares. Shares and Institutional Shares are offered continuously at net asset value. There are certain restrictions on the purchase of Institutional Shares, as described in the Funds’ prospectus. The financial highlights of the Institutional Shares of the Funds are presented separately.

41

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Note 2. Significant Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain ratios have been reclassified on the Financial Highlights to conform to the current period presentation. The changes have no effect on the ratios. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements.

Security Valuation

Securities in the Funds are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met, including that the Funds’ Board of Directors continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Funds. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Funds’ Board of Directors has established procedures intended to stabilize each Fund’s net asset value for purposes of sales and redemptions at $1.00 per share. These procedures include determinations, at such intervals as the Board of Directors deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which each Fund’s market-based net asset value deviates from $1.00 per share. In the event such deviation exceeds half of 1%, the Board of Directors will promptly consider what action, if any, should be initiated.

Investments in other open-end investment companies are valued at net asset value.

In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), was issued. SFAS 157 is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is evaluating the impact the application of SFAS 157 will have on the Funds’ financial statement disclosures.

Security Transactions

Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.

Repurchase Agreements

Each Fund may engage in repurchase agreement transactions with institutions that the Funds’ investment advisor has determined are creditworthy. Each Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. Collateral for certain tri-party repurchase agreements is held at the counterparty’s custodian in a segregated account for the benefit of a Fund and the counterparty. The investment advisor is responsible for determining that collateral is

42

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon each Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights.

Income Recognition

Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on debt securities. Dividend income is recorded on the ex-date.

Determination of Class Net Asset Value

All income, expenses (other than class-specific expenses, as shown on the Statements of Operations) and realized and unrealized gains (losses) are allocated to each class of a Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.

Federal Income Tax Status

Each Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable or tax-exempt income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.

Distributions to Shareholders

Distributions from net investment income are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carryforward. Distributions to shareholders are recorded on the ex-dividend date. Income distributions and capital gain distributions on a Fund level are determined in accordance with federal income tax regulations which may differ from GAAP.

Indemnification

In the normal course of business, each Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. A Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the organizational documents of Excelsior Fund and Excelsior Tax-Exempt Fund, and by contract, the Board of Directors of Excelsior Fund and Excelsior Tax-Exempt Fund are indemnified against certain liabilities that may arise out of actions relating to their duties to Excelsior Fund and Excelsior Tax-Exempt Fund. However, based on experience, the Funds expect the risk of loss due to these representations, warranties and indemnities to be minimal.

43

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Note 3. Federal Income Tax Information

The tax character of distributions paid during the year ended March 31, 2007 was as follows:

	Ordinary Income*		Tax-Exempt Income		Long-Term Capital Gains
Government Money Fund	$	15,546,941	$	—	$	—
Money Fund		65,587,427		—		—
New York Tax-Exempt Money Fund		770		12,662,681		—
Tax-Exempt Money Fund		—		63,305,228		—
Treasury Money Fund		13,964,644		—		5

* For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions.

The following capital loss carryforwards, determined as of March 31, 2007, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:

	Expires March 31,
	2008		2011		2012		2014		2015		Total
Government Money Fund	$	18,903	$	—	$	5,556	$	224	$	—	$	24,683
Money Fund		—		11,662		23,975		4,889		2,912		43,438

The Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an Interpretation of FASB Statement No. 109 (“FIN 48”) effective September 28, 2007. FIN 48 requires management to determine whether a tax position of a Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that exceeds fifty percent of the amount likely to be realized upon ultimate settlement. FIN 48 must be applied to all existing tax positions upon initial adoption and the cumulative effect, if any, is to be reported as an adjustment to net assets. Management has evaluated the known implications of FIN 48 on its computation of net assets for each Fund. As a result of this evaluation, management believes that FIN 48 will not have any effect on the Funds’ financial statements. However, management’s conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations, and administrative interpretations (including relevant court decisions).

44

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Note 4. Fees and Compensation Paid to Affiliates

Investment Advisory Fee

United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Effective July 1, 2007, U.S. Trust became a wholly owned subsidiary of the Bank of America Corporation (“BOA”). Prior to July 1, 2007, U.S. Trust was a wholly owned subsidiary of The Charles Schwab Corporation.

For its services, the Advisor receives an investment advisory fee, computed daily and paid monthly, based on each Fund’s average daily net assets at the following annual rates:

	Annual Fee Rate
Government Money Fund	0.25	%
Money Fund	0.25	%
New York Tax-Exempt Money Fund	0.50	%
Tax-Exempt Money Fund	0.25	%
Treasury Money Fund	0.30	%

Administration Fee

Effective July 1, 2007, Columbia Management Advisors, LLC (“Columbia”) serves as the administrator of the Funds. Columbia is an indirect, wholly owned subsidiary of BOA. Prior to July 1, 2007, USTA and BISYS Fund Services Ohio, Inc. (“BISYS”) served as the administrators of the Funds under the same fee structure.

Columbia is entitled to an administration fee, computed daily and paid monthly, based on the combined aggregate average daily net assets of Excelsior Fund, Excelsior Tax-Exempt Fund, and Excelsior Funds Trust (excluding Emerging Markets Fund, International Fund, Pacific/Asia Fund and International Equity Fund, series of Excelsior Fund or the Trust), at the following annual rates:

Average Daily Net Assets	Annual Fee Rate
First $200 million	0.200	%
Next $200 million	0.175	%
In excess of $400 million	0.150	%

Effective September 17, 2007, Columbia received an administration fee at the annual rates listed above less the fees payable by the Funds as described under the Pricing and Bookkeeping Fees note below.

Effective July 1, 2007, Columbia voluntarily agreed to waive administration fees for each Fund at the annual rate of 0.05% of average daily net assets. Columbia, at its discretion, may revise or discontinue this arrangement at any time.

For the six months ended September 30, 2007, the effective administration fee rate was 0.13% of each Fund’s average daily net assets before the reduction for pricing and bookkeeping fees and net of voluntary expense waivers.

45

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under this agreement were as follows:

	Amounts Paid to Affiliates		Amounts Payable to Affiliates
Government Money Fund	$	161,915	$	19,340
Money Fund		661,350		76,191
New York Tax-Exempt Money Fund		253,602		30,315
Tax-Exempt Money Fund		1,128,958		153,631
Treasury Money Fund		174,821		25,717

Pricing and Bookkeeping Fees

Effective September 17, 2007, the Funds entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank & Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Funds. Also effective September 17, 2007, the Funds entered into an Accounting Services Agreement with State Street and Columbia (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) pursuant to which State Street provides accounting services to the Funds. Under the State Street Agreements, each Fund pays State Street an annual fee of $38,000 paid monthly, plus a monthly fee based on an annualized percentage rate of average daily net assets of each Fund for the month. The aggregate fee for each Fund will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Funds also reimburse State Street for certain out-of-pocket expenses and charges.

Effective September 17, 2007, the Funds entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. The Funds reimburse Columbia for out-of-pocket expenses and direct internal costs relating to accounting oversight and for services relating to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002.

Prior to July 1, 2007, BISYS was responsible for providing fund accounting and financial reporting services to the Funds, and USTA was responsible for oversight of these functions. On July 1, 2007, Columbia assumed responsibility from USTA for oversight of the activities performed by BISYS. BISYS was responsible for providing services to the Funds through September 16, 2007.

For the six months ended September 30, 2007, the total amounts paid and payable to affiliates for each Fund were $505 and $505, respectively.

Transfer Agent Fee

Effective September 17, 2007, Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. Prior to September 17, 2007, BFDS served as the transfer agent for the Funds’ shares.

46

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

The Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $17.00 per open account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Funds. The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcript fees due the Transfer Agent from shareholders of the Funds and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Funds. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.

For the period September 17, 2007 through September 30, 2007, the total amounts paid and payable to affiliates by the Funds under this agreement were as follows:

	Amounts Paid to Affiliates		Amounts Payable to Affiliates
Government Money Fund	$	151	$	151
Money Fund		1,059		1,059
New York Tax-Exempt Money Fund		124		124
Tax-Exempt Money Fund		187		187
Treasury Money Fund		125		125

Shareholder Servicing Fee

The Funds have entered into shareholder servicing agreements with various service organizations which include USTA. The Funds are permitted to pay a fee of up to 0.25% of the average daily net assets of the Funds’ shares held by each service organization’s customers, with the exception of the Institutional Shares of Money Fund which pays a fee of up to 0.15% of the average daily net assets of its shares, to such organizations for providing shareholder and administrative services to their customers who hold shares of the Funds.

For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:

	Amounts Paid to Affiliates		Amounts Payable to Affiliates
Government Money Fund	$	368,477	$	63,593
Money Fund		738,244		118,478
New York Tax-Exempt Money Fund		566,300		92,646
Tax-Exempt Money Fund		2,519,874		427,792
Treasury Money Fund		390,324		76,780

47

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Distribution and Service Fees

Effective September 17, 2007, Columbia Management Distributors, Inc. (the “Distributor”) serves as distributor of the Funds’ shares. Through July 31, 2007, BISYS Fund Services Limited Partnership (“BISYS Fund Services”) served as distributor of the Funds’ shares. On August 1, 2007, Foreside Distribution Services, L.P. served as distributor until September 16, 2007.

Fees Paid to Officers and Trustees

The Board of Trustees/Directors may include people who are officers and/or trustees of other fund families affiliated with the investment advisor. The Funds did not pay any of the interested persons for their service as Trustees/Directors, but did pay non-interested persons (independent trustees), as noted in the Statements of Operations.

Expense Limits and Fee Waivers

The Advisor has contractually agreed to waive fees or reimburse expenses through July 31, 2008, so that the expenses incurred by each Fund (exclusive of brokerage commissions, interest, taxes and extraordinary expenses, but inclusive of custodial charges relating to overdrafts, if any), after giving effect to any balance credits from the Funds’ custodian, will not exceed the following annual rates, based on each Fund’s average daily net assets:

	Shares		Institutional Shares
Government Money Fund	0.55	%	—
Money Fund	0.55	%	0.30	%
New York Tax-Exempt Money Fund	0.60	%	—
Tax-Exempt Money Fund	0.55	%	—
Treasury Money Fund	0.60	%	—

Custody Credits

Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses in the Statements of Operations. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement.

48

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Note 5. Concentration of Ownership

As of September 30, 2007, several of the Funds had shareholders that held greater than 5% of the shares outstanding. Subscription and redemption activity of these accounts may have a significant effect on the operations of the Funds. The percentage of shares of beneficial interest outstanding held therein are as follows:

	Number of Shareholders	% of Shares Outstanding Held
Government Money Fund	1	95.70
Money Fund	3	81.85
New York Tax-Exempt Money Fund	1	84.52
Tax-Exempt Money Fund	1	96.22
Treasury Money Fund	1	20.03

Note 6. Significant Risks and Contingencies

Municipal Bond Tax Status

Certain Funds purchase municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued. As a shareholder of the Funds, you may be required to file an amended tax return as a result.

Tax Development Risk

The U.S. Supreme Court has heard an appeal of a state-court decision that might significantly affect how states tax in-state and out-of-state municipal bonds. If the Supreme Court determines that the U.S. Constitution prohibits states from treating the interest income on in-state municipal bonds differently from the income on out-of-state municipal bonds for state income tax purposes, most states likely will revisit the way in which they treat the interest on municipal bonds. This has the potential to increase significantly the amount of state tax paid by shareholders on exempt-interest dividends. This also has the potential to cause decline in the value of the municipal securities held by New York Tax-Exempt Money Fund and Tax-Exempt Money Fund which, in turn, would reduce the value of these Funds’ shares. You should consult your tax advisor to discuss the tax consequences of your investment in these Funds.

49

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Geographic Concentration

Certain Funds have greater than 5% of their total investments on September 30, 2007 invested in debt obligations issued by an individual state and its political subdivisions, agencies and public authorities. These Funds are more susceptible to economic and political factors adversely affecting issuers of the state’s or territory’s municipal securities than are municipal bond funds that are not concentrated to the same extent in these issuers.

Note 7. Legal Proceedings

Excelsior Funds

United States Trust Company of New York and U.S. Trust Company, N.A. (formerly, co-investment advisers to the Funds, together referred to herein as “U.S. Trust Company”), Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (the “Companies”), The Charles Schwab Corporation and several individuals and third parties were named in four fund shareholder class actions and two derivative actions which alleged that U.S. Trust Company, the Companies, and others allowed certain parties to engage in illegal and improper mutual fund trading practices, which allegedly caused financial injury to the shareholders of certain of the Excelsior Funds advised by U.S. Trust Company. Each plaintiff seeks unspecified monetary damages and related equitable relief.

The class and derivative actions described above were transferred to the United States District Court for the District of Maryland for coordinated and consolidated pre-trial proceedings. In November 2005, the Maryland court dismissed many of the plaintiffs’ claims in both the class and derivative actions. The court entered implementing orders on February 24, 2006. All claims against the Companies have been dismissed. Plaintiffs’ claims against U.S. Trust Company and certain individuals under Sections 10(b) and 20(a) of the Securities Exchange Act and Sections 36(b) and 48(a) of the Investment Company Act, however, have not been dismissed. Plaintiffs’ Section 48(a) claims against parent entity U.S. Trust Company and former parent entity The Charles Schwab Corporation also remain.

While the ultimate outcome of these matters cannot be predicted with any certainty at this time, based on currently available information, U.S. Trust Company believes that the likelihood is remote that the pending litigation will have a material adverse financial impact on the Companies, or materially affect the advisers’ ability to provide investment management services to the Companies.

50

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Note 8. Reorganization of the Funds

The Boards of Directors/Trustees of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (the “Board”) have approved proposals, described below, that are part of a larger integration of the Excelsior Fund complex and the Columbia Funds complex. Generally, these proposals involve the reorganization of certain Excelsior Funds into newly formed Columbia Funds that will be series of a different legal entity governed by a different board than the Excelsior Funds, and will be managed by Columbia Management Advisors, LLC, an affiliate of the current advisers to the Excelsior Funds. The portfolio managers of the Excelsior Funds immediately before such reorganizations are expected to be the same portfolio managers of the newly formed Columbia Funds immediately after such reorganizations.

Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Excelsior Fund”) into a corresponding newly formed shell fund listed in the right column below (each, a “Newly Formed Fund”) as shown in the chart below, subject to approval by the shareholders of the Excelsior Fund. If the shareholders of each Excelsior Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Excelsior Fund will be transferred to the corresponding Newly Formed Fund and shareholders of the Excelsior Fund will receive shares of a designated class of the corresponding Newly Formed Fund in exchange for their shares. For each Excelsior Fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Newly Formed Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Newly Formed Fund. Shareholders of each Excelsior Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.

Excelsior Fund	Newly Formed Fund
Blended Equity Fund	Columbia Blended Equity Fund
Emerging Markets Fund	Columbia Emerging Markets Fund
Energy and Natural Resources Fund	Columbia Energy and Natural Resources Fund
International Fund	Columbia International Growth Fund
Large Cap Growth Fund	Columbia Select Growth Fund
Pacific/Asia Fund	Columbia Pacific/Asia Fund
Small Cap Fund	Columbia Select Small Cap Fund
Value & Restructuring Fund	Columbia Value and Restructuring Fund
Core Bond Fund	Columbia Bond Fund
Intermediate-Term Bond Fund	Columbia Short-Intermediate Bond Fund
Equity Opportunities Fund	Columbia Select Opportunities Fund
Mid Cap Value & Restructuring Fund	Columbia Mid Cap Value and Restructuring Fund

The Board has also approved proposals, described below, that involve the reorganization of certain Excelsior Funds into Columbia Funds that are series of different legal entities governed by a different board than the Excelsior Funds, and are managed by Columbia Management Advisors, LLC.

51

EXCELSIOR FUNDS

NOTES TO FINANCIAL STATEMENTS — (continued)

September 30, 2007 (Unaudited)

Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Acquired Fund”) into a corresponding acquiring fund listed in the right column below (each, an “Acquiring Fund”) as shown in the chart below, subject to approval by the shareholders of the Acquired Fund. If the shareholders of an Acquired Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Acquired Fund will be transferred to the corresponding Acquiring Fund and shareholders of the Acquired Fund will receive shares of a designated class of the corresponding Acquiring Fund in exchange for their shares. For each Acquired Fund, except the money market funds, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Acquiring Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Acquiring Fund. For each Acquired Fund that is a money market fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Trust Class shares of the corresponding Acquiring Fund. Shareholders of each Acquired Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008, except for Intermediate-Term Tax-Exempt Fund and New York Intermediate-Term Tax-Exempt Fund which are currently expected to be held in the second quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.

Acquired Fund	Acquiring Fund
Equity Income Fund	Columbia Dividend Income Fund
Real Estate Fund	Columbia Real Estate Equity Fund
International Equity Fund	International Fund
Short-Term Government Securities Fund	Columbia Short Term Bond Fund
Short-Term Tax-Exempt Securities Fund	Columbia Short Term Municipal Bond Fund
High Yield Fund	Columbia High Yield Opportunity Fund
Long-Term Tax-Exempt Fund	Columbia Tax-Exempt Fund
Intermediate-Term Tax-Exempt Fund	Columbia Intermediate Municipal Bond Fund
New York Intermediate-Term Tax-Exempt Fund	Columbia New York Intermediate Municipal Bond Fund
California Short-Intermediate Term Tax-Exempt Income Fund	Columbia California Intermediate Municipal Bond Fund
Treasury Money Fund	Columbia Government Reserves
Government Money Fund	Columbia Government Plus Reserves
Money Fund	Columbia Cash Reserves
Tax-Exempt Money Fund	Columbia Tax-Exempt Reserves
New York Tax-Exempt Money Fund	Columbia New York Tax-Exempt Reserves

52

APPROVAL OF INVESTMENT ADVISORY AGREEMENTS

The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party to the advisory agreement (the “Independent Directors”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s board of directors or trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.

At a meeting held on September 27th and 28th 2007, the Board of Directors/Trustees (the “Board”) of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (each a “Company” and, together, the “Companies”), including a majority of the Independent Directors, approved the continuation of the Investment Advisory Agreements (the “Advisory Agreements”) by and between each Company and UST Advisers, Inc. and U.S. Trust New York Asset Management Division, a division of United States Trust Company, National Association (together, “U.S. Trust”) with respect to each series of each Company (each, a “Fund”).

In preparation for the meeting, the Board requested and reviewed a wide variety of materials provided by U.S. Trust and its affiliates, which included information about the operations and personnel of U.S. Trust, as well as the personnel and operations of its affiliates. In this regard, the Board received information about the large mutual fund business of Columbia Management Advisors, LLC and its affiliates (together, “Columbia”), which are, together with U.S. Trust, all under the control of Bank of America Corporation, and how the resources dedicated to the Columbia mutual fund business affect the Funds. The Board also received extensive information that was provided by or derived from information prepared by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Board also received a memorandum from counsel regarding the responsibilities of the Board for the approval of the Advisory Agreements. In addition, the Independent Directors received advice from independent counsel to the Independent Directors, met in executive session outside the presence of Company management and U.S. Trust personnel and participated in question and answer sessions with representatives of U.S. Trust.

The Board’s approval of the continuation of the Advisory Agreements was based on the consideration and evaluation of the information and material provided to the Board and a variety of specific factors discussed at the meetings, including:

Nature, Extent and Quality of Services.    The Board considered the nature, extent and quality of the services provided by U.S. Trust to the Funds under the Advisory Agreements and the resources of U.S. Trust and their affiliates, including Columbia, dedicated to the Funds. In this regard, the Board evaluated, among other things, U.S. Trust’s personnel, experience, performance history of various products, and compliance program. The Board considered that U.S. Trust and Columbia provide

53

APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (Continued)

substantial administrative, accounting and compliance services and provide oversight of third party service providers to the Funds. The Board considered representations of U.S. Trust that U.S. Trust and Columbia have allocated substantial resources and personnel, and have made significant financial expenditures and commitments, to the investment management and other operations of the Funds. The Board also considered the nature and quantity of additional resources that have been dedicated to the operations of the Funds since U.S. Trust had become affiliated with Columbia. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services to be provided by U.S. Trust to the Funds and the resources of the U.S. Trust and its affiliates dedicated to the Funds supported the renewal of the Advisory Agreements.

Fund Performance.    The Board considered Fund performance in determining whether to renew the Advisory Agreements. Specifically, the Board considered each Fund’s performance relative to a peer group of other mutual funds and appropriate indices/benchmarks, in light of total return, yield and market trends. As part of this review, the Board considered the composition of the peer groups, selection criteria and the reputation of third party providers who provided data for the peer group analysis. In evaluating the performance of each Fund, the Board considered both market risk and shareholder risk expectations for such Fund and whether, irrespective of relative performance, each Fund’s absolute performance was consistent with expectations for its investment methodology. The Board further considered the level of Fund performance in the context of its review of Fund expenses and U.S. Trust’s profitability discussed below. In the case of each Fund that had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Advisory Agreements. These factors varied from Fund to Fund, but included one or more of the following: (1) that the Fund’s performance, although lagging in certain recent periods, was strong over the longer term; (2) that the underperformance was attributable, to a significant extent, to investment decisions by U.S. Trust that were reasonable and consistent with the Fund’s investment objective and policies; (3) that each Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (4) that U.S. Trust has taken or is taking steps designed to help improve the Fund’s investment performance. Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of the Funds supported the renewal of the Advisory Agreements.

Fund Expenses.    With respect to the Funds’ expenses, the Board considered the rate of compensation called for by the Advisory Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of other comparable mutual funds, such peer groups and comparisons having been selected and calculated based on objective factors. The Board noted that with respect to the Funds, U.S. Trust had contractually committed to waive a portion of its fee and/or reimburse the Funds for a portion of their expenses to limit the Funds’ total operating expenses. In evaluating this information, the Board considered the nature and scope of services provided to the Funds. The Board also reviewed the fees charged by U.S. Trust to provide advisory services to other types of accounts with substantially similar investment objectives as the Funds and the differences in services and risks involved in managing such other accounts, including differences relating to compliance and regulatory burdens. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported the renewal of the Advisory Agreements.

54

APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (Continued)

Profitability.    With regard to profitability, the Board considered the compensation flowing to U.S. Trust and its affiliates, directly or indirectly. In this connection, the Board reviewed management’s profitability analyses. The Board also considered any other benefits derived by U.S. Trust from its relationship with the Funds, such as whether, by virtue of its management of the Funds, it obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to U.S. Trust and its affiliates, the Board considered whether the varied levels of compensation and profitability under the Advisory Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of U.S. Trust is reasonable and supported the renewal of the Advisory Agreements.

Economies of Scale.    The Board considered the existence of any economies of scale and whether those economies are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by U.S. Trust. In this regard, and consistent with their consideration of fund expenses, the Board considered that U.S. Trust has previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer Funds or Funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such Funds at subsidized expense levels. The Board also reviewed asset flows in the Funds, noting that a relatively few number of Funds had experienced significant asset growth, while most of the Funds had experienced only moderate growth, if any. After reviewing such information, the Board determined not to seek advisory fee breakpoints at this time. The Board noted that it would continue to monitor the growth in assets of the Funds as compared to expenses and asked U.S. Trust and Columbia to continue to monitor the Funds’ expenses and asset sizes in connection with determining when economies of scale would dictate that advisory fee breakpoints were advisable.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including all of the Independent Directors, unanimously approved the continuation of the Advisory Agreements and concluded that the compensation under the Advisory Agreements is fair and reasonable in light of the services and expenses and such other matters as the Board considered to be relevant in the exercise of their reasonable judgment. In the course of their deliberations, the Board did not identify any particular information or factor that was all-important or controlling.

55

[THIS PAGE INTENTIONALLY LEFT BLANK]

56

PROXY VOTING RESULTS

A Special Meeting of Shareholders of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust and each of their Funds was held on March 30, 2007, for the purpose of seeking shareholder approval of the following proposal: to approve new investment advisory agreements by and among USTA, USTNA and the Companies, on behalf of the Funds. The Special Meeting for Excelsior Funds with respect to the Value and Restructuring Fund, Energy and Natural Resources and Treasury Money Funds was adjourned for the purpose of soliciting additional proxies, and subsequently held on April 30, 2007. The number of votes necessary to conduct the Special Meetings and approve the proposal was obtained. The results of the votes of shareholders are listed below:

EXCELSIOR FUNDS, INC.

Fund	For	Against	Abstain
Value and Restructuring Fund	71,659,202.229	1,308,059.398	2,313,244.343
Energy and Natural Resources Fund	10,149,963.059	261,710.922	349,760.892
Treasury Money Fund	147,661,994.420	8,327.040	953,491.100

IMPORTANT INFORMATION ABOUT THIS REPORT

Excelsior Money Market Funds

The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Excelsior Money Market Funds.

A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund’s voting records are available (i) on the Securities and Exchange Commission’s website at www.sec.gov, and (ii) without charge, upon request, by calling 1-800-368-0346. Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC’s website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds’ website.

Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’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.

Please consider the investment objectives, risks, charges and expenses for a fund carefully before investing. Contact your financial advisor for a prospectus, which contains this and other important information about a fund. You should read it carefully before you invest.

United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member of FINRA, SIPC, part of Columbia Management. USTA, USTNA and Columbia Management Distributor, Inc. are affiliates of Bank of America Corporation.

57

^©2007 Columbia Management Distributors, Inc.

One Financial Center, Boston, MA 02111-2621

800-345-6611 www.columbiafunds.com

SHC-44/136414-0907 (11/07) 07/45972

INSTITUTIONAL SHARES

MONEY FUND

CORE BOND FUND

HIGH YIELD FUND

EQUITY OPPORTUNITIES FUND

LARGE CAP GROWTH FUND

MID CAP VALUE AND RESTRUCTURING FUND

VALUE AND RESTRUCTURING FUND

EMERGING MARKETS FUND

INTERNATIONAL EQUITY FUND

SEMI ANNUAL REPORT

September 30, 2007

NOT FDIC INSURED	May Lose Value
NOT BANK ISSUED	No Bank Guarantee

TABLE OF CONTENTS

	PAGE
LETTER TO SHAREHOLDERS	2
UNDERSTANDING YOUR EXPENSES
Money Fund	4
Core Bond Fund	5
High Yield Fund	6
Equity Opportunities Fund	7
Large Cap Growth Fund	8
Mid Cap Value and Restructuring Fund	9
Value and Restructuring Fund	10
Emerging Markets Fund	11
International Equity Fund	12
PORTFOLIOS OF INVESTMENTS
Money Fund	13
Core Bond Fund	15
High Yield Fund	20
Equity Opportunities Fund	24
Large Cap Growth Fund	26
Mid Cap Value and Restructuring Fund	28
Value and Restructuring Fund	30
Emerging Markets Fund	34
International Equity Fund	37
STATEMENTS OF ASSETS AND LIABILITIES	40
STATEMENTS OF OPERATIONS	46
STATEMENTS OF CHANGES IN NET ASSETS	48
FINANCIAL HIGHLIGHTS	58
NOTES TO FINANCIAL STATEMENTS	67
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS	88
PROXY VOTING RESULTS	93
IMPORTANT INFORMATION ABOUT THIS REPORT	93

An investment in money market mutual funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds. Please see the prospectus for a complete discussion of investments in money market funds.

The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for an Excelsior Fund are based on numerous factors, may not be relied on as an indication of trading intent in behalf of any particular Excelsior Fund. References to specific securities should not be construed as a recommendation or investment advice.

Investments in equity securities are subject to sudden and unpredictable drops in value and periods of lackluster performance.

Funds which concentrate their investments in one economic sector or in a geographical region may expose an investor to greater volatility. When used as part of a broader investment portfolio, these funds may serve to reduce overall portfolio volatility. Currency fluctuations, differences in security regulation, financial accounting standards, and foreign taxation regulations are among the risks associated with foreign investing, as well as political risk. Investing in emerging markets may accentuate these risks.

Small-cap stocks may be less liquid and subject to greater price volatility.

Value-based investments are subject to the risk that the broad market may not recognize their intrinsic value.

Investment in fixed income securities are subject to interest rate risks. The principal value of a bond falls when interest rates rise and rises when interest rates fall. During periods of rising interest rates the value of a bond investment is at greater risk than during periods of stable or falling rates.

LETTER TO SHAREHOLDERS

Dear Shareholder:

Allow me to take this opportunity to formally welcome you to the Columbia Funds family. In July, U.S. Trust Advisors was acquired by Bank of America (parent company of Columbia Management Group). The Excelsior Funds are now distributed by Columbia Management Distributors, Inc. The combined organization is committed to delivering unparalleled wealth management solutions and building deep, lasting relationships with our shareholders.

Your Excelsior Funds account will be serviced by Columbia Management Services, Inc., an experienced service provider in the industry. This team will process transactions, generate account statements and support your ongoing servicing needs.

As we complete the integration over the next several months, you will gain access to a broad array of investment choices including money market investments, mutual funds and 529 plans. Throughout this period of change, our goal is to ensure a smooth transition and provide services that we hope will exceed your expectations. We recommend you visit our website: www.columbiafunds.com for more information about our products and services. Those of you who receive your statements directly from Columbia Management can also register for on-line account access, which allows you to check your account balance, change your distribution options and make other account transactions. If you receive statements from your brokerage firm, please check with your financial advisor for service availability.

There’s a lot to know about Columbia Management

With $709.9 billion under management and a history that dates to the early 1900s, Columbia Management and its affiliates make up one of the nation’s largest and most experienced asset management companies.¹ We offer a comprehensive array of investment solutions, including equity, fixed-income and cash strategies. Our diverse investment solutions and our focus on the needs of our clients make Columbia Management the advisor of choice for individual, institutional and high-net-worth investors.

Welcome to Columbia Management. Thank you for your business — we’re pleased to have you as a customer.

Sincerely,

Christopher L. Wilson

President, Excelsior Funds

2

About Christopher L. Wilson

Chris Wilson is head of mutual funds for Columbia Management, responsible for the day-to-day delivery of mutual fund products and services to the firm’s investors. With the exception of distribution, Mr. Wilson oversees all aspects of the mutual fund services operation including treasury, investment accounting, product development and shareholder and broker services. Mr. Wilson serves as Columbia Management’s chief liaison to the mutual fund boards of trustees. He joined Columbia Management in 2004 and has been a member of the investment community since 1980.

Columbia Management Group, LLC (“Columbia Management”) is the investment management arm of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member FINRA and SIPC. Columbia Management Distributors, Inc. is part of Columbia Management and an affiliate of Bank of America Corporation.

¹ Columbia Management and its affiliates comprise the wealth and investment management division of Bank of America Corporation. As of September 30, 2007, Columbia Management and its affiliates managed assets of $709.9 billion. Columbia Management and its affiliates’ managed assets consist of assets under the discretionary management of the registered investment advisors, Columbia Management Advisors, LLC ($377.9 billion), Columbia Wanger Asset Management, L.P. ($38.5 billion) and Marsico Capital Management, LLC ($103.4 billion); U.S. Trust, Bank of America Private Wealth Management; Banc of America Investment Services, Inc.; Banc of America Investment Advisors, Inc.; Bank of America Capital Advisors, LLC; Premier Banking & Investments, and United States Trust, National Association, including its subsidiary, UST Advisers, Inc. ($116.5 billion).

3

Understanding Your Expenses — Money Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Institutional Shares	1,000.00	1,000.00	1,025.50	1,023.50	1.52	1.52	0.30

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

4

Understanding Your Expenses — Core Bond Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
04/01/07 – 09/30/07
Institutional Shares	1,000.00	1,000.00	1,021.20	1,021.75	3.28	3.29	0.65

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

5

Understanding Your Expenses — High Yield Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Institutional Shares	1,000.00	1,000.00	1,000.25	1,021.00	4.00	4.04	0.80

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

6

Understanding Your Expenses — Equity Opportunities Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Institutional Shares	1,000.00	1,000.00	1,123.40	1,021.00	4.25	4.04	0.80

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

7

Understanding Your Expenses — Large Cap Growth Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Institutional Shares	1,000.00	1,000.00	1,148.00	1,020.30	5.05	4.75	0.94

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

8

Understanding Your Expenses — Mid Cap Value and Restructuring Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Institutional Shares	1,000.00	1,000.00	1,078.60	1,020.65	4.52	4.39	0.87

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

9

Understanding Your Expenses — Value and Restructuring Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Institutional Shares	1,000.00	1,000.00	1,084.40	1,020.95	4.22	4.09	0.81

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

10

Understanding Your Expenses — Emerging Markets Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Institutional Shares	1,000.00	1,000.00	1,261.40	1,017.00	9.05	8.07	1.60

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

11

Understanding Your Expenses — International Equity Fund

Estimating your actual expenses

To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:

• For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.

• For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance.

1. Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6.

2. In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period.

As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Analyzing your fund’s expenses

To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.

Compare with other funds

Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.

	Account value at the beginning of the period ($)		Account value at the end of the period ($)		Expenses paid during the period ($)		Fund’s annualized expense ratio (%)
	Actual	Hypothetical	Actual	Hypothetical	Actual	Hypothetical	Actual
(04/01/07 – 09/30/07)
Institutional Shares	1,000.00	1,000.00	1,047.65	1,019.50	5.63	5.55	1.10

Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.

Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.

It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.

12

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Money Fund

Principal Amount			Value
COMMERCIAL PAPER — 69.46%
$	50,000,000	Abbott Laboratories, Discount Note, 4.96% 10/15/07	$	49,903,556
	50,000,000	American General Finance Co., Discount Note, 4.39% 10/04/07		49,977,292
	50,000,000	CIT Group Funding, Inc., Discount Note, 6.40% 10/05/07		49,964,445
	35,000,000	Coca-Cola Co., Discount Note, 4.65% 12/11/07		34,679,021
	30,000,000	Corporate Asset Funding Co., Inc., Discount Note, 5.10% 10/24/07		29,902,250
	20,000,000	Corporate Asset Funding Co., Inc., Discount Note, 5.20% 10/03/07		19,994,222
	25,000,000	Ei Dupont, Discount Note, 4.75% 10/17/07		24,947,444
	25,000,000	Ei Dupont, Discount Note, 4.77% 10/25/07		24,920,833
	25,000,000	Govco, Inc., Discount Note, 5.15% 10/01/07		25,000,000
	50,000,000	HSBC Finance Corp., Discount Note, 5.35% 10/31/07		49,777,083
	30,000,000	International Business Machines, Discount Note, 4.73% 10/03/07		29,992,117
	50,000,000	International Lease Finance Corp., Discount Note, 5.23% 10/26/07		49,818,403
	25,000,000	John Deere Capital Corp., Discount Note, 5.10% 11/19/07		24,826,458
	20,800,000	Johnson & Johnson, Discount Note, 4.72% 10/15/07		20,761,821
	40,000,000	JP Morgan Chase & Co., Discount Note, 2.82% 10/23/07		39,872,400

Principal Amount			Value
COMMERCIAL PAPER — (continued)
$	50,000,000	Merrill Lynch, Discount Note, 2.06% 10/03/07	$	49,985,500
	25,000,000	Morgan Stanley, Discount Note, 4.40% 11/19/07		24,812,847
	40,000,000	National Rural Utilities Cooperative Finance, Discount Note, 4.78% 10/25/07		39,872,533
	35,000,000	Procter & Gamble Co., Discount Note, 3.20% 10/19/07		34,908,300
	15,000,000	Procter & Gamble Co., Discount Note, 4.81% 12/11/07		14,859,183
	50,000,000	Societe Generale, Discount Note, 2.20% 10/11/07		49,927,153
	25,000,000	UBS Finance Corp., Discount Note, 4.97% 11/26/07		24,806,722
	25,000,000	UBS Finance Corp., Discount Note, 5.52% 02/11/08		24,502,174
	25,000,000	Wal-Mart Stores, Inc., Discount Note, 4.78% 12/18/07		24,744,333
		TOTAL COMMERCIAL PAPER (Cost $812,756,090)		812,756,090
CERTIFICATES OF DEPOSIT — 12.82%
	50,000,000	Barclays Bank PLC, 5.32% 10/05/07		50,000,000
	50,000,000	Citibank, 5.35% 11/08/07		50,000,000
	50,000,000	First Tennessee Bank, 5.65% 12/06/07		50,000,000
		TOTAL CERTIFICATES OF DEPOSIT (Cost $150,000,000)		150,000,000
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 4.70%
	20,000,000	Federal Home Loan Bank, 5.54% 09/17/08(a)		20,000,000

See Notes to Financial Statements.

13

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Money Fund — (continued)

Principal Amount			Value
U.S. GOVERNMENT & AGENCY OBLIGATIONS — (continued)
$	20,000,000	Federal Home Loan Bank, 4.13% 03/14/08(a)	$	20,000,000
	15,000,000	Federal National Mortgage Association, 5.30% 01/08/08		15,000,000
		TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (Cost $55,000,000)		55,000,000
CORPORATE BONDS — 2.56%
	30,000,000	Wells Fargo Bank, 4.82% 10/31/07		30,000,000
		TOTAL CORPORATE BONDS (Cost $30,000,000)		30,000,000
Shares
REGISTERED INVESTMENT COMPANY — 0.16%
	1,900,537	Dreyfus Government Cash Management Fund (7 day yield of 3.23%)		1,900,537
		TOTAL REGISTERED INVESTMENT COMPANY (Cost $1,900,537)		1,900,537

Principal Amount			Value
REPURCHASE AGREEMENT — 10.51%
$	123,000,000	Repurchase agreement with Morgan Stanley, dated 09/28/07, due on 10/01/07, at 4.90%, collateralized by U.S. Government Agency Obligations with various maturities to 08/01/37, market value $126,207,166 (repurchase proceeds $123,050,225)	$	123,000,000
		TOTAL REPURCHASE AGREEMENT (Cost $123,000,000)		123,000,000

TOTAL INVESTMENTS (Cost $1,172,656,627)(b)	100.21	%	$	1,172,656,627
OTHER LIABILITIES IN EXCESS OF ASSETS	(0.21	)		(2,468,098	)
NET ASSETS	100.00	%	$	1,170,188,529

(a) The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007.

(b) Cost for federal tax purposes is $1,172,656,627.

Discount Note—The rate reported is the discount rate at the time of purchase.

PLC—Public Limited Company

The summary of the Fund’s investments as of September 30, 2007 is as follows:

Portfolio Diversification	% of Net Assets		Value
Commercial Paper	69.46		$	812,756,090
Certificates of Deposit	12.82			150,000,000
Repurchase Agreement	10.51			123,000,000
U.S. Government & Agency Obligations	4.70			55,000,000
Corporate Bonds	2.56			30,000,000
Registered Investment Company	0.16			1,900,537
Total Investments	100.21		$	1,172,656,627
Other Liabilities in Excess of Assets	(0.21	)		(2,468,098	)
Net Assets	100.00		$	1,170,188,529

See Notes to Financial Statements.

14

Excelsior Funds, Inc.

Portfolio of Investments — September 30, 2007 (Unaudited)

Core Bond Fund

Principal Amount			Rate		Maturity Date	Value
	ASSET-BACKED SECURITIES — 2.34%
$	4,200,000	Capital Auto Receivables Asset Trust, 2006-SN1A B(a)	5.50	%	04/20/10	$	4,189,576
	2,015,000	Capital Auto Receivables Asset Trust, 2007-3 A4	5.00		03/17/14		2,020,575
	6,765,000	Citibank Credit Card Issuance Trust, 2003-A10	4.75		12/10/15		6,588,500
		TOTAL ASSET-BACKED SECURITIES (Cost $12,779,089)					12,798,651
	COLLATERALIZED MORTGAGE OBLIGATIONS — 6.99%
		NON-GOVERNMENTAL AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS —6.00%
	435,193	Bear Stearns Adjustable Rate Mortgage Trust, 2004-10 15A1(b)	4.60		01/25/35		433,167
	1,794,354	Citigroup Mortgage Loan Trust, 2004-HYB4 WA(b)