N-CSR

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number            811-06719            

                             Sterling Capital Funds                            

(Exact name of registrant as specified in charter)

434 Fayetteville Street, 5th Floor

                         Raleigh, NC 27601-0575                            

(Address of principal executive offices) (Zip code)

James T. Gillespie, President

Sterling Capital Funds

434 Fayetteville Street, 5th Floor

                             Raleigh, NC 27601-0575                            

(Name and address of agent for service)

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

Date of fiscal year end:   September 30

Date of reporting period:   September 30, 2013

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

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.

STERLING

CAPITAL FUNDS
ANNUAL REPORT
SEPTEMBER 30, 2013
May lose value Not FDIC insured Not insured by any government agency Not guaranteed by the bank Not a deposit

Notice of Privacy Policy & Practices

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

Collection of Customer Information

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

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

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

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

Disclosure of Customer Information

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

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

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

Security of Customer Information

We require service providers to the Sterling Capital Funds:

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

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

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

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

Sterling Capital Funds

   Table of Contents

Management Discussion of Performance
Letter from the President and the Investment Advisor	1
Fund Summary
Sterling Capital Large Cap Value Diversified Fund	2
Sterling Capital Mid Value Fund	4
Sterling Capital Small Cap Value Diversified Fund	6
Sterling Capital Special Opportunities Fund	8
Sterling Capital Equity Income Fund	10
Sterling Capital Ultra Short Bond Fund	12
Sterling Capital Short-Term Bond Fund	14
Sterling Capital Intermediate U.S. Government Fund	16
Sterling Capital Total Return Bond Fund	18
Sterling Capital Corporate Fund	20
Sterling Capital Securitized Opportunities Fund	22
Sterling Capital Kentucky Intermediate Tax-Free Fund	24
Sterling Capital Maryland Intermediate Tax-Free Fund	26
Sterling Capital North Carolina Intermediate Tax-Free Fund	28
Sterling Capital South Carolina Intermediate Tax-Free Fund	30
Sterling Capital Virginia Intermediate Tax-Free Fund	32
Sterling Capital West Virginia Intermediate Tax-Free Fund	34
Sterling Capital Strategic Allocation Funds	36
Summary of Portfolio Holdings	40
Expense Example	42
Schedules of Portfolio Investments
Sterling Capital Large Cap Value Diversified Fund	46
Sterling Capital Mid Value Fund	48
Sterling Capital Small Cap Value Diversified Fund	49
Sterling Capital Special Opportunities Fund	52
Sterling Capital Equity Income Fund	53
Sterling Capital Ultra Short Bond Fund	54
Sterling Capital Short-Term Bond Fund	59
Sterling Capital Intermediate U.S. Government Fund	63
Sterling Capital Total Return Bond Fund	64
Sterling Capital Corporate Fund	70
Sterling Capital Securitized Opportunities Fund	73
Sterling Capital Kentucky Intermediate Tax-Free Fund	76
Sterling Capital Maryland Intermediate Tax-Free Fund	78
Sterling Capital North Carolina Intermediate Tax-Free Fund	80
Sterling Capital South Carolina Intermediate Tax-Free Fund	84
Sterling Capital Virginia Intermediate Tax-Free Fund	87
Sterling Capital West Virginia Intermediate Tax-Free Fund	90
Sterling Capital Strategic Allocation Conservative Fund	93
Sterling Capital Strategic Allocation Balanced Fund	94
Sterling Capital Strategic Allocation Growth Fund	95
Financial Statements	96
Notes to Financial Statements	152
Report of Independent Registered Public Accounting Firm	167
Other Information	169
Board of Trustees	170

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Letter from the President and the Investment Advisor

Dear Shareholders:

We are pleased to present this Sterling Capital Funds annual report covering the 12 months between October 1, 2012 and September 30, 2013. Despite notable setbacks, equities posted strong gains for the period. Investors took encouragement from robust corporate profits, improvements in the housing market and the continuation of the Federal Reserve’s (the “Fed”) accommodative monetary policy. Meanwhile, fixed income securities experienced losses for the period.

A mixed picture

The economy continued to expand at a modest pace during the 12 months under review. Business confidence rose over the course of the period, but industrial production weakened on a year-over-year basis. Consumer spending and personal income growth also declined compared to levels reported a year ago.

The job market continued to be a weak point in the economic recovery. Although the unemployment rate fell slightly throughout the period, reaching 7.3% by August, analysts continued to believe that trend masked underlying challenges to a thorough job market recovery. In particular, the number of long-term unemployed, including those who have dropped out of the labor market entirely, remained high despite declining unemployment.

The housing market remained a bright spot in the economic landscape, continuing its recovery through the first three quarters of 2013. While new home sales and housing starts increased through the final quarter of the period under review, the pace of growth slowed.

Ongoing economic headwinds

Despite stocks’ strong performance during the period, the U.S. economy remained vulnerable to shocks. Fiscal and monetary policy in Washington weighed on investor confidence. Spending sequestration and tax hikes

threatened to dampen economic growth and to further challenge the employment picture. Expectations that the Fed might begin the process of “tapering” back its accommodative monetary policy led to an uptick in interest rates. However, those expectations declined when the Fed

confirmed on September 18^th that it would not taper its stimulus efforts until the unemployment rate falls even further. Other factors undermining the overall strength of the U.S. economy included low consumer savings, weak personal income growth and increased pressure on corporate earnings.

U.S. gross domestic product (“GDP”) grew at an annualized rate of 0.1% during the last quarter of 2012, and then accelerated to a rate of 1.1% in the following quarter. Preliminary estimates suggested that GDP growth picked up in the second quarter of 2013, increasing at a rate of 2.5%. Despite expectations that the Fed would ease its stimulus efforts, it maintained its aggressive stance toward monetary policy in the final months of the period under review. The Fed kept its target for short-term interest rates at the historically low range of between zero and 0.25% and continued its program of quantitative easing.

During the period, the economies of both Europe and Japan transitioned out of recession, providing a boost to international stocks. Ongoing eurozone sovereign debt problems continued to pose risks to the global economy, but aggressive steps by policymakers helped ease investors’ concerns about another crisis. Weak economic growth in China dragged on emerging market stocks and commodity prices.

Strong stocks; weak bonds

The stock market climbed somewhat steadily throughout the period. The S&P 500 Index gained 19.34% during the 12 months under review. Small-cap stocks outperformed larger companies, with the Russell 2000 Index of small-cap stocks gaining 30.06%. International stocks made strong gains as well, with the MSCIEAFE Index returning 23.77% for the period.

The U.S. fixed income market suffered losses during the period due to rising interest rates, widening credit spreads and uncertainty about government policy. Barclays U.S. Aggregate Bond Index returned -1.68% during the period.

Our perspective

The U.S. economy remains weak four years

after the end of the recession that began in 2008. Recent economic data has been generally negative, and much uncertainty remains regarding fiscal and monetary policy. The Fed’s ongoing efforts to improve economic conditions will continue to have a limited but positive impact. The ongoing political standoff over the debt-ceiling and federal budget, which has pushed back to early 2014, will present additional risks to the struggling economic recovery.

Given the current economic environment, we expect the best performance from defensive portfolios with significant growth exposure. Stocks with strong financials and attractive valuations are likely to outperform, in our estimation. Overall, the stock market can be expected to present better relative value than the fixed income market, which continues to offer low yields.

We will continue to monitor the evolving economic and market climate, and will manage the Sterling Capital Funds accordingly.

Thank you for your confidence in Sterling Capital Management. We look forward to serving your investment needs during the months and years ahead, and we encourage you to call us at 1-800-228-1872 with any questions.

Sincerely,

James T.Gillespie

President

Sterling Capital Funds

Jeffrey J.Schappe, CFA

Managing Director-Chief Market Strategist

Sterling Capital Management LLC

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

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

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

1

Sterling Capital Large Cap Value Diversified Fund

Portfolio Managers

Sterling Capital Large Cap Value Diversified Fund (formerly known as Sterling Capital Select Equity Fund) (the “Fund”) is managed by Robert W. Bridges and Robert O.Weller, Directors and portfolio managers for Sterling Capital Management LLC (“Sterling Capital”).

Robert W. Bridges, CFA

Mr. Bridges joined Sterling Capital in 1996. He has investment experience since 1991. He is a graduate of Wake Forest University where he received his BS in Business.

Robert O. Weller, CFA

Mr. Weller joined Sterling Capital in 2012. He has investment experience since 1996. He is a graduate of Loyola University Maryland where he received his BBA in Finance.

Investment Concerns

Value-based investments are subject to the risk that the broad market may not recognize their intrinsic value. Equity securities (stocks) are more volatile and carry more risk. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes. The Fund may invest in foreign securities which involve certain risks such as currency volatility and political, social and economic instability. There is no guarantee that the strategy used by the portfolio manager will produce the desired results.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund underperformed its prior benchmark, the S&P 500^® Index, and its current benchmark, the Russell 1000 ^® Value Index, during the period.

Q. What factors affected the Fund’s performance?

A. The Fund, formerly known as Sterling Capital Select Equity Fund, was re-named on September 3, 2013 as the Sterling Capital Large Cap Value Diversified Fund. As part of this change, the Fund’s benchmark was changed to the Russell 1000^® Value Index from the S&P 500^® Index to better suit the new strategy. The Fund’s new investment strategy seeks to capitalize on investor behavior that leads to anomalies and opportunities in equity markets. The investment strategy employs techniques that seek to capitalize upon behavioral finance based principles. Our investment process, from the valuation and momentum factors we use to the portfolio construction techniques employed, are specifically designed to capitalize upon investor behavior.¹

Equity markets performed exceptionally well during the 12-month period under review. While the Fund’s absolute return benefited from the overall rise in equity markets, large-cap stocks largely underperformed small-cap stocks for the period. Investors responded to the Federal Reserve’s accommodative monetary policy and widespread

anticipation of acceleration in the growth of the U.S. economy by targeting the growth potential of smaller companies.

The Fund underperformed its benchmarks, the S&P 500^® Index and Russell 1000^® Value Index, due largely to stock selection in the materials, consumer discretionary and energy sectors. The exposure to gold mining companies, as well as a company that produces materials used in crop fertilizers, put significant pressure on relative returns. Additional detractors included an underweight position to the consumer discretionary sector and an overweight position in a technology company whose stock fell sharply due to investor disappointment in recent product launches and an earnings report that fell short of expectations.

The Fund’s relative return benefited from an underweight position in utilities, as that sector was one of the worst-performing sectors during the period. Stock selection in consumer staples was another positive contributor to relative performance, specifically the overweight positions in a pharmacy health care provider and an organic and natural foods company. An overweight position in a biotech company also made a positive contribution to relative performance. The stock’s strong performance was driven by an inflow of investment funds to the biotechnology sector in general, as well as positive developments in the company’s drug development pipeline.

    Portfolio composition is as of September 30, 2013 and is subject to change and risk.

2

* Reflects 5.75% maximum sales charge.

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

*** Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	10/9/92	5.30%	4.46%	4.28%
Class B Shares**	1/1/96	6.83%	4.75%	4.28%
Class C Shares***	2/1/01	10.88%	4.90%	4.12%
Institutional Shares	10/9/92	11.94%	5.98%	5.17%
Russell 1000® Value Index1	N/A	22.30%	8.86%	7.99%
S&P 500® Index1	N/A	19.34%	10.02%	7.57%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹ As of September 3, 2013, the primary benchmark for the Fund changed from the S&P 500^® Index to the Russell 1000^® Value Index (the “New Benchmark”), as the New Benchmark was determined to be a more appropriate broad-based index for comparison purposes. The S&P 500^® Index will not be shown in the future.

S&P 500^® Index is generally considered to be representative of the performance of the stock market as a whole. The New Benchmark is a widely recognized index of common stocks that measures the performance of large- and mid-capitalization value sectors of the U.S. equity market. The indexes are unmanaged and do not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

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

3

Sterling Capital Mid Value Fund

Portfolio Manager

Timothy P. Beyer, CFA

Sterling Capital Mid Value Fund is managed by Timothy P. Beyer, CFA, portfolio manager for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund. Timothy joined Sterling Capital in 2004. He has investment experience since 1989. Timothy is a graduate of East Carolina University where he received his BSBA in Finance.

The Investment Team supporting the Fund has more than 104 combined years of investment experience and includes:

• Eduardo A. Brea, CFA, Managing Director

• Robert W. Bridges, CFA, Director

• Lee D. Houser, CFA, Director

• Patrick W. Rau, CFA, Executive Director

Investment Concerns

The Fund may invest in undervalued securities that may not appreciate in value as anticipated or remain undervalued for longer than anticipated. Investments made in small to mid-capitalization companies are subject to greater risks than large company stocks due to limited resources and inventory and are more sensitive to adverse conditions. The Fund may invest in foreign securities which may be more volatile and less liquid due to currency fluctuation and political, social and economic instability.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund underperformed its benchmark, the Russell Midcap^® Value Index.

Q. What factors affected the Fund’s performance?

A. The economy continued its recovery during the 12-month period, with markets responding positively to the Federal Reserve’s extraordinary efforts to keep interest rates low and boost economic growth. In the beginning of the period, stocks boasted attractive valuations, which expanded as the year went on, contributing to the Fund’s substantial absolute return for the 12 months. The interest-rate sensitive consumer discretionary and financial services sectors accounted for more than half of the Fund’s absolute return, with the more defensive health care sector accounting for another quarter.

The Fund benefited from a large overweight position in the financial services sector. Stock selection in the financial services sector, including

holdings of an insurance company and an online trading company, also boosted the Fund’s relative performance as these shares benefited from an increase in interest rates near the end of the period. In addition, overweight positions and stock selection in media stocks and health care holdings, contributed positively to relative return, due primarily to strong earnings and fundamentals. The Fund also benefited by avoiding income-oriented sectors of the market, namely utilities, which underperformed the broader markets.

Stock selection in the technology sector, particularly the underperformance of an IT services and communications company, contributed negatively to the Fund’s relative performance. Stock selection was also a negative factor in the industrials sector, with notable underperformance by a company that acts as a job site for the technology industry and a supply chain management company whose recovery has not gained traction.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

4

* Reflects 5.75% maximum sales charge.

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

*** Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	8/1/96	24.76%	11.54%	9.93%
Class B Shares**	7/25/01	27.34%	11.85%	9.90%
Class C Shares***	7/25/01	31.37%	11.94%	9.72%
Institutional Shares	8/1/96	32.65%	13.10%	10.83%
Class R Shares	2/1/101	30.65%	12.49%	10.53%
Russell Midcap® Value Index	N/A	27.77%	11.86%	10.91%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹  Class R Shares were not in existence prior to 2/1/10. Performance for periods prior to 2/1/10 is based on the performance of the Institutional Shares, but such performance does not reflect Class R Shares’ 12b-1 fees, which if reflected, would have caused performance to be lower.

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

5

Sterling Capital Small Cap Value Diversified Fund

Portfolio Managers

Sterling Capital Small Cap Value Diversified Fund (formerly known as Sterling Capital Small Value Fund) (the “Fund”) is managed by Robert W. Bridges and Robert O.Weller, Directors and portfolio managers for Sterling Capital Management LLC (“Sterling Capital”).

Robert W. Bridges, CFA

Mr. Bridges joined Sterling Capital in 1996. He has investment experience since 1991. He is a graduate of Wake Forest University where he received his BS in Business.

Robert O. Weller, CFA

Mr. Weller joined Sterling Capital in 2012. He has investment experience since 1996. He is a graduate of Loyola University Maryland where he received his BBA in Finance.

 The Investment Team supporting the Fund has 45 combined years of investment experience and includes:

• Rose L. Alexander, Director

• Kenneth L. Willson, Director

Investment Concerns

The Fund may invest in undervalued securities which may not appreciate in value as anticipated or remain undervalued for longer than anticipated. Investments made in small to mid-capitalization companies are subject to greater risks than large company stocks due to limited resources and inventory and are more sensitive to adverse conditions. The Fund may invest in foreign securities which may be more volatile and less liquid due to currency fluctuation and political, social and economic instability. There is no guarantee that the strategy used by the portfolio manager will produce the desired results.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund’s Institutional Shares outperformed its benchmark, the Russell 2000^® Value Index.

Q. What factors affected the Fund’s performance?

A. The former Sterling Capital Small Value Fund was re-named on June 3, 2013 as the Sterling Capital Small Cap Value Diversified Fund. The Fund’s new investment strategy seeks to capitalize upon insights gained from behavioral finance to identify anomalies and opportunities in equity markets.

Equity markets performed exceptionally well during the 12-month period under review, boosting the Fund’s absolute return. In particular, small-cap stocks outperformed large-cap stocks as investors responded to the Federal Reserve’s accommodative monetary policy, along with widespread confidence in accelerating growth of the U.S. economy. Stock selection in the financial sector boosted the Fund’s returns relative to its benchmark. In particular, holdings of a Puerto Rico financial

services firm, a provider of financial guaranty insurance and reinsurance, and a company that provides technology for the financial services industry helped boost the Fund’s relative performance. Strong stock performance of specific holdings in health care also benefited the Fund’s relative performance. A company that specializes in animal health care and a provider of information services for the health care industry were among the largest positive contributors.

The energy and consumer discretionary sectors were two of the Fund’s largest detractors from relative performance. The volatility of crude oil prices during the period dragged on the performance of many of the Fund’s holdings in the energy sector. And though the consumer discretionary sector was the best performer during the year, stock selection in that sector dragged on the Fund’s relative performance. Specifically, the Fund had limited exposure to the top-performing companies in this sector, namely companies that produce durable goods with high price points and low-cost financing.

    Portfolio composition is as of September 30, 2013 and is subject to change and risk.

6

* Reflects 5.75% maximum sales charge.

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

*** Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	2/1/101	21.36%	11.04%	8.87%
Class B Shares**	2/1/101	22.74%	11.49%	9.21%
Class C Shares***	2/1/101	27.77%	11.74%	9.21%
Institutional Shares	1/2/97	29.03%	12.57%	9.61%
Class R Shares	2/1/101	28.48%	12.38%	9.52%
Russell 2000® Value Index	N/A	27.04%	9.13%	9.29%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹  Class A, B, C and R Shares were not in existence prior to 2/1/10. Performance for periods prior to 2/1/10 is based on the performance of Institutional Shares and have been adjusted for maximum CDSC to the applicable class but does not include 12b-1 fees, which if reflected, would have caused performance of Class A, B C and R Shares to be lower. The performance information for Institutional Shares (formerly known as Sterling Shares) prior to 12/18/06 is based on the performance of the Institutional Shares of the Fund’s Predecessor, Sterling Capital Small Cap Value Fund, a series of The Advisors’ Inner Circle Fund (the “Predecessor Fund”), which transferred all of its assets and liabilities to the Fund pursuant to a reorganization. The performance of the Fund’s Institutional Shares would have been different because the Fund’s Institutional Shares have different expenses than the Predecessor’s Institutional Shares.

The Russell 2000^® Value Index is a widely recognized index of common stocks that measures the performance of small- to mid-sized companies. The index is unmanaged and does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

7

Sterling Capital Special Opportunities Fund

Portfolio Manager

George F. Shipp, CFA

Sterling Capital Special Opportunities Fund (the “Fund”) is managed by George F. Shipp, CFA, Director and portfolio manager for Sterling Capital Management LLC. George has been the Fund’s manager since 2003 and also manages the Sterling Capital Equity Income Fund. He has investment experience since 1982. George is a graduate of the University of Virginia and received his MBA at the Darden Graduate School of Business.

The Investment Team supporting the Fund has more than 132 combined years of investment experience and includes:

• Adam B. Bergman, CFA

• Joshua L. Haggerty, CFA

• R. Griffith Jones, Jr.

• Farley C. Shiner, CFA

• Colin R. Ducharme, CFA

• Guy W. Ford, CFA

• Michael S. Peasley, CFA

Investment Concerns

The Fund is subject to investment style risk which depends on the market segment in which the Fund is primarily invested. An investment in growth stocks may be particularly sensitive to market conditions while value stocks may be undervalued for longer than anticipated. The Fund may invest in foreign securities subject to risks such as currency volatility and political and social instability or small capitalization companies subject to greater volatility and less liquidity due to limited resources or product lines. The Fund may engage in writing covered call options on securities. By writing covered call options, the Fund limits its opportunity to profit from an increase in the price of the underlying stock above the premium and the strike price, but continues to bear the risk of a decline in the stock price. While the Fund receives premiums for writing covered call options, the price it realizes from the exercise of an option could be substantially below a stock’s current market price.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund’s Institutional Shares outperformed its benchmarks, the S&P 500^® Index and the Russell 3000^® Index.

Q. What factors affected the Fund’s performance?

A. The Fund’s absolute performance was lifted by strong market performance during the period. Throughout the 12 months under review, investors increasingly gained confidence that the Federal Reserve would continue to keep interest rates at ultra-low levels for an extended period of time. As a result of the low rates, equity markets faced little competition from fixed income securities in terms of attracting investor dollars. The positive economic benefits of a rising market are offset, however, by an increasingly widening wealth gap between those who own financial assets and who can participate in the rising markets and those without the means to do so. The wages of the latter have not kept pace with the cost of living. The Fed nevertheless remains steadfast in its policy; its decision to keep its bond-buying program at full throttle provided another dose of confidence to equity investors, lending stocks a final kick going into the end of the 12-month period.

The Fund’s relative performance benefited strongly from its overweight positions in consumer discretionary and health care stocks, two of the three top-performing sectors in the S&P 500 during the 12-month

period. Stock selection, specifically the timely sale of two interest-rate sensitive holdings in the financial sector, as well as the timely addition of a large bank and a national hospital provider, also contributed positively to relative performance. In addition, beneficial corporate actions within specific holdings boosted the Fund’s relative performance. For example, the Fund benefited when a computer maker and a fresh foods company were taken private by controlling shareholders. The announcement of a potential leveraged recapitalization by a video game producer and a successful share repurchase effort by a leading energy services company also benefited the Fund’s relative performance.

The Fund’s cash performance was a drag on performance relative to its fully-invested benchmark. Other detractors from relative performance included the Fund’s focus on higher quality, larger-cap stocks relative to the benchmark’s holdings. Within the S&P 500, larger companies underperformed smaller companies as investors shifted their attention toward economically sensitive stocks with greater volatility and potential for gain, all in order to participate more fully in the market rally. An overweight position in the energy sector also hindered relative performance, given that the sector trailed the overall equity market’s gains.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

8

* Reflects 5.75% maximum sales charge.

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

*** Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	6/2/03	14.59%	8.56%	10.40%
Class B Shares**	6/2/03	16.64%	8.90%	10.39%
Class C Shares***	6/2/03	20.69%	9.05%	10.23%
Institutional Shares	6/2/03	21.90%	10.12%	11.34%
Class R Shares	2/1/101	21.28%	9.82%	11.19%
S&P 500® Index	N/A	19.34%	10.02%	7.57%
Russell 3000® Index2	N/A	21.60%	10.58%	8.11%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark and represents the reinvestment of dividends and capital gains.

¹  Class R Shares were not in existence prior to 2/1/10. Performance for periods prior to 2/1/10 is based on the performance of Institutional Shares, but such performance does not reflect Class R Shares’ 12b-1 fees, which if reflected, would have caused performance to be lower.

²  The Fund now includes the Russell 3000^® Index to show how the Fund’s performance compares with the overall performance of the large-cap value segment of the U.S. equity universe.

The Fund is measured against the S&P 500^® Index and the Russell 3000^® Index, unmanaged indexes that are generally considered to be representative of the performance of the stock market as a whole. The indexes do not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

9

Sterling Capital Equity Income Fund

Portfolio Manager

George F. Shipp, CFA

Sterling Capital Equity Income Fund (the “Fund”) is managed by George F. Shipp, CFA, Director and portfolio manager for Sterling Capital Management LLC, advisor to the Fund. George has been the Fund’s manager since 2004 and also manages the Sterling Capital Special Opportunities Fund. He has investment experience since 1982. George is a graduate of the University of Virginia and received his MBA at the Darden Graduate School of Business.

The Investment Team supporting the Fund has more than 132 combined years of investment experience and includes:

• Adam B. Bergman, CFA

• Joshua L. Haggerty, CFA

• R. Griffith Jones, Jr.

• Farley C. Shiner, CFA

• Colin R. Ducharme, CFA

• Guy W. Ford, CFA

• Michael S. Peasley, CFA

Investment Concerns

The Fund invests primarily in dividend-paying securities. These securities may be undervalued and their value could be negatively affected by a rise in interest rates. The Fund may engage in writing covered call options on securities. By writing covered call options, the Fund limits its opportunity to profit from an increase in the price of the underlying stock above the premium and the strike price, but continues to bear the risk of a decline in the stock price. While the Fund receives premiums for writing covered call options, the price it realizes from the exercise of an option could be substantially below a stock’s current market price.

Q. How did the Fund perform during the 12-month period between October 1, 2013 and September 30, 2013?

A. The Fund underperformed its benchmarks, the S&P 500^® Index and the Russell 1000^® Value Index.

Q. What factors affected the Fund’s performance?

A. The Fund’s absolute performance was boosted by strong market performance during the period. Throughout the 12-month period, investors increasingly gained confidence in the idea that the Federal Reserve would continue its efforts to maintain interest rates at ultra-low levels for an extended period of time. As a result of the low rates, equity markets faced little competition from fixed income securities in terms of attracting investor dollars. Equity markets rose as a result. The positive economic benefits of a rising market are offset, however, by an increasingly widening wealth gap between those who own financial assets and who can participate in the rising markets and those without the means to do so. The wages of the latter have not kept pace with the cost of living. The Fed nevertheless remains steadfast in its policy; its decision to keep its bond-buying program at full throttle provided another dose of confidence to stock investors, lending stocks a final kick going into the end of the period.

The Fund’s cash holdings hindered performance relative to its fully invested benchmark. Additionally, the Fund’s focus on large-cap, dividend-paying stocks contributed to its underperformance as investors gravitated to so-called “growth” stocks in a rising market. Within the S&P 500, larger companies underperformed smaller companies as investors shifted their attention toward economically sensitive stocks with greater volatility and potential for gain in order to participate in the market rally. An overweight position in energy stocks also detracted from relative performance, as that sector trailed the overall equity market’s gains. Likewise, an underweight position in financials, one of the stronger performing sectors for the period, contributed negatively to the Fund’s relative performance. However, stock selection in the Fund’s financial holdings helped offset some of the negative effects of that weighting decision.

Stock selection was a positive contributor to the Fund’s relative performance in other sectors. In particular, the Fund benefited from timely purchases of several new investments, including shares of a managed-care insurer, a national cable company, a diversified insurance company and a Canadian telecommunications company. Moreover, the underlying companies in the Fund’s holdings generally performed well, with the portfolio’s constituents which experienced dividend increases that were comfortably above historical averages.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

10

* Reflects 5.75% maximum sales charge.

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

*** Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	Since Inception
Class A Shares*	6/30/04	9.34%	8.73%	9.48%
Class B Shares**	6/30/04	11.13%	9.06%	9.46%
Class C Shares***	6/30/04	15.17%	9.19%	9.36%
Institutional Shares	6/30/04	16.33%	10.29%	10.45%
Class R Shares	2/1/101	15.69%	9.90%	10.24%
S&P 500® Index	6/30/04	19.34%	10.02%	6.48%
Russell 1000® Value Index2	6/30/04	22.30%	8.86%	6.67%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹  Class R Shares were not in existence prior to 2/1/10. Performance for periods prior to 2/1/10 is based on the performance of Institutional Shares, but such performance does not reflect Class R Shares’ 12b-1 fees, which if reflected, would have caused performance to be lower.

²  The Fund now includes the Russell 1000^® Value Index to show how the Fund’s performance compares with the overall performance of the large-cap value segment of the U.S. equity universe.

The Fund is measured against the S&P 500^® Index and the Russell 1000^® Value Index, unmanaged indexes that are generally considered to be representative of the performance of the stock market as a whole. The indexes do not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

11

Sterling Capital Ultra Short Bond Fund

Portfolio Managers

Sterling Capital Ultra Short Bond Fund (the “Fund”) is managed by Mark Montgomery, CFA and Richard LaCoff, portfolio managers for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund.

Mark Montgomery, CFA

Mark joined Sterling Capital in 1997 and has co-managed the Fund since 2012. He is head of Sterling’s Fixed Income Portfolio Management. He has investment experience since 1990 and is a graduate of West Chester University where he received his BS in Marketing and a Minor in Public Administration and an MBA from Drexel University. He is a CFA Charterholder.

Richard T. LaCoff

Richard joined Sterling Capital in 2007 and has co-managed the Fund since 2012. He has investment experience since 1991 and is a graduate of Villanova University where he received his BS in Business Administration and a MS in Finance from Drexel University.

The Investment Team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolio such as credit, prepayment, call and interest rate risk. As interest rates rise the value of bond prices will decline and an investor may lose money. The Fund may invest in more aggressive investments such as foreign securities which may expose the fund to currency and exchange rate fluctuations; mortgage-backed securities sensitive to interest rates and high yield debt (also known as junk bonds) all of which may cause greater volatility and less liquidity.

Q. How did the Fund perform during the period between October 1, 2012 and September 30, 2013?

A. The Fund’s Institutional Shares outperformed its benchmark, the Citi 6-Month Treasury Bill Index.

Q. What factors affected the Fund’s performance?

A. Short-term bond yields remained near historic lows during the period, anchored by the Federal Reserve’s accommodative monetary policy and market participants’ expectations that the federal funds target rate would remain near zero for an extended period of time. The Federal Reserve stated during the period that it was unlikely to raise the federal funds rate, which has a large influence on short-term bond yields, until mid-2015. This news encouraged market participants to invest in longer-term securities in search of higher yields and to de-emphasize money market instruments, which were yielding near zero percent, as well as focus on higher yielding risk assets such as corporate bonds.

The Fund benefited from its overweight position in various spread sectors — segments of the bond market such as corporate bonds and structured products that offered high yields relative to Treasury securities. Investor demand for these relatively high yielding bonds was strong during the period, and they outperformed other sectors of the bond market. Corporate bonds and structured products also benefited from the Federal Reserve’s continued asset purchase program and improvements in the U.S. economy and unemployment rate.

The Fund’s long duration relative to its benchmark was the biggest detractor from relative performance. During the period, market participants grew concerned that the Federal Reserve would end its asset purchase program. As a result, they sold longer-term bonds in favor of shorter-term securities, which pushed down longer-term bond prices. The Fund’s allocation to bonds in the two-year maturity range — on the longer end of maturities held by its benchmark — underperformed relative to shorter-term bonds in that environment.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

12

* Reflects 0.50% maximum sales charge.

Average Annual Total Returns
As of September 30, 2013	Inception Date	Since Inception
Class A Shares*	11/30/12	-0.35%
Institutional Shares	11/30/12	0.35%
Citi 6-Month Treasury Bill Index	11/30/12	0.09%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

The Fund is measured against the Citi 6-Month Treasury Bill Index, which measures the performance of Treasury bills with a maturity of six months or less. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

13

Sterling Capital Short-Term Bond Fund

Portfolio Managers

Sterling Capital Short-Term Bond Fund (the “Fund”) is managed by Mark Montgomery, CFA and Richard LaCoff, portfolio managers for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund.

Mark Montgomery, CFA

Mark joined Sterling Capital in 1997. He has co-managed the Fund since 2008. He is head of Sterling’s Fixed Income Portfolio Management. He has investment experience since 1990 and is a graduate of West Chester University where he received his BS in Marketing and a Minor in Public Administration and an MBA from Drexel University. He is a CFA Charterholder.

Richard T. LaCoff

Richard joined Sterling Capital in 2007. He has co-managed the Fund since 2011. He has investment experience since 1991 and is a graduate of Villanova University where he received his BS in Business Administration and an MS in Finance from Drexel University.

The Investment Team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolio such as credit, prepayment, call and interest rate risk. As interest rates rise, the value of bond prices will decline and an investor may lose money. The Fund may invest in more aggressive investments such as foreign securities which may expose the fund to currency and exchange rate fluctuations; mortgage-backed securities sensitive to interest rates and high yield debt (also known as junk bonds) all of which may cause greater volatility and less liquidity.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund’s Institutional Shares outperformed its benchmark, the BofA Merrill Lynch 1-3 Year U.S. Corporate Government Index.

Q. What factors affected the Fund’s performance?

A. Short-term bond yields were anchored by investor expectations that the Federal Reserve’s accommodative monetary policy would keep the federal funds target rate at historically low levels until 2015. In that environment, the yields on money market securities and other very short-term securities remained near zero throughout the period. This backdrop caused bond investors to seek the additional yield that was available from longer-term securities and risk assets such as corporate bonds.

The Fund’s performance relative to the benchmark benefited from overweight allocations to bond market sectors that offered relatively high yields, including short-term corporate bonds and structured

products. Investor demand for these relatively high yielding spread sectors was strong during the period, and they outperformed other sectors of the bond market. Corporate bonds and structured products also benefited from the Federal Reserve’s continued asset purchase program, as well as improvements in the U.S. economy and unemployment rate.

The Fund’s long duration relative to its benchmark was the biggest detractor from relative performance during the period. Longer-term bonds experienced larger losses than shorter-term bonds as investors grew concerned that the Federal Reserve would slow its asset purchase program. Investors shifted to the relative safety of short-term bonds, leading to a steepening of the yield curve and a decline in the prices of longer-term bonds. In that environment, the Fund’s holdings in bonds with maturities greater than two years underperformed relative to the Fund’s benchmark.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

14

* Reflects 2.00% maximum sales charge.

** Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	11/30/92	-1.26%	2.08%	2.40%
Class C Shares**	2/1/121	-0.03%	2.23%	2.48%
Institutional Shares	11/30/92	0.98%	2.74%	2.85%
BofA Merrill Lynch 1-3 Year U.S. Corporate Government Index	N/A	0.72%	2.51%	2.91%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹  Class C Shares were not in existence prior to 2/1/12. Performance for periods prior to 2/1/12 is based on the performance of Class A Shares. Such performance could differ only to the extent that the Classes have different expenses.

The Fund is measured against the BofA Merrill Lynch 1-3 Year U.S. Corporate Government Index, which consists of securities with a maturity from one to three years. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been waived. Fund performance for certain time periods would have been lower without fee waivers in effect.

15

Sterling Capital Intermediate U.S. Government Fund

Portfolio Manager

Brad D. Eppard, CFA

Sterling Capital Intermediate U.S. Government Fund (the “Fund”) is managed by Brad D. Eppard, CFA, Director and portfolio manager for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund. Brad joined Sterling Capital in 2003. He has investment experience since 1985. He has been the portfolio manager for the Fund since 2003. Brad is a graduate of Radford University where he received his BS in Business Administration/Accounting. He is a CFA Charterholder.

The Investment Team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolio such as credit, prepayment, call and interest rate risk. As interest rates rise, the value of bond prices will decline and an investor may lose money. The Fund may invest in mortgage-backed securities which tend to be more sensitive to changes in interest rates. The Fund invests in securities issued or guaranteed by the U.S. government or its agencies (such as Fannie Mae or Freddie Mac). Although U.S. government securities issued directly by the U.S. government are guaranteed by the U.S. Treasury, other U.S. government securities issued by an agency or instrumentality of the U.S. government may not be. No assurance can be given that the U.S. government would provide financial support to its agencies and instrumentalities if not required to do so by law.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund underperformed its benchmark, the Barclays Intermediate Government Index.

Q. What factors affected the Fund’s performance?

A. The Fund’s absolute performance during the period suffered from rising interest rates, which pushed bond prices lower. The income produced by Fund holdings was not sufficient to offset the loss in market value, leading to negative returns for the period. Interest rates on five-year Treasury bonds rose 0.76% during the period, while rates on 10-year Treasuries rose 0.98%.

The Fund underperformed its benchmark during the period largely due to the longer duration of its holdings. Rising interest rates pushed investors toward the relative safety of shorter-term bonds, causing the yield curve to steepen. The Fund’s exposure to agency mortgage-backed securities and agency step-up notes also dragged on relative

performance. Prices for both instruments fell due to the risk that rising interest rates would cause their maturities to lengthen, which happens when rising rates lead mortgage holders to slow prepayments on their mortgages. As a result, durations are extended on the mortgages that underly mortgage-backed securities.

The Fund’s performance relative to its benchmark benefited from the Fund’s exposure to the corporate sector, which generated relatively high levels of income. The Fund’s exposure to corporate bonds also boosted relative performance due to the compression of their spread to comparable Treasuries. Although interest rates rose and the Fund’s corporate bonds declined in price, they did not decline as much as the comparable Treasury. The Fund’s strategy of tactically substituting Treasury Inflation-Protected Securities (TIPS) for conventional Treasuries during periods when market inflation expectations appeared low, boosted the Fund’s performance when inflation expectations rose and the trade was reversed.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

16

* Reflects 2.00% maximum sales charge.

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

*** Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	10/9/92	-4.48%	3.12%	3.19%
Class B Shares**	1/1/96	-7.09%	2.56%	2.79%
Class C Shares***	2/1/01	-3.29%	2.76%	2.66%
Institutional Shares	10/9/92	-2.30%	3.77%	3.66%
Barclays Intermediate Government Index	N/A	-0.50%	4.95%	4.10%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark and represents the reinvestment of dividends and capital gains.

The Fund is measured against the Barclays Intermediate Government Index, an unmanaged index comprised of all publicly issued non-convertible domestic debt of the U.S. government or any agency there of, or corporate debt guaranteed by the U.S. government all with outstanding principal of $1 million and maturity between one and ten years. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

17

Sterling Capital Total Return Bond Fund

Portfolio Managers

Sterling Capital Total Return Bond Fund (the “Fund”) is managed by Mark Montgomery, CFA and Richard LaCoff, portfolio managers for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund.

Mark Montgomery, CFA

Mark joined Sterling Capital in 1997 and has co-managed the Fund since 2008. He is head of Sterling Capital’s Fixed Income Portfolio Management. He has investment experience since 1990 and is a graduate of West Chester University, where he received his BS in Marketing and a Minor in Public Administration and an MBA from Drexel University. He is a CFA Charterholder.

Richard T. LaCoff

Richard joined Sterling Capital in 2007 and has co-managed the Fund since 2011. He has investment experience since 1991 and is a graduate of Villanova University where he received his BS in Business Administration and an MS in Finance from Drexel University.

The Investment Team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolio such as credit, prepayment, call and interest rate risk. As interest rates rise the value of bond prices will decline and an investor may lose money. The Fund may invest in foreign securities which may expose the fund to currency and exchange rate fluctuations, and mortgage-backed securities sensitive to interest rates and high yield debt (also known as junk bonds) all of which may cause greater volatility and less liquidity.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund’s Institutional Shares outperformed its benchmark, the Barclays U.S. Aggregate Bond Index.

Q. What factors affected the Fund’s performance?

A. The Fund’s absolute performance was driven by negative returns in the fixed-income markets. During the period, the U.S. economy showed signs of improvement, prompting the Federal Reserve (the “Fed”) in May to suggest that its asset purchase program (commonly referred to as “QE3”) would likely be tapered before fiscal year-end 2013. Investors grew concerned about the impact on the bond market if the Fed slowed or ended QE3, and fled from fixed income securities as a result. As the result, bond yields rose and prices fell.

The Fund benefited from an overweight position in spread sectors such as corporate bonds, mortgage-backed securities and federal agency debt, which outperformed non-spread sectors during the period. The Fed’s asset purchase program provided support to spread sectors in general and agency mortgage-backed securities in particular. Moreover, the U.S. economy showed signs that growth was improving and the

unemployment rate was falling, which also helped boost the relative performance of risk assets.

Corporate bonds were the best performing sector on a duration-adjusted basis. The Fund held an overweight allocation to corporate bonds relative to its benchmark. Within the corporate bond sector, the Fund held an overweight position in the financials sector, which was the best performing sub-sector on an absolute and risk-adjusted basis.

The Fund also held an overweight position in the securitized sector, which outperformed during the period. Additionally, the Fund’s overweight allocation to non-agency mortgage-backed securities, which was the best performing sub-sector within the securitized sector, contributed to relative performance.

While the Fund’s overweight exposure to the corporate bond sector was positive for the period, the Fund’s allocation to the industrials sub-sector detracted from performance as it underperformed the overall corporate sector and broader index. Within the securitized sector, the Fund had an allocation to asset-backed securities that underperformed the broader index. In addition, the portfolio was underweight in agency mortgage-backed securities, which outperformed during the period.

    Portfolio composition is as of September 30, 2013 and is subject to change and risk.

18

* Reflects 5.75% maximum sales charge.

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

*** Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	12/2/99	-7.18%	5.26%	4.08%
Class B Shares**	12/2/99	-6.02%	5.55%	4.08%
Class C Shares***	2/1/01	-2.24%	5.73%	3.94%
Institutional Shares	12/2/99	-1.26%	6.77%	4.97%
Class R Shares	2/1/101	-1.83%	6.30%	4.73%
Barclays U.S. Aggregate Bond Index	N/A	-1.68%	5.41%	4.59%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹  Class R Shares were not in existence prior to 2/1/10. Performance for periods prior to 2/1/10 is based on the performance of Institutional Shares, but such performance does not reflect Class R Shares’ 12b-1 fees, which if reflected, would have caused performance to be lower.

The Fund is measured against the Barclays U.S. Aggregate Bond Index, an unmanaged index which is a market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities, with maturities of at least one year. The index is unmanaged and does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees has been waived. Fund performance for certain time periods would have been lower without fee waivers in effect.

19

Sterling Capital Corporate Fund

Portfolio Managers

Sterling Capital Corporate Fund (the “Fund”) is managed by Mark Montgomery, CFA and Richard LaCoff, portfolio managers for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund.

Mark Montgomery, CFA

Mark joined Sterling Capital in 1997 and has co-managed the Fund since 2011. He is head of Sterling Capital’s Fixed Income Portfolio Management. He has investment experience since 1990 and is a graduate of West Chester University where he received his BS in Marketing and a Minor in Public Administration and an MBA from Drexel University. He is a CFA Charterholder.

Richard T. LaCoff

Richard joined Sterling Capital in 2007 and has co-managed the Fund since 2011. He has investment experience since 1991 and is a graduate of Villanova University where he received his BS in Business Administration and an MS in Finance from Drexel University.

The investment team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolio such as credit, prepayment, call and interest rate risk. As interest rates rise the value of bond prices will decline and an investor may lose money. The Fund may invest in more aggressive investments such as foreign securities which may expose the fund to currency and exchange rate fluctuations; mortgage-backed securities sensitive to interest rates and high yield debt (also known as junk bonds) all of which may cause greater volatility and less liquidity. Derivatives may be more sensitive to changes in market conditions and may amplify risks.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund’s Institutional Shares outperformed its benchmark, the Barclays U.S. Corporate Investment Grade Index.

Q. What factors affected the Fund’s performance?

A. The Fund’s absolute return was negative for the period, as the Federal Reserve (the “Fed”) suggested in May that its asset purchase program (commonly referred to as “QE3”) would likely be tapered before fiscal year-end 2013. The Fed’s announcement caused investors to sell bonds in anticipation of tighter future monetary policy, which pushed bond yields sharply higher and bond prices sharply lower. The Fed’s asset purchase program provided support to corporate bonds, as did signs that U.S. economic growth was improving and the unemployment rate was falling.

The biggest contributor to relative performance was the Fund’s position

in below-investment-grade securities, which outperformed comparable Treasuries during the period under review. By contrast, investment grade corporate bonds outperformed comparable Treasuries. The Fund’s overweight position in the financials sector versus the industrials sector also boosted relative returns. Financial institutions benefitted from the recovery in the housing market during the period and were more insulated from event risk than were industrials. The Fund also had less interest rate sensitivity than the benchmark, which contributed positively to performance when rates rose sharply.

The Fund’s positioning on the yield curve was the biggest detractor from relative performance during the period. The Fund held an overweight position in the 5-year and 10-year sections of the yield curve. Interest rates in those areas rose more than did rates in the 2-year and 30-year points, as investors grew concerned that the Fed would taper its asset purchase program.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

20

* Reflects 2.00% maximum sales charge.

** Reflects the applicable maximum contingent deferred sales charge (CDSC) of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	Since Inception
Class A Shares*	2/1/131	-2.84%	3.71%
Class C Shares**	2/1/131	-1.33%	4.40%
Institutional Shares	6/30/112	-0.65%	4.72%
Barclays U.S. Corporate Investment Grade Index	6/30/11	-1.59%	5.16%

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains, and do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-888-228-1872.

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹  Class A and C Shares were not in existence prior to 2/1/13. Performance for periods prior to 2/1/13 is based on the performance of Institutional Shares and has been adjusted for maximum CDSC to the class applicable but does not include 12b-1 fees, which if reflected, would have caused performance of Class A and C Shares to be lower.

²  The Fund converted Class S Shares into Institutional Shares effective 2/1/13.

The Fund is measured against the Barclays U.S. Corporate Investment Grade Index, an unmanaged index consisting of publicly issued U.S. Corporate and specified foreign debentures and secured notes, all which have at least one year to final maturity. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees had been waived prior to 2/1/13. Fund performance for certain time periods would have been lower without fee waivers in effect. There are currently no waiver agreements in effect.

21

Sterling Capital Securitized Opportunities Fund

Portfolio Managers

Sterling Capital Securitized Opportunities Fund (the “Fund”) is managed by Mark Montgomery, CFA and Richard LaCoff, portfolio managers for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund.

Mark Montgomery, CFA

Mark joined Sterling Capital in 1997 and has co-managed the Fund since 2011. He is head of Sterling Capital’s Fixed Income Portfolio Management. He has investment experience since 1990 and is a graduate of West Chester University where he received his BS in Marketing and a Minor in Public Administration and an MBA from Drexel University. He is a CFA Charterholder.

Richard T. LaCoff

Richard joined Sterling Capital in 2007 and has co-managed the Fund since 2011. He has investment experience since 1991 and is a graduate of Villanova University where he received his BS in Business Administration and an MS in Finance from Drexel University.

The investment team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolio such as credit, prepayment, call and interest rate risk. As interest rates rise the value of bond prices will decline and an investor may lose money. The Fund may invest in more aggressive investments such as foreign securities which may expose the fund to currency and exchange rate fluctuations; mortgage-backed securities sensitive to interest rates and high yield debt (also known as junk bonds) all of which may cause greater volatility and less liquidity.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund’s Institutional Shares outperformed its benchmark, the Barclays U.S. Mortgage Backed Securities Index.

Q. What factors affected the Fund’s performance?

A. The Fund’s absolute return was negative for the period. As signs of improvement in the U.S economy emerged, the Federal Reserve in May suggested that it might slow the pace of its asset purchase program (commonly referred to as “QE3”) before fiscal year-end 2013. Investors worried that a reduction in QE3 would lead to tighter monetary policy that would cause bond market performance to suffer. As a result, investors sold fixed income investments, pushing their yields sharply higher and their prices sharply lower.

The only sector to boost portfolio returns on an absolute basis was nonagency residential mortgage-backed securities, which were buoyed by their relatively high yields and by price appreciation as spreads between these securities and comparable Treasuries tightened during the period. All other sectors (including commercial mortgage-backed securities, agency mortgage-backed securities and Treasuries) had negative absolute returns, as their durations were long enough to cause negative returns

when bond prices fell.

The Fund’s relative return benefited from overweight positions in nonagency residential mortgage-backed securities and commercial mortgage-backed securities, which performed well relative to other sectors of the market. The Fund also benefited from an underweight allocation to agency mortgage-backed securities, which performed relatively poorly over the period. Security selection within the agency mortgage-backed securities sector also added to the Fund’s relative performance during the period. For example, the Fund took an underweight position in the lowest coupon, longest duration mortgages, which performed poorly on a relative basis as yields rose. Instead, the Fund favored agency mortgage-backed securities with durations of around 15 to 20 years. These securities held up relatively well in the rising rate environment.

The Fund’s relative performance was dampened somewhat by an underweight position in agency adjustable rate mortgages, which posted positive relative performance over the period. The Fund also suffered from its exposure to Treasury securities, which were used as duration management tools and typically had longer durations than the benchmark.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

22

* Reflects 2.00% maximum sales charge.

** Reflects the applicable maximum contingent deferred sales charge (CDSC) of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	Since Inception
Class A Shares*	2/1/131	-3.11%	1.87%
Class C Shares**	2/1/131	-1.62%	2.54%
Institutional Shares	6/30/112	-0.97%	2.84%
Barclays U.S. Mortgage Backed Securities Index	6/30/11	-1.20%	2.14%

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains, and do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-888-228-1872.

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹  Class A and C Shares were not in existence prior to 2/1/13. Performance for periods prior to 2/1/13 is based on the performance of Institutional Shares and has been adjusted for maximum CDSC to the class applicable but does not include 12b-1 fees, which if reflected, would have caused performance of Class A and C Shares to be lower.

²  The Fund converted Class S Shares into Institutional Shares effective 2/1/13.

The Fund is measured against the Barclays U.S. Mortgage Backed Securities Index. The index measures the performance of investment grade fixed-rate mortgage-backed pass-through securities of Ginnie Mae, Fannie Mae, and Freddie Mac. The index is unmanaged and does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees had been waived prior to 2/1/13. Fund performance for certain time periods would have been lower without fee waivers in effect. There are currently no waiver agreements in effect.

23

Sterling Capital Kentucky Intermediate Tax-Free Fund

Portfolio Manager

Robert F. Millikan, CFA

Sterling Capital Kentucky Intermediate Tax-Free Fund (the “Fund”) is managed by Robert F. Millikan, CFA, Executive Director and portfolio manager for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund. Robert joined Sterling Capital in 2000. He manages the state-specific municipal bond fund portfolios and has investment experience since 1990. Robert is a graduate of Wake Forest University where he received his BA in Economics and is a CFA Charterholder.

The Investment Team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolios such as credit, prepayment and interest rate risk. As interest rates rise the value of bond prices will decline and an investor may lose money. The Fund is non-diversified and may invest a greater percentage of its assets in a single issuer than funds that are more diversified. Furthermore, the Fund invests primarily in municipal obligations issued by Kentucky and its political subdivisions and therefore will be affected by economic, political or other events affecting Kentucky.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund underperformed its benchmark, the BofA Merrill Lynch 2-17 Year Municipal Bond Index.

Q. What factors affected the Fund’s performance?

A. Municipal bond markets experienced a violent sell-off in the latter half of the 12-month period. Improving economic data and expectations that the Federal Reserve would begin tapering its stimulus efforts drove Treasury rates higher, and municipal bonds followed suit.

However, municipal markets were hit in rapid succession by three major credit-related headlines, which further panicked municipal bond investors. During back-to-back days in July, Chicago was downgraded from Aa3 to A3 by Moody’s Investors Service, Inc. and Detroit declared bankruptcy. The broad press coverage of the bankruptcy caused panic among municipal bond investors, triggering a $2 billion per week outflow of investor capital from muni funds. The resulting pressure on prices caused a steepening in the yield curve as investors sought out shorter, higher quality bonds. Then negative headlines out of Puerto

Rico drove prices down to a market bottom on September 9, at which point Puerto Rican bonds were trading above 10%. However, this bottom helped spur a broader market rally through the remaining three weeks of the period, which helped to mitigate some of the Fund’s losses to that point.

Most of the Fund’s underperformance occurred during May and June. During this two-month period, the Fund favored longer duration bonds than its benchmark, which dragged on performance as relatively shorter duration bonds outperformed those with longer durations. The Fund’s relative performance also suffered as the benchmark was buoyed by strong credit improvement in some large states, namely California, New York, Florida and Texas.

The Fund’s relative performance benefited from a lack of exposure to Puerto Rico bonds, which dragged on the national benchmark. The weighting in favor of longer duration bonds was a positive contributor to relative performance (with the exception of May and June) due to the higher income generated by these holdings.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

24

* Reflects 2.00% maximum sales charge.

** Reflects the applicable maximum contingent deferred sales charge of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date		1 Year		5 Years		10 Years
Class A Shares*		2/24/03		-3.81%		4.54%		3.39%
Class C Shares**		2/1/121		-2.47%		4.71%		3.47%
Institutional Shares		2/24/03		-1.59%		5.20%		3.83%
BofA Merrill Lynch 2-17 Year Municipal Bond Index		N/A		-1.20%		5.74%		4.44%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹  Class C Shares were not in existence prior to 2/1/12. Performance for periods prior to 2/1/12 is based on the performance of Class A Shares. Such performance would differ only to the extent that the Classes have different expenses.

The Fund is measured against the BofA Merrill Lynch 2-17 Year Municipal Bond Index, an unmanaged index that is representative of municipal bonds. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

25

Sterling Capital Maryland Intermediate Tax-Free Fund

Portfolio Manager

Robert F. Millikan, CFA

Sterling Capital Maryland Intermediate Tax-Free Fund (the “Fund”) is managed by Robert F. Millikan, CFA, Executive Director and portfolio manager for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund. Robert joined Sterling Capital in 2000. He manages the state-specific municipal bond fund portfolios and has investment experience since 1990. Robert is a graduate of Wake Forest University where he received his BA in Economics and is a CFA Charterholder.

The Investment Team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolios such as credit, prepayment and interest rate risk. As interest rates rise the value of bond prices will decline and an investor may lose money. The Fund is non-diversified and may invest a greater percentage of its assets in a single issuer than funds that are more diversified. Furthermore, the Fund invests primarily in municipal obligations issued by Maryland and its political subdivisions and therefore will be affected by economic, political or other events affecting Maryland.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund underperformed its benchmark, the BofA Merrill Lynch 2-17 Year Municipal Bond Index.

Q. What factors affected the Fund’s performance?

A. Municipal bond markets experienced a violent sell-off in the latter half of the 12-month period. Improving economic data and expectations that the Federal Reserve would begin tapering its stimulus efforts drove Treasury rates higher, and municipal bonds followed suit.

However, municipal markets were hit in rapid succession by three major credit-related headlines, which further panicked municipal bond investors. During back-to-back days in July, Chicago was downgraded from Aa3 to A3 by Moody’s Investors Service, Inc. and Detroit declared bankruptcy. The broad press coverage of the bankruptcy caused panic among municipal bond investors, triggering a $2 billion per week outflow of investor capital from muni funds. The resulting pressure on prices caused a steepening in the yield curve as investors sought out shorter, higher quality bonds. Then negative headlines out of Puerto

Rico drove prices down to a market bottom on September 9, at which point Puerto Rican bonds were trading above 10%. However, this bottom helped spur a broader market rally through the remaining three weeks of the period, which helped to mitigate some of the Fund’s losses to that point.

Most of the Fund’s underperformance occurred during May and June. During this two-month period, the Fund favored longer duration bonds than its benchmark, which dragged on performance as relatively shorter duration bonds outperformed those with longer durations. The Fund’s relative performance also suffered as the benchmark was buoyed by strong credit improvement in some large states, namely California, New York, Florida and Texas.

The Fund’s relative performance benefited from a lack of exposure to Puerto Rico bonds, which dragged on the national benchmark. The weighting in favor of longer duration bonds was a positive contributor to relative performance (with the exception of May and June) due to the higher income generated by these holdings.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

26

* Reflects 2.00% maximum sales charge.

** Reflects the applicable maximum contingent deferred sales charge of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date		1 Year		5 Years		10 Years
Class A Shares*		2/24/03		-4.29%		4.43%		3.48%
Class C Shares**		2/1/121		-3.04%		4.58%		3.57%
Institutional Shares		2/24/03		-2.14%		5.08%		3.94%
BofA Merrill Lynch 2-17 Year Municipal Bond Index		N/A		-1.20%		5.74%		4.44%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹ Class C Shares were not in existence prior to 2/1/12. Performance for periods prior to 2/1/12 is based on the performance of Class A Shares. Such performance would differ only to the extent that the Classes have different expenses.

The Fund is measured against BofA Merrill Lynch 2-17 Year Municipal Bond Index, an unmanaged index which is representative of municipal bonds. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

27

Sterling Capital North Carolina Intermediate Tax-Free Fund

Portfolio Manager

Robert F. Millikan, CFA

Sterling Capital North Carolina Intermediate Tax-Free Fund (the “Fund”) is managed by Robert F. Millikan, CFA, Executive Director and portfolio manager for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund. Robert joined Sterling Capital in 2000. He manages the state-specific municipal bond fund portfolios and has investment experience since 1990. Robert is a graduate of Wake Forest University where he received his BA in Economics and is a CFA Charterholder.

The Investment Team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolios such as credit, prepayment and interest rate risk. As interest rates rise, the value of bond prices will decline and an investor may lose money. The Fund is non-diversified and may invest a greater percentage of its assets in a single issuer than funds that are more diversified. Furthermore, the Fund invests primarily in municipal obligations issued by North Carolina and its political subdivisions and therefore will be affected by economic, political or other events affecting North Carolina.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund underperformed its benchmark, the BofA Merrill Lynch 2-17 Year Municipal Bond Index.

Q. What factors affected the Fund’s performance?

A. Municipal bond markets experienced a violent sell-off in the latter half of the 12-month period. Improving economic data and expectations that the Federal Reserve would begin tapering its stimulus efforts drove Treasury rates higher, and municipal bonds followed suit.

The Federal Reserve’s decision to maintain short-term interest rates at historically low levels contributed to a lack of attractive yields in short-term issues, which drove investors farther out along the yield curve. It also caused investors to seek out riskier assets in order to generate adequate yields, which resulted in a compression of the interest rate spreads.

However, municipal markets were hit in rapid succession by three major credit-related headlines, which further panicked municipal bond investors. During back-to-back days in July, Chicago was downgraded from Aa3 to A3 by Moody’s Investors Service, Inc. and Detroit declared bankruptcy. The broad press coverage of the bankruptcy caused panic among municipal bond investors, triggering a $2 billion per week

outflow of investor capital from muni funds. The resulting pressure on prices caused a steepening in the yield curve as investors sought out shorter, higher quality bonds. Then negative headlines out of Puerto Rico drove prices down to a market bottom on September 9, at which point Puerto Rican bonds were trading above 10%. However, this bottom helped spur a broader market rally through the remaining three weeks of the period, which helped to mitigate some of the Fund’s losses to that point.

Most of the Fund’s underperformance occurred during May and June. During this two-month period, the Fund favored longer duration bonds than its benchmark, which dragged on performance as relatively shorter duration bonds outperformed those with longer durations. The Fund’s relative performance also suffered as the benchmark was buoyed by strong credit improvement in some large states, namely California, New York, Florida and Texas.

The Fund’s relative performance benefited from a lack of exposure to Puerto Rico bonds, which dragged on the national benchmark. The weighting in favor of longer duration bonds was a positive contributor to relative performance (with the exception of May and June) due to the higher income generated by these holdings.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

28

* Reflects 2.00% maximum sales charge.

** Reflects the applicable maximum contingent deferred sales charge of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	10/16/92	-4.56%	4.28%	3.30%
Class C Shares**	2/1/121	-3.27%	4.44%	3.38%
Institutional Shares	10/16/92	-2.38%	4.97%	3.76%
BofA Merrill Lynch 2-17 Year Municipal Bond Index	N/A	-1.20%	5.74%	4.44%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹  Class C Shares were not in existence prior to 2/1/12. Performance for periods prior to 2/1/12 is based on the performance of Class A Shares. Such performance would differ only to the extent that the Classes have different expenses.

The Fund is measured against the BofA Merrill Lynch 2-17 Year Municipal Bond Index, an unmanaged index which is representative of municipal bonds. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

29

Sterling Capital South Carolina Intermediate Tax-Free Fund

Portfolio Manager

Robert F. Millikan, CFA

Sterling Capital South Carolina Intermediate Tax-Free Fund (the “Fund”) is managed by Robert F. Millikan, CFA, Executive Director and portfolio manager for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund. Robert joined Sterling Capital in 2000. He manages the state-specific municipal bond fund portfolios and has investment experience since 1990. Robert is a graduate of Wake Forest University where he received his BA in Economics and is a CFA Charterholder.

The Investment Team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolios such as credit, prepayment and interest rate risk. As interest rates rise, the value of bond prices will decline and an investor may lose money. The Fund is non-diversified and may invest a greater percentage of its assets in a single issuer than funds that are more diversified. Furthermore, the Fund invests primarily in municipal obligations issued by South Carolina and its political subdivisions and therefore will be affected by economic, political or other events affecting South Carolina.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund underperformed its benchmark, the BofA Merrill Lynch 2-17 Year Municipal Bond Index.

Q. What factors affected the Fund’s performance?

A. Municipal bond markets experienced a violent sell-off in the latter half of the 12-month period. Improving economic data and expectations that the Federal Reserve would begin tapering its stimulus efforts drove Treasury rates higher, and municipal bonds followed suit.

However, municipal markets were hit in rapid succession by three major credit-related headlines, which further panicked municipal bond investors. During back-to-back days in July, Chicago was downgraded from Aa3 to A3 by Moody’s Investors Service, Inc. and Detroit declared bankruptcy. The broad press coverage of the bankruptcy caused panic among municipal bond investors, triggering a $2 billion per week outflow of investor capital from muni funds. The resulting pressure on prices caused a steepening in the yield curve as investors sought out shorter, higher quality bonds. Then negative headlines out of Puerto

Rico drove prices down to a market bottom on September 9, at which point Puerto Rican bonds were trading above 10%. However, this bottom helped spur a broader market rally through the remaining three weeks of the period, which helped to mitigate some of the Fund’s losses to that point.

Most of the Fund’s underperformance occurred during May and June. During this two-month period, the Fund favored longer duration bonds than its benchmark, which dragged on performance as relatively shorter duration bonds outperformed those with longer durations. The Fund’s relative performance also suffered as the benchmark was buoyed by strong credit improvement in some large states, namely California, New York, Florida and Texas.

The Fund’s relative performance benefited from a lack of exposure to Puerto Rico bonds, which dragged on the national benchmark. The weighting in favor of longer duration bonds was a positive contributor to relative performance (with the exception of May and June) due to the higher income generated by these holdings.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

30

* Reflects 2.00% maximum sales charge.

** Reflects the applicable maximum contingent deferred sales charge of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	10/20/97	-3.87%	4.61%	3.41%
Class C Shares**	2/1/121	-2.67%	4.77%	3.48%
Institutional Shares	10/20/97	-1.62%	5.29%	3.87%
BofA Merrill Lynch 2-17 Year Municipal Bond Index	N/A	-1.20%	5.74%	4.44%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹ Class C Shares were not in existence prior to 2/1/12. Performance for periods prior to 2/1/12 is based on the performance of Class A Shares. Such performance would differ only to the extent that the Classes have different expenses.

The Fund is measured against the BofA Merrill Lynch 2-17 Year Municipal Bond Index, an unmanaged index which is representative of municipal bonds. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

31

Sterling Capital Virginia Intermediate Tax-Free Fund

Portfolio Manager

Robert F. Millikan, CFA

Sterling Capital Virginia Intermediate Tax-Free Fund (the “Fund”) is managed by Robert F. Millikan, CFA, Executive Director and portfolio manager for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund. Robert joined Sterling Capital in 2000. He manages the state-specific municipal bond fund portfolios and has investment experience since 1990. Robert is a graduate of Wake Forest University where he received his BA in Economics and is a CFA Charterholder.

The Investment Team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolios such as credit, prepayment and interest rate risk. As interest rates rise, the value of bond prices will decline and an investor may lose money. The Fund is non-diversified and may invest a greater percentage of its assets in a single issuer than funds that are more diversified. Furthermore, the Fund invests primarily in municipal obligations issued by Virginia and its political subdivisions and therefore will be affected by economic, political or other events affecting Virginia.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund underperformed its benchmark, the BofA Merrill Lynch 2-17 Year Municipal Bond Index.

Q. What factors affected the Fund’s performance?

A. Municipal bond markets experienced a violent sell-off in the latter half of the 12-month period. Improving economic data and expectations that the Federal Reserve would begin tapering its stimulus efforts drove Treasury rates higher, and municipal bonds followed suit.

However, municipal markets were hit in rapid succession by three major credit-related headlines, which further panicked municipal bond investors. During back-to-back days in July, Chicago was downgraded from Aa3 to A3 by Moody’s Investors Service, Inc. and Detroit declared bankruptcy. The broad press coverage of the bankruptcy caused panic among municipal bond investors, triggering a $2 billion per week outflow of investor capital from muni funds. The resulting pressure on prices caused a steepening in the yield curve as investors sought out shorter, higher quality bonds. Then negative headlines out of Puerto

Rico drove prices down to a market bottom on September 9, at which point Puerto Rican bonds were trading above 10%. However, this bottom helped spur a broader market rally through the remaining three weeks of the period, which helped to mitigate some of the Fund’s losses to that point.

Most of the Fund’s underperformance occurred during May and June. During this two-month period, the Fund favored longer duration bonds than its benchmark, which dragged on performance as relatively shorter duration bonds outperformed those with longer durations. The Fund’s relative performance also suffered as the benchmark was buoyed by strong credit improvement in some large states, namely California, New York, Florida and Texas.

The Fund’s relative performance benefited from a lack of exposure to Puerto Rico bonds, which dragged on the national benchmark. The weighting in favor of longer duration bonds was a positive contributor to relative performance (with the exception of May and June) due to the higher income generated by these holdings.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

32

* Reflects 2.00% maximum sales charge.

** Reflects the applicable maximum contingent deferred sales charge of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	5/17/99	-4.52%	4.14%	3.23%
Class C Shares**	2/1/121	-3.25%	4.30%	3.30%
Institutional Shares	5/17/99	-2.28%	4.83%	3.68%
BofA Merrill Lynch 2-17 Year Municipal Bond Index	N/A	-1.20%	5.74%	4.44%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

¹  Class C Shares were not in existence prior to 2/1/12. Performance for periods prior to 2/1/12 is based on the performance of Class A Shares. Such performance would differ only to the extent that the Classes have different expenses.

The Fund is measured against the BofA Merrill Lynch 2-17 Year Municipal Bond Index, an unmanaged index which is representative of municipal bonds. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

33

Sterling Capital West Virginia Intermediate Tax-Free Fund

Portfolio Manager

Robert F. Millikan, CFA

Sterling Capital West Virginia Intermediate Tax-Free Fund (the “Fund”) is managed by Robert F. Millikan, CFA, Executive Director and portfolio manager for Sterling Capital Management LLC (“Sterling Capital”), advisor to the Fund. Robert joined Sterling Capital in 2000. He manages the state-specific municipal bond fund portfolios and has investment experience since 1990. Robert is a graduate of Wake Forest University where he received his BA in Economics and is a CFA Charterholder.

The Investment Team supporting the Fund includes 21 investment professionals with an average of more than 18 years of industry experience.

Investment Concerns

The Fund is subject to the same risks as the underlying bonds in the portfolios such as credit, prepayment and interest rate risk. As interest rates rise, the value of bond prices will decline and an investor may lose money. The Fund is non-diversified and may invest a greater percentage of its assets in a single issuer than funds that are more diversified. Furthermore, the Fund invests primarily in municipal obligations issued by West Virginia and its political subdivisions and therefore will be affected by economic, political or other events affecting West Virginia.

Q. How did the Fund perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. The Fund underperformed its benchmark, the BofA Merrill Lynch 2-17 Year Municipal Bond Index.

Q. What factors affected the Fund’s performance?

A. Municipal bond markets experienced a violent sell-off in the latter half of the 12-month period. Improving economic data and expectations that the Federal Reserve would begin tapering its stimulus efforts drove Treasury rates higher, and municipal bonds followed suit.

However, municipal markets were hit in rapid succession by three major credit-related headlines, which further panicked municipal bond investors. During back-to-back days in July, Chicago was downgraded from Aa3 to A3 by Moody’s Investors Service, Inc. and Detroit declared bankruptcy. The broad press coverage of the bankruptcy caused panic among municipal bond investors, triggering a $2 billion per week outflow of investor capital from muni funds. The resulting pressure on prices caused a steepening in the yield curve as investors sought out shorter, higher quality bonds. Then negative headlines out of Puerto

Rico drove prices down to a market bottom on September 9, at which point Puerto Rican bonds were trading above 10%. However, this bottom helped spur a broader market rally through the remaining three weeks of the period, which helped to mitigate some of the Fund’s losses to that point.

Most of the Fund’s underperformance occurred during May and June. During this two-month period, the Fund favored longer duration bonds than its benchmark, which dragged on performance as relatively shorter duration bonds outperformed those with longer durations. The Fund’s relative performance also suffered as the benchmark was buoyed by strong credit improvement in some large states, namely California, New York, Florida and Texas.

The Fund’s relative performance benefited from a lack of exposure to Puerto Rico bonds, which dragged on the national benchmark. The weighting in favor of longer duration bonds was a positive contributor to relative performance (with the exception of May and June) due to the higher income generated by these holdings.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

34

* Reflects 2.00% maximum sales charge.

** Reflects the applicable maximum contingent deferred sales charge of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Average Annual Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date			1 Year			5 Years			10 Years
Class A Shares*		12/17/93			-4.56	%		4.11	%		3.18	%
Class C Shares**		2/1/12	1		-3.28	%		4.29	%		3.27	%
Institutional Shares		12/1/93			-2.30	%		4.81	%		3.66	%
BofA Merrill Lynch 2-17 Year Municipal Bond Index		N/A			-1.20	%		5.74	%		4.44	%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmark, and represents the reinvestment of dividends and capital gains.

1 Class C Shares were not in existence prior to 2/1/12. Performance for periods prior to 2/1/12 is based on the performance of Class A Shares. Such performance would differ only to the extent that the Classes have different expenses.

The Fund is measured against the BofA Merrill Lynch 2-17 Year Municipal Bond Index, an unmanaged index which is representative of municipal bonds. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

35

Sterling Capital Strategic Allocation Funds

Portfolio Managers

Team Managed

Sterling Capital Strategic Allocation Funds (the “Funds”) are managed by the Sterling Capital Advisory Solutions Team which is led by James C. Willis, CFA and Jeffrey J. Schappe, CFA & Chief Market Strategist.

The Investment Team supporting the Funds includes 8 investment professionals with an average of more than 14 years of industry experience.

Investment Concerns

The Funds are primarily concentrated in underlying funds and are therefore subject to the same risks as the underlying funds and bear a portion of the expenses of the underlying funds. The underlying funds may be invested in equity securities and are subject to market risk. Investments in bonds are subject to credit risk, call risk and interest rate risk (as interest rates rise the value of bond prices will decline). The underlying funds may invest in foreign securities, which involve certain risks such as currency volatility, political and social instability and reduced market liquidity; small capitalization companies subject to greater volatility and less liquidity due to limited resources or product lines and more sensitive to economic factors; and high-yield (junk) debt securities, which involve greater risks than investment grade bonds. The underlying funds may also be money market funds.

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in them.

Sterling Capital Strategic Allocation Conservative Fund

Sterling Capital Strategic Allocation Balanced Fund

Sterling Capital Strategic Allocation Growth Fund

(Collectively, “Sterling Capital Strategic Allocation Funds”)

Q. How did the Funds perform during the 12-month period between October 1, 2012 and September 30, 2013?

A. Sterling Capital Strategic Allocation Funds and their benchmark returns can be found on pages 37 through 39.

Q. What factors affected the Funds’ performance?

A. As of March 15, 2013, the Strategic Allocation Funds held three underlying Funds: the Sterling Capital Special Opportunities Fund, the Sterling Capital Equity Income Fund and the Sterling Capital Total Return Bond Fund.

A strong equity market fueled by extraordinarily accommodative monetary policy boosted the Funds’ absolute returns over the 12-month period. As investors grew more confident that the Federal Reserve would continue its efforts to maintain low interest rates for an extended period, funds flowed into equity investments at the expense of fixed-income markets. As a result, the Russell Global Index returned 19.51% over the period. U.S. government bond yields increased materially over the period, hurting fixed income returns and acting as a drag on the

Funds’ absolute returns. The Barclays U.S. Aggregate Bond index returned -1.68% for the period.

The Funds’ exposure to commodities for much of the period contributed to their underperformance relative to the benchmark. The DJ UBS Commodity Index returned -14.35% for the 12-month period, which represents a significant underperformance of both equities and fixed income investments. Underweight positions in equities relative to the benchmarks also detracted from the Funds’ relative performance given the stark difference in performance between equities and fixed income markets.

The two Sterling Capital equity funds in which the Funds invest have some exposure to international securities, but they primarily hold U.S. equities. This underweight position in emerging markets equities contributed positively to the Funds’ performance relative to their benchmarks. The Russell Emerging Markets Index returned just 3.17% for the period, versus 19.51% for the Russell Global Index. The Funds also held an overweight position in U.S. small and mid-cap equities, which provided a boost to relative performance as those stock classes outperformed the broader equity markets. For the period, the Russell 2000^® Index and mid-cap indices returned 30.06% and 27.91%, respectively, versus 21.60% for the Russell 3000^® Index.

Portfolio composition is as of September 30, 2013 and is subject to change and risk.

36

Sterling Capital Strategic Allocation Conservative Fund

* Reflects 5.75% maximum sales charge.

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

*** Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Annual Average Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	1/29/98	-0.79%	5.39%	4.40%
Class B Shares**	1/29/99	0.49%	5.68%	4.39%
Class C Shares***	2/1/01	4.40%	5.82%	4.22%
Institutional Shares	10/2/97	5.46%	6.90%	5.27%
Russell Global Index	N/A	19.51%	8.94%	8.83%
Russell 3000® Index1	N/A	21.60%	10.58%	8.11%
Barclays U.S. Aggregate Bond Index	N/A	-1.68%	5.41%	4.59%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmarks, and represents the reinvestment of dividends and capital gains.

¹  As of March 1, 2013, the Russell 3000^® Index is included to show how the Fund’s performance compares with the returns of the U.S. equity markets generally. The Russell 3000^® Index represents approximately 98% of the U.S. equity market and comprises the 3,000 largest companies in the United States.

The Fund is measured against the Russell Global Index, the Russell 3000^® Index and the Barclays U.S. Aggregate Bond Index. The indices are unmanaged and do not reflect the deduction of expenses associated with a mutual fund, such as investment management and, fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees had been waived. Fund performance for certain time periods would have been lower without fee waivers in effect. Currently all management fees are being waived.

37

Sterling Capital Strategic Allocation Balanced Fund

* Reflects 5.75% maximum sales charge.

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

*** Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Annual Average Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 years
Class A Shares*	1/29/98	2.66%	5.59%	4.58%
Class B Shares**	1/29/99	4.14%	5.85%	4.59%
Class C Shares***	2/1/01	8.10%	6.02%	4.44%
Institutional Shares	10/2/97	9.28%	7.11%	5.49%
Russell Global Index	N/A	19.51%	8.94%	8.83%
Russell 3000® Index1	N/A	21.60%	10.58%	8.11%
Barclays U.S. Aggregate Bond Index	N/A	-1.68%	5.41%	4.59%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmarks, and represents the reinvestment of dividends and capital gains.

¹  As of March 1, 2013, the Russell 3000^® Index is included to show how the Fund’s performance compares with the returns of the U.S. equity markets generally. The Russell 3000^® Index represents approximately 98% of the U.S. equity market and comprises the 3,000 largest companies in the United States.

The Fund is measured against the Russell Global Index, the Russell 3000^® Index and the Barclays U.S. Aggregate Bond Index. The indices are unmanaged and do not reflect the deduction of expenses associated with a mutual fund, such as investment management and, fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees had been waived. Fund performance for certain time periods would have been lower without fee waivers in effect. Currently all management fees are being waived.

38

Sterling Capital Strategic Allocation Growth Fund

* Reflects 5.75% maximum sales charge.

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

*** Reflects the applicable maximum CDSC of 1.00% (applicable only to redemptions within one year of purchase, and as such, are not reflected in the Annual Average Total Returns table since the periods reflected are for a year or longer).

Average Annual Total Returns
As of September 30, 2013	Inception Date	1 Year	5 Years	10 Years
Class A Shares*	1/29/98	5.42%	5.33%	4.56%
Class B Shares**	1/29/99	7.04%	5.65%	4.57%
Class C Shares***	2/1/01	11.07%	5.83%	4.41%
Institutional Shares	10/2/97	12.27%	6.90%	5.46%
Russell Global Index	N/A	19.51%	8.94%	8.83%
Russell 3000® Index1	N/A	21.60%	10.58%	8.11%
Barclays U.S. Aggregate Bond Index	N/A	-1.68%	5.41%	4.59%

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

The chart above represents a comparison of a hypothetical $10,000 investment in the indicated share class versus a similar investment in the Fund’s benchmarks, and represents the reinvestment of dividends and capital gains.

¹  As of March 1, 2013, the Russell 3000^® Index is included to show how the Fund’s performance compares with the returns of the U.S. equity markets generally. The Russell 3000^® Index represents approximately 98% of the U.S. equity market and comprises the 3,000 largest companies in the United States.

The Fund is measured against the Russell Global Index, the Russell 3000^® Index and the Barclays U.S. Aggregate Bond Index. The indices are unmanaged and do not reflect the deduction of expenses associated with a mutual fund, such as investment management and, fund accounting fees. The Fund’s performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.

A portion of the Fund’s fees had been waived. Fund performance for certain time periods would have been lower without fee waivers in effect. Currently all management fees are being waived.

39

Sterling Capital Funds

Summary of Portfolio Holdings (Unaudited)

Sterling Capital Funds invested, as a percentage of net assets, in the following industry sectors, countries, states, funds or security types, as of September 30, 2013:

Sterling Capital Large Cap Value Diversified Fund	Percentage of net assets
Consumer Discretionary		8.4	%
Consumer Staples		5.5	%
Energy		13.5	%
Financials		26.9	%
Health Care		13.1	%
Industrials		12.0	%
Information Technology		9.7	%
Materials		2.3	%
Telecommunication Services		1.6	%
Utilities		5.1	%
Money Market Fund		1.7	%
		99.8	%
Sterling Capital Mid Value Fund	Percentage of net assets
Consumer Discretionary		18.7	%
Energy		0.6	%
Financials		30.7	%
Health Care		16.4	%
Industrials		4.3	%
Information Technology		23.6	%
Money Market Fund		6.0	%
		100.3	%
Sterling Capital Small Cap Value Diversified Fund	Percentage of net assets
Consumer Discretionary		11.1	%
Consumer Staples		2.5	%
Energy		5.4	%
Financials		37.5	%
Health Care		4.5	%
Industrials		13.5	%
Information Technology		11.9	%
Materials		5.1	%
Telecommunication Services		1.6	%
Utilities		4.9	%
Exchange Traded Fund		0.6	%
Money Market Fund		1.9	%
		100.5	%
Sterling Capital Special Opportunities Fund	Percentage of net assets
Consumer Discretionary		12.5	%
Consumer Staples		2.4	%
Energy		12.7	%
Financials		5.7	%
Health Care		18.2	%
Industrials		11.5	%
Information Technology		27.7	%
Materials		2.2	%
Money Market Fund		7.3	%
		100.2	%

Sterling Capital Equity Income Fund	Percentage of net assets
Consumer Discretionary		13.0	%
Consumer Staples		13.1	%
Energy		20.3	%
Financials		7.6	%
Health Care		14.7	%
Industrials		1.9	%
Information Technology		11.9	%
Telecommunication Services		3.8	%
Money Market Fund		14.6	%
		100.9	%
Sterling Capital Ultra Short Bond Fund	Percentage of net assets
Asset Backed Securities		14.7	%
Collateralized Mortgage Obligations		0.9	%
Commercial Mortgage-Backed Securities		7.4	%
Corporate Bonds		55.8	%
Municipal Bonds		23.4	%
Money Market Fund		1.3	%
		103.5	%
Sterling Capital Short-Term Bond Fund	Percentage of net assets
Asset Backed Securities		9.6	%
Collateralized Mortgage Obligations		4.3	%
Commercial Mortgage-Backed Securities		18.1	%
Corporate Bonds		62.1	%
Mortgage-Backed Securities		0.1	%
Municipal Bonds		3.6	%
Preferred Stocks		0.9	%
Money Market Fund		1.3	%
		100.0	%
Sterling Capital Intermediate U.S. Government Fund	Percentage of net assets
Collateralized Mortgage Obligations		6.1	%
Corporate Bonds		7.1	%
Mortgage-Backed Securities		17.1	%
Municipal Bonds		3.1	%
U.S. Government Agencies		48.1	%
U.S. Treasury Notes		17.3	%
Money Market Fund		0.9	%
		99.7	%
Sterling Capital Total Return Bond Fund	Percentage of net assets
Asset Backed Securities		6.1	%
Collateralized Mortgage Obligations		10.4	%
Commercial Mortgage-Backed Securities		15.9	%
Corporate Bonds		42.9	%
Mortgage-Backed Securities		11.5	%
Municipal Bonds		8.0	%
Preferred Stocks		1.9	%
U.S. Government Agencies		4.8	%
U.S. Treasury Bonds		1.0	%
U.S. Treasury Notes		0.1	%
Money Market Fund		0.1	%
		102.7	%

40

Sterling Capital Funds

Summary of Portfolio Holdings (Unaudited)

Sterling Capital Corporate Fund	Percentage of net assets
Corporate Bonds		94.7	%
Preferred Stocks		4.5	%
Money Market Fund		0.1	%
		99.3	%
Sterling Capital Securitized Opportunities Fund	Percentage of net assets
Asset Backed Securities		10.1	%
Collateralized Mortgage Obligations		20.0	%
Commercial Mortgage-Backed Securities		28.4	%
Mortgage-Backed Securities		42.8	%
U.S. Government Agencies		3.6	%
U.S. Treasury Bonds		4.0	%
Money Market Fund		3.4	%
		112.3	%
Sterling Capital Kentucky Intermediate Tax- Free Fund	Percentage of net assets
Kentucky Municipal Bonds		96.0	%
Money Market Fund		3.1	%
		99.1	%
Sterling Capital Maryland Intermediate Tax- Free Fund	Percentage of net assets
District of Columbia Municipal Bonds		4.0	%
Maryland Municipal Bonds		91.0	%
Money Market Fund		4.4	%
		99.4	%
Sterling Capital North Carolina Intermediate Tax-Free Fund	Percentage of net assets
North Carolina Municipal Bonds		96.8	%
Money Market Fund		0.4	%
		97.2	%
Sterling Capital South Carolina Intermediate Tax-Free Fund	Percentage of net assets
South Carolina Municipal Bonds		97.5	%
Money Market Fund		1.6	%
		99.1	%

Sterling Capital Virginia Intermediate Tax-Free Fund	Percentage of net assets
District of Columbia Municipal Bonds		1.5	%
Virginia Municipal Bonds		97.1	%
Money Market Fund		2.6	%
		101.2	%
Sterling Capital West Virginia Intermediate Tax-Free Fund	Percentage of net assets
West Virginia Municipal Bonds		95.2	%
Money Market Fund		3.4	%
		98.6	%
Sterling Capital Strategic Allocation Conservative Fund	Percentage of net assets
Equity Funds		40.5	%
Fixed Income Fund		57.7	%
Money Market Fund		1.7	%
		99.9	%
Sterling Capital Strategic Allocation Balanced Fund	Percentage of net assets
Equity Funds		60.4	%
Fixed Income Fund		37.7	%
Money Market Fund		2.0	%
		100.1	%
Sterling Capital Strategic Allocation Growth Fund	Percentage of net assets
Equity Funds		75.5	%
Fixed Income Fund		22.8	%
Money Market Fund		1.7	%
		100.0	%

41

Sterling Capital Funds

Expense Example (Unaudited)

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

These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2013 through September 30, 2013.

Actual Example

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

	Beginning Account Value 4/1/13			Ending Account Value 9/30/13			Expenses Paid During Period* 4/1/13 - 9/30/13			Annualized Expense Ratio During Period 4/1/13 - 9/30/13
Sterling Capital Large Cap Value Diversified Fund
Class A Shares		$	1,000.00		$	1,064.79		$	5.69		1.10	%
Class B Shares			1,000.00			1,060.22			9.50		1.84	%
Class C Shares			1,000.00			1,060.10			9.55		1.85	%
Institutional Shares			1,000.00			1,065.84			4.40		0.85	%
Sterling Capital Mid Value Fund
Class A Shares			1,000.00			1,137.07			6.27		1.17	%
Class B Shares			1,000.00			1,132.66			10.26		1.92	%
Class C Shares			1,000.00			1,133.09			10.27		1.92	%
Institutional Shares			1,000.00			1,139.16			4.93		0.92	%
Class R Shares			1,000.00			1,124.84			7.56		1.42	%
Sterling Capital Small Cap Value Diversified Fund
Class A Shares			1,000.00			1,110.78			6.72		1.27	%
Class B Shares			1,000.00			1,106.24			10.67		2.02	%
Class C Shares			1,000.00			1,106.31			10.67		2.02	%
Institutional Shares			1,000.00			1,112.20			5.40		1.02	%
Class R Shares			1,000.00			1,107.59			8.24		1.56	%
Sterling Capital Special Opportunities Fund
Class A Shares			1,000.00			1,094.16			6.40		1.22	%
Class B Shares			1,000.00			1,089.85			10.27		1.96	%
Class C Shares			1,000.00			1,090.34			10.32		1.97	%
Institutional Shares			1,000.00			1,095.80			5.10		0.97	%
Class R Shares			1,000.00			1,093.10			7.66		1.46	%
Sterling Capital Equity Income Fund
Class A Shares			1,000.00			1,041.54			6.19		1.21	%
Class B Shares			1,000.00			1,037.76			10.01		1.96	%
Class C Shares			1,000.00			1,037.29			10.01		1.96	%
Institutional Shares			1,000.00			1,042.70			4.92		0.96	%
Class R Shares			1,000.00			1,039.90			7.47		1.46	%
Sterling Capital Ultra Short Bond Fund
Class A Shares			1,000.00			1,000.16			3.71		0.74	%
Institutional Shares			1,000.00			1,001.42			2.46		0.49	%
Sterling Capital Short-Term Bond Fund
Class A Shares			1,000.00			999.75			3.81		0.76	%
Class C Shares			1,000.00			996.02			7.56		1.51	%
Institutional Shares			1,000.00			1,001.01			2.56		0.51	%
Sterling Capital Intermediate U.S. Government Fund
Class A Shares			1,000.00			978.26			4.46		0.90	%
Class B Shares			1,000.00			973.52			8.16		1.65	%
Class C Shares			1,000.00			973.60			8.16		1.65	%
Institutional Shares			1,000.00			978.59			3.22		0.65	%
Sterling Capital Total Return Bond Fund
Class A Shares			1,000.00			979.21			4.02		0.81	%
Class B Shares			1,000.00			975.54			7.73		1.56	%
Class C Shares			1,000.00			975.58			7.73		1.56	%
Institutional Shares			1,000.00			980.48			2.78		0.56	%
Class R Shares			1,000.00			977.68			5.21		1.05	%
Sterling Capital Corporate Fund
Class A Shares			1,000.00			976.76			4.21		0.85	%
Class C Shares			1,000.00			973.08			7.91		1.60	%
Institutional Shares			1,000.00			978.18			2.98		0.60	%

42

Sterling Capital Funds

Expense Example (Unaudited)

	Beginning Account Value 4/1/13			Ending Account Value 9/30/13			Expenses Paid During Period* 4/1/13 - 9/30/13			Annualized Expense Ratio During Period 4/1/13 - 9/30/13
Sterling Capital Securitized Opportunities Fund
Class A Shares		$	1,000.00		$	985.83		$	4.48		0.90	%
Class C Shares			1,000.00			981.96			8.20		1.65	%
Institutional Shares			1,000.00			987.05			3.24		0.65	%
Sterling Capital Kentucky Intermediate Tax-Free Fund
Class A Shares			1,000.00			973.96			4.75		0.96	%
Class C Shares			1,000.00			970.33			8.45		1.71	%
Institutional Shares			1,000.00			975.12			3.52		0.71	%
Sterling Capital Maryland Intermediate Tax-Free Fund
Class A Shares			1,000.00			974.11			4.70		0.95	%
Class C Shares			1,000.00			969.63			8.34		1.69	%
Institutional Shares			1,000.00			974.53			3.46		0.70	%
Sterling Capital North Carolina Intermediate Tax-Free Fund
Class A Shares			1,000.00			973.39			4.55		0.92	%
Class C Shares			1,000.00			969.74			8.25		1.67	%
Institutional Shares			1,000.00			974.64			3.32		0.67	%
Sterling Capital South Carolina Intermediate Tax-Free Fund
Class A Shares			1,000.00			975.36			4.65		0.94	%
Class C Shares			1,000.00			971.69			8.35		1.69	%
Institutional Shares			1,000.00			976.38			3.42		0.69	%
Sterling Capital Virginia Intermediate Tax-Free Fund
Class A Shares			1,000.00			972.76			4.60		0.93	%
Class C Shares			1,000.00			969.11			8.29		1.68	%
Institutional Shares			1,000.00			973.97			3.32		0.67	%
Sterling Capital West Virginia Intermediate Tax-Free Fund
Class A Shares			1,000.00			970.56			4.59		0.93	%
Class C Shares			1,000.00			967.89			8.29		1.68	%
Institutional Shares			1,000.00			972.81			3.36		0.68	%
Sterling Capital Strategic Allocation Conservative Fund
Class A Shares			1,000.00			1,014.39			2.22		0.44	%
Class B Shares			1,000.00			1,010.03			6.00		1.19	%
Class C Shares			1,000.00			1,010.35			6.00		1.19	%
Institutional Shares			1,000.00			1,014.53			0.96		0.19	%
Sterling Capital Strategic Allocation Balanced Fund
Class A Shares			1,000.00			1,031.50			2.04		0.40	%
Class B Shares			1,000.00			1,027.75			5.90		1.16	%
Class C Shares			1,000.00			1,028.43			5.85		1.15	%
Institutional Shares			1,000.00			1,032.61			0.51		0.10	%
Sterling Capital Strategic Allocation Growth Fund
Class A Shares			1,000.00			1,045.00			2.20		0.43	%
Class B Shares			1,000.00			1,040.64			5.83		1.14	%
Class C Shares			1,000.00			1,041.39			6.09		1.19	%
Institutional Shares			1,000.00			1,046.23			0.87		0.17	%

* Expenses are equal to the average account value over the period multiplied by the Fund’s annualized expense ratio, multiplied by 183 days divided by 365 (to reflect the six month period).

43

Sterling Capital Funds

Expense Example (Unaudited)

Hypothetical Example for Comparison Purposes

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

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

	Beginning Account Value 4/1/13			Ending Account Value 9/30/13			Expenses Paid During Period* 4/1/13 - 9/30/13			Annualized Expense Ratio During Period 4/1/13 - 9/30/13
Sterling Capital Large Cap Value Diversified Fund
Class A Shares		$	1,000.00		$	1,019.55		$	5.57		1.10	%
Class B Shares			1,000.00			1,015.84			9.30		1.84	%
Class C Shares			1,000.00			1,015.79			9.35		1.85	%
Institutional Shares			1,000.00			1,020.81			4.31		0.85	%
Sterling Capital Mid Value Fund
Class A Shares			1,000.00			1,019.20			5.92		1.17	%
Class B Shares			1,000.00			1,015.44			9.70		1.92	%
Class C Shares			1,000.00			1,015.44			9.70		1.92	%
Institutional Shares			1,000.00			1,020.46			4.66		0.92	%
Class R Shares			1,000.00			1,017.95			7.18		1.42	%
Sterling Capital Small Cap Value Diversified Fund
Class A Shares			1,000.00			1,018.70			6.43		1.27	%
Class B Shares			1,000.00			1,014.94			10.20		2.02	%
Class C Shares			1,000.00			1,014.94			10.20		2.02	%
Institutional Shares			1,000.00			1,019.95			5.16		1.02	%
Class R Shares			1,000.00			1,017.25			7.89		1.56	%
Sterling Capital Special Opportunities Fund
Class A Shares			1,000.00			1,018.95			6.17		1.22	%
Class B Shares			1,000.00			1,015.24			9.90		1.96	%
Class C Shares			1,000.00			1,015.19			9.95		1.97	%
Institutional Shares			1,000.00			1,020.21			4.91		0.97	%
Class R Shares			1,000.00			1,017.75			7.38		1.46	%
Sterling Capital Equity Income Fund
Class A Shares			1,000.00			1,019.00			6.12		1.21	%
Class B Shares			1,000.00			1,015.24			9.90		1.96	%
Class C Shares			1,000.00			1,015.24			9.90		1.96	%
Institutional Shares			1,000.00			1,020.26			4.86		0.96	%
Class R Shares			1,000.00			1,017.75			7.38		1.46	%
Sterling Capital Ultra Short Bond Fund
Class A Shares			1,000.00			1,021.36			3.75		0.74	%
Institutional Shares			1,000.00			1,022.61			2.48		0.49	%
Sterling Capital Short-Term Bond Fund
Class A Shares			1,000.00			1,021.26			3.85		0.76	%
Class C Shares			1,000.00			1,017.50			7.64		1.51	%
Institutional Shares			1,000.00			1,022.51			2.59		0.51	%
Sterling Capital Intermediate U.S. Government Fund
Class A Shares			1,000.00			1,020.56			4.56		0.90	%
Class B Shares			1,000.00			1,016.80			8.34		1.65	%
Class C Shares			1,000.00			1,016.80			8.34		1.65	%
Institutional Shares			1,000.00			1,021.81			3.29		0.65	%
Sterling Capital Total Return Bond Fund
Class A Shares			1,000.00			1,021.01			4.10		0.81	%
Class B Shares			1,000.00			1,017.25			7.89		1.56	%
Class C Shares			1,000.00			1,017.25			7.89		1.56	%
Institutional Shares			1,000.00			1,022.26			2.84		0.56	%
Class R Shares			1,000.00			1,019.80			5.32		1.05	%
Sterling Capital Corporate Fund
Class A Shares			1,000.00			1,020.81			4.31		0.85	%
Class C Shares			1,000.00			1,017.05			8.09		1.60	%
Institutional Shares			1,000.00			1,022.06			3.04		0.60	%

44

Sterling Capital Funds

Expense Example (Unaudited)

	Beginning Account Value 4/1/13			Ending Account Value 9/30/13			Expenses Paid During Period* 4/1/13 - 9/30/13			Annualized Expense Ratio During Period 4/1/13 - 9/30/13
Sterling Capital Securitized Opportunities Fund
Class A Shares		$	1,000.00		$	1,020.56		$	4.56		0.90	%
Class C Shares			1,000.00			1,016.80			8.34		1.65	%
Institutional Shares			1,000.00			1,021.81			3.29		0.65	%
Sterling Capital Kentucky Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.26			4.86		0.96	%
Class C Shares			1,000.00			1,016.50			8.64		1.71	%
Institutional Shares			1,000.00			1,021.51			3.60		0.71	%
Sterling Capital Maryland Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.31			4.81		0.95	%
Class C Shares			1,000.00			1,016.60			8.54		1.69	%
Institutional Shares			1,000.00			1,021.56			3.55		0.70	%
Sterling Capital North Carolina Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.46			4.66		0.92	%
Class C Shares			1,000.00			1,016.70			8.44		1.67	%
Institutional Shares			1,000.00			1,021.71			3.40		0.67	%
Sterling Capital South Carolina Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.36			4.76		0.94	%
Class C Shares			1,000.00			1,016.60			8.54		1.69	%
Institutional Shares			1,000.00			1,021.61			3.50		0.69	%
Sterling Capital Virginia Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.41			4.71		0.93	%
Class C Shares			1,000.00			1,016.65			8.49		1.68	%
Institutional Shares			1,000.00			1,021.71			3.40		0.67	%
Sterling Capital West Virginia Intermediate Tax-Free Fund
Class A Shares			1,000.00			1,020.41			4.71		0.93	%
Class C Shares			1,000.00			1,016.65			8.49		1.68	%
Institutional Shares			1,000.00			1,021.66			3.45		0.68	%
Sterling Capital Strategic Allocation Conservative Fund
Class A Shares			1,000.00			1,022.86			2.23		0.44	%
Class B Shares			1,000.00			1,019.10			6.02		1.19	%
Class C Shares			1,000.00			1,019.10			6.02		1.19	%
Institutional Shares			1,000.00			1,024.12			0.96		0.19	%
Sterling Capital Strategic Allocation Balanced Fund
Class A Shares			1,000.00			1,023.06			2.03		0.40	%
Class B Shares			1,000.00			1,019.25			5.87		1.16	%
Class C Shares			1,000.00			1,019.30			5.82		1.15	%
Institutional Shares			1,000.00			1,024.57			0.51		0.10	%
Sterling Capital Strategic Allocation Growth Fund
Class A Shares			1,000.00			1,022.91			2.18		0.43	%
Class B Shares			1,000.00			1,019.35			5.77		1.14	%
Class C Shares			1,000.00			1,019.10			6.02		1.19	%
Institutional Shares			1,000.00			1,024.22			0.86		0.17	%

* Expenses are equal to the average account value over the period multiplied by the Fund’s annualized expense ratio, multiplied by 183 days divided by 365 (to reflect the six month period).

45

Sterling Capital Large Cap Value Diversified Fund

Schedule of Portfolio Investments

September 30, 2013

Shares		Fair Value
COMMON STOCKS (98.1%)
	Consumer Discretionary (8.4%)
26,693	Best Buy Co., Inc.	$	1,000,987
262,487	Ford Motor Co.		4,428,156
19,139	GameStop Corp., Class A		950,251
57,443	Gap, Inc. (The)		2,313,804
16,156	Hanesbrands, Inc.		1,006,680
10,879	Lear Corp.		778,610
76,911	Time Warner, Inc.		5,061,513
40,262	Viacom, Inc., Class B		3,365,098
			18,905,099
	Consumer Staples (5.5%)
106,745	Archer-Daniels-Midland Co.		3,932,486
15,751	Herbalife, Ltd.		1,098,947
18,839	Kimberly-Clark Corp.		1,775,011
87,521	Kroger Co. (The)		3,530,597
11,479	Nu Skin Enterprises, Inc., Class A		1,098,999
33,194	Tyson Foods, Inc., Class A		938,726
			12,374,766
	Energy (13.5%)
139,002	Chesapeake Energy Corp.		3,597,372
79,558	ConocoPhillips		5,530,077
66,734	Halliburton Co.		3,213,242
15,244	Helmerich & Payne, Inc.		1,051,074
50,784	Hess Corp.		3,927,635
52,423	Marathon Petroleum Corp.		3,371,847
16,516	Murphy Oil Corp.		996,245
55,337	Occidental Petroleum Corp.		5,176,223
103,980	Valero Energy Corp.		3,550,917
			30,414,632
	Financials (26.9%)
40,652	Ameriprise Financial, Inc.		3,702,584
18,118	Assurant, Inc.		980,184
48,314	Assured Guaranty, Ltd.		905,887
23,905	Capital One Financial Corp.		1,643,230
144,046	Citigroup, Inc.		6,987,671
65,865	Duke Realty Corp., REIT		1,016,956
18,214	Endurance Specialty Holdings, Ltd.		978,456
32,847	Goldman Sachs Group, Inc. (The)		5,196,724
32,465	Hartford Financial Services Group, Inc.		1,010,311
35,565	Hospitality Properties Trust, REIT		1,006,489
160,174	JPMorgan Chase & Co.		8,279,394
19,299	Lincoln National Corp.		810,365
92,004	MetLife, Inc.		4,319,588
31,373	National Retail Properties, Inc., REIT		998,289
33,837	Omega Healthcare Investors, Inc., REIT		1,010,711
55,936	Piedmont Office Realty Trust, Inc., Class A, REIT		971,049
57,916	PNC Financial Services Group, Inc. (The)		4,196,014
23,484	Principal Financial Group, Inc.		1,005,585
50,193	Prudential Financial, Inc.		3,914,050
72,037	Retail Properties of America, Inc., Class A, REIT		990,509
40,057	SLM Corp.		997,419
38,547	Starwood Property Trust, Inc., REIT		923,972
8,506	Weingarten Realty Investors, REIT		249,481
201,699	Wells Fargo & Co.		8,334,203
			60,429,121

Shares		Fair Value
COMMON STOCKS — (continued)
	Health Care (13.1%)
23,696	Actavis, Inc.(a)	$	3,412,224
57,607	Aetna, Inc.		3,688,000
15,037	Biogen Idec, Inc.(a)		3,620,308
72,627	Cardinal Health, Inc.		3,787,498
20,868	Charles River Laboratories International, Inc.(a)		965,354
23,387	Endo Health Solutions, Inc.(a)		1,062,705
10,958	Jazz Pharmaceuticals PLC(a)		1,007,807
26,383	McKesson Corp.		3,384,939
27,192	Mylan, Inc.(a)		1,037,919
9,437	Omnicare, Inc.		523,753
45,127	Thermo Fisher Scientific, Inc.		4,158,453
13,552	United Therapeutics Corp.(a)		1,068,575
20,752	WellPoint, Inc.		1,735,075
			29,452,610
	Industrials (12.0%)
16,990	AGCO Corp.		1,026,536
9,931	Alliant Techsystems, Inc.		968,868
7,348	Copa Holdings SA, Class A		1,018,947
174,261	Delta Air Lines, Inc.		4,110,817
65,327	Exelis, Inc.		1,026,287
46,173	General Dynamics Corp.		4,041,061
24,025	Lockheed Martin Corp.		3,064,389
40,733	Northrop Grumman Corp.		3,880,226
21,393	Oshkosh Corp.(a)		1,047,829
50,690	Raytheon Co.		3,906,678
57,612	RR Donnelley & Sons Co.		910,270
35,531	Spirit Aerosystems Holdings, Inc., Class A(a)		861,271
11,683	Towers Watson & Co., Class A		1,249,614
			27,112,793
	Information Technology (9.7%)
206,743	Activision Blizzard, Inc.		3,446,406
20,701	Arrow Electronics, Inc.(a)		1,004,619
24,921	Avnet, Inc.		1,039,455
47,502	Booz Allen Hamilton Holding Corp.		917,739
129,862	Brocade Communications Systems, Inc.(a)		1,045,389
135,764	Cisco Systems, Inc.		3,179,593
19,162	Computer Sciences Corp.		991,442
67,107	Freescale Semiconductor, Ltd.(a)		1,117,332
193,095	Hewlett-Packard Co.		4,051,133
43,483	Ingram Micro, Inc., Class A(a)		1,002,283
79,354	Marvell Technology Group, Ltd.		912,571
62,804	Micron Technology, Inc.(a)		1,097,186
17,415	SanDisk Corp.		1,036,367
15,499	Western Digital Corp.		982,637
			21,824,152
	Materials (2.3%)
12,644	Eastman Chemical Co.		984,968
45,663	Lyondellbasell Industries NV, Class A		3,343,901
8,648	Rock Tenn Co., Class A		875,783
			5,204,652
	Telecommunication Services (1.6%)
104,471	AT&T, Inc.		3,533,209
	Utilities (5.1%)
28,422	Ameren Corp.		990,222
29,287	Consolidated Edison, Inc.		1,614,885
69,536	Dominion Resources, Inc.		4,344,609

Continued

46

Sterling Capital Large Cap Value Diversified Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Shares		Fair Value
COMMON STOCKS — (continued)
	Utilities — (continued)
119,644	PPL Corp.	$	3,634,785
29,477	Vectren Corp.		983,058
			11,567,559
	Total Common Stocks (Cost $205,518,657)		220,818,593
MONEY MARKET FUND (1.7%)
3,776,347	Federated Treasury Obligations Fund, Institutional Shares		3,776,347
	Total Money Market Fund (Cost $3,776,347)		3,776,347

	Fair Value
Total Investments — 99.8% (Cost $209,295,004)	$	224,594,940
Net Other Assets (Liabilities) — 0.2%		468,960
NET ASSETS — 100.0%	$	225,063,900

(a) Represents non-income producing security.

REIT - Real Estate Investment Trust

See accompanying Notes to the Financial Statements.

47

Sterling Capital Mid Value Fund

Schedule of Portfolio Investments

September 30, 2013

Shares		Fair Value
COMMON STOCKS (94.3%)
	Consumer Discretionary (18.7%)
819,900	Ascena Retail Group, Inc.(a)	$	16,340,607
99,350	Chico’s FAS, Inc.		1,655,171
1,241,700	Interpublic Group of Cos., Inc. (The)		21,332,406
200,925	Kohl’s Corp.		10,397,869
710,500	News Corp., Class B(a)		11,673,515
384,820	Omnicom Group, Inc.		24,412,981
245,819	Universal Technical Institute, Inc.		2,981,784
253,100	Viacom, Inc., Class B		21,154,098
			109,948,431
	Energy (0.6%)
605,526	Forest Oil Corp.(a)		3,693,709
	Financials (30.7%)
1,191,275	Annaly Capital Management, Inc., REIT		13,794,965
537,092	Aspen Insurance Holdings, Ltd.		19,491,069
397,303	Assured Guaranty, Ltd.		7,449,431
47,100	CBRE Group, Inc., Class A(a)		1,089,423
1,170,000	E*TRADE Financial Corp.(a)		19,305,000
394,385	Endurance Specialty Holdings, Ltd.		21,186,362
65,600	Enstar Group, Ltd.(a)		8,960,960
2,575	Granite REIT		91,799
844,400	Leucadia National Corp.		23,001,456
279,000	Lincoln National Corp.		11,715,210
43,741	Markel Corp.(a)		22,647,777
335,700	Ryman Hospitality Properties, Inc., REIT		11,585,007
462,584	Willis Group Holdings PLC		20,043,765
			180,362,224
	Health Care (16.4%)
134,600	Becton Dickinson & Co.		13,462,692
197,813	Covidien PLC		12,054,724
136,028	Laboratory Corp. of America Holdings(a)		13,485,816
250,700	Mallinckrodt PLC(a)		11,053,363
313,500	Omnicare, Inc.		17,399,250
223,542	WellPoint, Inc.		18,690,347
124,922	Zimmer Holdings, Inc.		10,261,093
			96,407,285
	Industrials (4.3%)
215,850	AerCap Holdings NV(a)		4,200,441
132,770	General Dynamics Corp.		11,620,030

Shares		Fair Value
COMMON STOCKS — (continued)
	Industrials — (continued)
617,900	UTi Worldwide, Inc.	$	9,336,469
			25,156,940
	Information Technology (23.6%)
1,054,761	Dice Holdings, Inc.(a)		8,976,016
142,200	DST Systems, Inc.		10,723,302
906,996	EarthLink, Inc.		4,489,630
319,200	Fidelity National Information Services, Inc.		14,823,648
326,300	Global Payments, Inc.		16,667,404
88,000	Kulicke & Soffa Industries, Inc.(a)		1,016,400
77,325	Leidos Holdings, Inc.		3,519,834
181,800	Lender Processing Services, Inc.		6,048,486
318,725	MICROS Systems, Inc.(a)		15,917,127
119,155	MicroStrategy, Inc., Class A(a)		12,363,523
44,186	Science Applications International Corp.		1,491,266
467,200	Symantec Corp.		11,563,200
658,800	Western Union Co. (The)		12,293,208
1,846,367	Xerox Corp.		18,999,116
			138,892,160
	Total Common Stocks (Cost $432,559,866)		554,460,749
MONEY MARKET FUND (6.0%)
35,563,394	Federated Treasury Obligations Fund, Institutional Shares		35,563,394
	Total Money Market Fund (Cost $35,563,394)		35,563,394
Total Investments — 100.3% (Cost $468,123,260)			590,024,143
Net Other Assets (Liabilities) — (0.3)%			(1,995,079	)
NET ASSETS — 100.0%		$	588,029,064

(a) Represents non-income producing security.

REIT — Real Estate Investment Trust

See accompanying Notes to the Financial Statements.

48

Sterling Capital Small Cap Value Diversified Fund

Schedule of Portfolio Investments

September 30, 2013

Shares		Fair Value
COMMON STOCKS (98.0%)
	Consumer Discretionary (11.1%)
19,136	Big 5 Sporting Goods Corp.	$	307,707
27,722	Boyd Gaming Corp.(a)		392,266
27,980	Bridgepoint Education, Inc.(a)		504,759
11,353	Brown Shoe Co., Inc.		266,455
7,657	Capella Education Co.(a)		433,080
8,557	CEC Entertainment, Inc.		392,424
6,190	CSS Industries, Inc.		148,622
102,293	Cumulus Media, Inc., Class A(a)		542,153
30,853	Dana Holding Corp.		704,683
31,530	Digital Generation, Inc.(a)		407,683
77,789	Entravision Communications Corp., Class A		458,955
29,670	EW Scripps Co. (The) Class A(a)		544,445
40,187	Gray Television, Inc.(a)		315,468
9,558	Guess?, Inc.		285,306
24,011	hhgregg, Inc.(a)		430,037
45,634	Journal Communications, Inc., Class A(a)		390,171
5,632	Lear Corp.		403,082
37,842	Live Nation Entertainment, Inc.(a)		701,969
11,598	Marcus Corp.		168,519
12,250	MDC Partners, Inc., Class A		342,755
6,776	Monarch Casino & Resort, Inc.(a)		128,608
6,891	NACCO Industries, Inc., Class A		381,899
45,447	Orbitz Worldwide, Inc.(a)		437,655
5,832	Outerwall, Inc.(a)		291,542
3,857	Red Robin Gourmet Burgers, Inc.(a)		274,233
30,826	Ruth’s Hospitality Group, Inc.		365,596
7,964	Scholastic Corp.		228,169
2,730	Sears Hometown and Outlet Stores, Inc.(a)		86,677
32,816	Smith & Wesson Holding Corp.(a)		360,648
34,794	Stoneridge, Inc.(a)		376,123
10,408	Tower International, Inc.(a)		208,056
14,451	Unifi, Inc.(a)		337,575
11,343	Universal Electronics, Inc.(a)		408,688
542	Washington Post Co. (The) Class B		331,352
			12,357,360
	Consumer Staples (2.5%)
7,519	Andersons, Inc. (The)		525,578
16,659	Farmer Bros. Co.(a)		250,885
6,005	Ingles Markets, Inc., Class A		172,524
6,325	John B. Sanfilippo & Son, Inc.		146,677
22,967	Pilgrim’s Pride Corp.(a)		385,616
14,072	Safeway, Inc.		450,163
5,007	Sanderson Farms, Inc.		326,657
54,132	SUPERVALU, Inc.(a)		445,506
415	USANA Health Sciences, Inc.(a)		36,018
			2,739,624
	Energy (5.4%)
27,600	Alon USA Energy, Inc.		281,796
30,657	Cloud Peak Energy, Inc.(a)		449,738
10,564	Dawson Geophysical Co.(a)		343,013
18,923	Exterran Holdings, Inc.(a)		521,707
25,462	Green Plains Renewable Energy, Inc.		408,665
49,251	Hercules Offshore, Inc.(a)		362,980
21,468	Nabors Industries, Ltd.		344,776
43,737	Newpark Resources, Inc.(a)		553,710
92,136	Parker Drilling Co.(a)		525,175
11,182	Patterson-UTI Energy, Inc.		239,071
16,437	PBF Energy, Inc.		369,011
26,012	Renewable Energy Group, Inc.(a)		394,082

Shares		Fair Value
COMMON STOCKS — (continued)
	Energy — (continued)
9,571	REX American Resources Corp.(a)	$	294,213
18,273	Stone Energy Corp.(a)		592,593
53,337	Warren Resources, Inc.(a)		156,277
4,242	Western Refining, Inc.		127,430
			5,964,237
	Financials (37.5%)
13,146	1st Source Corp.		353,890
4,007	Allied World Assurance Co. Holdings AG		398,256
26,458	American Capital, Ltd.(a)		363,797
30,074	American Equity Investment Life Holding Co.		638,170
6,982	American Financial Group, Inc.		377,447
3,666	American National Insurance Co.		359,415
9,327	American Safety Insurance Holdings, Ltd.(a)		281,675
11,040	Amtrust Financial Services, Inc.		431,222
90,072	Anworth Mortgage Asset Corp., REIT		435,048
18,634	Apollo Residential Mortgage, Inc., REIT		271,870
12,572	Argo Group International Holdings, Ltd.		539,087
14,535	Arlington Asset Investment Corp., Class A		345,642
137,283	ARMOUR Residential REIT, Inc.		576,589
10,052	Aspen Insurance Holdings, Ltd.		364,787
6,782	Assurant, Inc.		366,906
16,000	Assured Guaranty, Ltd.		300,000
8,541	Axis Capital Holdings, Ltd.		369,911
18,676	Banco Latinoamericano de Comercio Exterior SA		465,406
13,222	Banner Corp.		504,552
15,012	Calamos Asset Management, Inc., Class A		149,970
11,928	Capital Southwest Corp.		408,057
42,111	Capstead Mortgage Corp., REIT		495,646
68,084	Cedar Realty Trust, Inc., REIT		352,675
21,776	Central Pacific Financial Corp.		385,435
53,810	CNO Financial Group, Inc.		774,864
17,470	CoBiz Financial, Inc.		168,760
25,869	Colony Financial, Inc., REIT		516,863
33,073	Cousins Properties, Inc., REIT		340,321
10,123	Customers Bancorp, Inc.(a)		162,980
40,926	Dynex Capital, Inc., REIT		358,921
17,623	Employers Holdings, Inc.		524,108
7,027	Endurance Specialty Holdings, Ltd.		377,490
9,890	Enterprise Financial Services Corp.		165,954
9,696	FBL Financial Group, Inc., Class A		435,350
5,717	FBR & Co.(a)		153,273
10,400	Federal Agricultural Mortgage Corp., Class C		347,152
10,682	Fidelity Southern Corp.		163,862
8,448	Fidus Investment Corp.		163,891
1,848	First Citizens BancShares, Inc., Class A		379,949
19,154	First Interstate Bancsystem, Inc.		462,569
24,087	First Merchants Corp.		417,428
10,912	Flushing Financial Corp.		201,326
27,470	FXCM, Inc., Class A		542,533
32,854	Genworth Financial, Inc., Class A(a)		420,203
81,704	Gramercy Property Trust, Inc., REIT(a)		339,072
15,088	Greenlight Capital Re, Ltd., Class A(a)		429,103
26,319	Hanmi Financial Corp.		436,106
10,477	Hatteras Financial Corp., REIT		196,025
10,989	HCI Group, Inc.		448,791
31,027	Hercules Technology Growth Capital, Inc.		473,162
19,629	Horace Mann Educators Corp.		557,071
21,933	Interactive Brokers Group, Inc., Class A		411,682
18,860	International Bancshares Corp.		407,942

Continued

49

Sterling Capital Small Cap Value Diversified Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Shares		Fair Value
COMMON STOCKS — (continued)
	Financials — (continued)
40,081	Invesco Mortgage Capital, Inc., REIT	$	616,847
36,203	KCAP Financial, Inc.		325,103
10,647	Kemper Corp.		357,739
38,895	MaidenHoldings,Ltd.		459,350
18,629	Manning & Napier, Inc.		310,732
31,795	MBIA, Inc.(a)		325,263
59,256	MCG Capital Corp.		298,650
25,412	Medallion Financial Corp.		378,131
39,187	MFA Financial, Inc., REIT		291,943
19,664	Montpelier Re Holdings, Ltd.		512,247
1,932	National Western Life Insurance Co., Class A		389,820
6,541	Navigators Group, Inc. (The)(a)		377,874
12,079	Nelnet, Inc., Class A		464,438
26,521	OFG Bancorp		429,375
21,554	Old Republic International Corp.		331,932
14,954	One Liberty Properties, Inc., REIT		303,267
4,007	PartnerRe, Ltd.		366,801
40,081	PennantPark Investment Corp.		451,312
9,098	Phoenix Cos., Inc. (The)(a)		351,820
10,745	Platinum Underwriters Holdings, Ltd.		641,799
12,478	Popular, Inc.(a)		327,298
24,686	PrivateBancorp, Inc.		528,280
65,937	Prospect Capital Corp.		737,176
9,232	Protective Life Corp.		392,822
7,771	Provident Financial Holdings, Inc.		129,076
29,443	Redwood Trust, Inc., REIT		579,733
7,162	Regional Management Corp.(a)		227,752
5,282	Reinsurance Group of America, Inc.		353,841
4,182	RenaissanceRe Holdings, Ltd.		378,596
11,540	Republic Bancorp, Inc., Class A		317,927
4,219	Safety Insurance Group, Inc.		223,480
18,936	Sandy Spring Bancorp, Inc.		440,451
7,207	Southside Bancshares, Inc.		193,292
7,507	StanCorp Financial Group, Inc.		413,035
8,753	State Auto Financial Corp.		183,288
14,929	Stewart Information Services Corp.		477,579
35,516	Symetra Financial Corp.		632,895
128,026	Synovus Financial Corp.		422,486
32,215	TICC Capital Corp.		314,096
4,991	Tree.com, Inc.		131,064
13,248	Trico Bancshares		301,789
62,080	Two Harbors Investment Corp., REIT		602,797
15,925	Union First Market Bankshares Corp.		372,167
21,879	United Community Banks, Inc.(a)		328,185
15,453	United Fire Group, Inc.		470,853
39,692	Universal Insurance Holdings, Inc.		279,829
8,191	Validus Holdings, Ltd.		302,903
17,551	Washington Federal, Inc.		362,955
25,714	Webster Financial Corp.		656,478
29,281	Western Alliance Bancorp(a)		554,289
565	White Mountains Insurance Group, Ltd.		320,705
60,111	Wilshire Bancorp, Inc.		491,708
13,661	Winthrop Realty Trust, REIT		152,320
13,442	Wintrust Financial Corp.		552,063
6,357	WSFS Financial Corp.		383,009
			41,832,864
	Health Care (4.5%)
10,403	Addus HomeCare Corp.(a)		301,375
23,287	Albany Molecular Research, Inc.(a)		300,169
5,370	Alliance HealthCare Services, Inc.(a)		148,695

Shares		Fair Value
COMMON STOCKS — (continued)
	Health Care — (continued)
24,023	Amedisys, Inc.(a)	$	413,676
10,837	Anika Therapeutics, Inc.(a)		259,655
7,007	Centene Corp.(a)		448,168
13,330	Cornerstone Therapeutics, Inc.(a)		125,435
13,327	Lannett Co., Inc.(a)		290,795
5,935	LHC Group, Inc.(a)		139,235
6,857	LifePoint Hospitals, Inc.(a)		319,742
8,642	National Healthcare Corp.		408,507
18,878	NuVasive, Inc.(a)		462,322
17,935	Owens & Minor, Inc.		620,372
4,055	PDL BioPharma, Inc.		32,318
14,297	Providence Service Corp. (The)(a)		410,181
3,251	Questcor Pharmaceuticals, Inc.		188,558
2,529	United Therapeutics Corp.(a)		199,412
			5,068,615
	Industrials (13.5%)
22,445	AAR Corp.		613,422
6,557	Alaska Air Group, Inc.		410,599
10,687	Albany International Corp., Class A		383,343
3,792	Alliant Techsystems, Inc.		369,948
31,050	ARC Document Solutions, Inc.(a)		142,519
22,304	Arkansas Best Corp.		572,544
5,957	Barrett Business Services, Inc.		400,966
15,613	Celadon Group, Inc.		291,495
12,456	Coleman Cable, Inc.		262,946
7,494	Columbus McKinnon Corp.(a)		180,081
8,482	Consolidated Graphics, Inc.(a)		475,501
10,270	Ducommun, Inc.(a)		294,544
23,404	Ennis, Inc.		422,208
6,705	G&K Services, Inc., Class A		404,915
19,553	Heidrick & Struggles International, Inc.		372,680
5,395	Hyster-Yale Materials Handling, Inc.		483,770
9,894	ICF International, Inc.(a)		350,347
14,895	Insteel Industries, Inc.		239,809
5,226	Kadant, Inc.		175,541
32,627	Kimball International, Inc., Class B		361,833
9,902	Lydall, Inc.(a)		170,017
13,524	Matson, Inc.		354,735
7,213	Michael Baker Corp.		291,910
10,085	NN, Inc.		156,923
5,446	Northwest Pipe Co.(a)		179,064
32,191	Orion Marine Group, Inc.(a)		335,108
6,924	Oshkosh Corp.(a)		339,138
24,630	Pacer International, Inc.(a)		152,460
6,724	Park-Ohio Holdings Corp.(a)		258,336
18,304	Quad/Graphics, Inc.		555,709
26,416	Quality Distribution, Inc.(a)		244,084
36,288	Republic Airways Holdings, Inc.(a)		431,827
22,962	RPX Corp.(a)		402,524
22,187	RR Donnelley & Sons Co.		350,555
18,117	Rush Enterprises, Inc., Class A(a)		480,282
30,920	SkyWest, Inc.		448,958
15,854	Spirit Aerosystems Holdings, Inc., Class A(a)		384,301
18,033	Swift Transportation Co.(a)		364,086
6,448	Trinity Industries, Inc.		292,417
10,687	Twin Disc, Inc.		279,251
13,912	United Stationers, Inc.		605,172
3,349	VSE Corp.		157,236
39,161	Wabash National Corp.(a)		456,617

Continued

50

Sterling Capital Small Cap Value Diversified Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Shares		Fair Value
COMMON STOCKS — (continued)
	Industrials — (continued)
10,859	Xerium Technologies, Inc.(a)	$	125,856
			15,025,577
	Information Technology (11.9%)
16,946	Alpha & Omega Semiconductor, Ltd.(a)		142,516
6,054	Anaren, Inc.(a)		154,377
6,248	Arrow Electronics, Inc.(a)		303,215
19,154	AVG Technologies NV(a)		458,547
55,899	Avid Technology, Inc.(a)		335,394
9,947	Avnet, Inc.		414,889
28,486	AVX Corp.		374,021
26,056	Benchmark Electronics, Inc.(a)		596,422
1,803	Black Box Corp.		55,244
39,734	Brocade Communications Systems, Inc.(a)		319,859
30,006	Checkpoint Systems, Inc.(a)		501,100
26,124	CTS Corp.		411,975
2,377	ePlus, Inc.		122,843
20,736	Fabrinet(a)		349,194
15,639	First Solar, Inc.(a)		628,844
19,023	Hackett Group, Inc. (The)		135,634
59,081	Harmonic, Inc.(a)		454,333
18,645	Insight Enterprises, Inc.(a)		352,763
25,591	International Rectifier Corp.(a)		633,889
15,541	Jabil Circuit, Inc.		336,929
11,481	Lexmark International, Inc., Class A		378,873
32,058	Marvell Technology Group, Ltd.		368,667
52,507	Photronics, Inc.(a)		411,130
14,622	Plexus Corp.(a)		543,938
36,785	Sanmina Corp.(a)		643,370
1,625	ScanSource, Inc.(a)		56,225
27,685	Silicon Graphics International Corp.(a)		449,881
22,338	SunPower Corp.(a)		584,362
12,513	Supertex, Inc.		317,079
12,057	SYNNEX Corp.(a)		740,903
37,104	TiVo, Inc.(a)		461,574
32,753	TTM Technologies, Inc.(a)		319,342
11,264	Ubiquiti Networks, Inc.		378,358
21,151	Ultra Clean Holdings, Inc.(a)		146,153
27,932	Vishay Intertechnology, Inc.(a)		360,043
			13,241,886
	Materials (5.1%)
21,809	A.M. Castle & Co.(a)		351,125
18,589	Berry Plastics Group, Inc.(a)		371,222
57,004	Boise, Inc.		718,250
2,907	Domtar Corp.		230,874
4,790	Huntsman Corp.		98,722
9,051	Materion Corp.		290,175
15,787	Myers Industries, Inc.		317,477
8,095	Neenah Paper, Inc.		318,214
11,065	Olympic Steel, Inc.		307,386
16,207	OM Group, Inc.(a)		547,472
7,057	Packaging Corp. of America		402,884
18,437	PH Glatfelter Co.		499,090
1,386	Reliance Steel & Aluminum Co.		101,552

Shares		Fair Value
COMMON STOCKS — (continued)
	Materials — (continued)
7,932	Schweitzer-Mauduit International, Inc.	$	480,124
4,517	United States Steel Corp.		93,005
17,415	Worthington Industries, Inc.		599,598
			5,727,170
	Telecommunication Services (1.6%)
12,063	Hawaiian Telcom Holdco, Inc.(a)		320,876
19,904	IDT Corp., Class B		353,296
53,626	Iridium Communications, Inc.(a)		368,947
12,826	Telephone & Data Systems, Inc.		379,008
23,606	USA Mobility, Inc.		334,261
			1,756,388
	Utilities (4.9%)
7,568	Chesapeake Utilities Corp.		397,244
10,913	Consolidated Water Co., Ltd.		163,368
31,252	Dynegy, Inc.(a)		603,789
15,274	El Paso Electric Co.		510,152
4,769	Empire District Electric Co.		103,297
15,261	IDACORP, Inc.		738,632
7,546	New Jersey Resources Corp.		332,401
26,828	PNM Resources, Inc.		607,118
13,601	Southwest Gas Corp.		680,050
9,182	UGI Corp.		359,292
10,840	Westar Energy, Inc.		332,246
15,461	WGL Holdings, Inc.		660,339
			5,487,928
	Total Common Stocks (Cost $103,119,306)		109,201,649
EXCHANGE TRADED FUND (0.6%)
7,400	iShares Russell 2000 Value ETF		678,136
	Total Exchange Traded Fund (Cost $638,602)		678,136
MONEY MARKET FUND (1.9%)
2,148,527	Federated Treasury Obligations Fund, Institutional Shares		2,148,527
	Total Money Market Fund (Cost $2,148,527)		2,148,527
Total Investments — 100.5% (Cost $105,906,435)			112,028,312
Net Other Assets (Liabilities) — (0.5)%			(575,617	)
NET ASSETS — 100.0%		$	111,452,695

(a) Represents non-income producing security.

ETF — Exchange Traded Fund

REIT — Real Estate Investment Trust

See accompanying Notes to the Financial Statements.

51

Sterling Capital Special Opportunities Fund

Schedule of Portfolio Investments

September 30, 2013

Shares		Fair Value
COMMON STOCKS (92.9%)
	Consumer Discretionary (12.5%)
845,000	Comcast Corp., Class A	$	38,151,750
529,000	DIRECTV(a)		31,607,750
1,960,000	Ford Motor Co.		33,065,200
			102,824,700
	Consumer Staples (2.4%)
637,000	Mondelez International, Inc., Class A		20,014,540
	Energy (12.7%)
310,000	Apache Corp.		26,393,400
186,000	EOG Resources, Inc.(b)		31,486,080
644,000	Halliburton Co.		31,008,600
449,565	Williams Cos., Inc. (The)		16,346,183
			105,234,263
	Financials (5.7%)
352,000	Capital One Financial Corp.		24,196,480
669,000	Ryman Hospitality Properties, Inc., REIT		23,087,190
			47,283,670
	Health Care (18.2%)
541,300	Agilent Technologies, Inc.		27,741,625
605,500	HCA Holdings, Inc.		25,885,125
1,161,000	Myriad Genetics, Inc.(a)		27,283,500
784,000	Teva Pharmaceutical Industries, Ltd., ADR		29,619,520
550,000	UnitedHealth Group, Inc.(b)		39,385,500
			149,915,270
	Industrials (11.5%)
689,500	ADT Corp. (The)		28,035,070
86,000	FedEx Corp.		9,813,460
692,000	Nielsen Holdings NV		25,223,400
389,205	Robert Half International, Inc.(b)		15,190,671
242,000	Ryder System, Inc.		14,447,400
75,000	Xylem, Inc.		2,094,750
			94,804,751
	Information Technology (27.7%)
560,000	Akamai Technologies, Inc.(a)		28,952,000

Shares		Fair Value
COMMON STOCKS — (continued)
	Information Technology — (continued)
67,900	Apple, Inc.(b)	$	32,371,325
1,044,000	Broadcom Corp., Class A(b)		27,154,440
655,000	Check Point Software Technologies, Ltd.(a)		37,046,800
1,510,000	Cisco Systems, Inc.		35,364,200
669,000	eBay, Inc.(a)		37,323,510
460,000	Intuit, Inc.		30,502,600
			228,714,875
	Materials (2.2%)
1,733,000	Yamana Gold, Inc.		18,023,200
	Total Common Stocks (Cost $590,991,002)		766,815,269
MONEY MARKET FUND (7.3%)
60,636,436	Federated Treasury Obligations Fund, Institutional Shares		60,636,436
	Total Money Market Fund (Cost $60,636,436)		60,636,436
Total Investments — 100.2% (Cost $651,627,438)			827,451,705
Net Other Assets (Liabilities) — (0.2)%			(1,907,345	)
NET ASSETS — 100.0%		$	825,544,360

(a) Represents non-income producing security.

(b) All or a portion of security was held as collateral for written call options.

ADR — American Depositary Receipt

REIT — Real Estate Investment Trust

See accompanying Notes to the Financial Statements.

52

Sterling Capital Equity Income Fund

Schedule of Portfolio Investments

September 30, 2013

Shares		Fair Value
COMMON STOCKS (86.3%)
	Consumer Discretionary (13.0%)
576,000	McDonald’s Corp.	$	55,416,960
692,000	Omnicom Group, Inc.		43,900,480
1,013,000	Pearson PLC, ADR		20,604,420
989,000	Target Corp.		63,276,220
589,500	Time Warner Cable, Inc.		65,788,200
			248,986,280
	Consumer Staples (13.1%)
1,563,000	Coca-Cola Co. (The)		59,206,440
1,136,000	General Mills, Inc.		54,437,120
565,000	PepsiCo, Inc.		44,917,500
405,000	Philip Morris International, Inc.		35,068,950
1,525,000	Unilever PLC, ADR		58,834,500
			252,464,510
	Energy (20.3%)
360,000	Chevron Corp.		43,740,000
1,320,000	Ensco PLC, Class A		70,950,000
149,335	Kinder Morgan Management LLC(a)		11,194,141
1,763,000	Kinder Morgan, Inc.		62,709,910
1,018,596	Natural Resource Partners LP		19,404,254
715,000	Occidental Petroleum Corp.		66,881,100
188,000	Royal Dutch Shell PLC, Class A, ADR		12,347,840
322,000	Royal Dutch Shell PLC, Class B, ADR		22,169,700
1,987,200	Spectra Energy Corp.		68,021,856
275,000	Teekay LNG Partners LP		12,130,250
			389,549,051
	Financials (7.6%)
112,000	BlackRock, Inc.		30,309,440
1,299,000	MetLife, Inc.		60,988,050
634,500	Travelers Cos., Inc. (The)		53,786,565
			145,084,055
	Health Care (14.7%)
1,029,000	Abbott Laboratories		34,152,510
775,999	AbbVie, Inc.		34,710,435
1,049,000	Baxter International, Inc.		68,908,810

Shares		Fair Value
COMMON STOCKS — (continued)
	Health Care — (continued)
763,000	Novartis AG, ADR	$	58,529,730
1,267,000	Pfizer, Inc.		36,375,570
594,005	WellPoint, Inc.		49,664,758
			282,341,813
	Industrials (1.9%)
410,000	United Parcel Service, Inc., Class B		37,461,700
	Information Technology (11.9%)
45,000	Accenture PLC, Class A		3,313,800
2,393,000	Intel Corp.		54,847,560
1,788,000	Maxim Integrated Products, Inc.		53,282,400
1,379,000	Microsoft Corp.		45,934,490
1,049,702	QUALCOMM, Inc.		70,707,927
			228,086,177
	Telecommunication Services (3.8%)
1,697,500	Rogers Communications, Inc., Class B		73,009,475
	Total Common Stocks (Cost $1,377,515,244)		1,656,983,061
MONEY MARKET FUND (14.6%)
279,831,363	Federated Treasury Obligations Fund, Institutional Shares		279,831,363
	Total Money Market Fund (Cost $279,831,363)		279,831,363
Total Investments — 100.9% (Cost $1,657,346,607)			1,936,814,424
Net Other Assets (Liabilities) — (0.9)%			(16,350,658	)
NET ASSETS — 100.0%		$	1,920,463,766

(a) Represents non-income producing security.

ADR — American Depositary Receipt

See accompanying Notes to the Financial Statements.

53

Sterling Capital Ultra Short Bond Fund

Schedule of Portfolio Investments

September 30, 2013

Principal      Amount		Fair Value
ASSET BACKED SECURITIES (14.7%)
$    178,000	Ally Auto Receivables Trust, Series 2012-1, Class A3, 0.930%, 2/16/16	$	178,546
500,000	Ally Auto Receivables Trust, Series 2011-2, Class A4, 1.980%, 4/15/16		505,364
300,000	Ally Auto Receivables Trust, Series 2012-4, Class A3, 0.590%, 1/17/17		299,973
500,000	AmeriCredit Automobile Receivables Trust, Series 2013-3, Class A2, 0.680%, 10/11/16		500,208
405,000	AmeriCredit Automobile Receivables Trust, Series 2011-5, Class B, 2.450%, 12/8/16		412,152
173,333	Avis Budget Rental Car Funding AESOP, LLC, Series 2011-1A, Class A, 1.850%, 11/20/14(a)		173,545
560,000	Avis Budget Rental Car Funding AESOP, LLC, Series 2011-2A, Class A, 2.370%, 11/20/14(a)		567,997
140,645	CarMax Auto Owner Trust, Series 2011-1, Class A3, 1.290%, 9/15/15		140,882
1,000,000	Citibank Omni Master Trust, Series 2009-A17, Class A17, 4.900%, 11/15/18(a)		1,046,879
110,990	Countrywide Asset-Backed Certificates, Series 2005-6, Class M1, 0.669%, 12/25/35(b)		110,371
375,310	First Franklin Mortgage Loan Trust, Series 2005-FF5, Class M1, 0.629%, 3/25/35(b)		373,374
370,833	Hertz Vehicle Financing, LLC, Series 2010-1A, Class A1, 2.600%, 2/25/15(a)		372,580
264,000	Honda Auto Receivables Owner Trust, Series 2013-3, Class A2, 0.540%, 1/15/16		264,249
665,000	M&T Bank Auto Receivables Trust, Series 2013-1A, Class A2, 0.660%, 2/16/16(a)		665,186
171,585	Mastr Asset Backed Securities Trust, Series 2006-NC1, Class A3, 0.369%, 1/25/36(b)		167,303
171,911	Option One Mortgage Loan Trust, Asset-Backed Certificates, Series 2005-4, Class A3, 0.439%, 11/25/35(b)		168,668
218,839	Park Place Securities, Inc. Pass Through Certificates, Series 2005-WHQ1, Class M2, 0.679%, 3/25/35(b)		217,547
378,000	Santander Drive Auto Receivables Trust, Series 2012-1, Class A3, 1.490%, 10/15/15		379,162
500,000	Santander Drive Auto Receivables Trust, Series 2013-3, Class A2, 0.550%, 9/15/16		499,576
480,000	Santander Drive Auto Receivables Trust, Series 2012-5, Class A3, 0.830%, 12/15/16		481,041
304,035	Volkswagen Auto Loan Enhanced Trust, Series 2012-2, Class A2, 0.330%, 7/20/15		303,881
159,958	World Omni Auto Receivables Trust, Series 2012-A, Class A2, 0.520%, 6/15/15		159,975
	Total Asset Backed Securities (Cost $8,006,140)		7,988,459
COLLATERALIZED MORTGAGE OBLIGATIONS (0.9%)
412,507	Freddie Mac, Series 3944, Class LB, 2.000%, 2/15/25		414,384
71,679	Freddie Mac, Series 3128, Class BE, 5.000%, 5/15/33		72,728
	Total Collateralized Mortgage Obligations (Cost $490,689)		487,112

Principal      Amount		Fair Value
COMMERCIAL MORTGAGE-BACKED SECURITIES (7.4%)
$    200,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2004-2, Class B, 4.665%, 11/10/38(b)	$	204,299
137,365	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2004-3, Class A5, 5.743%, 6/10/39(b)		139,109
345,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-2, Class AJ, 4.953%, 7/10/43(b)		361,017
309,122	Bear Stearns Commercial Mortgage Securities Trust, Series 2004-T16, Class A6, 4.750%, 2/13/46(b)		318,235
150,000	Commercial Mortgage Trust, Series 2005-GG5, Class AM, 5.277%, 4/10/37(b)		158,952
248,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C1, Class AJ, 5.075%, 2/15/38(b)		256,831
300,000	Extended Stay America Trust, Series 2013-ESFL, Class A2FL, 0.882%, 12/5/31(a)(b)		298,398
240,000	GE Capital Commercial Mortgage, Series 2005-C2, Class AJ, 5.061%, 5/10/43(b)		252,669
200,000	GMAC Commercial Mortgage Securities, Inc., Series 2005-C1, Class AM, 4.754%, 5/10/43		208,012
200,000	GS Mortgage Securities Corp. II, Series 2013-KYO, Class A, 1.032%, 11/8/29(a)(b)		198,155
500,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-FL3, Class A2, 0.882%, 4/15/28(a)(b)		497,722
500,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-JWRZ, Class A, 0.962%, 4/15/30(a)(b)		494,913
185,000	Merrill Lynch Mortgage Trust, Series 2005-MCP1, Class AM, 4.805%, 6/12/43(b)		193,492
400,000	Wachovia Bank Commercial Mortgage Trust, Series 2003-C8, Class E, 5.341%, 11/15/35(b)		400,649
	Total Commercial Mortgage-Backed Securities (Cost $4,053,420)		3,982,453
CORPORATE BONDS (55.8%)
	Consumer Discretionary (5.4%)
485,000	Daimler Finance North America, LLC, 1.875%, 9/15/14(a)		490,182
370,000	DIRECTV Holdings, LLC/DIRECTV Financing Co., Inc., 4.750%, 10/1/14		384,543
250,000	ERAC USA Finance, LLC, 5.600%, 5/1/15(a)		267,365
410,000	NBCUniversal Media, LLC, 2.100%, 4/1/14		413,313
335,000	Nordstrom, Inc., 6.750%, 6/1/14		348,513
255,000	Royal Caribbean Cruises, Ltd., 6.875%, 12/1/13		256,594
260,000	Viacom, Inc., 1.250%, 2/27/15		260,704
250,000	Volkswagen International Finance NV, 1.625%, 3/22/15(a)		253,211
235,000	WPP Finance, 5.875%, 6/15/14		242,775
			2,917,200

Continued

54

Sterling Capital Ultra Short Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal      Amount			Fair Value
	CORPORATE BONDS — (continued)
		Consumer Staples (2.8%)
	$455,000	Altria Group, Inc., 8.500%, 11/10/13	$	458,706
	250,000	ConAgra Foods, Inc., 5.875%, 4/15/14		256,909
	485,000	Mondelez International, Inc., 5.250%, 10/1/13		485,000
	310,000	SABMiller Holdings, Inc., 1.850%, 1/15/15(a)		313,849
				1,514,464
		Energy (7.5%)
	215,000	Anadarko Petroleum Corp., 5.750%, 6/15/14		222,203
	310,000	Cameron International Corp., 1.600%, 4/30/15		312,293
	360,000	Canadian Natural Resources, Ltd., 1.450%, 11/14/14		362,691
	468,000	Devon Energy Corp., 5.625%, 1/15/14		474,962
	295,000	EnCana Holdings Finance Corp., 5.800%, 5/1/14		303,559
	330,000	Energy Transfer Partners LP, 8.500%, 4/15/14		342,703
	450,000	Enterprise Products Operating, LLC, Series G, 5.600%, 10/15/14		472,928
	100,000	Hess Corp., 7.000%, 2/15/14		102,218
	470,000	Kinder Morgan Energy Partners LP, 5.000%, 12/15/13		474,070
	360,000	Petrobras International Finance Co., 2.875%, 2/6/15		365,224
	300,000	Petrohawk Energy Corp., 10.500%, 8/1/14		309,990
	315,000	TransCanada PipeLines, Ltd., 0.875%, 3/2/15		315,975
				4,058,816
		Financials (24.7%)
	265,000	ABN AMRO Bank NV, 3.000%, 1/31/14(a)		266,966
	230,000	Allstate Corp. (The), 5.000%, 8/15/14		238,905
	290,000	American International Group, Inc., 3.750%, 11/30/13(a)		291,378
	355,000	Axis Capital Holdings, Ltd., 5.750%, 12/1/14		374,520
	675,000	Bank of America Corp., MTN, 7.375%, 5/15/14		702,562
	300,000	BNP Paribas SA, 3.250%, 3/11/15		310,385
	300,000	Capital One Financial Corp., 6.250%, 11/15/13		302,009
	705,000	Citigroup, Inc., 5.000%, 9/15/14		731,574
	200,000	CME Group, Inc., 5.750%, 2/15/14		203,820
	361,000	CNA Financial Corp., 5.850%, 12/15/14		381,716
	150,000	Colonial Realty LP, 6.250%, 6/15/14		155,504
	225,000	Commonwealth Bank of Australia, 0.984%, 3/17/14(a)(b)		225,856
	180,000	Duke Realty LP, REIT, 5.400%, 8/15/14		186,600
	263,000	Endurance Specialty Holdings, Ltd., 6.150%, 10/15/15		284,667
	250,000	ERP Operating LP, REIT, 5.250%, 9/15/14		260,544
	250,000	Fixed Income Trust for Prudential Financial, Inc., 0.000%, 6/1/14		247,931
	380,000	Ford Motor Credit Co., LLC, 7.000%, 10/1/13		380,000
	375,000	Ford Motor Credit Co., LLC, 7.000%, 4/15/15		406,901
	350,000	General Electric Capital Corp., 5.900%, 5/13/14		362,042
	575,000	Goldman Sachs Group, Inc. (The), 3.300%, 5/3/15		594,571
	360,000	HCP, Inc., REIT, 2.700%, 2/1/14		362,250
	348,000	Health Care REIT, Inc., 6.000%, 11/15/13		350,066
	410,000	ING Bank NV, 2.000%, 9/25/15(a)		415,580
	365,000	Jefferies Group, LLC, 5.875%, 6/8/14		376,863
	695,000	JPMorgan Chase & Co., 5.125%, 9/15/14		723,560
	250,000	KeyBank NA, BKNT, 5.800%, 7/1/14		259,381
	400,000	Kimco Realty Corp., MTN, REIT, 4.820%, 6/1/14		410,578

Principal      Amount			Fair Value
	CORPORATE BONDS — (continued)
		Financials — (continued)
	$337,000	Macquarie Group, Ltd., 7.300%, 8/1/14(a)	$	353,887
	555,000	Morgan Stanley, 2.875%, 1/24/14		558,711
	75,000	Morgan Stanley, 2.875%, 7/28/14		76,242
	355,000	PNC Funding Corp., 3.000%, 5/19/14		360,633
	250,000	Simon Property Group LP, REIT, 6.750%, 5/15/14		255,451
	205,000	Societe Generale SA, 2.500%, 1/15/14(a)		205,881
	665,000	UBS AG, 2.250%, 1/28/14		669,173
	210,000	Union Bank NA, 1.209%, 6/6/14(b)		211,202
	576,000	Wachovia Corp., 5.250%, 8/1/14		598,087
	284,000	XL Group PLC, 5.250%, 9/15/14		295,923
				13,391,919
		Health Care (2.1%)
	190,000	DaVita HealthCare Partners, Inc., 6.375%, 11/1/18		199,500
	255,000	Express Scripts Holding Co., 2.750%, 11/21/14		260,526
	150,000	UnitedHealth Group, Inc., 5.000%, 8/15/14		155,810
	200,000	Valeant Pharmaceuticals International, 6.500%, 7/15/16(a)		207,000
	315,000	Zimmer Holdings, Inc., 1.400%, 11/30/14		317,193
				1,140,029
		Industrials (3.3%)
	416,000	Equifax, Inc., 4.450%, 12/1/14		432,203
	390,000	Penske Truck Leasing Co., LP/PTL Finance Corp., 2.500%, 7/11/14(a)		394,356
	200,000	Textron, Inc., 6.200%, 3/15/15		213,656
	365,000	Tyco Electronics Group SA, 1.600%, 2/3/15		367,724
	330,000	Waste Management, Inc., 6.375%, 3/11/15		354,905
				1,762,844
		Materials (4.2%)
	410,000	Anglo American Capital PLC, 9.375%, 4/8/14(a)		427,134
	250,000	ArcelorMittal USA, LLC, 6.500%, 4/15/14		255,782
	355,000	Ecolab, Inc., 2.375%, 12/8/14		361,789
	390,000	Freeport-McMoRan Copper & Gold, Inc., 1.400%, 2/13/15		391,024
	440,000	Rio Tinto Finance USA, Ltd., 8.950%, 5/1/14		461,203
	360,000	Xstrata Finance Canada, Ltd., 2.050%, 10/23/15(a)		360,980
				2,257,912
		Telecommunication Services (4.9%)
	305,000	America Movil SAB de CV, 5.500%, 3/1/14		310,777
	395,000	AT&T, Inc., 5.100%, 9/15/14		411,951
	250,000	British Telecommunications PLC, 2.000%, 6/22/15		254,574
	150,000	Crown Castle Towers, LLC, 4.523%, 1/15/15(a) .		155,615
	340,000	Qwest Corp., 7.500%, 10/1/14		360,256
	250,000	SBA Tower Trust, 4.254%, 4/15/15(a)		254,685
	500,000	Verizon Communications, Inc., 1.250%, 11/3/14		502,937
	220,000	Verizon New England, Inc., Series C, 4.750%, 10/1/13		220,000
	210,000	Vodafone Group PLC, 5.000%, 12/16/13		211,983
				2,682,778

Continued

55

Sterling Capital Ultra Short Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal         Amount			Fair Value
	CORPORATE BONDS — (continued)
		Utilities (0.9%)
	$465,000	Duke Energy Corp., 6.300%, 2/1/14	$	473,612
		Total Corporate Bonds     (Cost $30,207,799)		30,199,574
	MUNICIPAL BONDS (23.4%)
		Alaska (0.2%)
	100,000	Alaska Housing Finance Corp., State Capital Project, Refunding Revenue, Series A (NATL-RE), 4.000%, 12/1/13		100,641
		California (2.9%)
	100,000	Alameda County Joint Powers Authority, Juvenile Justice Facilities, Correctional Facility Improvements Revenue, Series D (XLCA), 5.000%, 12/1/13		100,802
	310,000	Beverly Hills Public Financing Authority, Various Projects Revenue, Series B, Taxable, 2.454%, 6/1/14		313,026
	100,000	California State Public Works Board, Department of Corrections & Rehab, Refunding Revenue, Series J (AMBAC), 4.000%, 1/1/14		100,965
	100,000	California State, Public Improvements, G.O. (AMBAC), 3.500%, 2/1/14		101,121
	100,000	California State, Variable Purpose, Refunding G.O., Taxable, 3.750%, 10/1/13		100,006
	220,000	California State, Various Purpose, Public Improvements Refunding G.O., 4.850%, 10/1/14		228,701
	175,000	Long Beach Bond Finance Authority, Aquarium of The Pacific, Refunding Revenue, 3.000%, 11/1/13		175,406
	125,000	Los Angeles County Public Works Financing Authority, L.A. Regulatory Park & Open Space, Special Assessment, Refunding Revenue (AGM), 5.000%, 10/1/13		125,016
	300,000	Orange County, CA, Pension Obligations, Refunding Revenue, Series A, Taxable, 0.680%, 2/1/14		300,255
				1,545,298
		Colorado (0.3%)
	135,000	City & County of Denver, CO, Airport System, Refunding Revenue, Series A, 4.000%, 11/15/14		140,473
		Connecticut (0.2%)
	100,000	Connecticut State Health & Educational Facility Authority, Quinnipiac University Health & Education Refunding Revenue, Series K1 (NATL-RE), 5.000%, 7/1/14		103,330
		Delaware (0.9%)
	500,000	Delaware State Health Facilities Authority, Nanticoke Memorial Hospital Refunding Revenue, 4.000%, 7/1/14		504,740
		Florida (2.5%)
	250,000	Broward County Airport System, FL, Unrefunded, Port, Airport & Marina Improvements Revenue, Series L (AMBAC), 5.000%, 10/1/13		250,033

Principal         Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Florida — (continued)
	$300,000	Cape Coral Water & Sewer, FL, Refunding Revenue, Series A (AGM), 3.000%, 10/1/13	$	300,021
	100,000	Florida Municipal Power Agency, All Requirements Power Supply, Electric Light & Power Improvements Revenue, Series A (AGM), OID, 3.750%, 10/1/13		100,010
	125,000	Greater Orlando Aviation Authority, FL, Refunding Revenue, Series B, Taxable, 4.780%, 10/1/14		129,626
	385,000	Hillsborough County Aviation Authority, Tampa International Airport, Refunding Revenue, Series A (AGM), 5.500%, 10/1/13		385,058
	175,000	Hillsborough County Aviation Authority, Tampa International Airport, Refunding Revenue, Series C (NATL-RE), 5.250%, 10/1/13		175,023
				1,339,771
		Illinois (2.6%)
	100,000	Chicago Board of Education, Dedicated Refunding Revenue, G.O., Series D, 4.000%, 12/1/13		100,646
	500,000	Chicago, IL, Midway Airport Refunding Revenue, Series C (NATL-RE), 5.500%, 1/1/15		528,130
	310,000	Chicago, IL, O’Hare International Airport, Passenger Facility Charge, Refunding Revenue, 5.000%, 1/1/14		313,596
	150,000	Chicago, IL, Wastewater Transmission Revenue, 2nd Lien, Sewer Improvements, 3.000%, 1/1/14		150,765
	300,000	Illinois State, Pension Funding, G.O., Taxable, 4.071%, 1/1/14		302,445
				1,395,582
		Kansas (0.2%)
	100,000	Kansas Development Finance Authority, Department of Administration, Comprehensive Program Transit Improvements, Revenue, Series A (NATL), 5.000%, 11/1/13		100,412
		Kentucky (0.4%)
	230,000	Fayette County School District Finance Corp., School Improvements Refunding Revenue, Series A, 2.000%, 10/1/14		234,216
		Massachusetts (0.6%)
	100,000	Massachusetts Health & Educational Facilities Authority, Northeastern University, Series Y1 (G.O. of Institution), 5.000%, 10/1/14		104,545
	225,000	Massachusetts Health & Educational Facilities Authority, Worcester City Campus Corp., University & College Improvements Revenue, Series E (NATL), 4.500%, 10/1/13		225,025
				329,570
		Michigan (0.8%)
	450,000	Michigan State Hospital Finance Authority, Oakwood Obligated Group, Refunding Revenue, Prerefunded 11/1/13 @ 100, 5.500%, 11/1/14		452,057

Continued

56

Sterling Capital Ultra Short Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

  Principal  
   Amount        Fair Value    

MUNICIPAL BONDS — (continued)
	Minnesota (0.6%)
$    100,000	Minneapolis-St. Paul Metropolitan Airports Commission, Subordinate Refunding Revenue, Series C, 4.000%, 1/1/15	$	104,404
200,000	Osseo Independent School District #279, School Building, Refunding Revenue G.O., Series A (AGM, School District Credit Enhancement Program), 5.000%, 2/1/14		203,264
			307,668
	New Hampshire (0.3%)
145,000	New Hampshire Municipal Bond Bank, Refunding Revenue, Series A, Prerefunded 8/15/14 @ 100 (NATL-RE G.O. of Bond Bank), 5.000%, 8/15/19		151,089
	New Jersey (2.7%)
450,000	New Jersey Economic Development Authority, Waste Management NJ, Inc. Project, Resource Recovery Improvements Revenue, 2.200%, 11/1/13(b)		450,432
190,000	New Jersey Health Care Facilities Financing Authority, Hospital Asset Transformation, Health, Hospital, Nursing Home Improvements Revenue, Series A, 5.000%, 10/1/13		190,025
320,000	New Jersey Health Care Facilities Financing Authority, Robert Wood Johnson University Hospital, Refunding Revenue, 4.000%, 7/1/14		328,304
500,000	New Jersey Higher Education Student Assistance Authority, Student Loan Revenue, Series 1A, 3.000%, 12/1/13		502,120
			1,470,881
	New York (2.0%)
200,000	Long Island Power Authority, Refunding Revenue, Series 2010A, 3.000%, 5/1/14		202,852
200,000	Long Island Power Authority, Refunding Revenue, Series B, 5.250%, 6/1/14		206,220
150,000	New York State Dormitory Authority, Economic Development & Housing Improvements, Revenue, Series A, OID, 5.500%, 12/15/13		151,572
370,000	New York State Dormitory Authority, Mount Sinai Hospital, Health, Hospital, Nursing Home Improvements Revenue, Series A, 4.000%, 7/1/14		380,227
110,000	New York State Dormitory Authority, School District Bond Financing Program Revenue, Series D (Assured Guaranty G.O. of Authority), 5.375%, 10/1/14		115,557
			1,056,428
	North Carolina (1.7%)
250,000	Iredell County, NC, Public Facilities Project Improvements, Certificate of Participation (AMBAC), 5.000%, 10/1/13		250,033
275,000	New Hanover County, NC, New Hanover Regional Medical Center, Refunding Revenue, 4.000%, 10/1/13		275,027
250,000	Raleigh Durham Airport Authority, Refunding Revenue, Series B (AMBAC), 5.000%, 5/1/14		256,595

  Principal  
   Amount        Fair Value    

MUNICIPAL BONDS — (continued)
	North Carolina — (continued)
$    160,000	University of North Carolina at Chapel Hill, Refunding Revenue, Series A, 5.000%, 2/1/14	$	162,302
			943,957
	Ohio (0.2%)
100,000	Ohio State Building Authority, State Facilities,
	Administration Building Fund Project, Refunding Revenue, Series B (NATL-RE), 5.000%, 10/1/13		100,013
	Oklahoma (1.4%)
500,000	Cleveland County Educational Facilities Authority, Moore Public Schools Project Revenue, 5.000%, 6/1/14		514,875
250,000	Oklahoma County Finance Authority, Putnam City Public Schools Project Revenue, 4.000%, 3/1/14		253,760
			768,635
	South Carolina (1.2%)
465,000	South Carolina State Public Service Authority, Libor Index, Refunding Revenue, Series D, Taxable, Callable 12/1/14 @ 100, 1.058%, 6/1/15(b)		466,097
100,000	South Carolina State Transportation Infrastructure Bank, Refunding Revenue, Series A, 3.000%, 10/1/13		100,008
100,000	South Carolina State Transportation Infrastructure Bank, Refunding Revenue, Series A, 5.000%, 10/1/13		100,013
			666,118
	Texas (0.6%)
200,000	Harris County, TX, Health Facilities Development Corp., Memorial Hermann Healthcare System, Health, Hospital, Nursing Home Improvements Revenue, Series A, 5.250%, 12/1/13		201,664
140,000	Houston, TX, Airport System Refunding Revenue, Subordinate Lien, Series B (NATL), OID, 4.000%, 7/1/14		143,837
			345,501
	Virginia (0.9%)
100,000	Fairfax County Economic Development Authority, Silver Line Phase I Project , Transit Improvements Revenue, 3.000%, 4/1/14		101,366
200,000	Roanoke Economic Development Authority, Carilion Clinic Obligations Group, Hospital Improvements, Refunding Revenue, 4.000%, 7/1/14		205,482
200,000	Virginia Resources Authority, Clean Water State Revolving Fund, Subordinate, Water Utility Improvements Revenue, 4.000%, 10/1/13		200,022
			506,870

Continued

57

Sterling Capital Ultra Short Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal      Amount		Fair Value
MUNICIPAL BONDS — (continued)
	Washington (0.2%)
$    115,000	King County Rural Library District, Public Improvements, G.O., 3.000%, 12/1/13	$	115,545
	Total Municipal Bonds (Cost $12,674,258)		12,678,795
Shares
MONEY MARKET FUND (1.3%)
716,735	Federated Treasury Obligations Fund, Institutional Shares		716,735
	Total Money Market Fund (Cost $716,735)		716,735
Total Investments — 103.5% (Cost $56,149,041)			56,053,128
Net Other Assets (Liabilities) — (3.5)%			(1,901,427	)
NET ASSETS — 100.0%		$	54,151,701

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

(b) The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The reflected rate is in effect as of September 30, 2013. The maturity date reflected is the final maturity date.

AGM — Assured Guaranty Municipal Corp.

AMBAC — American Municipal Bond Insurance Corp.

BKNT — Bank Note

G.O. — General Obligation

MTN — Medium Term Note

NATL -— National Public Finance Guarantee Corp.

OID — Original Issue Discount

RE — Reinsurance

REIT — Real Estate Investment Trust

XLCA — XL Capital Assurance

See accompanying Notes to the Financial Statements.

58

Sterling Capital Short-Term Bond Fund

Schedule of Portfolio Investments

September 30, 2013

Principal      Amount		Fair Value
ASSET BACKED SECURITIES (9.6%)
$    595,000	AmeriCredit Automobile Receivables Trust, Series 2011-5, Class B, 2.450%, 12/8/16	$	605,507
216,033	Argent Securities, Inc. Pass Through Certificates, Series 2005-W4, Class A2C, 0.479%, 2/25/36(a)		214,486
206,667	Avis Budget Rental Car Funding AESOP, LLC, Series 2011-1A, Class A, 1.850%, 11/20/14(b)		206,919
310,000	Avis Budget Rental Car Funding AESOP, LLC, Series 2011-2A, Class A, 2.370%, 11/20/14(b)		314,427
300,000	Avis Budget Rental Car Funding AESOP, LLC, Series 2010-4A, Class A, 2.090%, 4/20/15(b)		301,547
1,020,000	Avis Budget Rental Car Funding AESOP, LLC, Series 2012-1A, Class A, 2.054%, 8/20/16(b)		1,036,490
1,400,000	Citibank Omni Master Trust, Series 2009-A17, Class A17, 4.900%, 11/15/18(b)		1,465,631
552,025	First Franklin Mortgage Loan Trust, Series 2005-FF5, Class M1, 0.629%, 3/25/35(a)		549,177
400,000	Hyundai Auto Receivables Trust, Series 2013-C, Class A3, 1.010%, 2/15/18		401,500
251,658	Mastr Asset Backed Securities Trust, Series 2006-NC1, Class A3, 0.369%, 1/25/36(a)		245,378
400,168	Nomura Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1, Class A3, 0.389%, 2/25/36(a)		393,715
157,672	Option One Mortgage Loan Trust, Asset-Backed Certificates, Series 2005-4, Class A3, 0.439%, 11/25/35(a)		154,698
480,034	Park Place Securities, Inc. Pass Through Certificates, Series 2005-WHQ1, Class M2, 0.679%, 3/25/35(a)		477,200
1,000,000	Santander Drive Auto Receivables Trust, Series 2012-6, Class A3, 0.620%, 7/15/16		1,000,818
	Total Asset Backed Securities (Cost $7,373,831)		7,367,493
COLLATERALIZED MORTGAGE OBLIGATIONS (4.3%)
729,000	BCAP, LLC Trust, Series 2013-RR4, Class A4A2, 2.000%, 2/13/51(b)		715,788
212,359	Countrywide Alternative Loan Trust, Series 2004-22CB, Class 1A1, 6.000%, 10/25/34		216,621
246,604	Countrywide Home Loan Mortgage Pass Through Trust, Series 2003-J7, Class 1A3, 5.250%, 8/25/33		254,204
413,495	Fannie Mae, Series 2003-66, Class PA, 3.500%, 2/25/33		428,064
357,109	Fannie Mae, Series 2012-121, Class NA, 3.000%, 11/25/42		369,229
312,116	Freddie Mac, Series 2770, Class UE, 4.500%, 3/15/19		329,492
198,177	Freddie Mac, Series 3414, Class A, 4.500%, 7/15/22		201,082
88,913	Freddie Mac, Series 3591, Class A, 4.000%, 1/15/23		90,374
192,194	PHHMC Trust, Series 2007-6, Class A1, 5.648%, 12/18/37(a)		198,522
278,022	Structured Asset Securities Corp. Mortgage Pass Through Certificates, Series 2003-10, Class A, 6.000%, 4/25/33		284,724

Principal      Amount		Fair Value
COLLATERALIZED MORTGAGE OBLIGATIONS — (continued)
$    162,310	Wells Fargo Mortgage Backed Securities Trust, Series 2007-16, Class 1A1, 6.000%, 12/28/37	$	169,062
	Total Collateralized Mortgage Obligations (Cost $3,275,187)		3,257,162
COMMERCIAL MORTGAGE-BACKED SECURITIES (18.1%)
604,000	Banc of America Commercial Mortgage Trust, Series 2006-3, Class A4, 5.889%, 7/10/44(a)		662,962
475,000	Banc of America Commercial Mortgage Trust, Series 2006-4, Class A4, 5.634%, 7/10/46		520,832
475,000	Banc of America Commercial Mortgage Trust, Series 2006-5, Class A4, 5.414%, 9/10/47		520,687
549,461	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2004-3, Class A5, 5.743%, 6/10/39(a)		556,435
250,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-1, Class AJ, 5.463%, 11/10/42(a)		264,489
200,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-3, Class AM, 4.727%, 7/10/43		207,986
600,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-2, Class AJ, 4.953%, 7/10/43(a)		627,856
500,000	Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR9, Class A4B, 4.943%, 9/11/42		532,268
147,427	Bear Stearns Commercial Mortgage Securities Trust, Series 2004-T16, Class A6, 4.750%, 2/13/46(a)		151,774
475,000	CD Commercial Mortgage Trust, Series 2007-CD4, Class A4, 5.322%, 12/11/49		525,087
515,000	CD Mortgage Trust, Series 2006-CD3, Class A5, 5.617%, 10/15/48		564,827
475,000	Citigroup Commercial Mortgage Trust, Series 2006-C4, Class A3, 5.951%, 3/15/49(a)		519,686
396,000	Commercial Mortgage Trust, Series 2005-GG5, Class AM, 5.277%, 4/10/37(a)		419,633
603,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C1, Class AJ, 5.075%, 2/15/38(a)		624,471
500,000	Extended Stay America Trust, Series 2013-ESFL, Class A2FL, 0.882%, 12/5/31(a)(b)		497,329
360,000	GE Capital Commercial Mortgage, Series 2005-C2, Class AJ, 5.061%, 5/10/43(a)		379,003
200,000	GMAC Commercial Mortgage Securities, Inc., Series 2005-C1, Class AM, 4.754%, 5/10/43		208,012
475,000	GMAC Commercial Mortgage Securities, Inc., Series 2006-C1, Class A4, 5.238%, 11/10/45(a)		502,797
420,000	GS Mortgage Securities Corp. II, Series 2013-KYO, Class A, 1.032%, 11/8/29(a)(b)		416,125
700,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-FL3, Class A2, 0.882%, 4/15/28(a)(b)		696,811

Continued

59

Sterling Capital Short-Term Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal      Amount		Fair Value
COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
$    300,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-JWRZ, Class A, 0.962%, 4/15/30(a)(b)	$	296,948
600,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP2, Class AM, 4.780%, 7/15/42		630,568
427,185	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CB16, Class A4, 5.552%, 5/12/45		468,421
500,000	LB-UBS Commercial Mortgage Trust, Series 2006-C3, Class A4, 5.661%, 3/15/39(a)		543,155
500,000	Merrill Lynch Mortgage Trust, Series 2005-MKB2, Class AJ, 5.263%, 9/12/42(a)		524,268
445,311	Morgan Stanley Capital I Trust, Series 2006-HQ9, Class A4, 5.731%, 7/12/44(a)		488,840
500,000	Wachovia Bank Commercial Mortgage Trust, Series 2003-C8, Class E, 5.341%, 11/15/35(a)		500,811
600,000	Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class AMFX, 5.179%, 7/15/42(a)		637,250
364,867	Wachovia Bank Commercial Mortgage Trust, Series 2006-C27, Class A3, 5.765%, 7/15/45(a)		393,581
	Total Commercial Mortgage-Backed Securities (Cost $14,174,119)		13,882,912
CORPORATE BONDS (62.1%)
	Consumer Discretionary (2.6%)
205,000	Daimler Finance North America, LLC, 2.625%, 9/15/16(b)		211,307
260,000	Delphi Corp., 5.875%, 5/15/19		275,925
250,000	DIRECTV Holdings, LLC/DIRECTV Financing Co. Inc., 3.550%, 3/15/15		258,879
420,000	NBCUniversal Media, LLC, 3.650%, 4/30/15		440,154
250,000	Royal Caribbean Cruises, Ltd., 6.875%, 12/1/13		251,563
525,000	Volkswagen International Finance NV, 1.150%, 11/20/15(b)		527,636
			1,965,464
	Consumer Staples (0.7%)
250,000	ConAgra Foods, Inc., 1.350%, 9/10/15		252,035
280,000	Lorillard Tobacco Co., 3.500%, 8/4/16		293,306
			545,341
	Energy (7.4%)
405,000	Boardwalk Pipelines LP, 5.875%, 11/15/16		452,521
410,000	BP Capital Markets PLC, 2.248%, 11/1/16		422,015
440,000	Cameron International Corp., 1.600%, 4/30/15		443,255
315,000	Chesapeake Energy Corp., 3.250%, 3/15/16		316,181
200,000	CNOOC Finance 2013, Ltd., 1.125%, 5/9/16		197,873
250,000	Denbury Resources, Inc., 8.250%, 2/15/20		274,375
410,000	El Paso Natural Gas Co., LLC, 5.950%, 4/15/17		461,399
345,000	Energy Transfer Partners LP, 8.500%, 4/15/14		358,281
400,000	Hess Corp., 7.000%, 2/15/14		408,872
429,000	Petrobras International Finance Co., 2.875%, 2/6/15		435,226

Principal      Amount		Fair Value
CORPORATE BONDS — (continued)
	Energy — (continued)
$    300,000	Petrohawk Energy Corp., 7.875%, 6/1/15	$	306,032
265,000	Plains Exploration & Production Co., 7.625%, 4/1/20		290,274
325,000	Regency Energy Partners LP/Regency Energy Finance Corp., 6.875%, 12/1/18		349,375
250,000	Schlumberger Norge AS, 1.950%, 9/14/16(b)		255,385
350,000	Total Capital International SA, 0.835%, 8/10/18(a)		351,676
300,000	Transcontinental Gas Pipe Line Co., LLC, 6.400%, 4/15/16		338,215
			5,660,955
	Financials (37.2%)
500,000	ABN AMRO Bank NV, 1.375%, 1/22/16(b)		500,050
275,000	Aegon NV, 4.625%, 12/1/15		294,757
255,000	Aflac, Inc., 3.450%, 8/15/15		267,763
400,000	American Express Credit Corp., MTN, 1.750%, 6/12/15		407,290
410,000	American Honda Finance Corp., 1.000%, 8/11/15(b)		411,850
450,000	American International Group, Inc., 3.000%, 3/20/15		463,148
184,000	Associated Banc-Corp., 1.875%, 3/12/14		184,202
325,000	Axis Capital Holdings, Ltd., 5.750%, 12/1/14		342,870
1,000,000	Bank of America Corp., 5.750%, 12/1/17		1,128,083
500,000	Bank of Nova Scotia, 0.654%, 3/15/16(a)		500,639
480,000	Bank of Tokyo-Mitsubishi UFJ, Ltd. (The), 0.868%, 9/9/16(a)(b)		481,950
350,000	Capital One Financial Corp., 1.000%, 11/6/15		348,237
238,000	CBRE Services, Inc., 6.625%, 10/15/20		254,065
260,000	CIT Group, Inc., 4.750%, 2/15/15(b)		269,100
1,000,000	Citigroup, Inc., 1.964%, 5/15/18(a)		1,038,260
395,000	CNA Financial Corp., 6.500%, 8/15/16		446,705
315,000	Comerica Bank, BKNT, 5.750%, 11/21/16		356,092
500,000	Cooperatieve Centrale Raiffeisen- Boerenleenbank BA, 2.125%, 10/13/15		512,233
325,000	DDR Corp., REIT, 9.625%, 3/15/16		385,474
290,000	Duke Realty LP, REIT, 7.375%, 2/15/15		313,018
250,000	Endurance Specialty Holdings, Ltd., 6.150%, 10/15/15		270,596
250,000	Fifth Third Bancorp, 0.672%, 12/20/16(a)		245,549
550,000	Ford Motor Credit Co., LLC, 7.000%, 4/15/15		596,788
948,000	General Electric Capital Corp., MTN, 5.625%, 9/15/17		1,080,221
130,000	General Motors Financial Co., Inc., 2.750%, 5/15/16(b)		129,675
390,000	HCP, Inc., MTN, REIT, 6.300%, 9/15/16		440,993
325,000	Health Care REIT, Inc., 4.700%, 9/15/17		353,651
454,000	Host Hotels & Resorts LP, REIT, 5.875%, 6/15/19		490,187
500,000	HSBC USA, Inc., 2.375%, 2/13/15		511,223
200,000	Hyundai Capital America, 1.875%, 8/9/16(b)		200,836
325,000	ING Bank NV, 2.000%, 9/25/15(b)		329,423
360,000	Jefferies Group, LLC, 5.500%, 3/15/16		388,800
935,000	JPMorgan Chase Bank NA, BKNT, 6.000%, 10/1/17		1,069,784
280,000	KeyCorp., MTN, 3.750%, 8/13/15		294,189
320,000	Kilroy Realty LP, REIT, 5.000%, 11/3/15		343,331
400,000	Kimco Realty Corp., REIT, MTN, 5.584%, 11/23/15		436,886
385,000	Loews Corp., 5.250%, 3/15/16		423,773

Continued

60

Sterling Capital Short-Term Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal      Amount		Fair Value
CORPORATE BONDS — (continued)
	Financials — (continued)
$    305,000	Macquarie Bank, Ltd., 5.000%, 2/22/17(b)	$	332,633
250,000	Manufacturers & Traders Trust Co., BKNT, 0.558%, 3/7/16(a)		249,108
390,000	Manulife Financial Corp., 3.400%, 9/17/15		406,343
335,000	MetLife Institutional Funding II, 1.625%, 4/2/15(b)		339,383
880,000	Morgan Stanley, 4.750%, 3/22/17		950,154
625,000	PNC Bank NA, BKNT, 0.800%, 1/28/16		622,798
350,000	Principal Financial Group, Inc., 1.850%, 11/15/17		346,979
500,000	Prudential Financial, Inc., MTN, 3.000%, 5/12/16		522,726
330,000	Reinsurance Group of America, Inc., 5.625%, 3/15/17		364,683
250,000	Royal Bank of Canada, MTN, 2.625%, 12/15/15		259,680
328,000	Royal Bank of Scotland Group PLC, 5.000%, 10/1/14		336,172
325,000	Simon Property Group LP, REIT, 5.750%, 12/1/15		355,595
350,000	Sirius International Group, Ltd., 6.375%, 3/20/17(b)		382,676
400,000	Standard Chartered Bank, 6.400%, 9/26/17(b)		456,052
300,000	SunTrust Banks, Inc., 3.600%, 4/15/16		316,719
250,000	Tanger Properties LP, REIT, 6.150%, 11/15/15		276,981
375,000	Toronto-Dominion Bank (The), MTN, 0.716%, 9/9/16(a)		375,661
400,000	Toronto-Dominion Bank (The), MTN, Series 1, 0.815%, 4/30/18(a)		400,908
375,000	Transatlantic Holdings, Inc., 5.750%, 12/14/15		412,447
350,000	UBS AG, MTN, 5.875%, 7/15/16		387,292
280,000	Union Bank NA, BKNT, 3.000%, 6/6/16		293,348
500,000	US Bank NA, 3.778%, 4/29/20(a)		521,175
280,000	USAA Capital Corp., 1.050%, 9/30/14(b)		281,506
1,000,000	Vesey Street Investment Trust I, STEP, 4.404%, 9/1/16		1,072,226
800,000	Wachovia Corp., 5.625%, 10/15/16		896,385
395,000	WCI Finance LLC/WEA Finance LLC, 5.700%, 10/1/16(b)		441,874
355,000	WR Berkley Corp., 5.600%, 5/15/15		375,955
			28,489,150
	Health Care (3.9%)
425,000	AbbVie, Inc., 1.200%, 11/6/15		426,538
400,000	DaVita HealthCare Partners, Inc., 6.375%, 11/1/18		420,000
440,000	DENTSPLY International, Inc., 2.750%, 8/15/16		453,195
260,000	HCA, Inc., 8.500%, 4/15/19		279,500
250,000	Mylan, Inc., 7.875%, 7/15/20(b)		285,267
390,000	Providence Health & Services, 1.198%, 10/1/17(a)		389,617
250,000	Ventas Realty LP, 1.550%, 9/26/16		250,335
500,000	Zoetis, Inc., 1.150%, 2/1/16(b)		502,012
			3,006,464
	Industrials (3.2%)
270,000	Bombardier, Inc., 4.250%, 1/15/16(b)		280,125
300,000	CNH Capital, LLC, 3.875%, 11/1/15		309,000
350,000	Equifax, Inc., 4.450%, 12/1/14		363,633

Principal      Amount		Fair Value
CORPORATE BONDS — (continued)
	Industrials — (continued)
$     445,000	Penske Truck Leasing Co. LP/PTL Finance Corp., 3.125%, 5/11/15(b)	$	458,041
350,000	Textron, Inc., 6.200%, 3/15/15		373,899
300,000	United Rentals North America, Inc., 10.250%, 11/15/19		339,000
310,000	Waste Management, Inc., 6.375%, 3/11/15		333,396
			2,457,094
	Materials (2.8%)
250,000	Anglo American Capital PLC, 9.375%, 4/8/14(b)		260,447
250,000	ArcelorMittal USA, LLC, 6.500%, 4/15/14		255,782
200,000	Barrick Gold Corp., 2.900%, 5/30/16		202,537
300,000	Ecolab, Inc., 1.000%, 8/9/15		300,139
350,000	Rio Tinto Finance USA PLC, 1.094%, 6/17/16(a)		351,698
450,000	Vale Overseas, Ltd., 6.250%, 1/11/16		497,513
240,000	Xstrata Finance Canada, Ltd., 2.050%, 10/23/15(b)		240,653
			2,108,769
	Telecommunication Services (2.5%)
330,000	America Movil SAB de CV, 2.375%, 9/8/16		335,544
375,000	America Movil SAB de CV, 1.256%, 9/12/16(a)		375,001
300,000	Crown Castle Towers, LLC, 4.523%, 1/15/15(b)		311,230
300,000	SBA Telecommunications, Inc., 8.250%, 8/15/19		324,000
220,000	Verizon Communications, Inc., 1.782%, 9/15/16(a)		226,417
300,000	Vodafone Group PLC, 2.875%, 3/16/16		311,193
			1,883,385
	Utilities (1.8%)
300,000	CMS Energy Corp., 4.250%, 9/30/15		316,282
250,000	Duke Energy Corp., 2.150%, 11/15/16		257,135
270,000	PSEG Power, LLC, 5.500%, 12/1/15		294,662
230,000	Southern California Edison Co., Series 05-A, 5.000%, 1/15/16		251,570
250,000	Southern Power Co., Series D, 4.875%, 7/15/15		267,424
			1,387,073
	Total Corporate Bonds (Cost $47,546,770)		47,503,695
MORTGAGE-BACKED SECURITIES (0.1%)
	Fannie Mae (0.1%)
72,144	6.500%, 4/1/16, Pool #253706		75,656
	Total Mortgage-Backed Securities (Cost $72,346)		75,656
MUNICIPAL BONDS (3.6%)
	Illinois (1.3%)
1,000,000	State of Illinois, Build America Bonds, Transit Improvements G.O., 4.200%, 7/1/14		1,019,050
	Maine (0.3%)
250,000	Maine Municipal Bond Bank, Taxable, Miscellaneous Purpose, Revenue Bonds, 1.708%, 6/1/16		251,123

Continued

61

Sterling Capital Short-Term Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal      Amount		Fair Value
MUNICIPAL BONDS — (continued)
	New Jersey (0.4%)
$    320,000	New Jersey Economic Development Authority, School Facilities Construction Refunding Revenue, Series 00, 1.059%, 3/1/16	$	317,894
	South Carolina (0.7%)
500,000	South Carolina State Public Service Authority, Taxable Libor Index Refunding Revenue Bonds, Series D, Callable 12/1/15 @ 100, 1.283%, 6/1/16(a)		501,330
	Virginia (0.9%)
115,000	City of Danville, VA, Refunding G.O., Series B, Taxable (Assured Guaranty, State Aid Withholding), 4.200%, 3/1/14		116,500
100,000	City of Danville, VA, Refunding G.O., Series B, Taxable (Assured Guaranty, State Aid Withholding), 4.200%, 3/1/14		101,516
230,000	City of Danville, VA, Refunding G.O., Series B, Taxable (Assured Guaranty, State Aid Withholding), 4.550%, 3/1/15		239,681
200,000	City of Danville, VA, Refunding G.O., Series B, Taxable (Assured Guaranty, State Aid Withholding), 4.550%, 3/1/15		210,020
			667,717
	Total Municipal Bonds (Cost $2,715,000)		2,757,114
Shares
PREFERRED STOCKS (0.9%)
	Financials (0.5%)
6,925	Aegon NV, 7.250%		173,541
9,000	CubeSmart, Series A, REIT, 7.750%		229,050
			402,591
	Utilities (0.4%)
10,800	Dominion Resources, Inc., Series A, 8.375%		281,664
	Total Preferred Stocks (Cost $710,539)		684,255

Shares		Fair Value
MONEY MARKET FUND (1.3%)
961,724	Federated Treasury Obligations Fund, Institutional Shares	$	961,724
	Total Money Market Fund (Cost $961,724)		961,724
Total Investments — 100.0% (Cost $76,829,516)			76,490,011
Net Other Assets (Liabilities) — (0.0%)			(7,646	)
NET ASSETS — 100.0%		$	76,482,365

(a) The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The reflected rate is in effect as of September 30, 2013. The maturity date reflected is the final maturity date.

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

BKNT — Bank Note

G.O. — General Obligation

MTN — Medium Term Note

REIT — Real Estate Investment Trust

STEP — Step Coupon Bond

See accompanying Notes to the Financial Statements.

62

Sterling Capital Intermediate U.S. Government Fund

Schedule of Portfolio Investments

September 30, 2013

Principal         Amount		Fair Value
COLLATERALIZED MORTGAGE OBLIGATIONS (6.1%)
$1,495,140	Fannie Mae, Series 2010-129, Class NA, 3.500%, 3/25/25	$	1,576,272
1,336,087	Freddie Mac, Series 3644, Class BA, 4.500%, 2/15/29		1,415,384
561,742	Ginnie Mae, Series 1999-17, Class F, 0.482%, 5/16/29(a)		565,738
	Total Collateralized Mortgage Obligations (Cost $3,479,599)		3,557,394
CORPORATE BONDS (7.1%)
	Financials (7.1%)
500,000	Barclays Bank PLC, 3.900%, 4/7/15		522,195
500,000	General Electric Capital Corp., MTN, 3.500%, 6/29/15		522,955
1,000,000	Goldman Sachs Group, Inc. (The), 5.125%, 1/15/15		1,051,865
500,000	JPMorgan Chase & Co., GMTN, 1.100%, 10/15/15		500,957
1,000,000	MBNA Corp., 5.000%, 6/15/15		1,062,085
500,000	Morgan Stanley, 2.125%, 4/25/18		487,324
	Total Corporate Bonds (Cost $4,020,286)		4,147,381
MORTGAGE-BACKED SECURITIES (17.1%)
	Fannie Mae (10.5%)
1,925,130	3.584%, 9/1/20, Pool #FN0000		2,023,167
308,767	5.500%, 1/1/33, Pool #678321		335,956
1,120,191	5.000%, 7/1/33, Pool #724965		1,218,785
326,162	6.000%, 7/1/37, Pool #938378		357,751
2,053,564	5.500%, 8/1/37, Pool #946238		2,224,136
			6,159,795
	Freddie Mac (5.6%)
3,104,741	3.500%, 12/1/25, Pool #G14007		3,270,427
	Ginnie Mae (1.0%)
553,002	5.000%, 11/20/38, Pool #4283		580,790
	Total Mortgage-Backed Securities (Cost $9,316,000)		10,011,012
MUNICIPAL BONDS (3.1%)
	Illinois (3.1%)
1,000,000	State of Illinois, Building Public Improvements Revenue, Taxable, 1.998%, 6/15/18		997,530
810,000	Village of Rosemont, IL, Corporate Purpose, Refunding G.O., Taxable, Series B (AGM), 2.389%, 12/1/17		797,421
	Total Municipal Bonds (Cost $1,810,000)		1,794,951
U.S. GOVERNMENT AGENCIES (48.1%)
	Fannie Mae (13.0%)
1,550,000	1.125%, 4/10/28, STEP		1,438,278
1,150,000	1.000%, 4/17/28, STEP		1,061,367
2,000,000	6.250%, 5/15/29		2,559,756

Principal         Amount		Fair Value
U.S. GOVERNMENT AGENCIES — (continued)
	Fannie Mae — (continued)
$1,820,000	7.125%, 1/15/30	$	2,528,289
			7,587,690
	Federal Farm Credit Bank (9.7%)
5,000,000	4.670%, 2/27/18		5,686,615
	Federal Home Loan Bank (5.0%)
2,000,000	1.000%, 1/17/23, Series 0000, STEP		1,926,066
1,000,000	1.000%, 11/8/27, Series 0001, STEP		983,242
			2,909,308
	Freddie Mac (18.8%)
2,000,000	4.875%, 6/13/18		2,299,458
4,000,000	3.750%, 3/27/19		4,401,684
3,000,000	2.375%, 1/13/22		2,919,888
1,000,000	6.750%, 3/15/31		1,355,451
			10,976,481
	Private Export Funding Corp. (1.6%)
1,000,000	1.450%, 8/15/19, Series HH		956,731
	Total U.S. Government Agencies (Cost $27,947,832)		28,116,825
U.S. TREASURY NOTES (17.3%)
2,000,000	0.500%, 11/15/13		2,001,094
5,000,000	0.625%, 7/15/14		5,020,705
1,500,000	0.125%, 7/31/14		1,500,351
1,000,000	3.000%, 2/28/17		1,073,438
500,000	2.625%, 4/30/18		530,508
	Total U.S. Treasury Notes (Cost $10,136,571)		10,126,096
Shares
MONEY MARKET FUND (0.9%)
557,710	Federated Treasury Obligations Fund, Institutional Shares		557,710
	Total Money Market Fund (Cost $557,710)		557,710
Total Investments — 99.7% (Cost $57,267,998)			58,311,369
Net Other Assets (Liabilities) — 0.3%			159,312
NET ASSETS — 100.0%		$	58,470,681

(a) The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The reflected rate is in effect as of September 30, 2013. The maturity date reflected is the final maturity date.

AGM — Assured Guaranty Municipal Corp.

G.O. — General Obligation

GMTN — Global Medium Term Note

MTN — Medium Term Note

STEP — Step Coupon Bond

See accompanying Notes to the Financial Statements.

63

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments

September 30, 2013

Principal   Amount		Fair Value
ASSET BACKED SECURITIES (6.1%)
$1,487,038	Argent Securities, Inc. Pass Through Certificates, Series 2005-W3, Class A2D, 0.519%, 11/25/35(a)	$	1,361,164
8,272,000	Avis Budget Rental Car Funding AESOP, LLC, Series 2012-3A, Class A, 2.100%, 3/20/19(b)		8,249,624
1,825,000	Chase Issuance Trust, Series 2012-A9, Class A9, 0.332%, 10/16/17(a)		1,823,060
6,255,000	Citibank Omni Master Trust, Series 2009-A14A, Class A14, 2.932%, 8/15/18(a)(b)		6,386,005
767,086	Credit-Based Asset Servicing and Securitization, LLC, Series 2005-CB5, Class AF2, STEP, 4.498%, 8/25/35		777,649
2,923,454	Long Beach Mortgage Loan Trust, Series 2006-WL2, Class 2A3, 0.379%, 1/25/36(a)		2,629,793
1,200,084	Park Place Securities, Inc. Pass Through Certificates, Series 2005-WHQ1, Class M2, 0.679%, 3/25/35(a)		1,192,999
1,844,002	RAAC Trust, Series 2004-SP1, Class AI3, STEP, 5.618%, 3/25/34		1,891,325
5,967,768	Securitized Asset Backed Receivables, LLC Trust, Series 2005-OP2, Class A2C, 0.499%, 10/25/35(a)		5,522,501
	Total Asset Backed Securities (Cost $30,274,146)		29,834,120
COLLATERALIZED MORTGAGE OBLIGATIONS (10.4%)
1,040,316	Adjustable Rate Mortgage Trust, Series 2004-5, Class 4A1, 5.091%, 4/25/35(a)		1,034,231
1,089,978	Banc of America Alternative Loan Trust, Series 2004-10, Class 1CB1, 6.000%, 11/25/34		1,130,349
1,872,634	Banc of America Funding Trust, Series 2006-2, Class 3A1, 6.000%, 3/25/36		1,866,864
352,300	Banc of America Mortgage Trust, Series 2005-3, Class 1A24, 5.500%, 4/25/35		358,513
5,289,000	BCAP, LLC Trust, Series 2013-RR4, Class A4A2, 2.000%, 2/13/51(b)		5,193,147
552,545	Citicorp Mortgage Securities, Inc., Series 2005-1, Class 1A2, 5.000%, 2/25/35		552,130
314,406	Citigroup Mortgage Loan Trust, Inc., Series 2004-NCM2, Class 3CB2, 6.500%, 8/25/19		336,068
1,210,447	Countrywide Alternative Loan Trust, Series 2004-22CB, Class 1A1, 6.000%, 10/25/34		1,234,741
655,451	Countrywide Home Loan Mortgage Pass Through Trust, Series 2002-38, Class A3, 5.000%, 2/25/18		655,994
120,801	Countrywide Home Loan Mortgage Pass Through Trust, Series 2003-28, Class A3, 4.500%, 8/25/33		121,146
275,648	Countrywide Home Loan Mortgage Pass Through Trust, Series 2003-J7, Class 1A3, 5.250%, 8/25/33		284,143
429,952	Countrywide Home Loan Mortgage Pass Through Trust, Series 2004-3, Class A4, 5.750%, 4/25/34		439,450
187,912	Countrywide Home Loan Mortgage Pass Through Trust, Series 2005-J4, Class A3, 5.500%, 11/25/35		187,195
323,118	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-2, Class 4A1, 5.250%, 2/25/20		325,277

Principal   Amount		Fair Value
COLLATERALIZED MORTGAGE OBLIGATIONS — (continued)
$ 843,552	Credit Suisse First Boston Mortgage Securities Corp., Series 2004-1, Class 2A1, 6.500%, 2/25/34	$	900,813
506,156	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-6, Class 2A3, 5.500%, 7/25/35		517,351
847,546	Fannie Mae, Series 2003-33, Class A, 4.000%, 5/25/33		874,707
808,308	Fannie Mae, Series 2003-33, Class AQ, 4.000%, 5/25/33		834,211
3,171,335	Fannie Mae, Series 2011-38, Class D, 4.500%, 5/25/41		3,497,631
1,958,499	Freddie Mac, Series 3768, Class V, 4.000%, 11/15/23		2,089,742
1,153,964	Freddie Mac, Series 3632, Class PK, 5.000%, 2/15/40		1,270,195
5,042,196	Freddie Mac, Series 4077, Class PJ, 3.500%, 11/15/40		5,341,178
1,680,850	Ginnie Mae, Series 2008-51, Class PG, 5.000%, 6/20/38		1,813,615
1,240,463	MASTR Alternative Loan Trust, Series 2003-5, Class 8A1, 5.500%, 6/25/33		1,236,305
1,123,789	MASTR Alternative Loan Trust, Series 2004-13, Class 3A1, 6.500%, 1/25/35		1,142,876
249,848	MASTR Asset Securitization Trust, Series 2003-4, Class 5A1, 5.500%, 5/25/33		258,428
138,335	MASTR Asset Securitization Trust, Series 2005-2, Class 1A1, 5.250%, 11/25/35		138,040
601,846	MASTR Seasoned Securitization Trust, Series 2005-2, Class 1A1, 5.130%, 10/25/32		592,849
1,848,022	PHHMC Trust, Series 2007-6, Class A1, 5.648%, 12/18/37(a)		1,908,861
316,842	RAAC Trust, Series 2004-SP3, Class AI5, 4.890%, 12/25/32(a)		320,463
1,350,605	RALI Trust, Series 2005-QR1, Class A, 6.000%, 10/25/34		1,387,686
750,782	Residential Asset Securitization Trust, Series 2004-IP2, Class 4A, 2.645%, 12/25/34(a)		739,702
2,375,617	Specialty Underwriting & Residential Finance Trust, Series 2004-AA1, Class 1A1, 5.000%, 10/25/34		2,404,640
1,880,756	Structured Adjustable Rate Mortgage Loan Trust, Series 2004-6, Class 4A1, 2.540%, 6/25/34(a)		1,919,637
1,192,252	Structured Asset Securities Corp. Mortgage Pass Through Certificates, Series 2003-10, Class A, 6.000%, 4/25/33		1,220,990
936,510	Structured Asset Securities Corp. Trust, Series 2005-6, Class 5A2, 5.000%, 5/25/35		957,794
519,295	Structured Asset Securities Corp. Trust, Series 2005-6, Class 5A1, 5.000%, 5/25/35		531,095
389,524	Wells Fargo Mortgage Backed Securities Trust, Series 2007-3, Class 3A1, 5.500%, 4/25/22		401,482
1,505,826	Wells Fargo Mortgage Backed Securities Trust, Series 2004-BB, Class A2, 2.624%, 1/25/35(a)		1,508,322
870,240	Wells Fargo Mortgage Backed Securities Trust, Series 2005-4, Class A4, 5.000%, 4/25/35		886,294
1,641,657	Wells Fargo Mortgage Backed Securities Trust, Series 2005-AR16, Class 6A3, 2.630%, 10/25/35(a)		1,654,508

Continued

64

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal      Amount			Fair Value
	COLLATERALIZED MORTGAGE OBLIGATIONS — (continued)
	$    522,962	Wells Fargo Mortgage Backed Securities Trust, Series 2007-16, Class 1A1, 6.000%, 12/28/37	$	544,718
		Total Collateralized Mortgage Obligations (Cost $50,141,776)		50,613,381
	COMMERCIAL MORTGAGE-BACKED SECURITIES (15.9%)
	5,000,000	Banc of America Commercial Mortgage Trust, Series 2006-3, Class A4, 5.889%, 7/10/44(a)		5,488,095
	4,871,000	Banc of America Commercial Mortgage Trust, Series 2006-5, Class A4, 5.414%, 9/10/47		5,339,507
	127,589	Banc of America Commercial Mortgage Trust, Series 2007-2, Class A2, 5.634%, 4/10/49(a)		129,089
	2,500,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-1, Class AJ, 5.463%, 11/10/42(a)		2,644,895
	1,560,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-3, Class AM, 4.727%, 7/10/43		1,622,292
	1,750,000	Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR9, Class A4B, 4.943%, 9/11/42		1,862,936
	2,000,000	CD Commercial Mortgage Trust, Series 2005-CD1, Class AM, 5.393%, 7/15/44(a)		2,150,084
	5,000,000	CD Commercial Mortgage Trust, Series 2007-CD4, Class A4, 5.322%, 12/11/49		5,527,230
	3,100,000	CD Mortgage Trust, Series 2006-CD3, Class A5, 5.617%, 10/15/48		3,399,928
	3,000,000	COMM Mortgage Trust, Series 2005-LP5, Class AJ, 5.046%, 5/10/43(a)		3,158,382
	3,845,000	Commercial Mortgage Trust, Series 2005-GG5, Class AM, 5.277%, 4/10/37(a)		4,074,470
	600,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2004-C5, Class AJ, 4.889%, 11/15/37(a)		622,059
	2,828,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C1, Class AJ, 5.075%, 2/15/38(a)		2,928,697
	2,000,000	GE Capital Commercial Mortgage, Series 2005-C2, Class AJ, 5.061%, 5/10/43(a)		2,105,574
	3,400,000	GMAC Commercial Mortgage Securities, Inc., Series 2005-C1, Class AM, 4.754%, 5/10/43		3,536,207
	2,000,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP2, Class AM, 4.780%, 7/15/42.		2,101,892
	4,605,522	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CB16, Class A4, 5.552%, 5/12/45		5,050,102
	2,250,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2011-C3, Class B, 5.013%, 2/15/46(a)(b)		2,405,237
	2,500,000	LB-UBS Commercial Mortgage Trust, Series 2007-C1, Class A4, 5.424%, 2/15/40		2,768,370
	500,000	Merrill Lynch Mortgage Trust, Series 2005-MKB2, Class AJ, 5.263%, 9/12/42(a)		524,268
	2,390,000	Morgan Stanley Capital I Trust, Series 2006-HQ8, Class AM, 5.646%, 3/12/44(a)		2,584,861
	1,995,000	Wachovia Bank Commercial Mortgage Trust, Series 2003-C8, Class E, 5.341%, 11/15/35(a)		1,998,238

Principal      Amount			Fair Value
	COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
	$    300,000	Wachovia Bank Commercial Mortgage Trust, Series 2003-C9, Class B, 5.109%, 12/15/35(a)	$	300,882
	1,050,000	Wachovia Bank Commercial Mortgage Trust, Series 2004-C11, Class B, 5.306%, 1/15/41(a)		1,070,892
	3,170,000	Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class AMFX, 5.179%, 7/15/42(a)		3,366,806
	790,772	Wachovia Bank Commercial Mortgage Trust, Series 2007-C30, Class A3, 5.246%, 12/15/43		793,453
	2,134,345	Wachovia Bank Commercial Mortgage Trust, Series 2006-C27, Class A3, 5.765%, 7/15/45(a)		2,302,311
	4,995,000	Wachovia Bank Commercial Mortgage Trust, Series 2006-C28, Class A4, 5.572%, 10/15/48		5,483,851
	2,000,000	WF-RBS Commercial Mortgage Trust, Series 2011-C2, Class B, 5.174%, 2/15/44(a)(b)		2,158,154
		Total Commercial Mortgage-Backed Securities (Cost $77,728,434)		77,498,762
	CORPORATE BONDS (42.9%)
		Consumer Discretionary (3.8%)
	1,621,000	Comcast Cable Communications Holdings, Inc., 9.455%, 11/15/22(c)		2,285,164
	1,287,000	Delphi Corp., 5.875%, 5/15/19(c)		1,365,829
	1,124,000	ERAC USA Finance, LLC, 2.800%, 11/1/18(b)		1,131,983
	1,487,000	Ford Motor Co., 7.450%, 7/16/31		1,814,724
	1,835,000	George Washington University (The), 3.485%, 9/15/22		1,812,415
	905,000	Grupo Televisa SAB, 6.000%, 5/15/18		1,021,635
	1,130,000	Interpublic Group of Cos., Inc. (The), 3.750%, 2/15/23		1,057,751
	601,000	NBCUniversal Media, LLC, 5.950%, 4/1/41		678,794
	753,000	News America, Inc., 5.400%, 10/1/43(b)(d)		753,894
	636,000	Nordstrom, Inc., 6.250%, 1/15/18		740,161
	791,000	Royal Caribbean Cruises, Ltd., 11.875%, 7/15/15		927,447
	1,575,000	Service Corp. International, 7.000%, 5/15/19		1,677,375
	1,250,000	Toll Brothers Finance Corp., 6.750%, 11/1/19		1,381,250
	1,050,000	Viacom, Inc., 5.850%, 9/1/43		1,068,921
	862,000	Wyndham Worldwide Corp., 5.625%, 3/1/21		931,112
				18,648,455
		Consumer Staples (1.1%)
	738,000	Altria Group, Inc., 9.950%, 11/10/38		1,101,672
	1,052,000	CVS Caremark Corp., 6.125%, 9/15/39(c)		1,202,532
	2,000,000	Embotelladora Andina SA, 5.000%, 10/1/23(b)(d)		2,005,000
	917,000	Lorillard Tobacco Co., 6.875%, 5/1/20		1,054,554
				5,363,758
		Energy (5.7%)
	1,140,000	Atlas Pipeline Partners LP/Atlas Pipeline Finance Corp., 5.875%, 8/1/23(b)		1,071,600
	1,533,000	Boardwalk Pipelines LP, 3.375%, 2/1/23		1,408,550
	1,623,000	BP Capital Markets PLC, 1.375%, 11/6/17		1,598,454
	1,028,000	Buckeye Partners LP, 4.150%, 7/1/23		1,003,171

Continued

65

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal      Amount			Fair Value
	CORPORATE BONDS — (continued)
		Energy — (continued)
	$1,158,000	Cameron International Corp., 6.375%, 7/15/18	$	1,362,518
	1,396,000	Chesapeake Energy Corp., 3.250%, 3/15/16		1,401,235
	1,904,000	CNOOC Finance, Ltd., 1.750%, 5/9/18		1,840,713
	1,203,000	Denbury Resources, Inc., 8.250%, 2/15/20		1,320,293
	1,198,000	Energy Transfer Partners LP, 9.000%, 4/15/19		1,513,080
	1,435,000	Enterprise Products Operating, LLC, 5.950%, 2/1/41(c)		1,546,541
	1,133,000	Hess Corp., 5.600%, 2/15/41		1,164,802
	1,949,000	Kinder Morgan Energy Partners LP, 5.000%, 3/1/43		1,762,580
	856,000	NuStar Logistics LP, 8.150%, 4/15/18(c)		956,580
	932,000	Petrobras Global Finance BV, 2.000%, 5/20/16		925,980
	1,086,000	Petrobras International Finance Co., 3.500%, 2/6/17(c)		1,102,780
	1,226,000	Petrohawk Energy Corp., 6.250%, 6/1/19		1,344,003
	992,000	Phillips 66, 5.875%, 5/1/42		1,042,004
	975,000	Plains Exploration & Production Co., 6.500%, 11/15/20		1,046,100
	854,000	Regency Energy Partners LP/Regency Energy Finance Corp., 6.500%, 7/15/21		896,700
	1,127,000	Schlumberger Investment SA, 3.300%, 9/14/21(b)		1,128,768
	1,543,000	Shell International Finance BV, 4.550%, 8/12/43		1,520,127
	850,000	Western Gas Partners LP, 4.000%, 7/1/22		824,935
				27,781,514
		Financials (24.5%)
	586,000	Aflac, Inc., 8.500%, 5/15/19		757,410
	892,000	Alexandria Real Estate Equities, Inc., REIT, 4.600%, 4/1/22		896,463
	3,075,000	American International Group, Inc., 3.800%, 3/22/17(c)		3,270,296
	1,279,000	Associates Corp. of North America, 6.950%, 11/1/18		1,519,272
	1,147,000	Bank of America Corp., MTN, 5.875%, 2/7/42		1,273,493
	1,074,000	Bank of America Corp., Series K, 8.000%, 12/29/49(a)		1,167,975
	1,299,000	Bank of New York Mellon Corp. (The), STEP, 1.969%, 6/20/17		1,310,594
	1,938,000	Bank of Nova Scotia, 0.654%, 3/15/16(a)		1,940,479
	2,573,000	Bear Stearns Cos., LLC (The), 5.550%, 1/22/17(c)		2,855,634
	1,132,000	Blackstone Holdings Finance Co., LLC, 6.625%, 8/15/19(b)		1,332,556
	1,300,000	BNP Paribas SA, MTN, 3.250%, 3/3/23		1,217,544
	1,055,000	Carlyle Holdings Finance, LLC, 3.875%, 2/1/23(b)		1,031,326
	1,772,000	CBRE Services, Inc., 6.625%, 10/15/20		1,891,610
	1,455,000	CIT Group, Inc., 4.750%, 2/15/15(b)		1,505,925
	960,000	Citigroup, Inc., 5.875%, 1/30/42		1,067,375
	1,365,000	CNA Financial Corp., 7.350%, 11/15/19		1,661,306
	1,376,000	Cooperatieve Centrale Raiffeisen- Boerenleenbank BA, 3.950%, 11/9/22		1,320,224
	1,378,000	Corrections Corp. of America, REIT, 4.125%, 4/1/20(b)		1,305,655
	1,474,000	CubeSmart LP, REIT, 4.800%, 7/15/22		1,532,858
	1,308,000	Duke Realty LP, REIT, 7.375%, 2/15/15		1,411,820
	1,381,000	Fifth Third Bancorp, 3.625%, 1/25/16		1,456,967
	664,000	First American Financial Corp., 4.300%, 2/1/23		642,685

Principal      Amount			Fair Value
	CORPORATE BONDS — (continued)
		Financials — (continued)
	$1,338,000	General Electric Capital Corp., GMTN, 6.875%, 1/10/39(c)		$1,639,783
	3,499,000	General Electric Capital Corp., Series B, 6.250%, 12/29/49(a)(c)		3,533,990
	1,624,000	General Motors Financial Co., Inc., 2.750%, 5/15/16(b)		1,619,940
	1,327,000	Goldman Sachs Group, Inc. (The), 6.250%, 2/1/41		1,486,663
	1,025,000	Goodman Funding Pty, Ltd., REIT, 6.375%, 11/12/20(b)		1,135,514
	1,393,000	HCP, Inc., REIT, 6.000%, 1/30/17		1,566,565
	2,107,000	Health Care REIT, Inc., 4.125%, 4/1/19(c)		2,219,181
	1,300,000	Healthcare Realty Trust, Inc., REIT, 3.750%, 4/15/23		1,209,064
	1,676,000	Healthcare Trust of America Holdings LP, REIT, 3.700%, 4/15/23(b)		1,570,824
	972,000	Host Hotels & Resorts LP, REIT, Series D, 3.750%, 10/15/23		899,728
	2,500,000	HSBC Finance Corp., 0.690%, 6/1/16(a)		2,490,953
	2,513,000	HSBC Finance Corp., 6.676%, 1/15/21		2,869,740
	1,601,000	ING Bank NV, 4.000%, 3/15/16(b)(c)		1,690,576
	1,596,000	ING US, Inc., 2.900%, 2/15/18		1,602,512
	739,000	ING US, Inc., 5.700%, 7/15/43(b)		733,508
	1,061,000	Invesco Finance PLC, 3.125%, 11/30/22		985,160
	1,036,000	Jefferies Group, LLC, 8.500%, 7/15/19(c)		1,254,427
	1,376,000	Jones Lang LaSalle, Inc., 4.400%, 11/15/22		1,347,887
	570,000	JPMorgan Chase & Co., 5.600%, 7/15/41		614,540
	742,000	Kimco Realty Corp., REIT, MTN, 5.783%, 3/15/16		818,100
	1,390,000	Lexington Realty Trust, REIT, 4.250%, 6/15/23(b)		1,345,079
	983,000	Liberty Mutual Group, Inc., 6.500%, 5/1/42(b)		1,060,793
	980,000	Macquarie Bank, Ltd., 5.000%, 2/22/17(b)		1,068,788
	952,000	Macquarie Bank, Ltd., 6.625%, 4/7/21(b)(c)		1,037,966
	1,120,000	Markel Corp., 7.125%, 9/30/19		1,338,429
	946,000	Massachusetts Mutual Life Insurance Co., 8.875%, 6/1/39(b)		1,369,792
	2,835,000	Merrill Lynch & Co., Inc., MTN, 6.875%, 4/25/18		3,341,062
	4,026,000	Morgan Stanley, 5.375%, 10/15/15		4,329,291
	3,486,000	Morgan Stanley, GMTN, 6.625%, 4/1/18(c)		4,047,096
	5,502,000	Murray Street Investment Trust I, STEP, 4.647%, 3/9/17(c)		5,867,861
	1,120,000	National Rural Utilities Cooperative Finance Corp., 4.750%, 4/30/43(a)		1,036,000
	762,000	Nationwide Mutual Insurance Co., 9.375%, 8/15/39(b)		1,050,126
	855,000	OneBeacon US Holdings, Inc., 4.600%, 11/9/22		846,187
	1,187,000	Pacific LifeCorp, 5.125%, 1/30/43(b)		1,094,645
	500,000	PNC Bank NA, BKNT, 4.875%, 9/21/17		554,762
	1,007,000	PNC Bank NA, BKNT, 6.000%, 12/7/17(c)		1,165,903
	1,305,000	Prudential Financial, Inc., 8.875%, 6/15/38(a)(c)		1,579,050
	1,200,000	Prudential Holdings, LLC, 8.695%, 12/18/23(b).		1,508,388
	1,065,000	Reinsurance Group of America, Inc., 5.625%, 3/15/17		1,176,933
	1,340,000	Royal Bank of Canada, GMTN, 2.200%, 7/27/18		1,344,279
	1,096,000	Royal Bank of Scotland Group PLC, 5.000%, 10/1/14		1,123,308

Continued

66

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal     Amount			Fair Value
	CORPORATE BONDS — (continued)
		Financials — (continued)
$	960,000	Royal Bank of Scotland PLC (The), 5.625%, 8/24/20	$	1,059,970
	1,473,000	Simon Property Group LP, REIT, 10.350%, 4/1/19(c)		2,003,483
	1,014,000	Sirius International Group, Ltd., 6.375%, 3/20/17(b)		1,108,667
	1,350,000	Standard Chartered Bank, 6.400%, 9/26/17(b)		1,539,175
	1,245,000	SunTrust Banks, Inc., 3.500%, 1/20/17		1,316,556
	2,545,000	Toronto-Dominion Bank (The), MTN, 0.716%, 9/9/16(a)		2,549,489
	927,000	Transatlantic Holdings, Inc., 8.000%, 11/30/39		1,138,453
	805,000	Validus Holdings, Ltd., 8.875%, 1/26/40		1,005,662
	1,603,000	Ventas Realty LP/Ventas Capital Corp., REIT, 2.000%, 2/15/18		1,570,696
	2,109,000	Wachovia Bank NA, MTN, 5.600%, 3/15/16(c)		2,329,458
	1,225,000	Wachovia Corp., 5.500%, 8/1/35		1,260,878
	1,190,000	Wells Fargo Bank NA, 0.473%, 5/16/16(a)		1,177,380
				119,003,727
		Health Care (1.9%)
	1,136,000	DaVita HealthCare Partners, Inc., 6.625%, 11/1/20		1,207,000
	1,190,000	DENTSPLY International, Inc., 2.750%, 8/15/16(c)		1,225,686
	1,554,000	Edwards Lifesciences Corp., 2.875%, 10/15/18(d)		1,547,882
	766,000	Fresenius US Finance II, Inc., 9.000%, 7/15/15(b)		850,260
	716,000	HCA, Inc., 8.500%, 4/15/19		769,700
	814,000	Mylan, Inc., 7.875%, 7/15/20(b)		928,829
	1,340,000	Valeant Pharmaceuticals International, 6.500%, 7/15/16(b)		1,386,900
	1,114,000	Ventas Realty LP, 5.700%, 9/30/43		1,126,430
				9,042,687
		Industrials (2.0%)
	1,101,000	Burlington Northern Santa Fe, LLC, 4.950%, 9/15/41		1,073,004
	1,205,000	CNH Capital, LLC, 3.875%, 11/1/15		1,241,150
	389,000	Ingersoll-Rand Global Holding Co., Ltd., 2.875%, 1/15/19(b)		387,762
	942,500	Nielsen Finance, LLC/Nielsen Finance Co., 4.500%, 10/1/20		907,156
	1,335,000	Penske Truck Leasing Co. LP/PTL Finance Corp., 3.125%, 5/11/15(b)		1,374,124
	1,298,000	Ryder System, Inc., MTN, 2.350%, 2/26/19		1,268,299
	925,000	Textron, Inc., 4.625%, 9/21/16(c)		998,097
	976,000	United Rentals North America, Inc., 10.250%, 11/15/19		1,102,880
	1,060,000	Verisk Analytics, Inc., 5.800%, 5/1/21(c)		1,171,436
				9,523,908
		Information Technology (0.2%)
	1,214,000	Samsung Electronics America, Inc., 1.750%, 4/10/17(b)		1,211,572
		Materials (1.1%)
	2,783,000	BHP Billiton Finance USA, Ltd., 0.498%, 9/30/16(a)(d)		2,784,667
	650,000	Glencore Funding, LLC, 2.500%, 1/15/19(b)		609,293
	738,000	Rock Tenn Co., 4.900%, 3/1/22		762,776

Principal     Amount			Fair Value
	CORPORATE BONDS — (continued)
		Materials — (continued)
	$1,200,000	Rockwood Specialties Group, Inc., 4.625%, 10/15/20	$	1,206,000
				5,362,736
		Telecommunication Services (1.5%)
	1,555,000	America Movil SAB de CV, 1.256%, 9/12/16(a)		1,555,005
	681,000	British Telecommunications PLC, 9.625%, 12/15/30		1,008,417
	1,185,000	Crown Castle Towers, LLC, 6.113%, 1/15/20(b)		1,340,310
	890,000	Telefonica Emisiones SAU, 5.134%, 4/27/20(c)		911,212
	2,226,000	Verizon Communications, Inc., 6.550%, 9/15/43		2,513,014
				7,327,958
		Utilities (1.1%)
	1,088,000	CMS Energy Corp., 8.750%, 6/15/19		1,397,667
	1,004,000	Progress Energy, Inc., 3.150%, 4/1/22		960,012
	550,000	PSEG Power, LLC, 5.500%, 12/1/15		600,238
	471,000	PSEG Power, LLC, 2.750%, 9/15/16		489,674
	1,847,000	Puget Energy, Inc., 5.625%, 7/15/22		1,959,626
				5,407,217
		Total Corporate Bonds (Cost $208,531,844)		208,673,532
	MORTGAGE-BACKED SECURITIES (11.5%)
		Fannie Mae (7.5%)
	10	6.000%, 10/1/13, Pool #252061		10
	55,504	5.000%, 8/1/20, Pool #832058		58,955
	177,612	6.000%, 7/1/22, Pool #944967		194,840
	231,141	5.000%, 9/1/25, Pool #255892		251,238
	8,230,000	3.000%, 10/15/28(d)		8,520,622
	1,863,787	4.000%, 2/1/32, Pool #MA0977		2,007,085
	199,785	6.500%, 1/1/35, Pool #809198		220,807
	82,182	6.000%, 4/1/35, Pool #735503		90,943
	62,160	7.000%, 6/1/35, Pool #255820		70,948
	151,354	7.000%, 6/1/35, Pool #830686		172,336
	301,563	6.500%, 3/1/36, Pool #866062		333,780
	205,856	6.500%, 7/1/36, Pool #885493		231,810
	2,823,472	5.500%, 8/1/37, Pool #995082		3,075,142
	1,123,785	5.000%, 6/1/40, Pool #AD4927		1,225,271
	724,890	5.000%, 6/1/40, Pool #AD8718		788,011
	3,111,996	4.500%, 12/1/40, Pool #AH1100		3,327,790
	2,498,411	4.500%, 5/1/41, Pool #AI1023		2,671,272
	3,318,213	4.000%, 9/1/41, Pool #AI3940		3,481,585
	3,441,338	4.000%, 1/1/42, Pool #MA0956		3,611,748
	5,983,000	3.500%, 10/15/43(d)		6,090,507
				36,424,700
		Freddie Mac (3.2%)
	329,864	5.500%, 10/1/21, Pool #G12425		356,677
	284,743	5.000%, 12/1/21, Pool #J04025		301,689
	376,892	5.000%, 7/1/25, Pool #C90908		411,204
	555,621	4.000%, 11/1/31, Pool #C91410		586,192
	2,068,369	3.500%, 4/1/32, Pool #C91437		2,145,297
	3,263,051	3.500%, 7/1/32, Pool #C91467		3,401,808
	65,930	6.000%, 7/1/35, Pool #A36304		71,752
	327,897	5.000%, 3/1/36, Pool #G08115		352,798
	120,315	6.500%, 5/1/36, Pool #A48509		133,148
	99,565	5.000%, 7/1/36, Pool #G02291		107,287
	1,069,088	6.500%, 9/1/36, Pool #G08152		1,182,590
	710,748	5.000%, 2/1/37, Pool #A57714		764,725

Continued

67

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal      Amount		Fair Value
MORTGAGE-BACKED SECURITIES — (continued)
	Freddie Mac — (continued)
$    338,631	4.500%, 10/1/39, Pool #A89346	$	360,326
1,259,526	5.000%, 6/1/40, Pool #C03479		1,359,765
971,762	3.794%, 7/1/40, Pool #1B4948(a)		1,018,907
2,896,273	5.000%, 7/1/40, Pool #A93070		3,128,676
			15,682,841
	Ginnie Mae (0.8%)
752,479	5.000%, 2/15/40, Pool #737037		821,487
2,829,780	4.500%, 9/20/40, Pool #4801		3,069,561
			3,891,048
	Total Mortgage-Backed Securities (Cost $55,017,643)		55,998,589
MUNICIPAL BONDS (8.0%)
	California (1.2%)
3,700,000	Metropolitan Water District of Southern California, Build America Bonds, Water Utility Improvements Revenue, Callable 7/1/19 @ 100, 6.538%, 7/1/39		4,066,337
1,285,000	State of California, Build America Bonds, School Improvements G.O., 7.625%, 3/1/40		1,680,420
			5,746,757
	Colorado (0.4%)
1,810,000	Colorado Housing & Finance Authority, Unemployment/Welfare Funding Revenue, Taxable, Series B, 1.600%, 5/15/16		1,820,969
	Connecticut (0.6%)
3,000,000	State of Connecticut Special Tax Revenue, Build America Bonds, Transition Infrastructure, Series B, 4.126%, 11/1/20		3,151,500
	Florida (0.9%)
2,135,000	Brevard County School District, Refunding Certificates of Participation, Taxable, Series B, 1.981%, 7/1/18		2,062,282
2,500,000	Greater Orlando Aviation Authority, Airport Facilities Refunding Revenue, Taxable, Series D, 3.733%, 10/1/20		2,500,300
			4,562,582
	Georgia (0.4%)
1,840,000	Rockdale County Water & Sewerage Authority, Refunding Revenue, Taxable (County GTD), 2.860%, 7/1/23		1,741,707
	Illinois (0.9%)
4,500,000	State of Illinois, Building Public Improvements Revenue, Taxable, 3.081%, 6/15/23		4,239,180
	New Jersey (0.3%)
1,305,000	New Jersey Economic Development Authority, School Facilities Construction, Refunding Revenue, Series 00, 1.648%, 3/1/18		1,267,977
	New York (1.4%)
750,000	New York State Environmental Facilities Corp., State Revolving Funds, Refunding Revenue, Taxable, Series C, 2.445%, 6/15/20		713,467
900,000	New York State Environmental Facilities Corp., State Revolving Funds, Refunding Revenue, Taxable, Series C, 2.745%, 6/15/22		840,960

Principal      Amount		Fair Value
MUNICIPAL BONDS — (continued)
	New York — (continued)
$    2,900,000	New York, NY, Build America Bonds, Public Improvements G.O., 4.774%, 3/1/20	$	3,210,793
1,640,000	New York, NY, Build America Bonds, Public Improvements G.O., 4.874%, 3/1/21		1,820,006
			6,585,226
	North Carolina (0.9%)
4,500,000	North Carolina Eastern Municipal Power Agency Refunding Revenue, Taxable, Series C, 2.440%, 1/1/17		4,431,915
	Pennsylvania (0.4%)
2,260,000	Philadelphia Authority for Industrial Development, Refunding Revenue, Taxable, 3.664%, 4/15/22		2,113,416
	Washington (0.3%)
1,680,000	Port of Vancouver, WA, Refunding G.O., Limited Tax, Taxable, Series B, 2.714%, 12/1/21		1,575,403
	Wisconsin (0.3%)
1,640,000	Milwaukee County, WI, Pension Promissory Notes, Refunding G.O., Taxable, Callable 12/1/22 @ 100, 3.862%, 12/1/30		1,504,634
	Total Municipal Bonds (Cost $38,953,902)		38,741,266
U.S. GOVERNMENT AGENCIES (4.8%)
	Fannie Mae (4.8%)
16,815,000	7.125%, 1/15/30		23,358,894
	Total U.S. Government Agencies (Cost $23,642,248)		23,358,894
U.S. TREASURY BONDS (1.0%)
5,606,000	3.125%, 2/15/43		5,022,628
	Total U.S. Treasury Bonds (Cost $4,959,852)		5,022,628
U.S. TREASURY NOTES (0.1%)
736,000	1.875%, 6/30/20		732,608
	Total U.S. Treasury Notes (Cost $723,410)		732,608

Continued

68

Sterling Capital Total Return Bond Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Shares			Fair Value
	PREFERRED STOCKS (1.9%)
		Consumer Discretionary (0.0%)
	5,522	PulteGroup, Inc., 7.375%	$	137,940
		Financials (1.5%)
	48,595	Aegon NV, 7.250%		1,217,791
	61,601	Citigroup Capital XIII, 7.875%		1,692,179
	52,505	Merrill Lynch Preferred Capital Trust V, Series F, 7.280%		1,316,825
	35,765	National Retail Properties, Inc., REIT, Series D, 6.625%		820,807
	77,135	US Bancorp, Series F, 6.500%		2,004,739
				7,052,341
		Telecommunication Services (0.1%)
	28,000	Qwest Corp., 7.000%		672,840
		Utilities (0.3%)
	45,650	Dominion Resources, Inc., Series A, 8.375%		1,190,552
		Total Preferred Stocks (Cost $9,257,946)		9,053,673
	MONEY MARKET FUND (0.1%)
	290,798	Federated Treasury Obligations Fund, Institutional Shares		290,798
		Total Money Market Fund (Cost $290,798)		290,798
	Total Investments — 102.7% (Cost $499,521,999)			499,818,251
	Net Other Assets (Liabilities) — (2.7)%			(13,092,825	)
	NET ASSETS — 100.0%		$	486,725,426

(a) The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The reflected rate is in effect as of September 30, 2013. The maturity date reflected is the final maturity date.

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

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

(d) Represents securities purchased on a when-issued basis. At September 30, 2013, total cost of investments purchased on a when-issued basis was $21,335,243.

BKNT — Bank Note

G.O. — General Obligation

GMTN — Global Medium Term Note

GTD — Guaranteed

MTN — Medium Term Note

REIT — Real Estate Investment Trust

STEP — Step Coupon Bond

See accompanying Notes to the Financial Statements.

69

Sterling Capital Corporate Fund

Schedule of Portfolio Investments

September 30, 2013

Principal     Amount			Fair Value
	CORPORATE BONDS (94.7%)
		Consumer Discretionary (8.7%)
$	465,000	Comcast Cable Communications Holdings, Inc., 9.455%, 11/15/22(a)	$	655,522
	641,000	Delphi Corp., 5.875%, 5/15/19		680,261
	480,000	ERAC USA Finance, LLC, 2.800%, 11/1/18(b) .		483,409
	612,000	Ford Motor Co., 7.450%, 7/16/31		746,880
	425,000	Grupo Televisa SAB, 6.000%, 5/15/18		479,774
	545,000	Interpublic Group of Cos., Inc. (The), 3.750%, 2/15/23		510,154
	455,000	NBCUniversal Media, LLC, 5.950%, 4/1/41		513,896
	325,000	News America, Inc., 5.400%, 10/1/43(b)(c)		325,386
	375,000	Royal Caribbean Cruises, Ltd., 11.875%, 7/15/15		439,687
	850,000	Service Corp. International, 7.000%, 5/15/19		905,250
	560,000	Toll Brothers Finance Corp., 6.750%, 11/1/19		618,800
	475,000	Viacom, Inc., 5.850%, 9/1/43		483,559
	648,000	Wyndham Worldwide Corp., 2.950%, 3/1/17		664,991
				7,507,569
		Consumer Staples (2.0%)
	290,000	Altria Group, Inc., 9.950%, 11/10/38		432,906
	825,000	Embotelladora Andina SA, 5.000%, 10/1/23(b)(c)		827,063
	405,000	Lorillard Tobacco Co., 6.875%, 5/1/20		465,752
				1,725,721
		Energy (15.8%)
	500,000	Atlas Pipeline Partners LP/Atlas Pipeline Finance Corp., 5.875%, 8/1/23(b)		470,000
	720,000	Boardwalk Pipelines LP, 3.375%, 2/1/23		661,550
	479,000	BP Capital Markets PLC, 1.375%, 11/6/17		471,756
	610,000	Buckeye Partners LP, 4.875%, 2/1/21		633,085
	585,000	Cameron International Corp., 6.375%, 7/15/18		688,319
	590,000	Chesapeake Energy Corp., 3.250%, 3/15/16		592,213
	585,000	CNOOC Finance, Ltd., 1.750%, 5/9/18		565,555
	692,000	Denbury Resources, Inc., 8.250%, 2/15/20		759,470
	596,000	Energy Transfer Partners LP, 9.000%, 4/15/19		752,751
	600,000	Enterprise Products Operating, LLC, 6.450%, 9/1/40		688,639
	450,000	Hess Corp., 5.600%, 2/15/41		462,631
	660,000	Kinder Morgan Energy Partners LP, 5.000%, 3/1/43		596,872
	488,000	NuStar Logistics LP, 4.750%, 2/1/22		431,880
	487,000	Petrobras International Finance Co., 3.500%, 2/6/17		494,525
	665,000	Petrohawk Energy Corp., 7.250%, 8/15/18		721,525
	425,000	Phillips 66, 5.875%, 5/1/42		446,423
	550,000	Pioneer Natural Resources Co., 6.650%, 3/15/17		634,054
	330,000	Plains All American Pipeline LP/PAA Finance Corp., 8.750%, 5/1/19		422,680
	508,000	Plains Exploration & Production Co., 6.500%, 11/15/20		545,045
	410,000	Regency Energy Partners LP/Regency Energy Finance Corp., 6.500%, 7/15/21		430,500
	441,000	Schlumberger Investment SA, 3.300%, 9/14/21(b)		441,692
	580,000	Shell International Finance BV, 4.550%, 8/12/43		571,402
	480,000	Spectra Energy Capital, LLC, 8.000%, 10/1/19 .		583,732
	485,000	Western Gas Partners LP, 4.000%, 7/1/22		470,698
				13,536,997

Principal     Amount			Fair Value
	CORPORATE BONDS — (continued)
		Financials (50.5%)
$	395,000	Aflac, Inc., 8.500%, 5/15/19	$	510,541
	352,000	Alexandria Real Estate Equities, Inc., REIT, 4.600%, 4/1/22		353,761
	1,240,000	American International Group, Inc., 3.800%, 3/22/17		1,318,754
	560,000	Associates Corp. of North America, 6.950%, 11/1/18		665,201
	555,000	Bank of America Corp., MTN, 5.875%, 2/7/42		616,206
	190,000	Bank of America Corp., Series K, 8.000%, 12/29/49(d)		206,625
	710,000	Bear Stearns Cos., LLC (The), 5.550%, 1/22/17 .		787,991
	500,000	Blackstone Holdings Finance Co., LLC, 6.625%, 8/15/19(b)		588,585
	530,000	BNP Paribas SA, MTN, 3.250%, 3/3/23		496,383
	450,000	Carlyle Holdings Finance, LLC, 3.875%, 2/1/23(b)		439,902
	335,000	CBRE Services, Inc., 6.625%, 10/15/20		357,613
	565,000	CIT Group, Inc., 4.750%, 2/15/15(b)		584,775
	235,000	Citigroup, Inc., 6.875%, 3/5/38		290,512
	700,000	CNA Financial Corp., 7.350%, 11/15/19(a)		851,952
	500,000	Cooperatieve Centrale Raiffeisen- Boerenleenbank BA, 3.950%, 11/9/22		479,733
	478,000	Corrections Corp. of America, REIT, 4.125%, 4/1/20(b)		452,905
	687,000	CubeSmart LP, REIT, 4.800%, 7/15/22		714,433
	355,000	DDR Corp., REIT, 9.625%, 3/15/16		421,056
	635,000	Endurance Specialty Holdings, Ltd., 6.150%, 10/15/15		687,314
	355,000	First American Financial Corp., 4.300%, 2/1/23 .		343,604
	755,000	General Electric Capital Corp., GMTN, 6.875%, 1/10/39		925,289
	1,000,000	General Electric Capital Corp., Series B, 6.250%, 12/29/49(d)		1,010,000
	485,000	General Motors Financial Co., Inc., 2.750%, 5/15/16(b)		483,787
	506,000	Goldman Sachs Group, Inc. (The), 6.250%, 2/1/41		566,881
	550,000	Goodman Funding Pty, Ltd., REIT, 6.375%, 11/12/20(b)		609,300
	598,000	HCP, Inc., REIT, 6.000%, 1/30/17		672,510
	845,000	Health Care REIT, Inc., 4.125%, 4/1/19		889,989
	609,000	Healthcare Realty Trust, Inc., REIT, 3.750%, 4/15/23		566,400
	679,000	Healthcare Trust of America Holdings LP, REIT, 3.700%, 4/15/23(b)		636,390
	408,000	Host Hotels & Resorts LP, REIT, Series D, 3.750%, 10/15/23		377,664
	892,000	HSBC Finance Corp., 6.676%, 1/15/21		1,018,626
	500,000	ING Bank NV, 4.000%, 3/15/16(b)		527,975
	930,000	ING US, Inc., 2.900%, 2/15/18		933,794
	425,000	ING US, Inc., 5.700%, 7/15/43(b)		421,842
	485,000	Invesco Finance PLC, 3.125%, 11/30/22		450,332
	470,000	Jefferies Group, LLC, 8.500%, 7/15/19		569,093
	308,000	Jones Lang LaSalle, Inc., 4.400%, 11/15/22		301,707
	295,000	JPMorgan Chase & Co., 5.600%, 7/15/41		318,051
	500,000	JPMorgan Chase & Co., Series 1, 7.900%, 4/29/49(d)		542,500
	570,000	Lexington Realty Trust, REIT, 4.250%, 6/15/23(b)		551,579
	415,000	Liberty Mutual Group, Inc., 6.500%, 5/1/42(b)		447,842
	410,000	Macquarie Bank, Ltd., 5.000%, 2/22/17(b)		447,146

Continued

70

Sterling Capital Corporate Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

  Principal  
Amount     Fair Value    

	CORPORATE BONDS — (continued)
		Financials — (continued)
$	595,000	Macquarie Bank, Ltd., 6.625%, 4/7/21(a)(b)	$	648,729
	450,000	Markel Corp., 7.125%, 9/30/19		537,762
	380,000	Massachusetts Mutual Life Insurance Co., 8.875%, 6/1/39(b)		550,234
	1,290,000	Merrill Lynch & Co., Inc., MTN, 6.875%, 4/25/18		1,520,271
	595,000	Morgan Stanley, 5.375%, 10/15/15		639,823
	1,672,000	Morgan Stanley, GMTN, 6.625%, 4/1/18		1,941,120
	1,814,000	Murray Street Investment Trust I, STEP, 4.647%, 3/9/17(a)		1,934,624
	525,000	National Rural Utilities Cooperative Finance Corp., 4.750%, 4/30/43(d)		485,625
	385,000	Nationwide Mutual Insurance Co., 9.375%, 8/15/39(b)		530,575
	385,000	OneBeacon US Holdings, Inc., 4.600%, 11/9/22		381,031
	610,000	Pacific LifeCorp, 5.125%, 1/30/43(b)		562,539
	850,000	PNC Bank NA, BKNT, 4.875%, 9/21/17		943,095
	290,000	Prudential Financial, Inc., 8.875%, 6/15/38(d)		350,900
	380,000	Prudential Holdings, LLC, 8.695%, 12/18/23(b)		477,656
	583,000	Reinsurance Group of America, Inc., 5.000%, 6/1/21(a)		624,003
	470,000	Royal Bank of Canada, GMTN, 2.200%, 7/27/18		471,501
	445,000	Royal Bank of Scotland PLC (The), 5.625%, 8/24/20		491,340
	460,000	Simon Property Group LP, REIT, 10.350%, 4/1/19		625,663
	467,000	Sirius International Group, Ltd., 6.375%, 3/20/17(b)		510,599
	520,000	Standard Chartered Bank, 6.400%, 9/26/17(b)		592,868
	400,000	SunTrust Banks, Inc., 3.500%, 1/20/17		422,990
	363,000	Transatlantic Holdings, Inc., 8.000%, 11/30/39		445,802
	625,000	UBS AG, MTN, 5.875%, 7/15/16		691,593
	333,000	Validus Holdings, Ltd., 8.875%, 1/26/40		416,007
	606,000	Ventas Realty LP/Ventas Capital Corp., REIT, 2.000%, 2/15/18		593,788
	405,000	Wachovia Corp., 5.625%, 10/15/16		453,795
	536,000	Wachovia Corp., 5.500%, 8/1/35		551,698
	495,000	WEA Finance, LLC, 4.625%, 5/10/21(b)		522,157
				43,354,331
		Health Care (4.5%)
	453,000	DaVita HealthCare Partners, Inc., 6.625%, 11/1/20		481,313
	485,000	DENTSPLY International, Inc., 2.750%, 8/15/16		499,544
	600,000	Edwards Lifesciences Corp., 2.875%, 10/15/18(c)		597,638
	310,000	Fresenius US Finance II, Inc., 9.000%, 7/15/15(b)		344,100
	445,000	HCA, Inc., 8.500%, 4/15/19		478,375
	380,000	Mylan, Inc., 7.875%, 7/15/20(b)		433,605
	624,000	Valeant Pharmaceuticals International, 6.500%, 7/15/16(b)		645,840
	420,000	Ventas Realty LP, 5.700%, 9/30/43		424,686
				3,905,101
		Industrials (5.3%)
	695,000	Burlington Northern Santa Fe, LLC, 5.150%, 9/1/43		698,952

  Principal  
Amount     Fair Value    

	CORPORATE BONDS — (continued)
		Industrials — (continued)
$	500,000	CNH Capital, LLC, 3.875%, 11/1/15	$	515,000
	486,000	Nielsen Finance, LLC/Nielsen Finance Co., 4.500%, 10/1/20		467,775
	600,000	Norfolk Southern Corp., 4.800%, 8/15/43		583,092
	668,000	Ryder System, Inc., MTN, 2.350%, 2/26/19		652,715
	485,000	Textron, Inc., 4.625%, 9/21/16		523,327
	514,000	United Rentals North America, Inc., 10.250%, 11/15/19		580,820
	445,000	Verisk Analytics, Inc., 5.800%, 5/1/21		491,782
				4,513,463
		Materials (2.7%)
	368,000	Glencore Funding, LLC, 2.500%, 1/15/19(b)		344,954
	485,000	Rio Tinto Finance USA PLC, 1.094%, 6/17/16(d)		487,353
	489,000	Rock Tenn Co., 4.900%, 3/1/22		505,417
	429,000	Rockwood Specialties Group, Inc., 4.625%, 10/15/20		431,145
	500,000	Vale Overseas, Ltd., 6.250%, 1/23/17		560,469
				2,329,338
		Telecommunication Services (2.9%)
	350,000	British Telecommunications PLC, 9.625%, 12/15/30(a)		518,276
	450,000	Crown Castle Towers, LLC, 6.113%, 1/15/20(b)		508,978
	475,000	Telefonica Emisiones SAU, 3.992%, 2/16/16(a)		492,041
	856,000	Verizon Communications, Inc., 6.550%, 9/15/43		966,370
				2,485,665
		Utilities (2.3%)
	463,000	CMS Energy Corp., 8.750%, 6/15/19		594,779
	495,000	Duke Energy Carolinas, LLC, 6.100%, 6/1/37		570,620
	732,000	Puget Energy, Inc., 5.625%, 7/15/22		776,636
				1,942,035
		Total Corporate Bonds (Cost $81,377,086)		81,300,220

Continued

71

Sterling Capital Corporate Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

  Shares       Fair Value    

PREFERRED STOCKS (4.5%)
	Consumer Discretionary (0.1%)
2,841	PulteGroup, Inc., 7.375%	$	70,968
	Financials (3.2%)
18,071	Aegon NV, 7.250%		452,859
26,500	Citigroup Capital XIII, 7.875%		727,955
23,759	Merrill Lynch Preferred Capital Trust V, Series F, 7.280%		595,876
16,858	National Retail Properties, Inc., REIT, Series D, 6.625%		386,891
22,025	US Bancorp, Series F, 6.500%		572,430
			2,736,011
	Telecommunication Services (0.6%)
7,920	Qwest Corp., 7.000%		190,318
12,825	Qwest Corp., 7.375%		321,138
			511,456
	Utilities (0.6%)
20,050	Dominion Resources, Inc., Series A, 8.375%		522,904
	Total Preferred Stocks (Cost $3,976,462)		3,841,339
MONEY MARKET FUND (0.1%)
67,707	Federated Treasury Obligations Fund, Institutional Shares		67,707
	Total Money Market Fund (Cost $67,707)		67,707
Total Investments — 99.3% (Cost $85,421,255)			85,209,266
Net Other Assets (Liabilities) — 0.7%			574,926
NET ASSETS — 100.0%		$	85,784,192

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

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

(c) Represents securities purchased on a when-issued basis. At September 30, 2013, total cost of investments purchased on a when-issued basis was $1,744,047.

(d) The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The reflected rate is in effect as of September 30, 2013. The maturity date reflected is the final maturity date.

BKNT — Bank Note

GMTN — Global Medium Term Note

MTN — Medium Term Note

REIT — Real Estate Investment Trust

STEP — Step Coupon Bond

See accompanying Notes to the Financial Statements.

72

Sterling Capital Securitized Opportunities Fund

Schedule of Portfolio Investments

September 30, 2013

Principal Amount		Fair Value
ASSET BACKED SECURITIES (10.1%)
$   467,355	Argent Securities, Inc. Pass Through Certificates, Series 2005-W3, Class A2D, 0.519%, 11/25/35(a)	$	427,794
1,182,000	Avis Budget Rental Car Funding AESOP, LLC, Series 2012-3A, Class A, 2.100%, 3/20/19(b)		1,178,803
650,000	Chase Issuance Trust, Series 2012-A7, Class A7, 2.160%, 9/16/24		596,879
1,300,000	Hertz Vehicle Financing, LLC, Series 2013-1A, Class A2, 1.830%, 8/25/19(b)		1,270,910
753,468	Long Beach Mortgage Loan Trust, Series 2006-WL2, Class 2A3, 0.379%, 1/25/36(a)		677,782
305,746	Nomura Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-HE1, Class A3, 0.389%, 2/25/36(a)		300,816
847,118	Park Place Securities, Inc. Pass Through Certificates, Series 2005-WHQ1, Class M2, 0.679%, 3/25/35(a)		842,117
652,657	Securitized Asset Backed Receivables, LLC Trust, Series 2005-OP2, Class A2C, 0.499%, 10/25/35(a)		603,961
	Total Asset Backed Securities (Cost $5,993,090)		5,899,062
COLLATERALIZED MORTGAGE OBLIGATIONS (20.0%)
276,070	Banc of America Alternative Loan Trust, Series 2004-10, Class 1CB1, 6.000%, 11/25/34		286,295
62,353	Banc of America Mortgage Trust, Series 2005-2, Class 2A1, 5.000%, 3/25/20		62,511
234,866	Banc of America Mortgage Trust, Series 2005-3, Class 1A24, 5.500%, 4/25/35		239,009
516,000	BCAP, LLC Trust, Series 2013-RR4, Class A4A2, 2.000%, 2/13/51(b)		506,649
200,926	Citicorp Mortgage Securities, Inc., Series 2005-1, Class 1A2, 5.000%, 2/25/35		200,775
261,782	Citicorp Mortgage Securities, Inc., Series 2005-1, Class 1A4, 5.500%, 2/25/35		270,560
313,620	Citigroup Mortgage Loan Trust, Inc., Series 2004-NCM2, Class 3CB2, 6.500%, 8/25/19		335,227
318,539	Countrywide Alternative Loan Trust, Series 2004-22CB, Class 1A1, 6.000%, 10/25/34		324,932
123,302	Countrywide Home Loan Mortgage Pass Through Trust, Series 2003-J7, Class 1A3, 5.250%, 8/25/33		127,102
257,971	Countrywide Home Loan Mortgage Pass Through Trust, Series 2004-3, Class A4, 5.750%, 4/25/34		263,670
154,873	Countrywide Home Loan Mortgage Pass Through Trust, Series 2005-J4, Class A3, 5.500%, 11/25/35		154,282
421,954	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-2, Class 4A1, 5.250%, 2/25/20		424,773
326,327	Credit Suisse First Boston Mortgage Securities Corp., Series 2004-1, Class 2A1, 6.500%, 2/25/34		348,478
306,730	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-6, Class 2A3, 5.500%, 7/25/35		313,515
745,455	Fannie Mae, Series 2013-90, Class VA, 4.000%, 9/25/24		809,192

Principal Amount			Fair Value
	COLLATERALIZED MORTGAGE OBLIGATIONS — (continued)
	$   792,834	Fannie Mae, Series 2011-38, Class D, 4.500%, 5/25/41	$	874,408
	305,317	Freddie Mac, Series 3768, Class V, 4.000%, 11/15/23		325,777
	233,273	Freddie Mac, Series 2485, Class WG, 6.000%, 8/15/32		261,369
	457,411	Freddie Mac, Series 4077, Class PJ, 3.500%, 11/15/40		484,534
	343,390	Freddie Mac, Series 3803, Class PJ, 4.250%, 1/15/41		363,741
	473,842	Ginnie Mae, Series 2002-45, Class OC, 6.000%, 6/16/32		531,970
	323,029	Ginnie Mae, Series 2010-85, Class DQ, 3.000%, 12/20/39		327,294
	440,881	MASTR Alternative Loan Trust, Series 2003-5, Class 8A1, 5.500%, 6/25/33		439,403
	107,352	MASTR Alternative Loan Trust, Series 2004-13, Class 3A1, 6.500%, 1/25/35		109,175
	136,359	MASTR Asset Securitization Trust, Series 2005-2, Class 1A1, 5.250%, 11/25/35		136,068
	226,655	MASTR Seasoned Securitization Trust, Series 2005-2, Class 1A1, 5.130%, 10/25/32		223,267
	332,644	PHHMC Trust, Series 2007-6, Class A1, 5.648%, 12/18/37(a)		343,595
	196,821	RALI Trust, Series 2005-QR1, Class A, 6.000%, 10/25/34		202,224
	258,504	RBSGC Mortgage Loan Trust, Series 2007-B, Class 3A1, 5.113%, 7/25/35(a)		257,663
	484,820	Specialty Underwriting & Residential Finance Trust, Series 2004-AA1, Class 1A1, 5.000%, 10/25/34		490,743
	148,279	Structured Asset Securities Corp. Mortgage Pass Through Certificates, Series 2003-10, Class A, 6.000%, 4/25/33		151,853
	191,417	Structured Asset Securities Corp. Trust, Series 2005-6, Class 4A1, 5.000%, 5/25/35		193,426
	112,381	Structured Asset Securities Corp. Trust, Series 2005-6, Class 5A1, 5.000%, 5/25/35		114,935
	74,734	Structured Asset Securities Corp. Trust, Series 2005-6, Class 5A2, 5.000%, 5/25/35		76,432
	343,226	Structured Asset Securities Corp. Trust, Series 2005-6, Class 2A1, 5.500%, 5/25/35		349,943
	123,008	Wells Fargo Mortgage Backed Securities Trust, Series 2007-3, Class 3A1, 5.500%, 4/25/22		126,784
	643,221	Wells Fargo Mortgage Backed Securities Trust, Series 2005-4, Class A4, 5.000%, 4/25/35		655,087
		Total Collateralized Mortgage Obligations (Cost $11,710,223)		11,706,661
	COMMERCIAL MORTGAGE-BACKED SECURITIES (28.4%)
	1,000,000	Banc of America Commercial Mortgage Trust, Series 2006-3, Class A4, 5.889%, 7/10/44(a)(c)		1,097,619
	80,000	Banc of America Commercial Mortgage Trust, Series 2006-4, Class A4, 5.634%, 7/10/46		87,719
	700,000	Banc of America Commercial Mortgage Trust, Series 2006-5, Class A4, 5.414%, 9/10/47(c)		767,328
	25,683	Banc of America Commercial Mortgage Trust, Series 2007-2, Class A2, 5.634%, 4/10/49(a)		25,986

Continued

73

Sterling Capital Securitized Opportunities Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal Amount		Fair Value
COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
$300,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2004-2, Class B, 4.665%, 11/10/38(a)		$306,449
418,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-1, Class AJ, 5.463%, 11/10/42(a)(c)		442,227
200,000	Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2005-3, Class AM, 4.727%, 7/10/43		207,986
850,000	Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR9, Class A4B, 4.943%, 9/11/42(c)		904,855
250,000	Bear Stearns Commercial Mortgage Securities Trust, Series 2007-PW18, Class A4, 5.700%, 6/11/50(c)		282,069
210,000	CD Commercial Mortgage Trust, Series 2005-CD1, Class AM, 5.393%, 7/15/44(a)(c)		225,759
800,000	CD Commercial Mortgage Trust, Series 2007-CD4, Class A4, 5.322%, 12/11/49(c)		884,357
420,000	CD Mortgage Trust, Series 2006-CD3, Class A5, 5.617%, 10/15/48(c)		460,635
500,000	COMM Mortgage Trust, Series 2005-LP5, Class AJ, 5.046%, 5/10/43(a)		526,397
618,000	Commercial Mortgage Trust, Series 2005-GG5, Class AM, 5.277%, 4/10/37(a)		654,882
180,000	Commercial Mortgage Trust, Series 2007-GG9, Class A4, 5.444%, 3/10/39(c)		199,163
400,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2004-C5, Class AJ, 4.889%, 11/15/37(a)(c)		414,706
422,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C1, Class AJ, 5.075%, 2/15/38(a)(c)		437,026
400,000	GE Capital Commercial Mortgage, Series 2005-C2, Class AJ, 5.061%, 5/10/43(a)		421,115
600,000	GMAC Commercial Mortgage Securities, Inc., Series 2005-C1, Class AM, 4.754%, 5/10/43		624,037
175,000	GS Mortgage Securities Trust, Series 2010-C1, Class B, 5.148%, 8/10/43(b)		189,675
385,500	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP2, Class AM, 4.780%, 7/15/42(c)		405,140
530,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP4, Class AM, 4.999%, 10/15/42(a)		564,147
400,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CB15, Class A4, 5.814%, 6/12/43(a)(c)		437,109
728,379	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CB16, Class A4, 5.552%, 5/12/45		798,691
500,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2011-C3, Class B, 5.013%, 2/15/46(a)(b)		534,497
420,000	JPMorgan Chase Commercial Mortgage Securities Trust, Series 2007-LDPX, Class A3, 5.420%, 1/15/49(c)		464,178
300,000	LB-UBS Commercial Mortgage Trust, Series 2007-C1, Class A4, 5.424%, 2/15/40(c)		332,204
240,000	Morgan Stanley Capital I Trust, Series 2006-HQ10, Class A4, 5.328%, 11/12/41(c)		263,133

Principal Amount		Fair Value
COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued)
$   160,000	Morgan Stanley Capital I Trust, Series 2006-HQ8, Class AM, 5.646%, 3/12/44(a)(c)	$	173,045
500,000	Wachovia Bank Commercial Mortgage Trust, Series 2003-C8, Class E, 5.341%, 11/15/35(a)		500,811
200,000	Wachovia Bank Commercial Mortgage Trust, Series 2003-C9, Class B, 5.109%, 12/15/35(a)(c)		200,588
622,000	Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class AMFX, 5.179%, 7/15/42(a)(c)		660,616
800,000	Wachovia Bank Commercial Mortgage Trust, Series 2006-C28, Class A4, 5.572%, 10/15/48		878,294
760,000	Wells Fargo Commercial Mortgage Trust, Series 2010-C1, Class B, 5.276%, 11/15/43(a)(b)		826,842
400,000	WF-RBS Commercial Mortgage Trust, Series 2011-C2, Class B, 5.174%, 2/15/44(a)(b)		431,631
	Total Commercial Mortgage-Backed Securities (Cost $16,844,172)		16,630,916
MORTGAGE-BACKED SECURITIES (42.8%)
	Fannie Mae (26.1%)
916,465	3.500%, 6/1/27, Pool #MA1096		967,731
3,580,000	3.000%, 10/15/28(d)		3,706,419
597,681	4.000%, 11/1/30, Pool #MA0563		637,153
292,096	4.000%, 3/1/31, Pool #MA0667		311,507
835,135	4.000%, 5/1/32, Pool #MA1074(c)		910,386
149,261	5.500%, 2/1/35, Pool #735230		162,964
111,942	5.500%, 12/1/35, Pool #AE0115		122,393
182,635	5.500%, 3/1/36, Pool #745353		199,000
437,242	5.500%, 9/1/36, Pool #938574		477,559
439,983	5.500%, 6/1/38, Pool #984277(c)		479,465
393,504	5.500%, 8/1/38, Pool #995072		429,000
308,696	4.500%, 9/1/39, Pool #AC1830		329,558
276,585	5.000%, 12/1/39, Pool #AC8518		304,785
583,452	5.000%, 7/1/40, Pool #AD7595		634,864
198,263	4.500%, 9/1/40, Pool #AE0411		212,838
497,477	4.500%, 10/1/40, Pool #AE4855		531,936
286,398	4.000%, 1/1/41, Pool #AH4732		300,953
379,513	5.000%, 1/1/41, Pool #AH3373		415,035
61,241	4.000%, 2/1/41, Pool #AH6188		64,380
738,365	4.000%, 3/1/41, Pool #AH4008		774,593
574,258	4.500%, 3/1/41, Pool #AB2467		618,335
248,456	4.500%, 6/1/41, Pool #AC9298		265,729
2,351,000	3.500%, 10/15/43(d)		2,393,245
			15,249,828
	Freddie Mac (14.9%)
962,637	3.500%, 5/1/32, Pool #C91458		998,714
886,736	4.000%, 5/1/32, Pool #C91449		935,462
833,716	3.500%, 7/1/32, Pool #C91467		869,169
1,099,726	3.500%, 8/1/32, Pool #D99351		1,146,516
1,278,423	4.500%, 10/1/39, Pool #G05659		1,359,936
228,173	5.500%, 10/1/39, Pool #A89387		247,446
290,830	5.000%, 4/1/40, Pool #A91812		314,181
236,759	5.500%, 4/1/40, Pool #C03467		256,030
303,079	5.500%, 6/1/40, Pool #A92764		329,435
298,036	5.000%, 8/1/40, Pool #C03491		322,005
247,713	4.500%, 9/1/40, Pool #A93996		263,644

Continued

74

Sterling Capital Securitized Opportunities Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal Amount		Fair Value
MORTGAGE-BACKED SECURITIES — (continued)
	Freddie Mac — (continued)
$402,340	4.000%, 12/1/40, Pool #A95447	$	421,594
556,550	4.000%, 1/1/41, Pool #A96312		581,974
641,939	4.000%, 5/1/42, Pool #G08492		671,400
			8,717,506
	Ginnie Mae (1.8%)
353,896	4.500%, 6/15/39, Pool #720075		383,873
47,741	4.000%, 12/20/40, Pool #755678		50,684
254,695	4.500%, 3/20/41, Pool #4978		275,297
337,804	4.500%, 5/15/41, Pool #738310		366,428
			1,076,282
	Total Mortgage-Backed Securities (Cost $24,820,401)		25,043,616
U.S. GOVERNMENT AGENCIES (3.6%)
	Freddie Mac (3.6%)
1,545,000	2.375%, 1/13/22		1,503,742
480,000	6.250%, 7/15/32		625,503
	Total U.S. Government Agencies (Cost $2,129,051)		2,129,245
U.S. TREASURY BONDS (4.0%)
790,000	4.500%, 2/15/36		912,944
1,682,000	2.875%, 5/15/43		1,427,597
	Total U.S. Treasury Bonds (Cost $2,406,865)		2,340,541

Shares		Fair Value
MONEY MARKET FUND (3.4%)
1,989,852	Federated Treasury Obligations Fund, Institutional Shares	$	1,989,852
	Total Money Market Fund (Cost $1,989,852)		1,989,852
Total Investments — 112.3% (Cost $65,893,654)			65,739,893
Net Other Assets (Liabilities) — (12.3)%			(7,196,186)
NET ASSETS — 100.0%		$	58,543,707

(a) The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The reflected rate is in effect as of September 30, 2013. The maturity date reflected is the final maturity date.

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

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

(d) Represents securities purchased on a when-issued basis. At September 30, 2013, total cost of investments purchased on a when-issued basis was $5,954,352.

See accompanying Notes to the Financial Statements.

75

Sterling Capital Kentucky Intermediate Tax-Free Fund

Schedule of Portfolio Investments

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS (96.0%)
		Kentucky (96.0%)
	$500,000	Christian County, KY, Public Courthouse Corp., Court Facility Project, Refunding Revenue, (AMBAC), 4.000%, 8/1/16	$	543,370
	400,000	Eastern Kentucky University, Refunding Revenue, Series A, (State Intercept), 5.000%, 4/1/24		455,468
	500,000	Fayette County, KY, School District Finance Corp., Lease Payable from Local Revenues, Series A, (State Intercept), 5.000%, 10/1/21		574,125
	700,000	Jefferson County, KY, School District Finance Corp., Jefferson County School Building, Refunding Revenue, Series A, (AGM), 5.250%, 1/1/19		820,890
	500,000	Kentucky Asset/Liability Commission, Project Notes, Federal Highway Transit Improvements Revenue, First Series, (NATL-RE), 4.500%, 9/1/17		559,105
	510,000	Kentucky Asset/Liability Commission, University of Kentucky Project Notes, Revenue, Series B, Callable 10/1/17 @ 100, 5.000%, 10/1/21		577,922
	300,000	Kentucky Asset/Liability Commission, University of Kentucky Project Notes, University & College Revenue, Series A, Callable 10/1/17 @ 100, (AMBAC), 5.000%, 10/1/18		338,961
	690,000	Kentucky Economic Development Finance Authority, Baptist Healthcare System, Improvements Refunding Revenue, Series A, Callable 8/15/18 @ 100, OID, 4.750%, 8/15/19		763,043
	500,000	Kentucky Economic Development Finance Authority, Owensboro Medical Health System, Hospital Improvements Revenue, Series A, 5.000%, 6/1/16		543,805
	555,000	Kentucky Economic Development Finance Authority, Saint Elizabeth Medical Center, Inc. Refunding & Improvement Revenue, Series A, Callable 5/1/19 @ 100, OID, 5.000%, 5/1/24		609,035
	500,000	Kentucky Municipal Power Agency, Prairie State Project, Power Improvements Revenue, Series A, (AGM), 5.000%, 9/1/20		578,495
	500,000	Kentucky Rural Water Finance Corp., Flexible Term Program, Refunding & Improvements Revenue, Series B, Callable 2/1/20 @ 100, 4.000%, 2/1/21		539,260
	500,000	Kentucky State Property & Buildings Commission, Project No. 101, Refunding Revenue, 5.000%, 10/1/19		584,220
	410,000	Kentucky State Property & Buildings Commission, Project No. 76, Refunding Revenue, (AMBAC), 5.500%, 8/1/21		492,799
	460,000	Kentucky State Property & Buildings Commission, Project No. 83, Refunding Revenue, (AMBAC), 5.000%, 10/1/19		538,048
	670,000	Kentucky Turnpike Authority, Revitalization Projects, Refunding Revenue, Series A, Callable 7/1/19 @ 100, 5.000%, 7/1/25		764,396

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Kentucky — (continued)
	$525,000	Kentucky Turnpike Authority, Revitalization Projects, Refunding Revenue, Series B, Callable 7/1/15 @ 100, (AMBAC), 5.000%, 7/1/25	$	560,632
	400,000	Kentucky Turnpike Authority, Revitalization Projects, Revenue, Series A, 4.000%, 7/1/21		442,944
	455,000	Laurel County, KY, Judicial Center Public Properties Corp., Justice Center Projects, Public Improvements Revenue, Callable 3/1/18 @ 100, OID, 4.500%, 3/1/24		478,983
	525,000	Lexington-Fayette Urban County, KY, Airport Board, Refunding Revenue, Series A, 5.000%, 7/1/19		611,279
	500,000	Louisville & Jefferson County, KY, Metropolitan Sewer District, Sewer Refunding Revenue, Series A, Callable 11/15/21 @ 100, 5.000%, 5/15/30		543,770
	205,000	Louisville & Jefferson County, KY, Metropolitan Sewer District, Sewer Unrefunded Revenue, Series A, Callable 5/15/15 @ 100, (AGM), 5.000%, 5/15/19		219,830
	500,000	Louisville Regional Airport Authority, Refunding Revenue, Series B, 3.000%, 7/1/15		519,065
	790,000	Northern Kentucky University, University & College Improvements Revenue, Series A, Callable 9/1/17 @ 100, (AMBAC, State Intercept), OID, 4.250%, 9/1/21		834,753
	535,000	Owensboro, KY, Water Refunding & Improvements Revenue, Callable 9/15/18 @ 100, (Assured Guaranty), 5.250%, 9/15/21		611,703
	585,000	Owensboro-Daviess County, KY, Regional Water Resource Agency, Refunding & Improvements Revenue, Series A, (XLCA), 4.000%, 1/1/16		625,616
	610,000	Pike County, KY, School District Finance Corp., School Improvements Revenue, (State Intercept), 3.000%, 11/1/20		633,961
	660,000	Pulaski County, KY, Public Properties Corp., Administration Office of the Court Judicial Facility, Public Improvement Revenue, Callable 12/1/18 @ 100, OID, 5.500%, 12/1/24		766,201
	270,000	Pulaski County, KY, Public Properties Corp., Administration Office of the Court Judicial Facility, Public Improvement Revenue, Callable 12/1/18 @ 100, OID, 5.625%, 12/1/25		308,556
	200,000	Russell, KY, Bon Secours Health System, Refunding Revenue, Callable 11/1/22 @ 100, 5.000%, 11/1/26		212,232
	380,000	Warren County, KY, Community Hospital Corp. Project, Refunding Revenue, Series A, 5.000%, 8/1/17		418,912
		Total Municipal Bonds (Cost $16,044,456)		17,071,379

Continued

76

Sterling Capital Kentucky Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Shares		Fair Value
MONEY MARKET FUND (3.1%)
549,575	Federated Tax-Free Obligations Fund, Institutional Shares	$	549,575
	Total Money Market Fund (Cost $549,575)		549,575
Total Investments — 99.1% (Cost $16,594,031)			17,620,954
Net Other Assets (Liabilities) — 0.9%			154,046
NET ASSETS — 100.0%		$	17,775,000

AGM — Assured Guaranty Municipal Corp.

AMBAC — American Municipal Bond Assurance Corp.

NATL — National Public Finance Guarantee Corp.

OID — Original Issue Discount

RE — Reinsurance

XLCA — XL Capital Assurance

See accompanying Notes to the Financial Statements.

77

Sterling Capital Maryland Intermediate Tax-Free Fund

Schedule of Portfolio Investments

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS (95.0%)
		District of Columbia (4.0%)
	$   550,000	Washington Metropolitan Area Transit Authority, DC, Transit Improvements Revenue, Refunding Notes, Series A, Callable 7/1/19 @ 100, 5.250%, 7/1/20	$	642,923
	1,000,000	Washington Metropolitan Area Transit Authority, DC, Transit Improvements Revenue, Refunding Notes, Series A, Callable 7/1/19 @ 100, 5.250%, 7/1/27		1,104,370
				1,747,293
		Maryland (91.0%)
	810,000	Anne Arundel County, MD, Economic Development, Anne Arundel Community College Project, Refunding Revenue, 4.000%, 9/1/20		879,401
	500,000	Baltimore, MD, Consolidated Public Improvements, Refunding G.O., Series B, 5.000%, 10/15/20		591,370
	600,000	Baltimore, MD, Refunding Certificate of Participation, Series A, 5.000%, 10/1/17		683,988
	250,000	Baltimore, MD, Waste Water Projects Revenue, Series C, Callable 7/1/16 @ 100 (AMBAC), 5.000%, 7/1/26		275,093
	1,000,000	Charles County, MD, Consolidated Public School Improvements G.O., 5.000%, 7/15/22		1,189,600
	1,000,000	Charles County, MD, Consolidated Public School Improvements G.O., Callable 7/15/23 @ 100, 5.000%, 7/15/24		1,183,120
	890,000	Charles County, MD, Consolidated Public School Improvements G.O., Callable 7/15/23 @ 100, 5.000%, 7/15/25		1,039,342
	1,025,000	Frederick County, MD, Public Facilities Improvements, Refunding G.O., Series B, 4.000%, 8/1/17		1,141,020
	125,000	Howard County, MD, Miscellaneous Purpose Certificate of Participation, Series A, 8.050%, 2/15/21		172,627
	135,000	Howard County, MD, Public Improvements Certificate of Participation, Series B, 8.250%, 2/15/20		182,637
	690,000	Maryland Community Development Administration, Residential Single Family Housing Revenue, Series A, Callable 9/1/18 @ 100, 4.750%, 9/1/29		702,696
	315,000	Maryland Community Development Administration, Residential Single Family Housing Revenue, Series B, 3.750%, 9/1/14		322,739
	250,000	Maryland Economic Development Corp., Electricity Lights & Power Improvements, Refunding Revenue, Callable 3/1/19 @ 100, 6.200%, 9/1/22		294,985
	165,000	Maryland Economic Development Corp., Lutheran World Relief Refugee, Refunding Revenue, Callable 4/1/17 @ 100, 5.250%, 4/1/19		178,627
	900,000	Maryland Economic Development Corp., Public Health Laboratory Public Improvements Revenue, 5.000%, 6/1/20		1,061,775

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Maryland — (continued)
	$   420,000	Maryland Economic Development Corp., Public Health Laboratory Public Improvements Revenue, Callable 6/1/21 @ 100, 5.000%, 6/1/26	$	466,964
	735,000	Maryland Economic Development Corp., University of Maryland College Park Projects, Refunding Revenue (AGC), 5.000%, 6/1/16		797,975
	555,000	Maryland Environmental Service, Mid Shore II Regional Landfill, Resource Recovery Improvements Revenue, 4.000%, 11/1/17		613,613
	1,090,000	Maryland Health & Higher Educational Facilities Authority, Carroll Hospital, Refunding Revenue, Series A, 5.000%, 7/1/19		1,233,575
	900,000	Maryland Health & Higher Educational Facilities Authority, College of Notre Dame, Refunding Revenue, 4.000%, 10/1/19		969,093
	500,000	Maryland Health & Higher Educational Facilities Authority, Greater Baltimore Medical Center, Refunding Revenue, Series A, Callable 7/1/22 @ 100, 5.000%, 7/1/26		539,465
	1,260,000	Maryland Health & Higher Educational Facilities Authority, Helix Health Issue, Refunding Revenue (AMBAC), OID, 5.000%, 7/1/27		1,461,008
	1,000,000	Maryland Health & Higher Educational Facilities Authority, Johns Hopkins Health System, Health, Hospital, Nursing Home Improvements Revenue, Callable 7/1/22 @ 100, 5.000%, 7/1/25		1,109,420
	530,000	Maryland Health & Higher Educational Facilities Authority, Maryland Institute College of Art, Refunding Revenue, Callable 6/1/22 @ 100, 5.000%, 6/1/23		581,097
	80,000	Maryland Health & Higher Educational Facilities Authority, Medstar Health, Refunding Revenue, 5.000%, 8/15/19		91,410
	320,000	Maryland Health & Higher Educational Facilities Authority, Peninsula Regional Medical Center, Health, Hospital, Nursing Home Improvements Revenue, 5.000%, 7/1/15		343,808
	725,000	Maryland Health & Higher Educational Facilities Authority, Peninsula Regional Medical Center, Health, Hospital, Nursing Home Improvements Revenue, Callable 7/1/16 @ 100, 5.000%, 7/1/26		743,299
	400,000	Maryland Health & Higher Educational Facilities Authority, University of Maryland Medical System, Refunding Revenue, 5.000%, 7/1/19		456,140
	400,000	Maryland State Department of Transportation, Transit Improvements Revenue, 5.250%, 12/15/17		469,896
	500,000	Maryland State Department of Transportation, Transit Improvements Revenue, Second Issue, Callable 9/1/18 @ 100, 5.000%, 9/1/23		568,020

Continued

78

Sterling Capital Maryland Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Maryland — (continued)
	$1,070,000	Maryland State Transportation Authority, Grant & Revenue Anticipation, Highway Improvements Revenue, Callable 3/1/19 @ 100, OID, 5.000%, 3/1/20	$	1,238,568
	1,005,000	Maryland State Transportation Authority, Grant & Revenue Anticipation, Transit Improvements Revenue, 5.000%, 3/1/16		1,111,238
	635,000	Maryland State Transportation Authority, Transportation Facilities Project, Highway Revenue, Series A, 5.000%, 7/1/19		747,484
	2,290,000	Maryland, State & Local Facilities, Loan Public Improvements G.O., First Series, 4.000%, 8/15/21		2,566,426
	590,000	Maryland, State & Local Facilities, Loan Public Improvements G.O., Second Series, Callable 7/15/18 @ 100, 5.000%, 7/15/23		670,665
	1,660,000	Maryland, State & Local Facilities, Loan Public Improvements G.O., Series C, 5.000%, 11/1/17		1,928,887
	250,000	Montgomery County Housing Opportunities Commission, Local Single Family Housing Revenue, Series A, 3.700%, 7/1/14		255,573
	250,000	Montgomery County Housing Opportunities Commission, Refunding Revenue, Series A, Callable 1/1/16 @ 100 (FHA/VA Mortgages), 3.800%, 7/1/16		262,120
	1,000,000	Montgomery County, MD, Consolidated Public Improvements G.O., Series A, Callable 6/1/15 @ 100, 5.000%, 6/1/24		1,071,380
	775,000	Montgomery County, MD, Consolidated Public Improvements, Refunding G.O., Series A, 5.000%, 7/1/15		838,341
	500,000	Montgomery County, MD, Department Liquor Control Public Improvements Revenue, Series A, Callable 4/1/21 @ 100, OID, 4.500%, 4/1/26		530,885
	1,000,000	Montgomery County, MD, Public Transportation Equipment Transit Improvements Certificate of Participation, 4.000%, 5/1/17		1,096,540
	750,000	Montgomery County, MD, Water Quality Public Improvements Revenue, Series A, Callable 4/1/20 @ 100, 5.000%, 4/1/30		812,513

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Maryland — (continued)
	$1,015,000	Prince George’s County, MD, Consolidated Public Improvements G.O., Series A, 4.000%, 9/15/15	$	1,087,004
	1,000,000	Prince George’s County, MD, Consolidated Public Improvements G.O., Series A, Callable 9/15/21 @ 100, 5.000%, 9/15/28		1,119,600
	1,000,000	Prince George’s County, MD, Equipment Acquisition Program, Public Improvements Certificate of Participation, 4.000%, 10/15/15		1,071,470
	500,000	Talbot County, MD, Public School Improvements G.O., 5.000%, 12/15/16		567,695
	1,140,000	Washington County, MD, Refunding G.O., 4.000%, 1/1/21		1,269,550
	1,180,000	Washington County, MD, Refunding G.O., 4.000%, 1/1/22		1,307,499
				39,897,241
		Total Municipal Bonds (Cost $40,709,486)		41,644,534
Shares
	MONEY MARKET FUND (4.4%)
	1,916,989	Federated Tax-Free Obligations Fund, Institutional Shares		1,916,989
		Total Money Market Fund (Cost $1,916,989)		1,916,989
	Total Investments — 99.4% (Cost $42,626,475)			43,561,523
	Net Other Assets (Liabilities) — 0.6%			254,124
	NET ASSETS — 100.0%		$	43,815,647

AGC — Assured Guaranty Corp.

AMBAC — American Municipal Bond Assurance Corp.

FHA — Federal Housing Authority

G.O. — General Obligation

OID — Original Issue Discount

VA — Veterans Administration

See accompanying Notes to the Financial Statements.

79

Sterling Capital North Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS (96.8%)
		North Carolina (96.8%)
	$2,335,000	Appalachian State University, University & College Improvements Revenue, Callable 10/1/21 @ 100, 5.000%, 10/1/24		$2,655,269
	2,655,000	Appalachian State University, University & College Improvements Revenue, Callable 10/1/21 @ 100, 4.750%, 10/1/27		2,876,215
	1,000,000	Beaufort County, NC, Refunding Limited G.O., Callable 6/1/22 @ 100, 5.000%, 6/1/24		1,118,760
	1,000,000	Beaufort County, NC, Refunding Limited G.O., Callable 6/1/22 @ 100, 5.000%, 6/1/26		1,095,040
	1,065,000	Broad River Water Authority, NC, Water System Refunding Revenue, Callable 6/1/15 @ 100 (XLCA), 5.000%, 6/1/18		1,117,462
	1,935,000	Buncombe County, NC, Public Improvements Revenue, Series A, 4.000%, 6/1/17		2,132,428
	1,000,000	Buncombe County, NC, University & College Improvements Certificate of Participation, Callable 4/1/16 @ 100 (NATL-RE), 5.000%, 4/1/19		1,098,530
	1,060,000	Burlington, NC, Combined Enterprise System, Water Utility Improvements Revenue, Callable 2/1/22 @ 100, 5.000%, 2/1/34		1,113,731
	1,000,000	Cabarrus County, NC, Installment Financing Contract, Correctional Facility Improvements Certificate of Participation, Series C, Callable 6/1/18 @ 100, OID, 5.000%, 6/1/23		1,123,000
	1,960,000	Cabarrus County, NC, Installment Financing Contract, School Improvements Certificate of Participation, 5.000%, 1/1/17		2,202,883
	1,520,000	Cabarrus County, NC, Installment Financing Contract, School Improvements Certificate of Participation, Callable 1/1/19 @ 100, 5.000%, 1/1/20		1,748,714
	1,730,000	Cabarrus County, NC, Installment Financing Contract, School Improvements Certificate of Participation, Callable 1/1/19 @ 100, 5.000%, 1/1/23		1,958,896
	1,240,000	Cape Fear Public Utility Authority, Water & Sewer System, Improvements Refunding Revenue, 5.000%, 8/1/21		1,462,568
	1,475,000	Cape Fear Public Utility Authority, Water & Sewer System, Improvements Refunding Revenue, Callable 8/1/21 @ 100, 5.000%, 8/1/26		1,646,307
	1,535,000	Cape Fear Public Utility Authority, Water & Sewer System, Improvements Refunding Revenue, Callable 8/1/21 @ 100, 5.000%, 8/1/28		1,684,923
	1,160,000	Cape Fear Public Utility Authority, Water & Sewer System, Improvements Revenue, Callable 8/1/18 @ 100, 5.000%, 8/1/26		1,306,392
	1,030,000	Cape Fear Public Utility Authority, Water & Sewer System, Improvements Revenue, Callable 8/1/18 @ 100, 5.000%, 8/1/31		1,104,448
	1,000,000	Catawba County, NC, School Improvements Refunding Revenue, 4.000%, 10/1/19		1,109,160
	1,000,000	Catawba County, NC, School Improvements Refunding Revenue, 4.000%, 10/1/20		1,106,640
	1,000,000	Charlotte, NC, Airport Refunding Revenue, Series B, 5.000%, 7/1/15		1,076,790

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		North Carolina — (continued)
	$1,000,000	Charlotte, NC, Port, Airport & Marina Improvements Revenue, Series A, Callable 7/1/20 @ 100, 5.000%, 7/1/27		$1,075,140
	1,280,000	Charlotte, NC, Storm Water Fee Public, Improvements Revenue, Callable 6/1/16 @ 100, 5.000%, 6/1/20		1,413,350
	1,000,000	Charlotte, NC, Storm Water Fee Public, Improvements Revenue, Callable 6/1/16 @ 100, 5.000%, 6/1/23		1,104,460
	1,000,000	Charlotte, NC, Water & Sewer System, Refunding Revenue, Series B, Callable 7/1/20 @ 100, 5.000%, 7/1/25		1,140,890
	1,000,000	Charlotte-Mecklenburg Hospital Authority, NC, Carolinas Health Care System, Refunding Revenue, Series A, 5.000%, 1/15/17		1,123,740
	3,000,000	Chatham County, NC, Refunding Revenue (County Guaranteed), 5.000%, 12/1/28		3,400,860
	2,000,000	Concord, NC, Utilities Systems, Refunding Revenue, Series B, Callable 12/1/19 @ 100, 5.000%, 12/1/22		2,238,500
	1,000,000	Durham Capital Financing Corp., Limited Obligation Refunding Revenue, 5.000%, 6/1/21		1,187,040
	1,410,000	Durham County, NC, Industrial Facilities & Pollution Control Financing Authority, Research Triangle Institute, University & College Improvements Revenue, 5.000%, 2/1/20		1,627,211
	2,000,000	Durham County, NC, Public Improvements Certificate of Participation, Series A, Callable 6/1/19 @ 100, 5.000%, 6/1/24		2,229,580
	380,000	Elizabeth City State University, University & College Improvements Revenue, Series A (AGM), 4.000%, 4/1/14		386,958
	2,170,000	Fayetteville, NC, Public Works Commission, Refunding Revenue, Series A, 5.000%, 3/1/16		2,394,769
	1,085,000	Franklin County, NC, Public Facilities Projects, Certificate of Participation, Callable 9/1/17 @ 100 (NATL-RE), 5.000%, 9/1/22		1,200,260
	1,000,000	Henderson County, NC, School Improvements Certificate of Participation, Series A (AMBAC), 5.000%, 6/1/16		1,105,820
	1,030,000	Henderson County, NC, University & College Improvements Revenue, Series B, 4.000%, 12/1/16		1,126,315
	1,150,000	Iredell County, NC, School Improvements Project, Certificate of Participation, Callable 6/1/16 @ 100 (AMBAC), 5.000%, 6/1/22		1,266,288
	1,000,000	Lee County, NC, Public Facilities Projects, School Improvements Certificate of Participation, Callable 4/1/17 @ 100 (AGM), 5.000%, 4/1/19		1,101,740
	1,570,000	Lenoir County, NC, Refunding G.O., 4.000%, 2/1/19		1,750,848
	1,705,000	Lenoir County, NC, Refunding G.O., 4.000%, 2/1/20		1,905,031
	1,750,000	Lincoln County, NC, Refunding G.O., Series A, 5.000%, 6/1/18		2,034,813
	2,535,000	Lincoln County, NC, Refunding G.O., Series A, 4.000%, 6/1/19		2,843,053

Continued

80

Sterling Capital North Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		North Carolina — (continued)
$	800,000	Lincolnton, NC, Combined Enterprise System, Refunding Revenue, Callable 5/1/15 @ 100 (XLCA), 5.000%, 5/1/17	$	829,808
	2,000,000	Mecklenburg County, NC, Refunding G.O., 5.000%, 2/1/21		2,398,840
	1,280,000	Monroe, NC, Combined Enterprise System, Refunding Revenue (AGM), 4.000%, 3/1/19		1,412,890
	1,000,000	Mooresville, NC, Enterprise System Refunding Revenue, Callable 5/1/22 @ 100, 4.000%, 5/1/24		1,061,700
	1,000,000	Mooresville, NC, Telecommunications Improvements Certificate of Participation, 5.000%, 9/1/15		1,081,030
	1,460,000	Mooresville, NC, Telecommunications Improvements Certificate of Participation, 5.000%, 9/1/16		1,624,746
	1,855,000	New Hanover County, NC, New Hanover County Projects, Refunding Revenue, 5.000%, 12/1/19		2,170,535
	1,015,000	New Hanover County, NC, New Hanover County Projects, Refunding Revenue, 5.000%, 12/1/20		1,194,218
	2,500,000	New Hanover County, NC, New Hanover Regional Medical, Refunding Revenue, 4.000%, 10/1/19		2,723,475
	1,270,000	New Hanover County, NC, New Hanover Regional Medical, Refunding Revenue, Callable 10/1/21 @ 100, 5.000%, 10/1/23		1,390,599
	345,000	New Hanover County, NC, Refunding Revenue, Callable 12/1/22 @ 100, 5.000%, 12/1/27		382,750
	1,050,000	New Hanover County, NC, Regional Medical Center Revenue, Series A, Callable 10/1/19 @ 100 (AGM), 5.000%, 10/1/22		1,153,079
	1,000,000	New Hanover County, NC, Regional Medical Center, Health Hospital, Nursing Home Improvements Revenue, Series A, Callable 10/1/19 @ 100 (AGM), 5.000%, 10/1/21		1,111,440
	1,305,000	North Carolina Capital Facilities Finance Agency, Johnson & Wales University Project, Refunding Revenue, 5.000%, 4/1/21		1,474,089
	2,400,000	North Carolina Eastern Municipal Power Agency, Electric, Lights & Power Improvements Revenue, Series A, OID, 6.400%, 1/1/21		2,839,272
	1,000,000	North Carolina Eastern Municipal Power Agency, Refunding Revenue, Series A, Callable 1/1/16 @ 100 (AMBAC), 5.250%, 1/1/20		1,092,310
	2,015,000	North Carolina Medical Care Commission, Blue Ridge Healthcare, Refunding Revenue, Series A, 4.000%, 1/1/16		2,128,445
	2,045,000	North Carolina Medical Care Commission, Caromont Health Facilities, Health Hospital, Nursing Home Improvements Revenue (Assured Guaranty), OID, 3.500%, 2/15/19		2,189,806
	1,005,000	North Carolina Medical Care Commission, First Mortgage Deerfield, Health, Hospital, Nursing Home Improvements Revenue, Series A, Callable 11/1/18 @ 100, OID, 6.000%, 11/1/33		1,029,210

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		North Carolina — (continued)
	$1,515,000	North Carolina Medical Care Commission, Firsthealth Carolina, Refunding Revenue, Series C, Callable 10/1/14 @ 100, OID, 4.000%, 10/1/18		$1,612,914
	915,000	North Carolina Medical Care Commission, Health Care Facilities, Refunding Revenue, Appalachian Regional Healthcare System, Series A, 5.000%, 7/1/19		1,016,876
	1,180,000	North Carolina Medical Care Commission, Health Care Facilities, Refunding Revenue, Appalachian Regional Healthcare System, Series A, 5.375%, 7/1/20		1,337,766
	965,000	North Carolina Medical Care Commission, Health Care Housing ARC Projects, Revenue, Series A (HUD Section 8), 4.650%, 10/1/14		982,341
	1,000,000	North Carolina Medical Care Commission, Mission Health Combine Group, Refunding Revenue, Callable 10/1/17 @ 100 (AGM-CR), 5.000%, 10/1/25		1,043,890
	3,030,000	North Carolina Medical Care Commission, North Carolina Baptist Hospital, Refunding Revenue, 5.000%, 6/1/20		3,454,291
	1,530,000	North Carolina Medical Care Commission, North Carolina Baptist Hospital, Refunding Revenue, Callable 6/1/20 @ 100, 5.250%, 6/1/29		1,600,763
	1,910,000	North Carolina Medical Care Commission, Novant Health Obligation Group, Refunding Revenue, Series A, Callable 11/1/13 @ 100, 5.000%, 11/1/14		1,917,468
	1,000,000	North Carolina Medical Care Commission, Novant Health, Refunding Revenue, Callable 11/1/13 @ 100 (AGM-CR), 5.000%, 11/1/15		1,003,410
	2,600,000	North Carolina Medical Care Commission, Rex Healthcare, Refunding Revenue, Series A, 5.000%, 7/1/17		2,923,232
	1,000,000	North Carolina Medical Care Commission, Stanly Memorial Hospital Project, Health, Hospital, Nursing Home Improvements Revenue, Callable 10/31/13 @ 100, OID, 6.250%, 10/1/19		1,002,050
	2,000,000	North Carolina Medical Care Commission, Universal Health System, Refunding Revenue, Series E2, 6.000%, 12/1/36(a)		2,124,180
	2,780,000	North Carolina Medical Care Commission, Vidant Health Care Facilities, Refunding Revenue, Series A, Callable 6/1/22 @ 100, 5.000%, 6/1/24		3,008,294
	2,000,000	North Carolina Medical Care Commission, Wakemed, Refunding Revenue, Series A, Callable 10/1/22 @ 100, 5.000%, 10/1/27		2,144,480
	1,115,000	North Carolina Medical Care Commission, Wilson Medical Center, Refunding Revenue, 5.000%, 11/1/17		1,244,741
	1,000,000	North Carolina Municipal Power Agency No. 1, Electric & Power Improvements Revenue, Series B, Callable 1/1/22 @ 100, 5.000%, 1/1/29		1,051,680

Continued

81

Sterling Capital North Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		North Carolina — (continued)
	$  745,000	North Carolina Municipal Power Agency No. 1, Catawba Electric Power, Refunding Revenue, Series A, Callable 1/1/18 @ 100, 5.250%, 1/1/20	$	833,849
	2,000,000	North Carolina State University at Raleigh, Refunding Revenue, Series A, Callable 10/1/23 @ 100, 5.000%, 10/1/28		2,263,980
	1,000,000	North Carolina State, Annual Appropriation, Public Improvements Revenue, Series A, Callable 5/1/19 @ 100, 5.000%, 5/1/24		1,142,800
	1,080,000	North Carolina State, Highway Improvements Vehicle, Revenue (NATL-RE), 5.000%, 3/1/16		1,192,968
	2,150,000	North Carolina State, Highway Improvements Vehicle, Revenue (NATL-RE), 5.000%, 3/1/17		2,437,563
	1,085,000	North Carolina State, Highway Improvements Vehicle, Revenue, Callable 3/1/17 @ 100 (NATL-RE), 5.000%, 3/1/18		1,208,332
	4,000,000	North Carolina State, Highway Improvements Vehicle, Revenue, Callable 9/1/17 @ 100, 4.000%, 3/1/23(a)		4,348,000
	4,900,000	North Carolina State, Public Improvements, Revenue, Series C, Callable 5/1/21 @ 100, 4.000%, 5/1/23		5,276,271
	2,925,000	North Carolina State, Refunding G.O., Series A, 5.000%, 9/1/16		3,294,427
	2,380,000	North Carolina State, Refunding G.O., Series B, 5.000%, 4/1/17		2,724,434
	2,000,000	North Carolina State, University & College Improvements G.O., Series A, Callable 3/1/17 @ 100, 5.000%, 3/1/20		2,251,440
	1,000,000	North Carolina State, Water Utility Improvements, Clean Water G.O., Series A, Callable 3/1/16 @ 100, 5.000%, 3/1/17		1,101,440
	1,000,000	Onslow County, NC, Refunding G.O., 5.000%, 12/1/21		1,186,630
	1,520,000	Onslow Water & Sewer Authority, Water Utility Improvements Revenue, Series B, Callable 6/1/14 @ 100 (XLCA), 5.000%, 6/1/21		1,564,217
	1,365,000	Orange County, NC, Public Facilities Co., Public Improvements, Revenue, Callable 10/1/21 @ 100, 5.000%, 10/1/23		1,545,235
	1,105,000	Pasquotank County, NC, Refunding Certificate of Participation (NATL-RE), 5.250%, 6/1/18		1,257,236
	1,000,000	Pasquotank County, NC, Refunding Certificate of Participation (NATL-RE), 5.250%, 6/1/19		1,148,310
	1,210,000	Pender County, NC, Limited Obligation Refunding Revenue, Callable 6/1/22 @ 100, 5.000%, 6/1/26		1,337,522
	1,390,000	Pitt County, NC, Certificate of Participation, Refunding, Callable 4/1/22 @ 100, 5.000%, 4/1/24		1,557,398
	1,395,000	Pitt County, NC, Certificate of Participation, Refunding, Callable 4/1/22 @ 100, 5.000%, 4/1/25		1,547,780
	1,535,000	Pitt County, NC, Pitt County Memorial Hospital Project, Refunding Revenue, Callable 10/31/13 @ 100, OID, 5.500%, 12/1/15		1,603,215

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		North Carolina — (continued)
	$2,150,000	Raleigh Durham Airport Authority, Refunding Revenue, Series B1, Callable 5/1/20 @ 100, 5.000%, 11/1/28		$2,305,811
	1,500,000	Raleigh, NC, Combined Enterprise System, Refunding Revenue, Series A, Callable 3/1/23 @ 100, 5.000%, 3/1/27		1,708,455
	1,615,000	Raleigh, NC, Combined Enterprise System, Refunding Revenue, Series A, Callable 3/1/23 @ 100, 5.000%, 3/1/28		1,821,736
	1,525,000	Rockingham County, NC, Public Improvements Certificate of Participation (Assured Guaranty), 5.000%, 4/1/17		1,719,041
	1,510,000	Rockingham County, NC, Refunding Revenue, 5.000%, 4/1/18		1,706,979
	1,825,000	Smithville Township, NC, Limited Tax Hospital, Refunding G.O., 5.000%, 6/1/24		2,104,553
	1,085,000	Surry County, NC, Northern Hospital District Revenue, Callable 4/1/18 @ 100, OID, 5.500%, 10/1/21		1,129,116
	1,000,000	Union County, NC, Enterprise Systems, Refunding Revenue, Series A, Callable 12/1/21 @ 100, 4.000%, 12/1/22		1,098,860
	1,260,000	Union County, NC, Enterprise Systems, Refunding Revenue, Series A, Callable 12/1/21 @ 100, 4.000%, 12/1/24		1,346,713
	1,380,000	Union County, NC, Enterprise Systems, Refunding Revenue, Series A, Callable 12/1/21 @ 100, 4.000%, 12/1/25		1,455,458
	2,205,000	Union County, NC, Refunding G.O., Series A, 5.000%, 3/1/22		2,640,399
	1,000,000	Union County, NC, Refunding Revenue, 5.000%, 12/1/23		1,183,750
	2,000,000	University of North Carolina at Chapel Hill, University & College Improvements Revenue, Callable 12/1/17 @ 100, 5.000%, 12/1/36		2,163,980
	2,285,000	University of North Carolina at Greensboro, Refunding Revenue, Callable 4/1/21 @ 100, 5.000%, 4/1/23		2,608,579
	2,000,000	University of North Carolina at Greensboro, Refunding Revenue, Callable 4/1/21 @ 100, 5.000%, 4/1/36		2,099,440
	1,160,000	University of North Carolina System, Appalachian State University, Refunding Revenue, Series B1, 4.000%, 10/1/15		1,239,356
	3,260,000	University of North Carolina System, Appalachian State University, Refunding Revenue, Series B1, Callable 4/1/20 @ 100, 5.250%, 10/1/22		3,788,609
	3,095,000	University of North Carolina System, Asheville/Wilmington, Refunding Revenue, Series C, Callable 4/1/20 @ 100 (Assured Guaranty), 5.000%, 10/1/20		3,601,590
	1,485,000	University of North Carolina System, Asheville/Wilmington, Refunding Revenue, Series C, Callable 4/1/20 @ 100 (Assured Guaranty), 5.250%, 10/1/24		1,671,249
	1,975,000	University of North Carolina System, The University of North Carolina at Greensboro, Refunding Revenue, Series B2, 5.000%, 4/1/17		2,239,551

Continued

82

Sterling Capital North Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		North Carolina — (continued)
	$1,005,000	University of North Carolina System, University & College Improvements Revenue, Series A, Callable 10/1/16 @ 100 (NATL-RE), 5.000%, 10/1/17	$	1,115,651
	1,565,000	University of North Carolina System, University & College Improvements, General Trust Indenture Revenue, Series C, 4.250%, 10/1/14		1,621,950
	1,000,000	University of North Carolina System, University & College Improvements, General Trust Indenture Revenue, Series C, 4.500%, 10/1/17		1,110,370
	2,125,000	Watauga Public Facilities Corp., Revenue, Series A, Callable 6/1/22 @ 100, 5.000%, 6/1/24		2,389,244
	1,000,000	Watauga Public Facilities Corp., Revenue, Series A, Callable 6/1/22 @ 100, 5.000%, 6/1/26		1,092,720
	1,000,000	Wilson, NC, Public Facilities Project, Public Improvements Certificate of Participation, Series A (Assured Guaranty), 5.000%, 5/1/16		1,101,680
	1,000,000	Winston-Salem State University Foundation LLC, Refunding Revenue, Callable 4/1/22 @ 100, 5.000%, 4/1/25		1,072,250
	1,000,000	Winston-Salem, NC, Water & Sewer System, Refunding Revenue, Series A, Callable 6/1/17 @ 100, 5.000%, 6/1/19		1,130,240
		Total Municipal Bonds (Cost $205,095,444)		212,241,817

Shares			Fair Value
	MONEY MARKET FUND (0.4%)
	798,336	Federated North Carolina Municipal Cash Trust, Institutional Shares	$	798,336
		Total Money Market Fund (Cost $798,336)		798,336
	Total Investments — 97.2% (Cost $205,893,780)			213,040,153
	Net Other Assets (Liabilities) — 2.8%			6,190,380
	NET ASSETS — 100.0%		$	219,230,533

(a) The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The reflected rate is in effect as of September 30, 2013. The maturity date reflected is the final maturity date.

AGM — Assured Guaranty Municipal Corp.

AMBAC — American Municipal Bond Assurance Corp.

CR — Custodial Receipts

G.O. — General Obligation

HUD — Housing & Urban Development

NATL — National Public Finance Guarantee Corp.

OID — Original Issue Discount

RE — Reinsurance

XLCA — XL Capital Assurance

See accompanying Notes to the Financial Statements.

83

Sterling Capital South Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS (97.5%)
		South Carolina (97.5%)
	$1,000,000	Anderson Regional Joint Water System, Refunding Revenue, Series A, Callable 7/15/21 @ 100, 5.000%, 7/15/25	$	1,112,700
	1,000,000	Anderson, SC, Water & Sewer, Refunding Revenue (AGM), 5.000%, 7/1/17		1,136,870
	1,095,000	Anderson, SC, Water & Sewer, Refunding Revenue (AGM), 5.000%, 7/1/19		1,267,846
	1,000,000	Beaufort County, SC, School District, Refunding G.O., Series A, Callable 3/1/17 @ 100 (AGM, SCSDE), 5.000%, 3/1/27		1,080,530
	505,000	Bennettsville, SC, Combined Utility System, Refunding & Improvements Revenue, Callable 2/1/14 @ 100 (AMBAC), OID, 3.625%, 2/1/16		507,545
	545,000	Bennettsville, SC, Combined Utility System, Refunding & Improvements Revenue, Callable 2/1/14 @ 100 (AMBAC), OID, 3.875%, 2/1/18		546,918
	215,000	Camden, SC, Combined Public Utility System, Unrefunded, Combined Refunding & Improvement Revenue, Callable 3/1/14 @ 100 (NATL-RE, FGIC), 5.000%, 3/1/15		218,956
	760,000	Cayce, SC, Waterworks & Sewer Systems Refunding & Improvements Revenue, Series A (XLCA), 5.250%, 7/1/16		845,720
	595,000	Cayce, SC, Waterworks & Sewer Systems Refunding & Improvements Revenue, Series A (XLCA), 5.250%, 7/1/20		694,871
	1,000,000	Charleston County, SC, Capital Improvements Transportation Sales Tax, Public Improvements G.O., Callable 11/1/21 @ 100 (State Aid Withholding), 5.000%, 11/1/22		1,188,940
	2,500,000	Charleston Educational Excellence Finance Corp., Charleston County School Refunding Revenue, 5.000%, 12/1/21		2,936,075
	1,295,000	College of Charleston, University & College Improvements Refunding Revenue, Series A, Callable 4/1/21 @ 100, 5.000%, 4/1/25		1,417,766
	1,170,000	Easley, SC, Combined Utility System Refunding Revenue, Callable 12/1/19 @ 100 (Assured Guaranty), 5.000%, 12/1/24		1,293,611
	1,135,000	East Richland County Public Service District, Refunding Revenue, 4.000%, 1/1/22		1,241,713
	200,000	Educational Facilities Authority, Wofford College, University & College Improvements Revenue, Series A, 4.000%, 4/1/15		209,526
	1,820,000	Fort Mill School District No. 4, School Improvements G.O., Series B (SCSDE), 5.000%, 3/1/23		2,163,088
	165,000	Fort Mill School Facilities Corp., School Improvements Revenue, Callable 12/1/16 @ 100, 5.250%, 12/1/18		181,492
	1,030,000	Georgetown County, SC, Refunding G.O. (State Aid Withholding), 4.000%, 3/1/23		1,139,077
	1,000,000	Greenville County, SC, School District Building Refunding Revenue, 5.000%, 12/1/22		1,164,830
	1,075,000	Greenville County, SC, School District Building Refunding Revenue, Callable 12/1/16 @ 100, 5.000%, 12/1/22		1,192,777

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		South Carolina — (continued)
	$1,340,000	Greenville, SC, Hospital System Board, Facilities Refunding Revenue, 5.000%, 5/1/21		$1,521,262
	1,085,000	Greenville, SC, Hospital System Board, Facilities Refunding Revenue, Series A, Callable 5/1/18 @100, 5.250%, 5/1/22		1,196,299
	1,000,000	Greenwood County, SC, Self Regional Healthcare Refunding Revenue, Series B, Callable 4/1/22 @ 100, 5.000%, 10/1/24		1,079,330
	530,000	Greenwood County, SC, Self Regional Healthcare Revenue, Callable 10/1/19 @ 100, OID, 5.000%, 10/1/23		563,777
	1,175,000	Greenwood, SC, Combined Public Utility Revenue, Series A, 4.000%, 12/1/18		1,296,213
	500,000	Kershaw County, SC, Kershaw County School District Project, Refunding Revenue (AGC), 5.000%, 12/1/16		559,070
	1,460,000	Lancaster Educational Assistance Program, Inc., SC, Lancaster County School District Refunding Revenue, Series B, Callable 12/1/23 @ 100, 5.000%, 12/1/24		1,635,214
	825,000	Lexington County, SC, Health Services District, Inc., Refunding Revenue, 5.000%, 11/1/15		890,975
	250,000	Lexington County, SC, Health Services District, Inc., Refunding Revenue, 5.000%, 11/1/16		277,405
	1,000,000	Lexington County, SC, Health Services District, Inc., Refunding Revenue, Callable 11/1/17 @ 100, 5.000%, 11/1/23		1,094,600
	760,000	Lexington County, SC, Health Services District, Inc., Refunding Revenue, Callable 11/1/21 @ 100, 5.000%, 11/1/22		845,500
	1,000,000	Lexington County, SC, School District No. 1, G.O., Series C (SCSDE), 5.000%, 2/1/21		1,186,690
	1,000,000	Lexington One School Facilities Corp., Lexington County School District No. 1 Revenue, 5.000%, 12/1/16		1,122,240
	940,000	Lexington, SC, Combined Waterworks & Sewer System Refunding Revenue, Callable 4/1/21 @100, 5.000%, 4/1/22		1,076,873
	565,000	Lexington, SC, Combined Waterworks & Sewer System Refunding Revenue, Callable 4/1/21 @100, 5.000%, 4/1/25		624,043
	790,000	Newberry Investing in Children’s Education, Newberry County School District Project, School Improvements Revenue, 5.250%, 12/1/14		828,742
	145,000	North Myrtle Beach, SC, Recreational Facility Improvements G.O. (State Aid Withholding), 4.000%, 3/1/19		161,726
	455,000	Oconee County, SC, Duke Power Co. Project Refunding Revenue, 3.600%, 2/1/17		490,554
	810,000	Orangeburg County, SC, School District No. 5, Refunding G.O. (SCSDE), 5.000%, 3/1/21		949,790
	1,100,000	Orangeburg County, SC, School District No. 5, Refunding G.O., Callable 3/1/17 @100 (NATL-RE, SCSDE), 4.000%, 3/1/19		1,178,045
	420,000	Piedmont Municipal Power Agency, Power System Refunding Revenue (NATL-RE), OID, 5.375%, 1/1/25		480,350

Continued

84

Sterling Capital South Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		South Carolina — (continued)
	$    900,000	Piedmont Municipal Power Agency, Power System Refunding Revenue, Series A3, 5.000%, 1/1/16	$	982,305
	325,000	Piedmont Municipal Power Agency, Power System Refunding Revenue, Series A3 (Assured Guaranty), 5.000%, 1/1/18		370,679
	1,000,000	Piedmont Municipal Power Agency, Power System Refunding Revenue, Series B, Callable 1/1/22 @ 100, 4.000%, 1/1/23		1,045,750
	1,000,000	Renewable Water Resources Sewage System, Refunding Revenue, 4.000%, 1/1/20		1,108,910
	250,000	Renewable Water Resources Sewage System, Refunding Revenue, Series A, Callable 1/1/20 @ 100, 5.000%, 1/1/21		286,897
	1,000,000	Rock Hill, SC, Combined Utility System, Refunding & Improvements Revenue, Series B (AGM), 5.000%, 1/1/20		1,157,010
	1,000,000	Rock Hill, SC, Combined Utility System, Refunding Revenue, Series A, Callable 1/1/22 @100 (AGM), 5.000%, 1/1/23		1,142,850
	1,090,000	Rock Hill, SC. Ltd. Obligations, Hospitality Fee Pledge, Refunding Revenue, 5.000%, 4/1/21		1,237,292
	1,135,000	SCAGO Educational Facilities Corp. for Pickens School District, Pickens County Project, School Improvements Revenue, Callable 12/1/16 @ 100 (AGM), 5.000%, 12/1/18		1,267,591
	825,000	SCAGO Educational Facilities Corp. for Pickens School District, Pickens County Project, School Improvements Revenue, Callable 12/1/16 @ 100 (AGM), 5.000%, 12/1/19		918,101
	905,000	SCAGO Educational Facilities Corp. for Spartanburg School District No. 5, Spartanburg County Project, School Improvements Revenue, Callable 10/1/15 @ 100 (AGM), 5.000%, 4/1/21		968,848
	500,000	SCAGO Public Facilities Corp. for Georgetown County, Georgetown County Project, Refunding Revenue, Series A, 5.000%, 12/1/18		568,295
	500,000	SCAGO Public Facilities Corp. for Georgetown County, Georgetown County Project, Refunding Revenue, Series A, 5.000%, 12/1/19		572,160
	550,000	South Carolina Jobs-Economic Development Authority, AnMed Health Project, Refunding & Improvement Revenue, Series B (Assured Guaranty), 5.000%, 2/1/19		625,917
	1,000,000	South Carolina Jobs-Economic Development Authority, Bons Secours Health System, Inc., Refunding Revenue, Callable 11/1/22 @ 100, 5.000%, 11/1/24		1,077,880
	1,500,000	South Carolina Jobs-Economic Development Authority, Conway Hospital Income Project, Health, Hospital, Nursing Home Improvements Revenue, Callable 7/1/22 @ 100,5.000%,7/1/23		1,642,830

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		South Carolina — (continued)
	$    850,000	South Carolina Jobs-Economic Development Authority, Kershaw County Medical Center Project, Health, Hospital, Nursing Home Improvements Revenue, OID, 5.000%, 9/15/18	$	924,307
	500,000	South Carolina Jobs-Economic Development Authority, Palmetto Health Facilities, Refunding Revenue, Series A, 2.500%, 8/1/14		506,215
	500,000	South Carolina Jobs-Economic Development Authority, Palmetto Health Facilities, Refunding Revenue, Series A (AGM), 5.000%, 8/1/19		565,130
	500,000	South Carolina Jobs-Economic Development Authority, Palmetto Health, Refunding & Improvement Facilities Revenue, OID, 5.000%, 8/1/18		549,555
	1,050,000	South Carolina State Ports Authority, Port, Airport & Marina Improvements Revenue, 5.000%, 7/1/19		1,209,589
	540,000	South Carolina State Public Service Authority, Electricity Lights & Power Improvements Revenue, Series A, Callable 1/1/17 @ 100 (AMBAC), 5.000%, 1/1/23		596,689
	1,030,000	South Carolina State Public Service Authority, Refunding Revenue, Series A, Callable 1/1/19 @ 100, 5.000%, 1/1/27		1,122,896
	1,015,000	South Carolina State Public Service Authority, Refunding Revenue, Series A, Callable 1/1/19 @ 100, 5.000%, 1/1/32		1,051,966
	1,225,000	South Carolina State Public Service Authority, Refunding Revenue, Series B, Callable 1/1/16 @ 100 (NATL-RE), 5.000%, 1/1/22		1,317,047
	500,000	South Carolina Transportation Infrastructure Bank, Refunding Revenue, Series B (AMBAC), 5.250%, 10/1/15		547,375
	285,000	South Carolina Transportation Infrastructure Bank, Transit Improvements Revenue, Series A (XLCA), 5.000%, 10/1/15		310,584
	400,000	Spartanburg County, SC, School District No. 1, School Improvements G.O., Callable 9/1/16 @ 100 (AGM, SCSDE), 5.000%, 3/1/22		444,616
	1,000,000	Spartanburg Regional Health Services District, Refunding Revenue, Series A, 5.000%, 4/15/20		1,131,380
	600,000	Spartanburg Regional Health Services District, Refunding Revenue, Series A, Callable 4/15/18 @ 100 (Assured Guaranty), 5.250%, 4/15/21		661,278
	250,000	Three Rivers Solid Waste Authority, Solid Waste Disposal Facilities, Refunding Revenue, 5.000%, 12/15/13		252,302
	830,000	Three Rivers Solid Waste Authority, Solid Waste Disposal Facilities, Refunding Revenue, 4.500%, 12/15/16		904,185
	1,080,000	University of South Carolina, Moore School Business Project, University & College Improvements Revenue, Callable 5/1/22 @ 100, 5.000%, 5/1/28		1,179,122

Continued

85

Sterling Capital South Carolina Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		South Carolina — (continued)
	$500,000	University of South Carolina, Refunding Revenue, Series A, Callable 5/1/20 @ 100, 5.000%, 5/1/28	$	537,365
	310,000	York County, SC, Public Improvements G.O., Callable 11/1/16 @ 100, OID, 5.100%, 11/1/21		344,366
	270,000	York County, SC, School District No. 1, Refunding G.O., Series A, Callable 3/1/19 @ 100 (SCSDE), 5.000%, 3/1/20		310,735
		Total Municipal Bonds (Cost $68,675,241)		70,039,566
Shares
	MONEY MARKET FUND (1.6%)
	1,126,531	Federated Tax-Free Obligations Fund, Institutional Shares		1,126,531
		Total Money Market Fund (Cost $1,126,531)		1,126,531

	Fair Value
Total Investments — 99.1% (Cost $69,801,772)	$	71,166,097
Net Other Assets (Liabilities) — 0.9%		640,940
NET ASSETS — 100.0%	$	71,807,037

AGC — Assured Guaranty Corp.

AGM — Assured Guaranty Municipal Corp.

AMBAC — American Municipal Bond Assurance Corp.

FGIC — Financial Guaranty Insurance Corp.

G.O. — General Obligation

NATL — National Public Finance Guarantee Corp.

OID — Original Issue Discount

RE — Reinsurance

SCAGO — South Carolina Association of Governmental Organizations

SCSDE — South Carolina School District Enhancement

XLCA — XL Capital Assurance

See accompanying Notes to the Financial Statements.

86

Sterling Capital Virginia Intermediate Tax-Free Fund

  Schedule of Portfolio Investments

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS (98.6%)
		District of Columbia (1.5%)
	$    1,160,000	Metropolitan Washington Airports Authority, Port, Airport & Marina Improvement Revenue, Series A, Callable 10/1/20 @ 100, 5.000%, 10/1/23		$1,335,578
	600,000	Metropolitan Washington Airports Authority, Refunding Revenue, Series B, Callable 10/1/19 @ 100, 5.000%, 10/1/21		688,440
				2,024,018
		Virginia (97.1%)
	2,760,000	Albemarle County, VA, Economic Development Authority, Refunding Revenue, 5.000%, 6/1/20		3,246,698
	1,000,000	Alexandria, VA, Public Improvements G.O., Series A, 5.000%, 6/15/16		1,118,350
	1,000,000	Alexandria, VA, Refunding G.O. (State Aid Withholding), 5.000%, 6/15/21		1,200,580
	1,000,000	Arlington County, VA, Industrial Development Authority, VA Hospital Center Arlington, Refunding Revenue, 5.000%, 7/1/18		1,135,860
	1,250,000	Charlottesville, VA, Public Improvements, Refunding G.O., Series B, 4.000%, 7/15/21		1,409,587
	1,100,000	Chesapeake Bay Bridge & Tunnel District, General Resolution, Refunding Revenue, (BHAC-CR, NATL-RE), 5.500%, 7/1/25		1,278,299
	875,000	Chesapeake, VA, Refunding G.O., Series A, (State Aid Withholding), 4.000%, 12/1/21		978,031
	1,100,000	Chesterfield County, VA, Economic Development Authority, Electric & Power, Refunding Revenue, Series A, Callable 5/1/19 @ 100, 5.000%, 5/1/23		1,211,782
	475,000	Danville, VA, Refunding G.O., Series A, Callable 3/1/19 @ 100 (Assured Guaranty, State Aid Withholding), 5.000%, 3/1/21		538,113
	550,000	Danville, VA, Refunding G.O., Series A, Callable 3/1/19 @ 100, (Assured Guaranty, State Aid Withholding), 5.000%, 3/1/22		615,797
	1,410,000	Fairfax County, VA, Economic Development Authority, Community Services Facilities Project, Health, Hospital, Nursing, Home Improvements, Revenue, Series A, 4.500%, 3/1/21		1,582,358
	2,500,000	Fairfax County, VA, Economic Development Authority, Laurel Hill Public Facilities Project, Refunding Revenue, 5.000%, 6/1/22		2,929,825
	1,000,000	Fairfax County, VA, Industrial Development Authority, Inova Health System Project, Refunding Revenue, (AGM-CR), OID, 5.250%, 8/15/19		1,145,830
	795,000	Fairfax County, VA, Industrial Development Authority, Inova Health Systems Project, Refunding Revenue, Series C, 5.000%, 5/15/18		914,520
	815,000	Fairfax County, VA, Redevelopment & Housing Authority, Redevelopment & Housing Refunding Revenue, 3.500%, 10/1/18		885,685
	2,160,000	Fairfax County, VA, Sewer Improvements Revenue, Callable 7/15/21 @ 100, 5.000%, 7/15/22		2,562,646

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Virginia — (continued)
	$    1,000,000	Hampton, VA, Public Improvements, Refunding G.O., Series A, Callable 1/15/19 @100, 5.000%, 1/15/21		$1,146,780
	1,525,000	Harrisonburg, VA, Public Improvements, Refunding G.O., Series B, (State Aid Withholding), 5.000%, 7/15/18		1,776,289
	1,830,000	Henrico County, VA, Water & Sewer System, Refunding Revenue, 4.000%, 5/1/17		2,032,307
	1,665,000	Loudoun County, VA, Industrial Development Authority, Refunding Revenue, 4.000%, 12/15/22		1,855,759
	1,020,000	Loudoun County, VA, Public Improvements G.O., Series B, (State Aid Withholding), 5.000%, 12/1/16		1,158,373
	1,000,000	Loudoun County, VA, School Improvements G.O., Series B, (State Aid Withholding), 5.000%, 12/1/15		1,099,180
	1,465,000	Montgomery County, VA, Economic Development Authority, Virginia Tech Foundation, Refunding Revenue, Series A, Callable 6/1/20 @ 100, 5.000%, 6/1/27		1,592,968
	2,460,000	Montgomery County, VA, Economic Development Authority, Virginia Tech Foundation, Refunding Revenue, Series A, Callable 6/1/21 @ 100, 5.000%, 6/1/24		2,785,433
	1,315,000	Montgomery County, VA, Industrial Development Authority, Public Projects, Public Improvements, Revenue, 5.000%, 2/1/18		1,510,948
	1,000,000	Montgomery County, VA, Industrial Development Authority, Public Projects, Public Improvements, Revenue, Callable 2/1/18 @ 100, 5.000%, 2/1/24		1,076,980
	2,000,000	Newport News, VA, General Water Improvements, Refunding G.O., Series A, 4.000%, 7/15/20		2,251,060
	1,000,000	Newport News, VA, General Water Improvements, Refunding G.O., Series B, 5.250%, 7/1/21		1,207,600
	1,105,000	Newport News, VA, Refunding G.O., Series B, (State Aid Withholding), 5.000%, 2/1/15		1,174,549
	500,000	Norfolk, VA, Bond Anticipation Notes Refunding G.O., Series A, Callable 10/28/13 @ 100, 3.000%, 1/1/14		501,590
	1,000,000	Norfolk, VA, Economic Development Authority, Bon Secours Health System, Inc., Refunding Revenue, Callable 11/1/22 @ 100, 5.000%, 11/1/29		1,035,400
	1,000,000	Norfolk, VA, Economic Development Authority, Sentara Healthcare Facilities, Refunding Revenue, Series B, Callable 11/1/22 @ 100, 5.000%, 11/1/25		1,093,320
	1,000,000	Norfolk, VA, Economic Development Authority, Sentara Healthcare, Refunding Revenue, Series B, Callable 11/1/22 @ 100, 5.000%, 11/1/24		1,107,100
	1,000,000	Norfolk, VA, Water Utility Improvements Revenue, Callable 11/1/18 @ 100, 5.000%, 11/1/23		1,132,180

Continued

87

Sterling Capital Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Virginia — (continued)
	$    400,000	Northern Transportation District Commission, Virginia Railway Express Project, Refunding Revenue, Callable 10/28/13 @ 100, (AGM), 5.375%, 7/1/14	$	404,456
	1,000,000	Pittsylvania County, VA, Refunding G.O., Series B, 3.000%, 3/1/16		1,053,200
	1,000,000	Pittsylvania County, VA, School Improvements G.O., Series B, 5.000%, 2/1/19		1,159,260
	1,320,000	Pittsylvania County, VA, School Improvements G.O., Series B, Callable 2/1/19 @ 100, OID, 5.200%, 2/1/20		1,520,680
	1,775,000	Pittsylvania County, VA, School Improvements G.O., Series B, Callable 2/1/19 @ 100, OID, 5.375%, 2/1/21		2,031,612
	1,175,000	Poquoson, VA, Refunding G.O., (State Aid Withholding), 5.000%, 2/15/19		1,367,465
	1,160,000	Poquoson, VA, Refunding G.O., (State Aid Withholding), 5.000%, 2/15/21		1,363,162
	1,700,000	Portsmouth, VA, Public Improvements, Refunding G.O., Series A, Callable 2/1/23 @ 100 (State Aid Withholding), 5.000%, 2/1/27		1,917,158
	1,330,000	Portsmouth, VA, Public Utilities, Refunding G.O., Series A, (State Aid Withholding), 4.000%, 7/15/19		1,486,448
	1,325,000	Portsmouth, VA, Public Utilities, Refunding G.O., Series A, Callable 7/15/22 @ 100, (State Aid Withholding), 5.000%, 7/15/24		1,537,981
	1,440,000	Portsmouth, VA, Refunding G.O., Series B, Callable 7/15/19 @ 100, 5.250%, 7/15/23		1,667,578
	1,055,000	Portsmouth, VA, Refunding G.O., Series D, Callable 7/15/20 @ 100, 5.000%, 7/15/21		1,231,892
	1,400,000	Prince William County, VA, County Facilities, Refunding Certificate of Participation, 3.500%, 10/1/18		1,513,722
	1,585,000	Prince William County, VA, Public Improvement, Refunding G.O., Series A, 4.000%, 8/1/21		1,787,278
	1,035,000	Richmond Metropolitan Authority, Expressway, Refunding Revenue, (NATL), 5.250%, 7/15/15		1,115,761
	1,520,000	Richmond Metropolitan Authority, Expressway, Refunding Revenue, (NATL), 5.250%, 7/15/16		1,685,391
	1,400,000	Riverside, VA, Regional Jail Authority, Refunding Revenue, 5.000%, 7/1/20		1,609,174
	1,760,000	Riverside, VA, Regional Jail Authority, Refunding Revenue, 5.000%, 7/1/22		2,018,245
	1,415,000	Roanoke, VA, Economic Development Authority, Carillion Health System, Remarketing, Refunding Revenue, Series C, (AGM), 5.000%, 7/1/17		1,590,913
	1,100,000	Smyth County, VA, Industrial Development Authority, Mountain States Health Alliance Refunding Revenue, 5.000%, 7/1/15		1,163,580
	885,000	Smyth County, VA, Industrial Development Authority, Mountain States Health Alliance Refunding Revenue, 5.000%, 7/1/20		973,686
	1,090,000	Smyth County, VA, Public Improvement, Refunding G.O., Series A, Callable 11/1/21 @ 100 (State Aid Withholding), 4.000%, 11/1/23		1,155,640

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Virginia — (continued)
	$    1,530,000	Smyth County, VA, Public Improvement, Refunding G.O., Series A, Callable 11/1/21 @ 100 (State Aid Withholding), 5.000%, 11/1/25	$	1,697,168
	1,000,000	Spotsylvania County, VA, Public Improvements, G.O., Callable 1/15/16 @ 100 (AGM), 5.000%, 1/15/17		1,093,260
	1,420,000	Spotsylvania County, VA, Water & Sewer System, Refunding Revenue, Series A, Callable 6/1/20 @ 100, 5.000%, 6/1/28		1,543,895
	1,515,000	Stafford County & Staunton Industrial Development Authority, Virginia Municipal League Association, Public Improvements Revenue, Series I, 4.000%, 2/1/16		1,620,686
	800,000	Stafford County & Staunton Industrial Development Authority, Virginia Municipal League Association, Public Improvements Revenue, Series I, 4.000%, 2/1/17		869,384
	535,000	Suffolk, VA, Pre-refunded, Refunding G.O., Callable 12/1/15 @ 100, 5.000%, 12/1/18		587,264
	1,300,000	Suffolk, VA, Public Improvements, Refunding G.O., Series A, (NATL-RE), 5.000%, 2/1/16		1,434,290
	2,425,000	Suffolk, VA, Public Improvements, Refunding G.O., Series A, (NATL-RE), 5.000%, 2/1/17		2,754,339
	465,000	Suffolk, VA, Unrefunded, Refunding G.O., Callable 12/1/15 @ 100, 5.000%, 12/1/18		508,268
	1,100,000	Virginia Biotechnology Research Partnership Authority, Constructions Laboratories Project, Refunding Revenue, 5.000%, 9/1/19		1,291,378
	2,500,000	Virginia College Building Authority, 21st Century College & Equipment, University & College Improvements Revenue, Series A, 5.000%, 2/1/22		2,977,200
	845,000	Virginia College Building Authority, 21st Century College & Equipment, University & College Improvements Revenue, Series A, Callable 2/1/18 @ 100, (State Intercept), 5.000%, 2/1/21		950,709
	1,000,000	Virginia College Building Authority, Educational Refunding Revenue, Series A, (State Intercept), 5.000%, 9/1/19		1,172,760
	1,805,000	Virginia College Building Authority, Public Higher Education Financing Program, Refunding Revenue, Series B, (State Intercept), 5.000%, 9/1/20		2,131,470
	2,200,000	Virginia College Building Authority, Public Higher Education Financing Program, Revenue, Series A, Callable 9/1/17 @ 100, (State Intercept), OID, 4.500%, 9/1/26		2,326,016
	1,505,000	Virginia College Building Authority, Public Higher Education Financing Program, University & College Improvements Revenue, Series A, Callable 9/1/21 @ 100, (State Intercept), 4.000%, 9/1/22		1,645,115
	1,620,000	Virginia Commonwealth Transportation Board, Federal Transportation Grant, Transit Improvements, Anticipation Revenue, 5.000%, 9/15/18		1,892,176

Continued

88

Sterling Capital Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		Virginia — (continued)
	$    1,850,000	Virginia Commonwealth Transportation Board, Federal Transportation Grant, Transit Improvements, Revenue, Series B, Callable 9/15/22 @ 100, 5.000%, 3/15/23		$  2,183,000
	1,285,000	Virginia Commonwealth, Refunding G.O., Series B, 4.000%, 6/1/23		1,440,742
	1,000,000	Virginia Commonwealth, University & College Improvements G.O., Series A1, 4.000%, 6/1/20		1,132,450
	1,075,000	Virginia Housing Development Authority, Refunding Revenue, Series A1, Callable 7/1/19 @ 100, (G.O. of Authority), 4.600%, 7/1/25		1,121,333
	1,500,000	Virginia Housing Development Authority, State Single Family Housing Revenue, Series A, 3.900%, 3/1/19		1,601,955
	1,500,000	Virginia Port Authority, Port, Airport & Marina Improvements Revenue, Callable 7/1/20 @ 100, 5.000%, 7/1/28		1,627,425
	1,025,000	Virginia Public Building Authority, Public Facilities Building Revenue, Series A, Callable 8/1/17 @ 100, (NATL-RE), 5.000%, 8/1/18		1,160,628
	2,000,000	Virginia Public Building Authority, Public Improvements Revenue, Series A, Callable 8/1/21 @ 100, 5.000%, 8/1/26		2,233,740
	1,000,000	Virginia Public School Authority, School Financing 1997 Resolution, School Improvement Revenue, Series B, Callable 8/1/17 @100, (NATL-RE), 5.000%, 8/1/26		1,106,830
	1,150,000	Virginia Resources Authority, State Revolving Fund, Refunding Revenue, 5.500%, 10/1/17		1,354,171
	1,835,000	Virginia Small Business Financing Authority, Sentara Healthcare Refunding Revenue, 4.000%, 11/1/16		1,994,829
	600,000	Virginia Small Business Financing Authority, Sentara Healthcare, Refunding Revenue, Callable 5/1/20 @ 100, OID, 4.000%, 11/1/20		645,132
	1,255,000	Western Regional Jail Authority, Correctional Facilities Improvement Revenue, Callable 6/1/17 @ 100, (NATL-RE), 4.750%, 6/1/23		1,383,876
	2,000,000	York County, VA, Economic Development Authority, Electric & Power, Refunding Revenue, Series A, 4.050%, 5/1/33(a)		2,035,500
				127,163,048
		Total Municipal Bonds (Cost $124,936,710)		129,187,066

Shares			Fair Value
	MONEY MARKET FUND (2.6%)
	3,437,170	Federated Virginia Municipal Money Market Portfolio, Institutional Shares		$  3,437,170
		Total Money Market Fund (Cost $3,437,170)		3,437,170
	Total Investments — 101.2% (Cost $128,373,880)			132,624,236
	Net Other Assets (Liabilities) — (1.2)%			(1,617,726)
	NET ASSETS — 100.0%			$131,006,510

(a) The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The reflected rate is in effect as of September 30, 2013. The maturity date reflected is the final maturity date.

AGM — Assured Guaranty Municipal Corp.

BHAC — Berkshire Hathaway Insurance Corp.

CR — Custodial Receipts

G.O. — General Obligation

NATL — National Public Finance Guarantee Corp.

OID — Original Issue Discount

RE — Reinsurance

See accompanying Notes to the Financial Statements.

89

Sterling Capital West Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS (95.2%)
		West Virginia (95.2%)
	$    1,460,000	Berkeley County, WV, Board of Education, Refunding Public School, G.O., 2.000%, 5/1/16		$1,500,836
	975,000	Berkeley County, WV, Public Service Sewer District, Sewer Improvements Revenue, Series A, Callable 3/1/15 @ 100, 5.000%, 3/1/22		1,014,790
	670,000	Braxton County, WV, Board of Education, Public School Improvements G.O., Callable 5/1/18 @ 100, (AGM, West Virginia Board Commission), 5.000%, 5/1/23		753,033
	1,450,000	Cabell County, WV, Board of Education, School Improvements G.O., (NATL-RE), 5.000%, 5/1/16		1,606,484
	1,215,000	Fairmont State University, WV, University & College Improvements Refunding Revenue, Series B, 4.000%, 6/1/19		1,332,053
	1,005,000	Fairmont State University, WV, University & College Improvements Refunding Revenue, Series A, Callable 6/1/21 @ 100, 5.000%, 6/1/23		1,128,414
	1,495,000	Fairmont State University, WV, University & College Improvements Refunding Revenue, Series B, Callable 6/1/21 @ 100, 5.000%, 6/1/23		1,678,586
	1,260,000	Fairmont, WV, Waterworks Refunding Revenue, Series D, (AGM), 3.000%, 7/1/18		1,325,659
	1,100,000	Fairmont, WV, Waterworks Refunding Revenue, Series D, Callable 7/1/19 @100, (AGM), 4.000%, 7/1/24		1,130,415
	2,250,000	Greenbrier County, WV, Board of Education, Public School Improvements G.O., (AGM), 5.000%, 5/1/18		2,597,108
	535,000	Jefferson County, WV, Board of Education Public School, Refunding G.O., (West Virginia Board Commission), 4.000%, 5/1/18.		587,928
	1,605,000	Jefferson County, WV, Board of Education Public School, Refunding G.O., (West Virginia Board Commission), 4.000%, 5/1/19		1,765,002
	815,000	Jefferson County, WV, Board of Education Public School, Refunding G.O., (West Virginia Board Commission), 4.000%, 5/1/20		895,921
	435,000	Logan County, WV, 1st Mortgage, Logan County, Health, Hospital, Nursing Home Improvements, Revenue, 8.000%, 12/1/16		489,236
	1,700,000	Marshall University, WV, Refunding Revenue, 5.000%, 5/1/19		1,963,160
	1,390,000	Marshall University, WV, University & College Improvements Revenue, Callable 5/1/21 @ 100, 5.000%, 5/1/26		1,518,172
	1,560,000	Marshall University, WV, University & College Improvements Revenue, Callable 5/1/21 @ 100, 5.000%, 5/1/27		1,682,694
	800,000	Monongalia County, WV, Board of Education, Public School Refunding G.O., (West Virginia Board Commission), 4.000%, 5/1/19		880,640
	1,545,000	Monongalia County, WV, Board of Education, Public School Refunding G.O., (West Virginia Board Commission), 5.000%, 5/1/20		1,793,482

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		West Virginia — (continued)
	$    1,000,000	Monongalia County, WV, Board of Education, Public School Refunding G.O., Callable 5/1/22 @ 100, (West Virginia Board Commission), 5.000%, 5/1/23		$1,144,170
	815,000	Monongalia County, WV, Building Commission, Health System Obligated Group Refunding Revenue, Callable 7/1/21 @ 100, OID, 6.250%, 7/1/31		864,682
	1,345,000	Monongalia County, WV, Building Commission, Health, Hospital, Nursing Home Improvement Revenue, Series A, Callable 7/1/15 @ 100, 5.250%, 7/1/20		1,388,551
	745,000	Ohio County, WV, County Commission, Fort Henry Centre Financing District, Public Improvement, Tax Allocation, Series A, 5.350%, 6/1/17		742,586
	1,190,000	Parkersburg, WV, Combined Waterworks & Sewer Systems, Refunding Revenue, Series C, (NATL), 5.000%, 9/1/14		1,232,697
	1,330,000	Parkersburg, WV, Combined Waterworks & Sewer Systems, Refunding Revenue, Series C, (NATL), 5.000%, 9/1/15		1,418,684
	420,000	Pleasants County, WV, Board of Education, Public School Improvements G.O., 3.000%, 5/1/17		444,898
	960,000	Pleasants County, WV, Board of Education, Public School Improvements G.O., 4.000%, 5/1/21		1,050,874
	795,000	Pleasants County, WV, Board of Education, Public School Improvements G.O., Callable 5/1/21 @ 100, 4.000%, 5/1/22		856,803
	1,210,000	Pleasants County, WV, Board of Education, Public School Improvements G.O., Callable 5/1/21 @ 100, 4.000%, 5/1/23		1,288,456
	1,165,000	Pleasants County, WV, Board of Education, Public School Improvements G.O., Callable 5/1/21 @ 100, 4.000%, 5/1/24		1,219,860
	1,000,000	Preston County, WV, Board of Education, Public School Improvements G.O., (West Virginia Board Commission), 3.000%, 5/1/19		1,048,320
	1,645,000	Preston County, WV, Board of Education, Public School Improvements G.O., (West Virginia Board Commission), 4.000%, 5/1/21		1,827,019
	1,285,000	Princeton, WV, Princeton Community Hospital Project, Refunding Revenue, Series A, 5.000%, 5/1/22		1,375,335
	1,365,000	Princeton, WV, Princeton Community Hospital Project, Refunding Revenue, Series A, Callable 5/1/22 @ 100, 5.000%, 5/1/27		1,365,259
	2,105,000	Putnam County, WV, Board of Education, Public School Improvements, G.O., (West Virginia Board Commission), 4.000%, 5/1/19		2,358,463
	1,000,000	Putnam County, WV, Board of Education, Public School Improvements, G.O., Callable 5/1/20 @ 100, (West Virginia Board Commission), 4.000%, 5/1/22		1,087,210
	1,400,000	Shepherd University Board of Governors, Residence Facilities Projects, University & College Improvements, Revenue, Callable 6/1/15 @ 100, (NATL-RE), 5.000%, 6/1/25		1,490,734

Continued

90

Sterling Capital West Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		West Virginia — (continued)
	$3,000,000	West Virginia Economic Development Authority, Correctional Juvenile Public Safety Facilities Lease, Refunding Revenue, Series A, Callable 6/1/22 @ 100, 5.000%, 6/1/25		$3,279,900
	4,685,000	West Virginia Economic Development Authority, Correctional Juvenile Public Safety Facilities Lease, Refunding Revenue, Series A, Callable 6/1/22 @ 100, 5.000%, 6/1/26		5,097,655
	750,000	West Virginia Economic Development Authority, Department of Environmental Protection Lease, Refunding Revenue, Series B, 4.000%, 11/1/21		810,833
	1,000,000	West Virginia Economic Development Authority, Ohio Power Co. Amos Project, Resource Recovery Improvements Revenue, Series A, 3.125%, 3/1/43(a)		1,025,190
	1,710,000	West Virginia Economic Development Authority, The Diamond Project, Refunding Revenue, 3.000%, 12/15/18		1,804,854
	2,390,000	West Virginia Economic Development Authority, The Diamond Project, Refunding Revenue, Callable 12/15/18 @ 100, 3.000%, 12/15/19		2,477,713
	670,000	West Virginia Higher Education Policy Commission, Community & Technology Capital Improvements Revenue, Series A, 5.000%, 7/1/17		758,541
	1,600,000	West Virginia Higher Education Policy Commission, Higher Education Facilities, Refunding Revenue, Series A, 5.000%, 4/1/20		1,859,552
	250,000	West Virginia Higher Education Policy Commission, Higher Educational Facilities, Refunding Revenue, Series B, Callable 4/1/14 @ 100, (NATL), 5.000%, 4/1/16		255,207
	640,000	West Virginia Hospital Finance Authority, Charleston Area Medical Center, Inc., Health, Hospital, Nursing Home Improvements Revenue, Series A, Callable 9/1/16 @ 100, OID, 6.500%, 9/1/16		711,302
	845,000	West Virginia Hospital Finance Authority, Health System Obligation, Health, Hospital, Nursing Home Improvements, Revenue, Callable 1/1/15 @ 100, OID, 5.000%, 1/1/24		884,901
	1,575,000	West Virginia Hospital Finance Authority, United Health System Obligation, Refunding Revenue, Series E, Callable 12/1/18 @ 100, OID, 5.375%, 6/1/28		1,614,470
	1,555,000	West Virginia Housing Development Fund, Refunding Revenue, Series A, 2.750%, 11/1/20		1,583,581
	2,325,000	West Virginia School Building Authority, Capital Improvements, Refunding Revenue, Series A, (NATL), 5.000%, 7/1/16		2,590,352
	1,855,000	West Virginia School Building Authority, Capital Improvements, Refunding Revenue, Series A, Callable 7/1/17 @ 100, (NATL), 5.000%, 7/1/18		2,080,958

Principal Amount			Fair Value
	MUNICIPAL BONDS — (continued)
		West Virginia — (continued)
	$1,650,000	West Virginia School Building Authority, Capital Improvements, Refunding Revenue, Series A, Callable 7/1/17 @ 100, (NATL), 5.000%, 7/1/19		$1,859,748
	2,500,000	West Virginia School Building Authority, Capital Improvements, Refunding Revenue, Series A, Callable 7/1/17 @ 100, (NATL), 5.000%, 7/1/20		2,813,900
	100,000	West Virginia School Building Authority, School Improvements Revenue, 5.000%, 7/1/16		111,355
	1,300,000	West Virginia School Building Authority, School Improvements Revenue, 5.000%, 7/1/18		1,502,176
	1,000,000	West Virginia School Building Authority, School Improvements Revenue, Callable 7/1/18 @ 100, OID, 5.000%, 7/1/27		1,085,050
	1,840,000	West Virginia School Building Authority, School Improvements Revenue, Callable 7/1/18 @100, 5.250%, 7/1/21		2,108,272
	1,890,000	West Virginia State Building Commission, Regional Jail Refunding Revenue, Series A, (AMBAC), 5.375%, 7/1/21		2,045,339
	1,020,000	West Virginia State Parkways Economic Development & Tourism Authority, Refunding Revenue (NATL, G.O. of Authority), 5.250%, 5/15/17		1,166,513
	2,000,000	West Virginia State Parkways Economic Development & Tourism Authority, Refunding Revenue (NATL, G.O. of Authority), 5.250%, 5/15/19		2,348,560
	1,380,000	West Virginia University, University Project, Refunding Revenue, Series A, Callable 10/1/22 @ 100, 5.000%, 10/1/35		1,439,961
	1,500,000	West Virginia University, University Projects, University & College Improvement Revenue, Series B, 5.000%, 10/1/20		1,758,435
	1,035,000	West Virginia University, University Projects, University & College Improvements Revenue, Series A, (NATL-RE), 5.250%, 4/1/28		1,194,876
	500,000	West Virginia University, University Projects, University & College Improvements Revenue, Series B, 5.000%, 10/1/19		583,295
	3,665,000	West Virginia University, University Projects, University & College Improvements Revenue, Series B, Callable 10/1/21 @ 100, 5.000%, 10/1/36		3,796,977
	1,110,000	West Virginia Water Development Authority, Loan Program II, Refunding Revenue, Series B, Callable 11/1/13 @ 101, (AMBAC), 5.250%, 11/1/23		1,125,707
	2,090,000	West Virginia, State Road, Refunding G.O., (NATL), 5.000%, 6/1/15		2,250,763
		Total Municipal Bonds (Cost $99,721,011)		101,874,150

Continued

91

Sterling Capital West Virginia Intermediate Tax-Free Fund

Schedule of Portfolio Investments — (continued)

September 30, 2013

Shares			Fair Value
	MONEY MARKET FUND (3.4%)
	3,577,683	Federated Tax-Free Obligations Fund, Institutional Shares		$  3,577,683
		Total Money Market Fund (Cost $3,577,683)		3,577,683
	Total Investments — 98.6% (Cost $103,298,694)			105,451,833
	Net Other Assets (Liabilities) — 1.4%			1,513,344
	NET ASSETS — 100.0%		$	106,965,177

(a) The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The reflected rate is in effect as of September 30, 2013. The maturity date reflected is the final maturity date.

AGM — Assured Guaranty Municipal Corp.

AMBAC — American Municipal Bond Assurance Corp.

G.O. — General Obligation

NATL — National Public Finance Guarantee Corp.

OID — Original Issue Discount

RE — Reinsurance

See accompanying Notes to the Financial Statements.

92

Sterling Capital Strategic Allocation Conservative Fund

Schedule of Portfolio Investments

September 30, 2013

Shares			Fair Value
	EQUITY FUNDS (40.5%)
	207,334	Sterling Capital Equity Income Fund, Institutional Shares(a)		$  3,769,324
	174,641	Sterling Capital Special Opportunities Fund, Institutional Shares(a)		3,835,116
		Total Equity Funds (Cost $6,749,518)		7,604,440
	FIXED INCOME FUND (57.7%)
	1,030,767	Sterling Capital Total Return Bond Fund, Institutional Shares(a)		10,853,980
		Total Fixed Income Funds (Cost $10,631,199)		10,853,980
	MONEY MARKET FUND (1.7%)
	316,108	Federated Treasury Obligations Fund, Institutional Shares		316,108
		Total Money Market Fund (Cost $316,108)		316,108
	Total Investments — 99.9% (Cost $17,696,825)			18,774,528
	Net Other Assets (Liabilities) — 0.1%			21,032
	NET ASSETS — 100.0%		$	18,795,560

(a) Investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940.

See accompanying Notes to the Financial Statements.

93

Sterling Capital Strategic Allocation Balanced Fund

Schedule of Portfolio Investments

September 30, 2013

Shares			Fair Value
	EQUITY FUNDS (60.4%)
	573,512	Sterling Capital Equity Income Fund, Institutional Shares(a)		$10,426,456
	483,055	Sterling Capital Special Opportunities Fund, Institutional Shares(a)		10,607,895
		Total Equity Funds (Cost $18,802,681)		21,034,351
	FIXED INCOME FUND (37.7%)
	1,245,350	Sterling Capital Total Return Bond Fund, Institutional Shares(a)		13,113,537
		Total Fixed Income Funds (Cost $12,873,018)		13,113,537
	MONEY MARKET FUND (2.0%)
	683,769	Federated Treasury Obligations Fund, Institutional Shares		683,769
		Total Money Market Fund (Cost $683,769)		683,769
	Total Investments — 100.1% (Cost $32,359,468)			34,831,657
	Net Other Assets (Liabilities) — (0.1)%			(39,650	)
	NET ASSETS — 100.0%		$	34,792,007

(a) Investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940.

See accompanying Notes to the Financial Statements.

94

Sterling Capital Strategic Allocation Growth Fund

Schedule of Portfolio Investments

September 30, 2013

Shares		Fair Value
EQUITY FUNDS (75.5%)
541,014	Sterling Capital Equity Income Fund, Institutional Shares(a)	$	9,835,643
455,702	Sterling Capital Special Opportunities Fund, Institutional Shares(a)		10,007,224
	Total Equity Funds (Cost $17,726,356)		19,842,867
FIXED INCOME FUND (22.8%)
568,819	Sterling Capital Total Return Bond Fund, Institutional Shares(a)		5,989,668
	Total Fixed Income Funds (Cost $5,970,641)		5,989,668
MONEY MARKET FUND (1.7%)
453,268	Federated Treasury Obligations Fund, Institutional Shares		453,268
	Total Money Market Fund (Cost $453,268)		453,268
Total Investments — 100.0% (Cost $24,150,265)			26,285,803
Net Other Assets (Liabilities) — (0.0)%			(7,893	)
NET ASSETS — 100.0%		$	26,277,910

(a) Investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940.

See accompanying Notes to the Financial Statements.

95

Sterling Capital Funds

    Statements of Assets and Liabilities

    September 30, 2013

	Sterling Capital Large Cap Value Diversified Fund			Sterling Capital Mid Value Fund
Assets:
Investments at fair value (a)	$	224,594,940		$	590,024,143
Interest and dividends receivable		328,284			1,047,115
Receivable for investments sold		—			5,075,570
Receivable for capital shares issued		327,214			3,281,992
Deferred offering costs		—			—
Prepaid expenses		17,488			19,771
Total Assets		225,267,926			599,448,591
Liabilities:
Call options written
(premiums received $ — , $ — , $ — , $719,815, $ — , $ — and $ — , respectively)		—			—
Distributions payable		—			—
Payable for investments purchased		—			10,383,351
Payable for capital shares redeemed		24,385			586,584
Accrued expenses and other payables:
Investment advisory fees		111,251			314,358
Administration fees		17,721			42,909
Audit fees		11,815			22,622
Compliance service fees		197			431
Distribution (12b-1) fees		7,120			9,951
Printing fees		12,493			14,060
Transfer agent fees		10,805			29,596
Other fees		8,239			15,665
Total Liabilities		204,026			11,419,527
Net Assets	$	225,063,900		$	588,029,064
Net Assets Consist of:
Capital	$	274,985,306		$	443,979,318
Undistributed (distributions in excess of) net investment income		148,938			1,533,564
Accumulated realized gain (loss)		(65,370,280	)		20,615,299
Net unrealized appreciation (depreciation)		15,299,936			121,900,883
Net Assets	$	225,063,900		$	588,029,064
Net Assets
Class A Shares	$	28,682,454		$	36,094,258
Class B Shares		1,261,414			2,001,633
Class C Shares		198,817			1,309,062
Institutional Shares		194,921,215			548,623,941
Class R Shares		—			170
Total	$	225,063,900		$	588,029,064
Shares of Beneficial Interest Outstanding (Unlimited number of shares authorized, no par value)
Class A Shares		2,026,125			1,921,628
Class B Shares		90,674			112,675
Class C Shares		14,394			73,894
Institutional Shares		13,697,780			29,014,769
Class R Shares		—			9
Total		15,828,973			31,122,975
Net Asset Value
Class A Shares - redemption price per share	$	14.16		$	18.78
Class B Shares - offering price per share*	$	13.91		$	17.76
Class C Shares - offering price per share*	$	13.81		$	17.72
Institutional Shares	$	14.23		$	18.91
Class R Shares	$	—		$	18.47	**
Maximum Sales Charge - Class A Shares		5.75	%		5.75	%
Maximum Offering Price (100%/(100% - Maximum Sales Charge)) of net asset value adjusted to the nearest cent per share - Class A Shares	$	15.02		$	19.93
(a) Investments at cost	$	209,295,004		$	468,123,260

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

** The Sterling Capital Mid Value Fund and Sterling Capital Small Cap Value Diversified Fund net asset value for Class R Shares is calculated using unrounded net assets of $170.03 and $160.34 divided by the unrounded shares of 9.207 and 10.541, respectively.

See accompanying Notes to the Financial Statements.

96

Sterling Capital Small Cap Value Diversified Fund			Sterling Capital Special Opportunities Fund			Sterling Capital Equity Income Fund			Sterling Capital Ultra Short Bond Fund			Sterling Capital Short-Term Bond Fund
$	112,028,312		$	827,451,705		$	1,936,814,424		$	56,053,128		$	76,490,011
	194,661			760,037			2,535,518			604,695			590,732
	479,524			—			—			—			—
	285,419			1,781,800			9,282,858			28,287			240,438
	—			—			—			2,001			—
	14,926			24,085			40,272			4,070			4,658
	113,002,842			830,017,627			1,948,673,072			56,692,181			77,325,839
	—			1,166,900			—			—			—
	—			—			2,588			8,475			125,796
	477,396			1,828,789			19,362,596			2,451,721			394,066
	974,249			617,006			6,832,643			52,910			282,763
	67,880			504,567			1,099,165			8,689			15,749
	8,650			64,779			150,078			4,152			6,022
	4,897			38,113			79,973			2,230			3,545
	96			710			1,627			44			63
	2,297			140,843			379,952			2,637			3,263
	3,029			23,774			49,173			1,377			2,224
	6,297			62,784			198,575			2,103			3,566
	5,356			25,002			52,936			6,142			6,417
	1,550,147			4,473,267			28,209,306			2,540,480			843,474
$	111,452,695		$	825,544,360		$	1,920,463,766		$	54,151,701		$	76,482,365
$	95,570,423		$	568,940,699		$	1,566,208,991		$	54,251,752		$	84,369,185
	138,201			1,176,686			1,175,992			10,474			(16,260	)
	9,622,194			80,049,793			73,610,966			(14,612	)		(7,531,055	)
	6,121,877			175,377,182			279,467,817			(95,913	)		(339,505	)
$	111,452,695		$	825,544,360		$	1,920,463,766		$	54,151,701		$	76,482,365
$	8,813,394		$	269,300,024		$	690,106,475		$	13,526,405		$	13,811,687
	424,614			8,920,959			10,335,471			—			—
	215,802			94,718,301			280,841,480			—			555,806
	101,998,725			452,155,369			936,399,632			40,625,296			62,114,872
	160			449,707			2,780,708			—			—
$	111,452,695		$	825,544,360		$	1,920,463,766		$	54,151,701		$	76,482,365
	578,056			12,594,449			38,046,702			1,355,687			1,495,116
	28,521			456,673			571,064			—			—
	14,505			4,845,389			15,591,552			—			60,170
	6,650,335			20,593,218			51,516,936			4,071,515			6,724,319
	11			20,708			154,111			—			—
	7,271,428			38,510,437			105,880,365			5,427,202			8,279,605
$	15.25		$	21.38		$	18.14		$	9.98		$	9.24
$	14.89		$	19.53		$	18.10		$	—		$	—
$	14.88		$	19.55		$	18.01		$	—		$	9.24
$	15.34		$	21.96		$	18.18		$	9.98		$	9.24
$	15.21	**	$	21.72		$	18.04		$	—		$	—
	5.75	%		5.75	%		5.75	%		0.50	%		2.00	%
$	16.18		$	22.68		$	19.25		$	10.03		$	9.43
$	105,906,435		$	651,627,438		$	1,657,346,607		$	56,149,041		$	76,829,516

97

Sterling Capital Funds

    Statements of Assets and Liabilities

    September 30, 2013

	Sterling Capital Intermediate U.S. Government Fund			Sterling Capital Total Return Bond Fund
Assets:
Investments at fair value (a)	$	58,311,369		$	499,818,251
Cash		—			4,282
Interest and dividends receivable		291,358			4,043,908
Receivable for investments sold		—			3,609,897
Receivable for capital shares issued		73,315			933,396
Prepaid expenses		4,451			10,617
Total Assets		58,680,493			508,420,351
Liabilities:
Distributions payable		93,620			776,078
Payable for investments purchased		—			20,002,275
Payable for capital shares redeemed		72,493			627,599
Accrued expenses and other payables:
Investment advisory fees		21,384			137,466
Administration fees		4,753			38,646
Compliance service fees		57			448
Distribution (12b-1) fees		3,450			14,945
Other fees		14,055			97,468
Total Liabilities		209,812			21,694,925
Net Assets	$	58,470,681		$	486,725,426
Net Assets Consist of:
Capital	$	64,555,674		$	491,729,764
Undistributed (distributions in excess of) net investment income		655,299			765,767
Accumulated realized gain (loss)		(7,783,663	)		(6,066,357	)
Net unrealized appreciation (depreciation)		1,043,371			296,252
Net Assets	$	58,470,681		$	486,725,426
Net Assets
Class A Shares	$	10,171,813		$	42,773,733
Class B Shares		532,558			1,942,734
Class C Shares		1,080,167			5,362,137
Institutional Shares		46,686,143			436,641,422
Class R Shares		—			5,400
Total	$	58,470,681		$	486,725,426
Shares of Beneficial Interest Outstanding (Unlimited number of shares authorized, no par value)
Class A Shares		988,928			4,064,420
Class B Shares		51,949			184,413
Class C Shares		105,167			508,764
Institutional Shares		4,533,584			41,467,934
Class R Shares		—			515
Total		5,679,628			46,226,046
Net Asset Value
Class A Shares - redemption price per share	$	10.29		$	10.52
Class B Shares - offering price per share*	$	10.25		$	10.53
Class C Shares - offering price per share*	$	10.27		$	10.54
Institutional Shares	$	10.30		$	10.53
Class R Shares	$	—		$	10.48	***
Maximum Sales Charge - Class A Shares		2.00	%		5.75	%
Maximum Offering Price (100%/(100% - Maximum Sales Charge)) of net asset value adjusted to the nearest cent per share - Class A Shares	$	10.50		$	11.16
(a) Investments at cost	$	57,267,998		$	499,521,999

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

** The Sterling Capital Securitized Opportunities Fund net asset value for Class C Shares is calculated using unrounded net assets of $2,652.98 divided by the unrounded shares of 269.603.

*** The Sterling Capital Total Return Bond Fund net asset value for Class R Shares is calculated using unrounded net assets of $5,400.54 divided by the unrounded shares of 515.167.

See accompanying Notes to the Financial Statements.

98

Sterling Capital Corporate Fund			Sterling Capital Securitized Opportunities Fund			Sterling Capital Kentucky Intermediate Tax-Free Fund			Sterling Capital Maryland Intermediate Tax-Free Fund			Sterling Capital North Carolina Intermediate Tax-Free Fund
$	85,209,266		$	65,739,893		$	17,620,954		$	43,561,523		$	213,040,153
	—			—			—			—			—
	1,125,413			221,331			193,698			461,133			3,054,171
	1,560,083			361,726			—			—			4,725,817
	246,665			67,748			3,379			3,966			138,513
	5,806			5,863			1,436			1,485			2,859
	88,147,233			66,396,561			17,819,467			44,028,107			220,961,513
	60,031			27,899			28,094			43,979			318,766
	2,083,850			7,721,408			—			—			1,158,160
	168,602			67,546			1,351			136,525			95,835
	24,904			16,403			6,753			16,165			80,849
	6,801			4,480			1,435			3,434			17,172
	80			51			18			39			198
	45			10			1,413			2,662			15,449
	18,728			15,057			5,403			9,656			44,551
	2,363,041			7,852,854			44,467			212,460			1,730,980
$	85,784,192		$	58,543,707		$	17,775,000		$	43,815,647		$	219,230,533
$	85,698,191		$	60,214,285		$	16,757,777		$	42,986,885		$	212,674,743
	(60,031	)		6,197			2,458			3,648			79,793
	358,021			(1,523,014	)		(12,158	)		(109,934	)		(670,376	)
	(211,989	)		(153,761	)		1,026,923			935,048			7,146,373
$	85,784,192		$	58,543,707		$	17,775,000		$	43,815,647		$	219,230,533
$	160,296		$	37,656		$	5,848,982		$	8,036,211		$	55,415,628
	—			—			—			—			—
	14,928			2,653			67,086			1,205,593			4,776,206
	85,608,968			58,503,398			11,858,932			34,573,843			159,038,699
	—			—			—			—			—
$	85,784,192		$	58,543,707		$	17,775,000		$	43,815,647		$	219,230,533
	15,787			3,824			548,291			733,478			5,157,727
	—			—			—			—			—
	1,471			270			6,287			110,010			444,885
	8,433,304			5,939,973			1,113,273			3,150,788			14,803,300
	—			—			—			—			—
	8,450,562			5,944,067			1,667,851			3,994,276			20,405,912
$	10.15		$	9.85		$	10.67		$	10.96		$	10.74
$	—		$	—		$	—		$	—		$	—
$	10.15		$	9.84	**	$	10.67		$	10.96		$	10.74
$	10.15		$	9.85		$	10.65		$	10.97		$	10.74
$	—		$	—		$	—		$	—		$	—
	2.00	%		2.00	%		2.00	%		2.00	%		2.00	%
$	10.36		$	10.05		$	10.89		$	11.18		$	10.96
$	85,421,255		$	65,893,654		$	16,594,031		$	42,626,475		$	205,893,780

99

Sterling Capital Funds

    Statements of Assets and Liabilities

    September 30, 2013

	Sterling Capital South Carolina Intermediate Tax-Free Fund			Sterling Capital Virginia Intermediate Tax-Free Fund
Assets:
Investments at fair value - unaffiliated (a)	$	71,166,097		$	132,624,236
Investments at fair value - affiliated (b)		—			—
Interest and dividends receivable - unaffiliated		927,870			1,321,950
Dividends receivable - affiliated		—			—
Receivable for capital shares issued		11,393			127,052
Prepaid expenses		2,241			3,410
Total Assets		72,107,601			134,076,648
Liabilities:
Distributions payable		81,724			159,582
Payable for investments purchased		—			2,184,114
Payable for capital shares redeemed		164,596			628,418
Accrued expenses and other payables:
Investment advisory fees		26,986			48,889
Administration fees		5,732			10,385
Compliance service fees		68			118
Distribution (12b-1) fees		5,251			11,802
Other fees		16,207			26,830
Total Liabilities		300,564			3,070,138
Net Assets	$	71,807,037		$	131,006,510
Net Assets Consist of:
Capital	$	70,640,834		$	127,256,613
Undistributed (distributions in excess of) net investment income		7,081			62,563
Accumulated realized loss		(205,203	)		(563,022	)
Net unrealized appreciation (depreciation)		1,364,325			4,250,356
Net Assets	$	71,807,037		$	131,006,510
Net Assets
Class A Shares	$	21,568,613		$	46,616,391
Class B Shares		—			—
Class C Shares		898,548			2,686,782
Institutional Shares		49,339,876			81,703,337
Total	$	71,807,037		$	131,006,510
Shares of Beneficial Interest Outstanding (Unlimited number of shares authorized, no par value)
Class A Shares		1,987,380			3,953,153
Class B Shares		—			—
Class C Shares		82,812			227,917
Institutional Shares		4,576,895			6,930,522
Total		6,647,087			11,111,592
Net Asset Value
Class A Shares - redemption price per share	$	10.85		$	11.79
Class B Shares - offering price per share*	$	—		$	—
Class C Shares - offering price per share*	$	10.85		$	11.79
Institutional Shares	$	10.78		$	11.79
Maximum Sales Charge - Class A Shares		2.00	%		2.00	%
Maximum Offering Price (100%/(100% - Maximum Sales Charge)) of net asset value adjusted to the nearest cent per share - Class A Shares	$	11.07		$	12.03
Investments at cost:
(a) Investments at cost - unaffiliated	$	69,801,772		$	128,373,880
(b) Investments at cost - affiliated	$	—		$	—

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

See accompanying Notes to the Financial Statements.

100

Sterling Capital West Virginia Intermediate Tax-Free Fund			Sterling Capital Strategic Allocation Conservative Fund			Sterling Capital Strategic Allocation Balanced Fund			Sterling Capital Strategic Allocation Growth Fund
$	105,451,833		$	316,108		$	683,769		$	453,268
	—			18,458,420			34,147,888			25,832,535
	1,516,281			3			6			4
	—			41,179			49,752			22,725
	316,659			1,101			433			777
	2,984			3,134			4,478			3,787
	107,287,757			18,819,945			34,886,326			26,313,096
	139,870			7,817			1,583			560
	—			—			—			—
	104,817			8,790			76,796			22,312
	39,197			—			—			—
	8,325			—			—			—
	94			16			30			23
	8,229			4,008			9,507			7,390
	22,048			3,754			6,403			4,901
	322,580			24,385			94,319			35,186
$	106,965,177		$	18,795,560		$	34,792,007		$	26,277,910
$	104,840,860		$	24,840,553		$	41,929,368		$	35,625,699
	(21,791	)		9,685			17,821			8,231
	(7,031	)		(7,132,381	)		(9,627,371	)		(11,491,558	)
	2,153,139			1,077,703			2,472,189			2,135,538
$	106,965,177		$	18,795,560		$	34,792,007		$	26,277,910
$	37,265,647		$	14,381,467		$	30,637,642		$	21,832,642
	—			1,020,113			3,263,843			2,986,372
	763,683			241,446			569,647			452,107
	68,935,847			3,152,534			320,875			1,006,789
$	106,965,177		$	18,795,560		$	34,792,007		$	26,277,910
	3,762,392			1,445,569			3,136,517			2,335,488
	—			102,232			341,036			327,463
	77,096			24,382			59,353			49,752
	6,952,084			313,576			32,629			107,449
	10,791,572			1,885,759			3,569,535			2,820,152
$	9.90		$	9.95		$	9.77		$	9.35
$	—		$	9.98		$	9.57		$	9.12
$	9.91		$	9.90		$	9.60		$	9.09
$	9.92		$	10.05		$	9.83		$	9.37
	2.00	%		5.75	%		5.75	%		5.75	%
$	10.10		$	10.56		$	10.37		$	9.92
$	103,298,694		$	316,108		$	683,769		$	453,268
$	—		$	17,380,717		$	31,675,699		$	23,696,997

101

Sterling Capital Funds

    Statements of Operations

    For the Year or Period Ended September 30, 2013

	Sterling Capital Large Cap Value Diversified Fund			Sterling Capital Mid Value Fund
Investment Income:
Interest income	$	—		$	—
Dividend income		4,626,754			8,392,891
Foreign tax withholding		(19,261	)		(16,161	)
Total investment income		4,607,493			8,376,730
Expenses:
Investment advisory fees (See Note 5)		1,562,538			2,995,416
Administration fees (See Note 5)		220,018			420,783
Distribution fees - Class A Shares		70,583			66,687
Distribution fees - Class B Shares		14,388			20,013
Distribution fees - Class C Shares		1,792			7,465
Distribution fees - Class R Shares		—			10
Compliance service fees (See Note 5)		2,511			4,725
Trustee fees		21,650			39,383
Accounting out-of-pocket fees		7,992			10,867
Audit fees		24,815			46,165
Custodian fees		11,477			21,864
Fund accounting fees (See Note 5)		16,734			32,091
Legal fees		50,301			47,429
Offering costs		—			—
Printing fees		31,967			46,226
Transfer agent fees (See Note 5)		94,918			211,595
Other fees		49,926			75,356
Total expenses before waivers		2,181,610			4,046,075
Less expenses waived by the Investment Advisor (See Note 5)		(223,220	)		—
Net expenses		1,958,390			4,046,075
Net investment income		2,649,103			4,330,655
Realized and Unrealized Gain (Loss):
Net realized gain (loss) from:
Investments		52,816,685			44,311,848
Litigation proceeds		331,817			380,029
Written options		—			—
Change in unrealized appreciation/depreciation on:
Investments		(30,764,619	)		71,663,696
Written options		—			—
Total realized and unrealized gain (loss)		22,383,883			116,355,573
Change in net assets from operations	$	25,032,986		$	120,686,228

* Commencement of operations was November 30, 2012.

See accompanying Notes to the Financial Statements.

102

Sterling Capital Small Cap Value Diversified Fund			Sterling Capital Special Opportunities Fund			Sterling Capital Equity Income Fund			Sterling Capital Ultra Short Bond Fund*			Sterling Capital Short-Term Bond Fund
$	—		$	—		$	—		$	397,769		$	1,657,918
	1,526,865			11,195,654			44,195,695			585			90,998
	(6,976	)		(236,797	)		(622,219	)		—			—
	1,519,889			10,958,857			43,573,476			398,354			1,748,916
	708,097			5,510,424			10,580,257			70,277			201,807
	91,076			708,500			1,486,012			34,455			66,193
	18,818			525,303			1,213,146			18,554			30,514
	4,365			107,837			117,649			—			—
	1,630			870,173			2,369,125			—			3,372
	—			2,023			10,138			—			—
	1,032			8,043			16,930			399			748
	8,572			67,649			136,697			3,230			6,241
	7,292			15,491			31,221			19,066			25,765
	9,975			78,118			166,155			4,167			7,158
	4,867			36,813			77,864			1,948			3,561
	6,945			54,011			113,357			2,635			5,045
	10,374			81,381			164,875			3,309			7,582
	—			—			—			6,670			—
	17,101			78,553			163,996			3,998			7,746
	48,992			404,514			1,277,090			14,471			28,721
	44,614			94,088			173,441			4,882			13,977
	983,750			8,642,921			18,097,953			188,061			408,430
	—			—			—			—			(23,642	)
	983,750			8,642,921			18,097,953			188,061			384,788
	536,139			2,315,936			25,475,523			210,293			1,364,128
	17,520,757			83,623,703			66,173,195			(3,406	)		344,743
	46,033			189			3,347			—			—
	—			121,014			498,868			—			—
	4,942,679			55,615,077			114,577,007			(95,913	)		(1,151,061	)
	—			139,446			766,221			—			—
	22,509,469			139,499,429			182,018,638			(99,319	)		(806,318	)
$	23,045,608		$	141,815,365		$	207,494,161		$	110,974		$	557,810

103

Sterling Capital Funds

    Statements of Operations

    For the Year Ended September 30, 2013

	Sterling Capital Intermediate U.S. Government Fund			Sterling Capital Total Return Bond Fund
Investment Income:
Interest income	$	1,870,349		$	18,456,630
Dividend income		133			740,702
Total investment income		1,870,482			19,197,332
Expenses:
Investment advisory fees (See Note 5)		343,301			2,026,494
Administration fees (See Note 5)		75,524			540,093
Distribution fees - Class A Shares		30,051			123,287
Distribution fees - Class B Shares		7,361			25,893
Distribution fees - Class C Shares		10,930			64,025
Distribution fees - Class R Shares		—			28
Compliance service fees (See Note 5)		831			6,173
Trustee fees		7,955			54,294
Accounting out-of-pocket fees		7,521			58,573
Audit fees		7,575			62,261
Custodian fees		3,758			28,024
Fund accounting fees (See Note 5)		5,737			41,076
Interest expense (See Note 7)		—			—
Legal fees		9,562			65,810
Printing fees		8,441			63,392
Transfer agent fees (See Note 5)		34,199			233,032
Other fees		18,937			60,314
Total expenses before waivers		571,683			3,452,769
Less expenses waived by the Investment Advisor (See Note 5)		—			(106,566	)
Net expenses		571,683			3,346,203
Net investment income		1,298,799			15,851,129
Realized and Unrealized Gain (Loss):
Net realized gain (loss) from investments		1,460,094			(100,158	)
Change in unrealized appreciation/depreciation on investments		(4,584,101	)		(23,167,353	)
Total realized and unrealized loss		(3,124,007	)		(23,267,511	)
Change in net assets from operations	$	(1,825,208	)	$	(7,416,382	)

See accompanying Notes to the Financial Statements.

104

Sterling Capital Corporate Fund			Sterling Capital Securitized Opportunities Fund			Sterling Capital Kentucky Intermediate Tax-Free Fund			Sterling Capital Maryland Intermediate Tax-Free Fund			Sterling Capital North Carolina Intermediate Tax-Free Fund
$	3,647,196		$	2,075,395		$	790,495		$	1,247,666		$	7,889,581
	306,603			228			121			562			487
	3,953,799			2,075,623			790,616			1,248,228			7,890,068
	358,019			270,549			112,116			212,250			1,124,936
	80,036			56,864			24,605			46,558			246,613
	169			40			26,171			23,097			158,701
	—			—			—			—			—
	34			17			2,537			15,599			51,642
	—			—			—			—			—
	1,109			859			283			530			2,818
	9,566			7,516			2,539			4,635			24,824
	21,656			28,101			9,750			12,656			28,773
	11,145			9,179			2,809			5,230			27,952
	5,103			3,814			1,382			2,511			12,739
	7,324			5,472			1,868			3,537			18,749
	—			19			—			—			—
	10,784			8,398			2,818			5,107			27,500
	11,822			10,125			3,451			5,920			29,027
	41,898			34,703			11,058			22,108			113,134
	16,049			15,494			4,268			9,782			20,628
	574,714			451,150			205,655			369,520			1,888,036
	(81,220	)		(76,067	)		—			—			—
	493,494			375,083			205,655			369,520			1,888,036
	3,460,305			1,700,540			584,961			878,708			6,002,032
	441,685			(563,438	)		(9,823	)		(118,683	)		(692,531	)
	(4,499,342	)		(1,687,559	)		(1,034,032	)		(1,946,782	)		(11,475,550	)
	(4,057,657	)		(2,250,997	)		(1,043,855	)		(2,065,465	)		(12,168,081	)
$	(597,352	)	$	(550,457	)	$	(458,894	)	$	(1,186,757	)	$	(6,166,049	)

105

Sterling Capital Funds

    Statements of Operations

    For the Year Ended September 30, 2013

	Sterling Capital South Carolina Intermediate Tax-Free Fund			Sterling Capital Virginia Intermediate Tax-Free Fund
Investment Income:
Interest income	$	2,282,210		$	4,226,235
Dividend income - unaffiliated		579			405
Dividend income - affiliated		—			—
Total investment income		2,282,789			4,226,640
Expenses:
Investment advisory fees (See Note 5)		359,948			654,996
Administration fees (See Note 5)		78,887			143,512
Distribution fees - Class A Shares		60,425			127,291
Distribution fees - Class B Shares		—			—
Distribution fees - Class C Shares		8,480			31,334
Compliance service fees (See Note 5)		904			1,638
Trustee fees		7,799			14,372
Audit fees		8,917			16,261
Custodian fees		4,199			7,499
Fund accounting fees (See Note 5)		5,999			10,917
Interest expense (See Note 7)		87			16
Insurance		2,221			4,319
Legal fees		8,660			15,916
Printing fees		9,581			17,273
Registration fees		4,363			5,422
Transfer agent fees (See Note 5)		37,137			63,242
Other fees		21,643			27,688
Total expenses before waivers		619,250			1,141,696
Less expenses waived by the Investment Advisor (See Note 5)		—			—
Net expenses		619,250			1,141,696
Net investment income		1,663,539			3,084,944
Realized and Unrealized Gain (Loss):
Net realized gain (loss) from:
Investment transactions - unaffiliated		(218,607	)		(420,926	)
Investment transactions - affiliated		—			—
Distributions from unaffiliated funds		—			—
Distributions from affiliated funds		—			—
Change in unrealized appreciation/depreciation on investments		(3,084,794	)		(6,393,589	)
Total realized and unrealized gain (loss)		(3,303,401	)		(6,814,515	)
Change in net assets from operations	$	(1,639,862	)	$	(3,729,571	)

See accompanying Notes to the Financial Statements.

106

Sterling Capital West Virginia Intermediate Tax-Free Fund			Sterling Capital Strategic Allocation Conservative Fund			Sterling Capital Strategic Allocation Balanced Fund			Sterling Capital Strategic Allocation Growth Fund
$	3,674,839		$	—		$	—		$	—
	470			49,211			126,070			99,316
	—			468,389			628,808			345,582
	3,675,309			517,600			754,878			444,898
	539,658			47,605			85,479			62,746
	118,273			—			—			—
	101,966			35,859			72,849			50,457
	—			12,027			42,732			37,094
	8,333			2,363			4,664			3,555
	1,356			216			379			279
	12,002			1,964			3,143			2,274
	13,574			2,127			3,773			2,754
	6,195			1,096			1,808			1,362
	8,994			1,428			2,564			1,882
	—			—			—			—
	3,742			564			1,042			739
	13,181			2,047			3,664			2,661
	14,186			3,870			6,324			5,142
	11,446			7,815			10,159			9,935
	51,242			9,842			15,661			11,834
	22,920			4,879			5,631			5,148
	927,068			133,702			259,872			197,862
	—			(28,134	)		(50,665	)		(37,961	)
	927,068			105,568			209,207			159,901
	2,748,241			412,032			545,671			284,997
	(73,273	)		1,167,936			2,994,594			2,607,929
	—			883,218			2,238,897			1,955,765
	—			11,268			16,746			8,766
	—			101,060			147,743			86,805
	(5,529,269	)		(1,608,299	)		(3,072,799	)		(2,182,982	)
	(5,602,542	)		555,183			2,325,181			2,476,283
$	(2,854,301	)	$	967,215		$	2,870,852		$	2,761,280

107

Sterling Capital Funds

    Statements of Changes in Net Assets

	Sterling Capital Large Cap Value Diversified Fund
	For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
From Investment Activities:
Operations:
Net investment income	$	2,649,103		$	2,457,825
Net realized gain		53,148,502			3,798,125
Change in unrealized appreciation/depreciation		(30,764,619	)		48,298,392
Change in net assets from operations		25,032,986			54,554,342
Distributions to Class A Shareholders From:
Net investment income		(273,192	)		(258,767	)
Net realized gains		—			—
Distributions to Class B Shareholders From:
Net investment income		(3,413	)		(3,948	)
Net realized gains		—			—
Distributions to Class C Shareholders From:
Net investment income		(468	)		(542	)
Net realized gains		—			—
Distributions to Institutional Class Shareholders From:
Net investment income		(2,350,357	)		(2,127,270	)
Net realized gains		—			—
Distributions to Class R Shareholders From:
Net investment income		—			—
Net realized gains		—			—
Change in net assets from shareholder distributions		(2,627,430	)		(2,390,527	)
Capital Transactions:
Change in net assets from capital transactions		(17,015,985	)		(16,021,699	)
Change in net assets		5,389,571			36,142,116
Net Assets:
Beginning of year		219,674,329			183,532,213
End of year	$	225,063,900		$	219,674,329
Undistributed net investment income	$	148,938		$	127,265

See accompanying Notes to the Financial Statements.

108

Sterling Capital Mid Value Fund						Sterling Capital Small Cap Value Diversified Fund						Sterling Capital Special Opportunities Fund
For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
$	4,330,655		$	3,535,707		$	536,139		$	356,521		$	2,315,936		$	212,150
	44,691,877			22,174,757			17,566,790			2,143,060			83,744,906			31,486,869
	71,663,696			57,049,107			4,942,679			12,911,771			55,754,523			108,303,489
	120,686,228			82,759,571			23,045,608			15,411,352			141,815,365			140,002,508
	(161,440	)		(165,158	)		(14,357	)		—			(54,587	)		—
	—			—			(79,193	)		(547,335	)		(8,583,850	)		(3,787,895	)
	(3,710	)		(5,215	)		—			—			—			—
	—			—			(5,235	)		(45,967	)		(643,747	)		(326,596	)
	(1,160	)		(1,375	)		—			—			—			—
	—			—			(1,544	)		(8,215	)		(4,427,390	)		(1,523,626	)
	(2,997,558	)		(3,319,999	)		(375,644	)		—			(1,115,681	)		—
	—			—			(872,669	)		(5,945,250	)		(18,269,580	)		(6,499,368	)
	(1	)		(1	)		(1	)		—			—			—
	—			—			(1	)		(9	)		(17,945	)		(5,704	)
	(3,163,869	)		(3,491,748	)		(1,348,644	)		(6,546,776	)		(33,112,780	)		(12,143,189	)
	105,419,733			(34,231,132	)		10,785,032			(1,660,022	)		60,853,963			(88,356,869	)
	222,942,092			45,036,691			32,481,996			7,204,554			169,556,548			39,502,450
	365,086,972			320,050,281			78,970,699			71,766,145			655,987,812			616,485,362
$	588,029,064		$	365,086,972		$	111,452,695		$	78,970,699		$	825,544,360		$	655,987,812
$	1,533,564		$	406,587		$	138,201		$	—		$	1,176,686		$	219,343

109

Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Equity Income Fund
	For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
From Investment Activities:
Operations:
Net investment income	$	25,475,523		$	15,936,707
Net realized gain (loss)		66,675,410			43,658,501
Change in unrealized appreciation/depreciation		115,343,228			120,629,987
Change in net assets from operations		207,494,161			180,225,195
Distributions to Class A Shareholders From:
Net investment income		(7,241,498	)		(3,853,569	)
Net realized gains		(3,938,641	)		—
Distributions to Class B Shareholders From:
Net investment income		(78,258	)		(60,891	)
Net realized gains		(121,503	)		—
Distributions to Class C Shareholders From:
Net investment income		(1,774,142	)		(862,533	)
Net realized gains		(2,047,025	)		—
Distributions to Institutional Class Shareholders From:
Net investment income		(13,466,586	)		(7,828,151	)
Net realized gains		(6,452,928	)		—
Distributions to Class R Shareholders From:
Net investment income		(25,171	)		(9,825	)
Net realized gains		(12,837	)		—
Change in net assets from shareholder distributions		(35,158,589	)		(12,614,969	)
Capital Transactions:
Change in net assets from capital transactions		532,656,895			323,453,318
Change in net assets		704,992,467			491,063,544
Net Assets:
Beginning of period		1,215,471,299			724,407,755
End of period	$	1,920,463,766		$	1,215,471,299
Undistributed (distributions in excess of) net investment income	$	1,175,992		$	1,132,934

* Commencement of operations.

See accompanying Notes to the Financial Statements.

110

Sterling Capital Ultra Short Bond Fund			Sterling Capital Short-Term Bond Fund						Sterling Capital Intermediate U.S. Government Fund
For the Period November 30, 2012* to September 30, 2013			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
$	210,293		$	1,364,128		$	1,262,285		$	1,298,799		$	3,033,372
	(3,406	)		344,743			229,158			1,460,094			6,285,092
	(95,913	)		(1,151,061	)		1,186,455			(4,584,101	)		(4,256,203	)
	110,974			557,810			2,677,898			(1,825,208	)		5,062,261
	(31,876	)		(388,539	)		(269,952	)		(338,378	)		(355,244	)
	—			—			—			—			—
	—			—			—			(15,323	)		(23,573	)
	—			—			—			—			—
	—			(8,152	)		(1,852	)		(22,496	)		(18,651	)
	—			—			—			—			—
	(187,443	)		(1,874,061	)		(1,754,266	)		(1,929,090	)		(3,900,325	)
	—			—			—			—			—
	—			—			—			—			—
	—			—			—			—			—
	(219,319	)		(2,270,752	)		(2,026,070	)		(2,305,287	)		(4,297,793	)
	54,260,046			21,779,293			(7,600,136	)		(29,640,056	)		(79,955,641	)
	54,151,701			20,066,351			(6,948,308	)		(33,770,551	)		(79,191,173	)
	—			56,416,014			63,364,322			92,241,232			171,432,405
$	54,151,701		$	76,482,365		$	56,416,014		$	58,470,681		$	92,241,232
$	10,474		$	(16,260	)	$	(97,384	)	$	655,299		$	1,178,198

111

Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Total Return Bond Fund
	For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
From Investment Activities:
Operations:
Net investment income	$	15,851,129		$	14,589,950
Net realized gain (loss)		(100,158	)		8,294,401
Change in unrealized appreciation/depreciation		(23,167,353	)		13,355,995
Change in net assets from operations		(7,416,382	)		36,240,346
Distributions to Class A Shareholders From:
Net investment income		(1,737,457	)		(1,498,746	)
Net realized gains		(385,353	)		(972,586	)
Distributions to Class B Shareholders From:
Net investment income		(71,392	)		(97,020	)
Net realized gains		(22,718	)		(91,479	)
Distributions to Class C Shareholders From:
Net investment income		(177,585	)		(133,490	)
Net realized gains		(55,269	)		(105,048	)
Distributions to Institutional Class Shareholders From:
Net investment income		(18,470,970	)		(17,141,811	)
Net realized gains		(3,851,849	)		(10,048,727	)
Distributions to Class R Shareholders From:
Net investment income		(177	)		(185	)
Net realized gains		(42	)		(137	)
Change in net assets from shareholder distributions		(24,772,812	)		(30,089,229	)
Capital Transactions:
Change in net assets from capital transactions		(54,498,804	)		138,913,175
Change in net assets		(86,687,998	)		145,064,292
Net Assets:
Beginning of year		573,413,424			428,349,132
End of year	$	486,725,426		$	573,413,424
Undistributed (distributions in excess of) net investment income	$	765,767		$	599,733

See accompanying Notes to the Financial Statements.

112

Sterling Capital Corporate Fund						Sterling Capital Securitized Opportunities Fund						Sterling Capital Kentucky Intermediate Tax-Free Fund
For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
$	3,460,305		$	2,530,206		$	1,700,540		$	1,174,093		$	584,961		$	619,706
	441,685			896,976			(563,438	)		268,767			(9,823	)		131,599
	(4,499,342	)		4,641,012			(1,687,559	)		1,233,633			(1,034,032	)		706,779
	(597,352	)		8,068,194			(550,457	)		2,676,493			(458,894	)		1,458,084
	(2,181	)		—			(503	)		—			(230,512	)		(235,881	)
	—			—			—			—			(59,631	)		(21,478	)
	—			—			—			—			—			—
	—			—			—			—			—			—
	(90	)		—			(45	)		—			(3,718	)		(1,190	)
	—			—			—			—			(1,452	)		—
	(3,458,034	)		(2,533,734	)		(2,476,396	)		(1,625,700	)		(349,035	)		(381,011	)
	(1,020,381	)		(32,802	)		—			(26,599	)		(78,818	)		(32,802	)
	—			—			—			—			—			—
	—			—			—			—			—			—
	(4,480,686	)		(2,566,536	)		(2,476,944	)		(1,652,299	)		(723,166	)		(672,362	)
	(2,084,076	)		41,116,246			(26,951,669	)		53,593,679			(6,766,426	)		2,451,157
	(7,162,114	)		46,617,904			(29,979,070	)		54,617,873			(7,948,486	)		3,236,879
	92,946,306			46,328,402			88,522,777			33,904,904			25,723,486			22,486,607
$	85,784,192		$	92,946,306		$	58,543,707		$	88,522,777		$	17,775,000		$	25,723,486
$	(60,031	)	$	(17,151	)	$	6,197		$	3,289		$	2,458		$	2,456

113

Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Maryland Intermediate Tax-Free Fund
	For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
From Investment Activities:
Operations:
Net investment income	$	878,708		$	888,216
Net realized gain (loss)		(118,683	)		618,471
Change in unrealized appreciation/depreciation		(1,946,782	)		761,535
Change in net assets from operations		(1,186,757	)		2,268,222
Distributions to Class A Shareholders From:
Net investment income		(156,484	)		(201,126	)
Net realized gains		(119,442	)		(62,182	)
Distributions to Class C Shareholders From:
Net investment income		(14,785	)		(6,230	)
Net realized gains		(22,173	)		—
Distributions to Institutional Class Shareholders From:
Net investment income		(705,517	)		(678,515	)
Net realized gains		(453,539	)		(168,673	)
Change in net assets from shareholder distributions		(1,471,940	)		(1,116,726	)
Capital Transactions:
Change in net assets from capital transactions		1,301,297			9,615,217
Change in net assets		(1,357,400	)		10,766,713
Net Assets:
Beginning of year		45,173,047			34,406,334
End of year	$	43,815,647		$	45,173,047
Undistributed net investment income	$	3,648		$	3,632

See accompanying Notes to the Financial Statements.

114

Sterling Capital North Carolina Intermediate Tax-Free Fund						Sterling Capital South Carolina Intermediate Tax-Free Fund						Sterling Capital Virginia Intermediate Tax-Free Fund
For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
$	6,002,032		$	6,059,160		$	1,663,539		$	1,500,568		$	3,084,944		$	3,174,312
	(692,531	)		2,021,592			(218,607	)		698,534			(420,926	)		1,659,383
	(11,475,550	)		6,501,111			(3,084,794	)		1,900,048			(6,393,589	)		2,622,988
	(6,166,049	)		14,581,863			(1,639,862	)		4,099,150			(3,729,571	)		7,456,683
	(1,416,684	)		(1,375,822	)		(461,688	)		(421,586	)		(1,004,673	)		(1,009,563	)
	(459,916	)		(333,256	)		(180,619	)		(108,257	)		(438,802	)		(248,762	)
	(76,417	)		(16,041	)		(9,696	)		(1,338	)		(38,241	)		(19,681	)
	(38,065	)		—			(3,997	)		—			(27,453	)		—
	(4,501,480	)		(4,657,350	)		(1,187,346	)		(1,071,805	)		(2,033,426	)		(2,132,796	)
	(1,369,438	)		(1,073,201	)		(404,480	)		(255,887	)		(789,514	)		(488,933	)
	(7,862,000	)		(7,455,670	)		(2,247,826	)		(1,858,873	)		(4,332,109	)		(3,899,735	)
	(25,591,152	)		38,943,769			264,958			16,988,719			(6,420,982	)		24,166,172
	(39,619,201	)		46,069,962			(3,622,730	)		19,228,996			(14,482,662	)		27,723,120
	258,849,734			212,779,772			75,429,767			56,200,771			145,489,172			117,766,052
$	219,230,533		$	258,849,734		$	71,807,037		$	75,429,767		$	131,006,510		$	145,489,172
$	79,793		$	74,251		$	7,081		$	3,816		$	62,563		$	42,835

115

Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital West Virginia Intermediate Tax-Free Fund
	For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
From Investment Activities:
Operations:
Net investment income	$	2,748,241		$	3,149,696
Net realized gain (loss)		(73,273	)		1,453,300
Change in unrealized appreciation/depreciation		(5,529,269	)		2,839,195
Change in net assets from operations		(2,854,301	)		7,442,191
Distributions to Class A Shareholders From:
Net investment income		(865,043	)		(952,616	)
Net realized gains		(471,436	)		(138,148	)
Distributions to Class B Shareholders From:
Net investment income		—			—
Distributions to Class C Shareholders From:
Net investment income		(11,386	)		(1,859	)
Net realized gains		(9,918	)		—
Distributions to Institutional Class Shareholders From:
Net investment income		(1,855,804	)		(2,179,987	)
Net realized gains		(976,219	)		(296,719	)
Change in net assets from shareholder distributions		(4,189,806	)		(3,569,329	)
Capital Transactions:
Change in net assets from capital transactions		(11,863,793	)		16,758,372
Change in net assets		(18,907,900	)		20,631,234
Net Assets:
Beginning of year		125,873,077			105,241,843
End of year	$	106,965,177		$	125,873,077
Undistributed (distributions in excess of) net investment income	$	(21,791	)	$	(21,796	)

See accompanying Notes to the Financial Statements.

116

Sterling Capital Strategic Allocation Conservative Fund						Sterling Capital Strategic Allocation Balanced Fund						Sterling Capital Strategic Allocation Growth Fund
For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
$	412,032		$	380,749		$	545,671		$	521,593		$	284,997		$	280,662
	2,163,482			308,621			5,397,980			730,254			4,659,265			428,285
	(1,608,299	)		1,538,274			(3,072,799	)		3,998,714			(2,182,982	)		3,478,670
	967,215			2,227,644			2,870,852			5,250,561			2,761,280			4,187,617
	(340,142	)		(267,399	)		(522,016	)		(458,188	)		(265,940	)		(231,372	)
	—			—			—			—			—			—
	(17,973	)		(20,360	)		(42,929	)		(52,650	)		(22,463	)		(29,195	)
	(3,820	)		(2,578	)		(5,023	)		(3,592	)		(2,250	)		(1,653	)
	—			—			—			—			—			—
	(83,023	)		(92,187	)		(5,684	)		(11,553	)		(12,353	)		(14,297	)
	—			—			—			—			—			—
	(444,958	)		(382,524	)		(575,652	)		(525,983	)		(303,006	)		(276,517	)
	(380,849	)		201,953			(1,954,538	)		(2,902,316	)		(584,575	)		(2,627,059	)
	141,408			2,047,073			340,662			1,822,262			1,873,699			1,284,041
	18,654,152			16,607,079			34,451,345			32,629,083			24,404,211			23,120,170
$	18,795,560		$	18,654,152		$	34,792,007		$	34,451,345		$	26,277,910		$	24,404,211
$	9,685		$	15,305		$	17,821		$	16,318		$	8,231		$	13,143

117

Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Large Cap Value Diversified Fund
	For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	1,335,415		$	1,062,879
Distributions reinvested		267,423			253,756
Value of shares redeemed		(4,376,463	)		(4,211,469	)
Change in net assets from Class A Share transactions		(2,773,625	)		(2,894,834	)
Class B Shares:
Proceeds from shares issued		13,477			12,498
Distributions reinvested		3,388			3,935
Value of shares redeemed		(532,727	)		(792,138	)
Change in net assets from Class B Share transactions		(515,862	)		(775,705	)
Class C Shares:
Proceeds from shares issued		18,235			33,121
Distributions reinvested		449			526
Value of shares redeemed		(5,120	)		(93,964	)
Change in net assets from Class C Share transactions		13,564			(60,317	)
Institutional Shares:
Proceeds from shares issued		20,881,987			14,298,868
Distributions reinvested		2,270,583			1,975,021
Value of shares redeemed		(36,892,632	)		(28,564,732	)
Change in net assets from Institutional Share transactions		(13,740,062	)		(12,290,843	)
Class R Shares:
Proceeds from shares issued		—			—
Distributions reinvested		—			—
Value of shares redeemed		—			—
Change in net assets from Class R Share transactions		—			—
Change in net assets from capital transactions	$	(17,015,985	)	$	(16,021,699	)
Share Transactions:
Class A Shares:
Issued		100,801			90,084
Reinvested		20,402			21,538
Redeemed		(330,937	)		(361,768	)
Change in Class A Shares		(209,734	)		(250,146	)
Class B Shares:
Issued		1,056			1,107
Reinvested		279			359
Redeemed		(40,913	)		(68,825	)
Change in Class B Shares		(39,578	)		(67,359	)
Class C Shares:
Issued		1,404			2,923
Reinvested		37			48
Redeemed		(419	)		(7,754	)
Change in Class C Shares		1,022			(4,783	)
Institutional Shares:
Issued		1,587,354			1,202,478
Reinvested		171,562			165,956
Redeemed		(2,771,181	)		(2,426,482	)
Change in Institutional Shares		(1,012,265	)		(1,058,048	)
Class R Shares:
Issued		—			—
Reinvested		—			—
Redeemed		—			—
Change in Class R Shares		—			—
Change in Shares		(1,260,555	)		(1,380,336	)

(a) Fractional share.

See accompanying Notes to the Financial Statements.

118

Sterling Capital Mid Value Fund						Sterling Capital Small Cap Value Diversified Fund						Sterling Capital Special Opportunities Fund
For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
$	12,852,239		$	3,078,221		$	1,398,154		$	818,659		$	100,921,179		$	28,334,736
	150,879			161,679			87,563			503,951			8,067,659			3,597,310
	(5,977,270	)		(3,887,142	)		(1,191,239	)		(1,487,047	)		(47,899,191	)		(94,894,473	)
	7,025,848			(647,242	)		294,478			(164,437	)		61,089,647			(62,962,427	)
	75,278			36,688			40,146			15,205			137,802			151,320
	3,706			5,079			5,235			44,496			630,334			320,071
	(616,627	)		(1,246,500	)		(154,601	)		(260,909	)		(5,678,864	)		(7,589,603	)
	(537,643	)		(1,204,733	)		(109,220	)		(201,208	)		(4,910,728	)		(7,118,212	)
	736,464			102,390			92,214			29,417			9,232,219			9,253,233
	1,068			1,265			1,544			8,011			4,202,670			1,443,247
	(162,004	)		(71,276	)		(24,476	)		(19,444	)		(13,102,889	)		(14,000,923	)
	575,528			32,379			69,282			17,984			332,000			(3,304,443	)
	184,105,102			52,535,101			30,713,585			15,967,841			83,434,468			68,386,406
	2,534,584			2,720,764			1,225,136			5,393,757			15,960,250			5,285,666
	(88,281,889	)		(87,667,402	)		(21,408,231	)		(22,673,968	)		(95,084,481	)		(88,649,057	)
	98,357,797			(32,411,537	)		10,530,490			(1,312,370	)		4,310,237			(14,976,985	)
	32,499			—			—			—			15,102			730
	1			1			2			9			17,705			4,468
	(34,297	)		—			—			—			—			—
	(1,797	)		1			2			9			32,807			5,198
$	105,419,733		$	(34,231,132	)	$	10,785,032		$	(1,660,022	)	$	60,853,963		$	(88,356,869	)
	737,714			229,741			100,754			69,216			5,199,387			1,617,617
	9,725			12,080			7,069			46,065			446,028			220,965
	(364,244	)		(288,550	)		(89,179	)		(125,861	)		(2,455,453	)		(5,361,514	)
	383,195			(46,729	)		18,644			(10,580	)		3,189,962			(3,522,932	)
	4,564			2,921			3,126			1,381			7,776			9,283
	279			414			442			4,116			37,926			21,154
	(39,448	)		(97,107	)		(11,649	)		(22,310	)		(317,696	)		(467,895	)
	(34,605	)		(93,772	)		(8,081	)		(16,813	)		(271,994	)		(437,458	)
	43,775			8,162			6,924			2,518			511,173			563,180
	80			103			131			741			252,716			95,327
	(9,793	)		(5,307	)		(1,685	)		(1,702	)		(739,623	)		(866,889	)
	34,062			2,958			5,370			1,557			24,266			(208,382	)
	10,518,638			3,866,763			2,180,707			1,334,230			4,179,558			3,799,918
	161,415			200,698			95,678			491,234			859,634			317,267
	(5,372,186	)		(6,522,864	)		(1,562,333	)		(1,891,341	)		(4,802,874	)		(4,977,737	)
	5,307,867			(2,455,403	)		714,052			(65,877	)		236,318			(860,552	)
	2,003			—			—			—			784			40
	—	(a)		—	(a)		1			—	(a)		962			340
	(2,003	)		—			—			—			—			—
	—	(a)		—	(a)		1			—	(a)		1,746			380
	5,690,519			(2,592,946	)		729,986			(91,713	)		3,180,298			(5,028,944	)

119

Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Equity Income Fund
	For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	377,326,270		$	167,670,442
Distributions reinvested		9,912,707			3,305,248
Value of shares redeemed		(119,758,060	)		(64,760,110	)
Change in net assets from Class A Share transactions		267,480,917			106,215,580
Class B Shares:
Proceeds from shares issued		711,264			596,547
Distributions reinvested		193,008			58,632
Value of shares redeemed		(4,710,846	)		(2,804,359	)
Change in net assets from Class B Share transactions		(3,806,574	)		(2,149,180	)
Class C Shares:
Proceeds from shares issued		77,272,776			78,710,849
Distributions reinvested		3,556,067			775,793
Value of shares redeemed		(22,327,127	)		(14,554,947	)
Change in net assets from Class C Share transactions		58,501,716			64,931,695
Institutional Shares:
Proceeds from shares issued		386,071,912			284,061,419
Distributions reinvested		16,136,422			6,073,026
Value of shares redeemed		(192,840,624	)		(136,408,778	)
Change in net assets from Institutional Share transactions		209,367,710			153,725,667
Class R Shares:
Proceeds from shares issued		1,926,718			902,903
Distributions reinvested		33,347			5,089
Value of shares redeemed		(846,939	)		(178,436	)
Change in net assets from Class R Share transactions		1,113,126			729,556
Change in net assets from capital transactions	$	532,656,895		$	323,453,318
Share Transactions:
Class A Shares:
Issued		21,232,193			11,015,927
Reinvested		590,857			214,666
Redeemed		(6,963,375	)		(4,241,406	)
Change in Class A Shares		14,859,675			6,989,187
Class B Shares:
Issued		40,291			39,988
Reinvested		11,904			3,859
Redeemed		(272,665	)		(184,294	)
Change in Class B Shares		(220,470	)		(140,447	)
Class C Shares:
Issued		4,475,234			5,201,450
Reinvested		218,353			50,992
Redeemed		(1,306,060	)		(959,719	)
Change in Class C Shares		3,387,527			4,292,723
Institutional Shares:
Issued		22,029,491			18,485,078
Reinvested		958,239			393,313
Redeemed		(11,034,081	)		(8,899,253	)
Change in Institutional Shares		11,953,649			9,979,138
Class R Shares:
Issued		112,882			57,024
Reinvested		1,973			327
Redeemed		(51,937	)		(11,986	)
Change in Class R Shares		62,918			45,365
Change in Shares		30,043,299			21,165,966

* Commencement of operations.

See accompanying Notes to the Financial Statements.

120

Sterling Capital Ultra Short Bond Fund			Sterling Capital Short-Term Bond Fund						Sterling Capital Intermediate U.S. Government Fund
For the Period November 30, 2012* to September 30, 2013			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
$	17,157,749		$	8,623,311		$	1,893,814		$	1,258,807		$	3,424,229
	10,004			335,450			244,731			301,287			324,834
	(3,614,242	)		(3,795,613	)		(951,586	)		(3,517,784	)		(4,383,481	)
	13,553,511			5,163,148			1,186,959			(1,957,690	)		(634,418	)
	—			—			—			6			7,979
	—			—			—			15,057			22,200
	—			—			—			(340,319	)		(756,698	)
	—			—			—			(325,256	)		(726,519	)
	—			429,711			243,382			356,639			739,041
	—			7,516			1,780			21,658			17,125
	—			(89,532	)		(29,256	)		(333,993	)		(324,483	)
	—			347,695			215,906			44,304			431,683
	45,611,386			40,074,634			18,872,983			11,347,763			40,930,823
	133,161			483,148			464,837			564,444			1,142,234
	(5,038,012	)		(24,289,332	)		(28,340,821	)		(39,313,621	)		(121,099,444	)
	40,706,535			16,268,450			(9,003,001	)		(27,401,414	)		(79,026,387	)
	—			—			—			—			—
	—			—			—			—			—
	—			—			—			—			—
	—			—			—			—			—
$	54,260,046		$	21,779,293		$	(7,600,136	)	$	(29,640,056	)	$	(79,955,641	)
	1,716,922			917,830			200,476			117,598			317,350
	1,002			35,898			25,948			28,465			30,028
	(362,237	)		(405,262	)		(101,057	)		(335,030	)		(406,364	)
	1,355,687			548,466			125,367			(188,967	)		(58,986	)
	—			—			—			—			741
	—			—			—			1,423			2,060
	—			—			—			(32,295	)		(70,352	)
	—			—			—			(30,872	)		(67,551	)
	—			46,151			25,766			33,757			68,488
	—			806			189			2,052			1,584
	—			(9,633	)		(3,109	)		(31,786	)		(30,026	)
	—			37,324			22,846			4,023			40,046
	4,562,273			4,285,682			2,000,634			1,071,266			3,785,855
	13,332			51,693			49,286			53,159			105,480
	(504,090	)		(2,600,459	)		(3,012,888	)		(3,717,053	)		(11,189,931	)
	4,071,515			1,736,916			(962,968	)		(2,592,628	)		(7,298,596	)
	—			—			—			—			—
	—			—			—			—			—
	—			—			—			—			—
	—			—			—			—			—
	5,427,202			2,322,706			(814,755	)		(2,808,444	)		(7,385,087	)

121

Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Total Return Bond Fund
	For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	11,899,923		$	17,864,518
Distributions reinvested		1,889,297			2,255,520
Value of shares redeemed		(18,143,998	)		(7,830,831	)
Change in net assets from Class A Share transactions		(4,354,778	)		12,289,207
Class B Shares:
Proceeds from shares issued		72,201			347,460
Distributions reinvested		90,709			180,782
Value of shares redeemed		(1,205,548	)		(1,196,835	)
Change in net assets from Class B Share transactions		(1,042,638	)		(668,593	)
Class C Shares:
Proceeds from shares issued		2,574,280			2,772,580
Distributions reinvested		212,669			204,372
Value of shares redeemed		(2,888,097	)		(1,417,093	)
Change in net assets from Class C Share transactions		(101,148	)		1,559,859
Institutional Shares:
Proceeds from shares issued		161,681,607			211,895,993
Distributions reinvested		11,055,357			13,066,517
Value of shares redeemed		(221,737,422	)		(99,229,731	)
Change in net assets from Institutional Share transactions		(49,000,458	)		125,732,779
Class R Shares:
Distributions reinvested		218			323
Value of shares redeemed		—			(400	)
Change in net assets from Class R Share transactions		218			(77	)
Change in net assets from capital transactions	$	(54,498,804	)	$	138,913,175
Share Transactions:
Class A Shares:
Issued		1,081,184			1,625,145
Reinvested		173,669			206,480
Redeemed		(1,680,724	)		(713,303	)
Change in Class A Shares		(425,871	)		1,118,322
Class B Shares:
Issued		6,547			31,675
Reinvested		8,310			16,565
Redeemed		(111,116	)		(108,855	)
Change in Class B Shares		(96,259	)		(60,615	)
Class C Shares:
Issued		232,590			251,999
Reinvested		19,486			18,689
Redeemed		(266,740	)		(128,804	)
Change in Class C Shares		(14,664	)		141,884
Institutional Shares:
Issued		14,787,872			19,307,577
Reinvested		1,015,390			1,194,698
Redeemed		(20,444,175	)		(9,028,012	)
Change in Institutional Shares		(4,640,913	)		11,474,263
Class R Shares:
Reinvested		20			30
Redeemed		—			(36	)
Change in Class R Shares		20			(6	)
Change in Shares		(5,177,687	)		12,673,848

See accompanying Notes to the Financial Statements.

122

Sterling Capital Corporate Fund						Sterling Capital Securitized Opportunities Fund						Sterling Capital Kentucky Intermediate Tax-Free Fund
For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
$	163,693		$	—		$	37,973		$	—		$	906,765		$	2,102,672
	2,070			—			503			—			173,299			149,655
	—			—			—			—			(5,646,964	)		(333,929	)
	165,763			—			38,476			—			(4,566,900	)		1,918,398
	—			—			—			—			—			—
	—			—			—			—			—			—
	—			—			—			—			—			—
	—			—			—			—			—			—
	15,004			—			2,693			—			72,500			206,000
	90			—			45			—			4,894			1,190
	—			—			—			—			(203,422	)		—
	15,094			—			2,738			—			(126,028	)		207,190
	56,785,516			56,819,950			30,013,814			61,359,243			6,200,180			4,026,055
	3,600,680			2,151,139			2,100,226			1,546,139			19,962			7,280
	(62,651,129	)		(17,854,843	)		(59,106,923	)		(9,311,703	)		(8,293,640	)		(3,707,766	)
	(2,264,933	)		41,116,246			(26,992,883	)		53,593,679			(2,073,498	)		325,569
	—			—			—			—			—			—
	—			—			—			—			—			—
	—			—			—			—			—			—
$	(2,084,076	)	$	41,116,246		$	(26,951,669	)	$	53,593,679		$	(6,766,426	)	$	2,451,157
	15,585			—			3,773			—			81,357			190,973
	202			—			51			—			15,697			13,621
	—			—			—			—			(531,130	)		(30,493	)
	15,787			—			3,824			—			(434,076	)		174,101
	—			—			—			—			—			—
	—			—			—			—			—			—
	—			—			—			—			—			—
	—			—			—			—			—			—
	1,462			—			265			—			6,415			18,594
	9			—			5			—			444			107
	—			—			—			—			(19,273	)		—
	1,471			—			270			—			(12,414	)		18,701
	5,385,772			5,564,408			2,963,654			6,010,600			561,421			367,004
	342,342			207,803			208,191			151,588			1,831			660
	(5,983,894	)		(1,742,368	)		(5,833,335	)		(914,631	)		(754,843	)		(338,328	)
	(255,780	)		4,029,843			(2,661,490	)		5,247,557			(191,591	)		29,336
	—			—			—			—			—			—
	—			—			—			—			—			—
	—			—			—			—			—			—
	(238,522	)		4,029,843			(2,657,396	)		5,247,557			(638,081	)		222,138

123

Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital Maryland Intermediate Tax-Free Fund
	For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	1,678,060		$	2,342,105
Distributions reinvested		225,617			208,003
Value of shares redeemed		(3,219,359	)		(2,179,696	)
Change in net assets from Class A Share transactions		(1,315,682	)		370,412
Class C Shares:
Proceeds from shares issued		781,298			1,294,459
Distributions reinvested		36,634			5,292
Value of shares redeemed		(846,290	)		—
Change in net assets from Class C Share transactions		(28,358	)		1,299,751
Institutional Shares:
Proceeds from shares issued		12,166,091			13,645,051
Distributions reinvested		299,492			152,722
Value of shares redeemed		(9,820,246	)		(5,852,719	)
Change in net assets from Institutional Share transactions		2,645,337			7,945,054
Change in net assets from capital transactions	$	1,301,297		$	9,615,217
Share Transactions:
Class A Shares:
Issued		146,643			205,724
Reinvested		19,859			18,336
Redeemed		(287,414	)		(191,585	)
Change in Class A Shares		(120,912	)		32,475
Class C Shares:
Issued		68,124			113,789
Reinvested		3,214			461
Redeemed		(75,578	)		—
Change in Class C Shares		(4,240	)		114,250
Institutional Shares:
Issued		1,071,556			1,198,604
Reinvested		26,388			13,423
Redeemed		(881,634	)		(515,296	)
Change in Institutional Shares		216,310			696,731
Change in Shares		91,158			843,456

See accompanying Notes to the Financial Statements.

124

Sterling Capital North Carolina Intermediate Tax-Free Fund						Sterling Capital South Carolina Intermediate Tax-Free Fund						Sterling Capital Virginia Intermediate Tax-Free Fund
For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
$	10,309,290		$	17,255,510		$	6,295,380		$	6,175,005		$	6,432,147		$	12,566,917
	1,482,006			1,234,786			519,304			446,118			1,144,777			940,960
	(18,337,658	)		(5,987,904	)		(6,435,463	)		(1,244,999	)		(8,941,691	)		(3,129,732	)
	(6,546,362	)		12,502,392			379,221			5,376,124			(1,364,767	)		10,378,145
	3,093,311			3,224,796			848,391			501,589			567,708			2,929,673
	104,401			13,425			8,010			464			58,253			16,299
	(1,364,016	)		(23,073	)		(416,194	)		—			(642,006	)		(100,920	)
	1,833,696			3,215,148			440,207			502,053			(16,045	)		2,845,052
	41,215,063			54,083,709			17,877,941			19,730,550			17,955,969			22,613,452
	846,129			637,136			298,570			181,073			238,927			182,970
	(62,939,678	)		(31,494,616	)		(18,730,981	)		(8,801,081	)		(23,235,066	)		(11,853,447	)
	(20,878,486	)		23,226,229			(554,470	)		11,110,542			(5,040,170	)		10,942,975
$	(25,591,152	)	$	38,943,769		$	264,958		$	16,988,719		$	(6,420,982	)	$	24,166,172
	916,510			1,542,881			557,683			553,727			522,869			1,025,951
	133,189			110,720			46,405			40,070			93,738			76,789
	(1,663,713	)		(537,040	)		(588,647	)		(111,158	)		(747,222	)		(255,473	)
	(614,014	)		1,116,561			15,441			482,639			(130,615	)		847,267
	273,959			287,363			75,827			44,566			45,927			238,604
	9,374			1,192			717			41			4,759			1,319
	(124,926	)		(2,077	)		(38,339	)		—			(54,527	)		(8,165	)
	158,407			286,478			38,205			44,607			(3,841	)		231,758
	3,696,962			4,848,480			1,603,792			1,780,935			1,471,143			1,844,600
	76,094			57,094			26,891			16,337			19,610			14,934
	(5,706,939	)		(2,825,464	)		(1,709,077	)		(799,828	)		(1,934,587	)		(965,783	)
	(1,933,883	)		2,080,110			(78,394	)		997,444			(443,834	)		893,751
	(2,389,490	)		3,483,149			(24,748	)		1,524,690			(578,290	)		1,972,776

125

Sterling Capital Funds

    Statements of Changes in Net Assets (continued)

	Sterling Capital West Virginia Intermediate Tax-Free Fund
	For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
Capital Transactions:
Class A Shares:
Proceeds from shares issued	$	8,104,470		$	9,155,672
Distributions reinvested		1,054,987			757,047
Value of shares redeemed		(9,469,654	)		(3,941,099	)
Change in net assets from Class A Share transactions		(310,197	)		5,971,620
Class B Shares:
Proceeds from shares issued		—			—
Distributions reinvested		—			—
Value of shares redeemed		—			—
Change in net assets from Class B Share transactions		—			—
Class C Shares:
Proceeds from shares issued		264,885			721,806
Distributions reinvested		19,120			1,366
Value of shares redeemed		(196,535	)		—
Change in net assets from Class C Share transactions		87,470			723,172
Institutional Shares:
Proceeds from shares issued		18,311,821			23,223,921
Distributions reinvested		349,716			112,183
Value of shares redeemed		(30,302,603	)		(13,272,524	)
Change in net assets from Institutional Share transactions		(11,641,066	)		10,063,580
Change in net assets from capital transactions	$	(11,863,793	)	$	16,758,372
Share Transactions:
Class A Shares:
Issued		781,439			889,767
Reinvested		102,472			73,406
Redeemed		(930,596	)		(382,000	)
Change in Class A Shares		(46,685	)		581,173
Class B Shares:
Issued		—			—
Reinvested		—			—
Redeemed		—			—
Change in Class B Shares		—			—
Class C Shares:
Issued		25,479			69,281
Reinvested		1,853			131
Redeemed		(19,648	)		—
Change in Class C Shares		7,684			69,412
Institutional Shares:
Issued		1,787,975			2,244,831
Reinvested		33,737			10,929
Redeemed		(2,963,399	)		(1,286,425	)
Change in Institutional Shares		(1,141,687	)		969,335
Change in Shares		(1,180,688	)		1,619,920

See accompanying Notes to the Financial Statements.

126

Sterling Capital Strategic Allocation Conservative Fund						Sterling Capital Strategic Allocation Balanced Fund						Sterling Capital Strategic Allocation Growth Fund
For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012			For the Year Ended September 30, 2013			For the Year Ended September 30, 2012
$	2,634,390		$	3,180,882		$	4,117,952		$	3,042,700		$	3,816,397		$	2,730,572
	303,414			241,018			516,486			453,657			263,733			229,377
	(2,652,484	)		(1,648,778	)		(4,320,772	)		(4,068,653	)		(3,037,747	)		(3,212,435	)
	285,320			1,773,122			313,666			(572,296	)		1,042,383			(252,486	)
	74,558			119,783			47,998			178,190			71,105			1,908
	17,969			20,318			42,900			52,548			22,421			28,979
	(503,529	)		(727,930	)		(2,307,127	)		(2,480,087	)		(1,825,711	)		(2,081,772	)
	(411,002	)		(587,829	)		(2,216,229	)		(2,249,349	)		(1,732,185	)		(2,050,885	)
	73,528			54,135			205,169			123,308			168,676			71,767
	3,820			2,578			5,023			3,592			2,190			1,653
	(49,294	)		(19,155	)		(89,669	)		(127,641	)		(47,205	)		(44,690	)
	28,054			37,558			120,523			(741	)		123,661			28,730
	448,719			388,233			96,478			374,010			711,976			96,677
	79,789			90,703			4,361			10,649			11,873			13,864
	(811,729	)		(1,499,834	)		(273,337	)		(464,589	)		(742,283	)		(462,959	)
	(283,221	)		(1,020,898	)		(172,498	)		(79,930	)		(18,434	)		(352,418	)
$	(380,849	)	$	201,953		$	(1,954,538	)	$	(2,902,316	)	$	(584,575	)	$	(2,627,059	)
	267,041			343,558			433,560			347,447			428,099			336,395
	30,916			25,813			54,705			52,009			29,751			28,482
	(268,156	)		(176,199	)		(459,926	)		(463,231	)		(346,061	)		(397,333	)
	29,801			193,172			28,339			(63,775	)		111,789			(32,456	)
	7,618			12,664			5,126			20,794			8,131			247
	1,829			2,188			4,688			6,230			2,669			3,752
	(51,182	)		(77,881	)		(248,539	)		(289,470	)		(209,726	)		(263,366	)
	(41,735	)		(63,029	)		(238,725	)		(262,446	)		(198,926	)		(259,367	)
	7,472			5,790			21,678			14,247			19,003			9,126
	391			278			543			423			258			213
	(4,945	)		(2,053	)		(9,612	)		(14,903	)		(5,252	)		(5,765	)
	2,918			4,015			12,609			(233	)		14,009			3,574
	45,233			40,673			10,015			44,463			77,883			12,207
	8,042			9,612			460			1,222			1,335			1,716
	(81,670	)		(156,109	)		(29,412	)		(53,488	)		(82,142	)		(59,728	)
	(28,395	)		(105,824	)		(18,937	)		(7,803	)		(2,924	)		(45,805	)
	(37,411	)		28,334			(216,714	)		(334,257	)		(76,052	)		(334,054	)

127

Sterling Capital Funds

Financial Highlights, Class A Shares

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

				Investment Activities									Distributions
	Net Asset Value, Beginning of Period			Net investment income (loss)(a)			Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Return of capital			Total Distributions
Sterling Capital Large Cap Value Diversified Fund
Year Ended September 30, 2013		$	12.80		0.13			1.36			1.49			(0.13	)		—			—			(0.13	)
Year Ended September 30, 2012		$	9.90		0.11			2.90			3.01			(0.11	)		—			—			(0.11	)
Year Ended September 30, 2011		$	10.52		0.11			(0.62	)		(0.51	)		(0.11	)		—			—			(0.11	)
Year Ended September 30, 2010		$	10.08		0.10			0.45			0.55			(0.11	)		—			—			(0.11	)
Year Ended September 30, 2009		$	11.31		0.11			(1.22	)		(1.11	)		(0.12	)		—			—			(0.12	)
Sterling Capital Mid Value Fund
Year Ended September 30, 2013		$	14.28		0.13			4.47			4.60			(0.10	)		—			—			(0.10	)
Year Ended September 30, 2012		$	11.37		0.10			2.91			3.01			(0.10	)		—			—			(0.10	)
Year Ended September 30, 2011		$	12.08		0.04			(0.70	)		(0.66	)		(0.05	)		—			—			(0.05	)
Year Ended September 30, 2010		$	10.81		0.04			1.27			1.31			(0.04	)		—			—			(0.04	)
Year Ended September 30, 2009		$	10.50		0.02			0.31			0.33			(0.02	)		—			—			(0.02	)
Sterling Capital Small Cap Value Diversified Fund
Year Ended September 30, 2013		$	12.01		0.05			3.37			3.42			(0.03	)		(0.15	)		—			(0.18	)
Year Ended September 30, 2012		$	10.79		0.03			2.17			2.20			—			(0.98	)		—			(0.98	)
Year Ended September 30, 2011		$	11.19		(0.05	)		(0.35	)		(0.40	)		—			—			—			—
February 1, 2010 to September 30, 2010(e)		$	10.55		0.04			0.63			0.67			(0.03	)		—			—			(0.03	)
Sterling Capital Special Opportunities Fund
Year Ended September 30, 2013		$	18.51		0.05	(g)		3.78			3.83			(0.01	)		(0.95	)		—			(0.96	)
Year Ended September 30, 2012		$	15.25		—	(h)		3.57			3.57			—			(0.31	)		—			(0.31	)
Year Ended September 30, 2011		$	15.93		(0.06	)		(0.52	)		(0.58	)		—			(0.10	)		—			(0.10	)
Year Ended September 30, 2010		$	14.66		(0.06	)		1.33			1.27			—			—			—			—
Year Ended September 30, 2009		$	15.34		—	(h)		—	(h)		—	(h)		—	(h)		(0.57	)		(0.11	)		(0.68	)
Sterling Capital Equity Income Fund
Year Ended September 30, 2013		$	16.03		0.29			2.23			2.52			(0.25	)		(0.16	)		—			(0.41	)
Year Ended September 30, 2012		$	13.25		0.25			2.72			2.97			(0.19	)		—			—			(0.19	)
Year Ended September 30, 2011		$	13.05		0.25			0.14	(j)		0.39			(0.19	)		—			—			(0.19	)
Year Ended September 30, 2010		$	11.43		0.30			1.56			1.86			(0.24	)		—			—			(0.24	)
Year Ended September 30, 2009		$	12.35		0.30			(0.99	)		(0.69	)		(0.20	)		(0.03	)		—			(0.23	)
Sterling Capital Ultra Short Bond Fund
November 30, 2012 to September 30, 2013(e)		$	10.00		0.03			(0.02	)		0.01			(0.03	)		—			—			(0.03	)
Sterling Capital Short-Term Bond Fund
Year Ended September 30, 2013		$	9.47		0.17			(0.10	)		0.07			(0.30	)		—			—			(0.30	)
Year Ended September 30, 2012		$	9.36		0.19			0.24			0.43			(0.32	)		—			—			(0.32	)
Year Ended September 30, 2011		$	9.68		0.17			(0.19	)		(0.02	)		(0.30	)		—			—			(0.30	)
Year Ended September 30, 2010		$	9.66		0.16			0.10			0.26			(0.24	)		—			—			(0.24	)
Year Ended September 30, 2009		$	9.54		0.24			0.19			0.43			(0.31	)		—			—			(0.31	)

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

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

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

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

(c) Annualized for periods less than one year.

(d) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 11.56%.

(e) Period from commencement of operations.

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

(g) Net investment income per share reflects a special dividend which amounted to $0.01 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 0.19% per share.

(h) Amount is less than $0.005.

(i) Ratio is below 0.005%.

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

See accompanying Notes to the Financial Statements.

128

		Ratios/Supplementary Data
Net Asset Value, End of Period	Total Return (excludes sales charge) (b)	Net Assets, End of Period (000)	Ratio of net expenses to average net assets (c)	Ratio of net investment income (loss) to average net assets (c)	Ratio of expenses to average net assets*(c)	Portfolio turnover rate**(b)
$14.16	11.72%(d)	$    28,682	1.09%	0.97%	1.19%	164.27%
$12.80	30.52%	$    28,618	1.08%	0.98%	1.28%	68.75%
$   9.90	(5.01)%	$    24,603	1.08%	0.93%	1.47%	66.29%
$10.52	5.47%	$    28,849	1.09%	0.98%	1.48%	119.85%
$10.08	(9.67)%	$    29,290	1.06%	1.25%	1.45%	92.97%
$18.78	32.36%	$    36,094	1.17%	0.79%	1.17%	34.03%
$14.28	26.57%	$    21,976	1.19%	0.78%	1.20%	21.62%
$11.37	(5.51)%	$    18,017	1.18%	0.32%	1.22%	38.30%
$12.08	12.09%	$    18,890	1.20%	0.33%	1.30%	45.02%
$10.81	3.24%	$    10,717	1.21%	0.19%	1.26%	46.83%
$15.25	28.74%	$     8,813	1.29%	0.36%	1.29%	176.62%
$12.01	21.31%	$     6,720	1.33%	0.22%	1.44%	32.86%
$10.79	(3.57)%	$     6,152	1.33%	(0.39)%	1.69%	63.02%
$11.19	6.39%(f)	$     5,389	1.40%	0.49%	1.91%	95.89%
$21.38	21.59%	$269,300	1.24%	0.27%(g)	1.24%	53.76%
$18.51	23.67%	$174,085	1.29%	(0.00)%(i)	1.38%	19.38%
$15.25	(3.72)%	$197,138	1.28%	(0.35)%	1.53%	31.51%
$15.93	8.66%	$202,670	1.29%	(0.38)%	1.55%	25.65%
$14.66	1.74%	$175,319	1.28%	0.02%	1.54%	45.22%
$18.14	16.02%	$690,106	1.20%	1.69%	1.20%	30.56%
$16.03	22.47%	$371,659	1.19%	1.61%	1.26%	21.30%
$13.25	2.93%	$214,622	1.18%	1.80%	1.43%	16.64%
$13.05	16.42%	$143,283	1.19%	2.43%	1.45%	21.63%
$11.43	(5.33)%	$  99,480	1.18%	2.93%	1.45%	37.13%
$   9.98	0.15%	$  13,526	0.73%	0.41%	0.73%	55.18%
$   9.24	0.72%	$  13,812	0.77%	1.83%	0.81%	56.09%
$   9.47	4.68%	$    8,965	0.81%	2.04%	0.91%	85.13%
$   9.36	(0.20)%	$    7,684	0.85%	1.81%	1.20%	120.09%
$   9.68	2.75%	$    7,747	0.95%	1.66%	1.36%	55.50%
$   9.66	4.57%	$    4,909	0.98%	2.44%	1.38%	89.57%

129

Sterling Capital Funds

Financial Highlights, Class A Shares

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

				Investment Activities								Distributions
	Net Asset Value, Beginning of Period			Net investment income (a)		Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital Intermediate U.S. Government Fund
Year Ended September 30, 2013		$	10.86		0.16		(0.43	)		(0.27	)		(0.30	)		—			(0.30	)
Year Ended September 30, 2012		$	10.79		0.20		0.16			0.36			(0.29	)		—			(0.29	)
Year Ended September 30, 2011		$	10.80		0.24		0.06			0.30			(0.31	)		—			(0.31	)
Year Ended September 30, 2010		$	10.56		0.29		0.27			0.56			(0.32	)		—			(0.32	)
Year Ended September 30, 2009		$	10.03		0.33		0.55			0.88			(0.35	)		—			(0.35	)
Sterling Capital Total Return Bond Fund
Year Ended September 30, 2013		$	11.15		0.29		(0.46	)		(0.17	)		(0.38	)		(0.08	)		(0.46	)
Year Ended September 30, 2012		$	11.05		0.29		0.46			0.75			(0.38	)		(0.27	)		(0.65	)
Year Ended September 30, 2011		$	11.32		0.38		0.01			0.39			(0.45	)		(0.21	)		(0.66	)
Year Ended September 30, 2010		$	10.78		0.43		0.61			1.04			(0.49	)		(0.01	)		(0.50	)
Year Ended September 30, 2009		$	9.88		0.45		0.90			1.35			(0.45	)		—			(0.45	)
Sterling Capital Corporate Fund
February 1, 2013 to September 30, 2013(d)		$	10.53		0.22		(0.38	)		(0.16	)		(0.22	)		—			(0.22	)
Sterling Capital Securitized Opportunities Fund
February 1, 2013 to September 30, 2013(d)		$	10.16		0.11		(0.21	)		(0.10	)		(0.21	)		—			(0.21	)
Sterling Capital Kentucky Intermediate Tax-Free Fund
Year Ended September 30, 2013		$	11.17		0.24		(0.44	)		(0.20	)		(0.24	)		(0.06	)		(0.30	)
Year Ended September 30, 2012		$	10.80		0.27		0.40			0.67			(0.27	)		(0.03	)		(0.30	)
Year Ended September 30, 2011		$	10.83		0.29		0.02	(e)		0.31			(0.29	)		(0.05	)		(0.34	)
Year Ended September 30, 2010		$	10.68		0.29		0.25			0.54			(0.29	)		(0.10	)		(0.39	)
Year Ended September 30, 2009		$	9.88		0.33		0.89			1.22			(0.32	)		(0.10	)		(0.42	)
Sterling Capital Maryland Intermediate Tax-Free Fund
Year Ended September 30, 2013		$	11.56		0.19		(0.45	)		(0.26	)		(0.19	)		(0.15	)		(0.34	)
Year Ended September 30, 2012		$	11.23		0.24		0.41			0.65			(0.24	)		(0.08	)		(0.32	)
Year Ended September 30, 2011		$	11.21		0.28		0.06			0.34			(0.28	)		(0.04	)		(0.32	)
Year Ended September 30, 2010		$	10.97		0.28		0.24			0.52			(0.28	)		—	(f)		(0.28	)
Year Ended September 30, 2009		$	10.04		0.30		1.01			1.31			(0.30	)		(0.08	)		(0.38	)
Sterling Capital North Carolina Intermediate Tax-Free Fund
Year Ended September 30, 2013		$	11.36		0.25		(0.54	)		(0.29	)		(0.25	)		(0.08	)		(0.33	)
Year Ended September 30, 2012		$	11.02		0.27		0.41			0.68			(0.27	)		(0.07	)		(0.34	)
Year Ended September 30, 2011		$	11.01		0.29		0.07			0.36			(0.29	)		(0.06	)		(0.35	)
Year Ended September 30, 2010		$	10.87		0.30		0.20			0.50			(0.30	)		(0.06	)		(0.36	)
Year Ended September 30, 2009		$	10.09		0.33		0.88			1.21			(0.33	)		(0.10	)		(0.43	)

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

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

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

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

(c) Annualized for periods less than one year.

(d) Period from commencement of operations.

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

(f) Amount is less than $0.005.

See accompanying Notes to the Financial Statements.

130

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge) (b)			Net Assets, End of Period (000)			Ratio of net expenses to average net assets (c)			Ratio of net investment income to average net assets (c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
	$10.29		(2.54	)%		$	10,172		0.93	%		1.50	%		0.93	%		66.16	%
	$10.86		3.41	%		$	12,788		0.97	%		1.81	%		1.10	%		71.68	%
	$10.79		2.86	%		$	13,344		0.96	%		2.30	%		1.33	%		83.62	%
	$10.80		5.38	%		$	14,235		0.96	%		2.76	%		1.34	%		83.92	%
	$10.56		8.90	%		$	12,865		0.95	%		3.14	%		1.32	%		47.13	%
	$10.52		(1.51	)%		$	42,774		0.82	%		2.68	%		0.84	%		149.09	%
	$11.15		7.13	%		$	50,063		0.88	%		2.65	%		0.99	%		110.82	%
	$11.05		3.68	%		$	37,274		0.95	%		3.47	%		1.32	%		131.87	%
	$11.32		10.00	%		$	31,465		0.96	%		3.90	%		1.34	%		122.94	%
	$10.78		13.89	%		$	15,760		0.96	%		4.38	%		1.33	%		122.26	%
	$10.15		(1.54	)%		$	160		0.85	%		3.21	%		0.85	%		99.48	%
	$  9.85		(1.00	)%		$	38		0.90	%		1.71	%		0.90	%		193.21	%
	$10.67		(1.83	)%		$	5,849		0.96	%		2.21	%		0.96	%		22.05	%
	$11.17		6.21	%		$	10,969		0.95	%		2.43	%		1.04	%		16.52	%
	$10.80		3.00	%		$	8,729		0.93	%		2.76	%		1.28	%		15.73	%
	$10.83		5.25	%		$	8,380		0.94	%		2.76	%		1.40	%		20.68	%
	$10.68		12.71	%		$	6,999		0.92	%		3.18	%		1.37	%		33.56	%
	$10.96		(2.31	)%		$	8,036		0.95	%		1.70	%		0.95	%		70.60	%
	$11.56		5.80	%		$	9,877		0.95	%		2.08	%		1.05	%		34.94	%
	$11.23		3.09	%		$	9,232		0.92	%		2.52	%		1.28	%		21.89	%
	$11.21		4.81	%		$	11,763		0.94	%		2.52	%		1.40	%		12.26	%
	$10.97		13.44	%		$	8,273		0.90	%		2.84	%		1.38	%		37.11	%
	$10.74		(2.63	)%		$	55,416		0.92	%		2.23	%		0.92	%		22.38	%
	$11.36		6.25	%		$	65,544		0.92	%		2.39	%		1.00	%		19.76	%
	$11.02		3.35	%		$	51,294		0.92	%		2.67	%		1.22	%		15.15	%
	$11.01		4.79	%		$	46,560		0.93	%		2.79	%		1.34	%		19.19	%
	$10.87		12.35	%		$	29,765		0.92	%		3.17	%		1.32	%		38.42	%

131

Sterling Capital Funds

Financial Highlights, Class A Shares

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

			Investment Activities								Distributions
	Net Asset Value, Beginning of Year		Net investment income(a)		Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital South Carolina Intermediate Tax-Free Fund
Year Ended September 30, 2013		$11.36		0.21		(0.43	)		(0.22	)		(0.21	)		(0.08	)		(0.29	)
Year Ended September 30, 2012		$10.97		0.24		0.46			0.70			(0.24	)		(0.07	)		(0.31	)
Year Ended September 30, 2011		$10.93		0.26		0.07			0.33			(0.26	)		(0.03	)		(0.29	)
Year Ended September 30, 2010		$10.68		0.30		0.25			0.55			(0.30	)		—			(0.30	)
Year Ended September 30, 2009		$  9.95		0.33		0.90			1.23			(0.33	)		(0.17	)		(0.50	)
Sterling Capital Virginia Intermediate Tax-Free Fund
Year Ended September 30, 2013		$12.45		0.24		(0.56	)		(0.32	)		(0.24	)		(0.10	)		(0.34	)
Year Ended September 30, 2012		$12.12		0.28		0.40			0.68			(0.28	)		(0.07	)		(0.35	)
Year Ended September 30, 2011		$12.14		0.31		0.02			0.33			(0.31	)		(0.04	)		(0.35	)
Year Ended September 30, 2010		$12.07		0.33		0.18			0.51			(0.33	)		(0.11	)		(0.44	)
Year Ended September 30, 2009		$11.11		0.36		1.05			1.41			(0.36	)		(0.09	)		(0.45	)
Sterling Capital West Virginia Intermediate Tax-Free Fund
Year Ended September 30, 2013		$10.51		0.22		(0.49	)		(0.27	)		(0.22	)		(0.12	)		(0.34	)
Year Ended September 30, 2012		$10.16		0.27		0.39			0.66			(0.27	)		(0.04	)		(0.31	)
Year Ended September 30, 2011		$10.17		0.32		—			0.32			(0.32	)		(0.01	)		(0.33	)
Year Ended September 30, 2010		$10.04		0.33		0.15			0.48			(0.33	)		(0.02	)		(0.35	)
Year Ended September 30, 2009		$  9.36		0.33		0.69			1.02			(0.33	)		(0.01	)		(0.34	)
Sterling Capital Strategic Allocation Conservative Fund(b)
Year Ended September 30, 2013		$  9.68		0.22		0.28			0.50			(0.23	)		—			(0.23	)
Year Ended September 30, 2012		$  8.74		0.20		0.94			1.14			(0.20	)		—			(0.20	)
Year Ended September 30, 2011		$  9.06		0.22		(0.26	)		(0.04	)		(0.28	)		—			(0.28	)
Year Ended September 30, 2010		$  8.50		0.26		0.57			0.83			(0.27	)		—			(0.27	)
Year Ended September 30, 2009		$  8.43		0.23		0.21			0.44			(0.23	)		(0.14	)		(0.37	)
Sterling Capital Strategic Allocation Balanced Fund(b)
Year Ended September 30, 2013		$  9.13		0.16		0.65			0.81			(0.17	)		—			(0.17	)
Year Ended September 30, 2012		$  7.95		0.14		1.18			1.32			(0.14	)		—			(0.14	)
Year Ended September 30, 2011		$  8.39		0.15		(0.41	)		(0.26	)		(0.18	)		—			(0.18	)
Year Ended September 30, 2010		$  7.79		0.18		0.60			0.78			(0.18	)		—			(0.18	)
Year Ended September 30, 2009		$  7.77		0.16		0.02			0.18			(0.16	)		—			(0.16	)
Sterling Capital Strategic Allocation Growth Fund(b)
Year Ended September 30, 2013		$  8.47		0.11		0.89			1.00			(0.12	)		—			(0.12	)
Year Ended September 30, 2012		$  7.20		0.10		1.27			1.37			(0.10	)		—			(0.10	)
Year Ended September 30, 2011		$  7.69		0.10		(0.48	)		(0.38	)		(0.11	)		—			(0.11	)
Year Ended September 30, 2010		$  7.11		0.13		0.58			0.71			(0.13	)		—			(0.13	)
Year Ended September 30, 2009		$  7.33		0.12		(0.22	)		(0.10	)		(0.12	)		—			(0.12	)

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

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

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

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

See accompanying Notes to the Financial Statements.

132

					Ratios/Supplementary Data
Net Asset Value, End of Year		Total Return (excludes sales charge)			Net Assets, End of Year (000)			Ratio of net expenses to average net assets			Ratio of net investment income to average net assets			Ratio of expenses to average net assets*			Portfolio turnover rate**
	$10.85		(1.93	)%		$	21,569		0.94	%		1.92	%		0.94	%		35.38	%
	$11.36		6.48	%		$	22,398		0.95	%		2.16	%		1.02	%		26.49	%
	$10.97		3.11	%		$	16,338		0.96	%		2.43	%		1.26	%		25.83	%
	$10.93		5.25	%		$	15,290		0.98	%		2.81	%		1.39	%		14.60	%
	$10.68		12.78	%		$	11,255		0.98	%		3.18	%		1.38	%		42.06	%
	$11.79		(2.60	)%		$	46,616		0.93	%		1.98	%		0.93	%		40.00	%
	$12.45		5.68	%		$	50,835		0.93	%		2.25	%		1.01	%		21.63	%
	$12.12		2.85	%		$	39,231		0.93	%		2.64	%		1.23	%		15.33	%
	$12.14		4.39	%		$	35,284		0.94	%		2.79	%		1.35	%		9.54	%
	$12.07		13.11	%		$	20,230		0.92	%		3.05	%		1.32	%		35.90	%
	$  9.90		(2.65	)%		$	37,266		0.93	%		2.13	%		0.93	%		22.18	%
	$10.51		6.59	%		$	40,019		0.93	%		2.60	%		0.93	%		26.70	%
	$10.16		3.22	%		$	32,791		0.94	%		3.19	%		0.94	%		23.34	%
	$10.17		4.87	%		$	29,858		0.94	%		3.33	%		0.95	%		6.60	%
	$10.04		11.14	%		$	19,518		0.93	%		3.45	%		0.93	%		24.19	%
	$  9.95		5.25	%		$	14,381		0.54	%		2.18	%		0.69	%		60.51	%
	$  9.68		13.10	%		$	13,704		0.69	%		2.09	%		0.77	%		7.99	%
	$  8.74		(0.55	)%		$	10,689		0.64	%		2.34	%		0.97	%		8.36	%
	$  9.06		9.93	%		$	7,230		0.46	%		3.01	%		0.97	%		33.33	%
	$  8.50		5.95	%		$	5,929		0.43	%		2.95	%		0.93	%		21.56	%
	$  9.77		8.95	%		$	30,638		0.51	%		1.70	%		0.66	%		81.00	%
	$  9.13		16.76	%		$	28,375		0.66	%		1.65	%		0.75	%		17.65	%
	$  7.95		(3.29	)%		$	25,227		0.58	%		1.68	%		0.91	%		9.96	%
	$  8.39		10.18	%		$	25,419		0.41	%		2.27	%		0.92	%		47.76	%
	$  7.79		2.67	%		$	24,426		0.38	%		2.36	%		0.88	%		22.46	%
	$  9.35		11.89	%		$	21,833		0.52	%		1.24	%		0.68	%		96.94	%
	$  8.47		19.14	%		$	18,827		0.68	%		1.30	%		0.76	%		20.21	%
	$  7.20		(5.10	)%		$	16,246		0.59	%		1.26	%		0.93	%		9.06	%
	$  7.69		10.13	%		$	17,838		0.42	%		1.81	%		0.93	%		57.35	%
	$  7.11		(1.25	)%		$	16,609		0.39	%		1.89	%		0.89	%		24.08	%

133

Sterling Capital Funds

Financial Highlights, Class B Shares

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

			Investment Activities									Distributions
	Net Asset Value, Beginning of Period		Net investment income (loss)(a)			Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Return of capital			Total Distributions
Sterling Capital Large Cap Value Diversified Fund
Year Ended September 30, 2013		$12.58		0.03			1.33			1.36			(0.03	)		—			—			(0.03	)
Year Ended September 30, 2012		$  9.73		0.03			2.84			2.87			(0.02	)		—			—			(0.02	)
Year Ended September 30, 2011		$10.33		0.02			(0.60	)		(0.58	)		(0.02	)		—			—			(0.02	)
Year Ended September 30, 2010		$  9.90		0.02			0.44			0.46			(0.03	)		—			—			(0.03	)
Year Ended September 30, 2009		$11.11		0.05			(1.21	)		(1.16	)		(0.05	)		—			—			(0.05	)
Sterling Capital Mid Value Fund
Year Ended September 30, 2013		$13.55		—	(e)		4.24			4.24			(0.03	)		—			—			(0.03	)
Year Ended September 30, 2012		$10.80		—	(e)		2.77			2.77			(0.02	)		—			—			(0.02	)
Year Ended September 30, 2011		$11.52		(0.06	)		(0.66	)		(0.72	)		—			—			—			—
Year Ended September 30, 2010		$10.35		(0.05	)		1.22			1.17			—	(e)		—			—			—	(e)
Year Ended September 30, 2009		$10.14		(0.05	)		0.27			0.22			(0.01	)		—			—			(0.01	)
Sterling Capital Small Cap Value Diversified Fund
Year Ended September 30, 2013		$11.80		(0.05	)		3.29			3.24			—			(0.15	)		—			(0.15	)
Year Ended September 30, 2012		$10.69		(0.06	)		2.15			2.09			—			(0.98	)		—			(0.98	)
Year Ended September 30, 2011		$11.17		(0.15	)		(0.33	)		(0.48	)		—			—			—			—
February 1, 2010 to September 30, 2010(f)		$10.55		(0.02	)		0.64			0.62			—			—			—			—
Sterling Capital Special Opportunities Fund
Year Ended September 30, 2013		$17.11		(0.08	)(h)		3.45			3.37			—			(0.95	)		—			(0.95	)
Year Ended September 30, 2012		$14.22		(0.12	)		3.32			3.20			—			(0.31	)		—			(0.31	)
Year Ended September 30, 2011		$14.97		(0.18	)		(0.47	)		(0.65	)		—			(0.10	)		—			(0.10	)
Year Ended September 30, 2010		$13.89		(0.16	)		1.24			1.08			—			—			—			—
Year Ended September 30, 2009		$14.65		(0.05	)		(0.05	)		(0.10	)		—	(e)		(0.57	)		(0.09	)		(0.66	)
Sterling Capital Equity Income Fund
Year Ended September 30, 2013		$15.99		0.16			2.22			2.38			(0.11	)		(0.16	)		—			(0.27	)
Year Ended September 30, 2012		$13.21		0.13			2.72			2.85			(0.07	)		—			—			(0.07	)
Year Ended September 30, 2011		$13.01		0.14			0.14	(i)		0.28			(0.08	)		—			—			(0.08	)
Year Ended September 30, 2010		$11.39		0.20			1.57			1.77			(0.15	)		—			—			(0.15	)
Year Ended September 30, 2009		$12.31		0.22			(0.98	)		(0.76	)		(0.13	)		(0.03	)		—			(0.16	)
Sterling Capital Intermediate U.S. Government Fund
Year Ended September 30, 2013		$10.82		0.08			(0.43	)		(0.35	)		(0.22	)		—			—			(0.22	)
Year Ended September 30, 2012		$10.75		0.12			0.16			0.28			(0.21	)		—			—			(0.21	)
Year Ended September 30, 2011		$10.77		0.17			0.04			0.21			(0.23	)		—			—			(0.23	)
Year Ended September 30, 2010		$10.52		0.21			0.28			0.49			(0.24	)		—			—			(0.24	)
Year Ended September 30, 2009		$10.00		0.25			0.54			0.79			(0.27	)		—			—			(0.27	)

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

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

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

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

(c) Annualized for periods less than one year.

(d) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 10.59%.

(e) Amount is less than $0.005.

(f) Period from commencement of operations.

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

(h) Net investment loss per share reflects a special dividend which amounted to $0.02 per share. Excluding the special dividend, the ratio of net investment loss to average net assets would have been (0.55)% per share.

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

See accompanying Notes to the Financial Statements.

134

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge) (b)			Net Assets, End of Period (000)			Ratio of net expenses to average net assets (c)			Ratio of net investment income (loss) to average net assets (c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
	$13.91		10.83	%(d)		$	1,261		1.84	%		0.23	%		1.94	%		164.27	%
	$12.58		29.55	%		$	1,638		1.83	%		0.24	%		1.95	%		68.75	%
	$  9.73		(5.67	)%		$	1,922		1.83	%		0.18	%		1.97	%		66.29	%
	$10.33		4.64	%		$	3,121		1.83	%		0.17	%		1.98	%		119.85	%
	$  9.90		(10.31	)%		$	4,501		1.82	%		0.54	%		1.96	%		92.97	%
	$17.76		31.34	%		$	2,002		1.92	%		(0.01	)%		1.92	%		34.03	%
	$13.55		25.72	%		$	1,996		1.93	%		(0.01	)%		1.95	%		21.62	%
	$10.80		(6.25	)%		$	2,604		1.93	%		(0.45	)%		1.97	%		38.30	%
	$11.52		11.32	%		$	3,796		1.94	%		(0.48	)%		2.05	%		45.02	%
	$10.35		2.17	%		$	3,454		1.96	%		(0.60	)%		2.01	%		46.83	%
	$14.89		27.74	%		$	425		2.04	%		(0.41	)%		2.04	%		176.62	%
	$11.80		20.43	%		$	432		2.08	%		(0.53	)%		2.11	%		32.86	%
	$10.69		(4.30	)%		$	571		2.08	%		(1.15	)%		2.19	%		63.02	%
	$11.17		5.88	%(g)		$	932		2.15	%		(0.28	)%		2.41	%		95.89	%
	$19.53		20.64	%		$	8,921		1.99	%		(0.45	)%(h)		1.99	%		53.76	%
	$17.11		22.76	%		$	12,466		2.04	%		(0.77	)%		2.04	%		19.38	%
	$14.22		(4.43	)%		$	16,582		2.03	%		(1.10	)%		2.03	%		31.51	%
	$14.97		7.78	%		$	22,538		2.04	%		(1.13	)%		2.05	%		25.65	%
	$13.89		1.04	%		$	24,068		2.03	%		(0.39	)%		2.04	%		45.22	%
	$18.10		15.13	%		$	10,335		1.95	%		0.94	%		1.95	%		30.56	%
	$15.99		21.60	%		$	12,653		1.93	%		0.85	%		1.93	%		21.30	%
	$13.21		2.13	%		$	12,314		1.93	%		1.02	%		1.93	%		16.64	%
	$13.01		15.59	%		$	13,959		1.94	%		1.67	%		1.94	%		21.63	%
	$11.39		(6.05	)%		$	13,567		1.93	%		2.18	%		1.95	%		37.13	%
	$10.25		(3.30	)%		$	533		1.69	%		0.77	%		1.69	%		66.16	%
	$10.82		2.64	%		$	896		1.72	%		1.10	%		1.76	%		71.68	%
	$10.75		1.99	%		$	1,617		1.71	%		1.58	%		1.83	%		83.62	%
	$10.77		4.71	%		$	2,690		1.71	%		1.99	%		1.84	%		83.92	%
	$10.52		8.01	%		$	3,256		1.70	%		2.42	%		1.82	%		47.13	%

135

Sterling Capital Funds

Financial Highlights, Class B Shares

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

				Investment Activities								Distributions
	Net Asset Value, Beginning of Year			Net investment income (loss)(a)		Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital Total Return Bond Fund
Year Ended September 30, 2013		$	11.16		0.21		(0.46	)		(0.25	)		(0.30	)		(0.08	)		(0.38	)
Year Ended September 30, 2012		$	11.06		0.22		0.45			0.67			(0.30	)		(0.27	)		(0.57	)
Year Ended September 30, 2011		$	11.33		0.30		0.01			0.31			(0.37	)		(0.21	)		(0.58	)
Year Ended September 30, 2010		$	10.78		0.35		0.62			0.97			(0.41	)		(0.01	)		(0.42	)
Year Ended September 30, 2009		$	9.89		0.37		0.89			1.26			(0.37	)		—			(0.37	)
Sterling Capital Strategic Allocation Conservative Fund(b)
Year Ended September 30, 2013		$	9.70		0.14		0.29			0.43			(0.15	)		—			(0.15	)
Year Ended September 30, 2012		$	8.76		0.12		0.94			1.06			(0.12	)		—			(0.12	)
Year Ended September 30, 2011		$	9.07		0.15		(0.25	)		(0.10	)		(0.21	)		—			(0.21	)
Year Ended September 30, 2010		$	8.50		0.20		0.57			0.77			(0.20	)		—			(0.20	)
Year Ended September 30, 2009		$	8.43		0.17		0.21			0.38			(0.17	)		(0.14	)		(0.31	)
Sterling Capital Strategic Allocation Balanced Fund(b)
Year Ended September 30, 2013		$	8.94		0.09		0.63			0.72			(0.09	)		—			(0.09	)
Year Ended September 30, 2012		$	7.79		0.07		1.16			1.23			(0.08	)		—			(0.08	)
Year Ended September 30, 2011		$	8.22		0.08		(0.40	)		(0.32	)		(0.11	)		—			(0.11	)
Year Ended September 30, 2010		$	7.63		0.12		0.59			0.71			(0.12	)		—			(0.12	)
Year Ended September 30, 2009		$	7.62		0.11		0.01			0.12			(0.11	)		—			(0.11	)
Sterling Capital Strategic Allocation Growth Fund(b)
Year Ended September 30, 2013		$	8.26		0.05		0.86			0.91			(0.05	)		—			(0.05	)
Year Ended September 30, 2012		$	7.03		0.04		1.24			1.28			(0.05	)		—			(0.05	)
Year Ended September 30, 2011		$	7.51		0.04		(0.46	)		(0.42	)		(0.06	)		—			(0.06	)
Year Ended September 30, 2010		$	6.95		0.08		0.56			0.64			(0.08	)		—			(0.08	)
Year Ended September 30, 2009		$	7.17		0.07		(0.22	)		(0.15	)		(0.07	)		—			(0.07	)

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

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

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

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

See accompanying Notes to the Financial Statements.

136

					Ratios/Supplementary Data
Net Asset Value, End of Year		Total Return (excludes sales charge)			Net Assets, End of Year (000)			Ratio of net expenses to average net assets			Ratio of net investment income (loss) to average net assets			Ratio of expenses to average net assets*			Portfolio turnover rate**
	$10.53		(2.25	)%		$	1,943		1.57	%		1.93	%		1.59	%		149.09	%
	$11.16		6.33	%		$	3,132		1.63	%		1.97	%		1.67	%		110.82	%
	$11.06		2.91	%		$	3,776		1.70	%		2.74	%		1.82	%		131.87	%
	$11.33		9.18	%		$	4,762		1.71	%		3.21	%		1.83	%		122.94	%
	$10.78		13.03	%		$	5,362		1.71	%		3.62	%		1.83	%		122.26	%
	$  9.98		4.49	%		$	1,020		1.30	%		1.41	%		1.44	%		60.51	%
	$  9.70		12.16	%		$	1,397		1.44	%		1.34	%		1.44	%		7.99	%
	$  8.76		(1.24	)%		$	1,813		1.37	%		1.61	%		1.47	%		8.36	%
	$  9.07		9.15	%		$	2,403		1.21	%		2.25	%		1.47	%		33.33	%
	$  8.50		5.15	%		$	3,184		1.18	%		2.20	%		1.43	%		21.56	%
	$  9.57		8.14	%		$	3,264		1.28	%		0.94	%		1.41	%		81.00	%
	$  8.94		15.80	%		$	5,184		1.41	%		0.87	%		1.41	%		17.65	%
	$  7.79		(4.01	)%		$	6,560		1.31	%		0.96	%		1.41	%		9.96	%
	$  8.22		9.40	%		$	9,771		1.16	%		1.48	%		1.41	%		47.76	%
	$  7.63		1.81	%		$	11,734		1.13	%		1.63	%		1.38	%		22.46	%
	$  9.12		11.04	%		$	2,986		1.28	%		0.53	%		1.41	%		96.94	%
	$  8.26		18.19	%		$	4,346		1.43	%		0.52	%		1.43	%		20.21	%
	$  7.03		(5.68	)%		$	5,521		1.33	%		0.52	%		1.43	%		9.06	%
	$  7.51		9.22	%		$	8,275		1.17	%		1.05	%		1.43	%		57.35	%
	$  6.95		(1.89	)%		$	9,973		1.15	%		1.17	%		1.40	%		24.08	%

137

Sterling Capital Funds

Financial Highlights, Class C Shares

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

			Investment Activities									Distributions
	Net Asset Value, Beginning of Period		Net investment income (loss)(a)			Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Return of capital			Total Distributions
Sterling Capital Large Cap Value Diversified Fund
Year Ended September 30, 2013		$12.49		0.03			1.32			1.35			(0.03	)		—			—			(0.03	)
Year Ended September 30, 2012		$  9.67		0.03			2.82			2.85			(0.03	)		—			—			(0.03	)
Year Ended September 30, 2011		$10.28		0.01			(0.59	)		(0.58	)		(0.03	)		—			—			(0.03	)
Year Ended September 30, 2010		$  9.85		0.02			0.45			0.47			(0.04	)		—			—			(0.04	)
Year Ended September 30, 2009		$11.08		0.04			(1.21	)		(1.17	)		(0.06	)		—			—			(0.06	)
Sterling Capital Mid Value Fund
Year Ended September 30, 2013		$13.51		0.01			4.23			4.24			(0.03	)		—			—			(0.03	)
Year Ended September 30, 2012		$10.78		—	(e)		2.76			2.76			(0.03	)		—			—			(0.03	)
Year Ended September 30, 2011		$11.50		(0.05	)		(0.67	)		(0.72	)		—			—			—			—
Year Ended September 30, 2010		$10.34		(0.05	)		1.21			1.16			—	(e)		—			—			—	(e)
Year Ended September 30, 2009		$10.14		(0.05	)		0.26			0.21			(0.01	)		—			—			(0.01	)
Sterling Capital Small Cap Value Diversified Fund
Year Ended September 30, 2013		$11.79		(0.05	)		3.29			3.24			—			(0.15	)		—			(0.15	)
Year Ended September 30, 2012		$10.69		(0.06	)		2.14			2.08			—			(0.98	)		—			(0.98	)
Year Ended September 30, 2011		$11.17		(0.15	)		(0.33	)		(0.48	)		—			—			—			—
February 1, 2010 to September 30, 2010(f)		$10.55		(0.01	)		0.64			0.63			(0.01	)		—			—			(0.01	)
Sterling Capital Special Opportunities Fund
Year Ended September 30, 2013		$17.12		(0.08	)(h)		3.46			3.38			—			(0.95	)		—			(0.95	)
Year Ended September 30, 2012		$14.23		(0.12	)		3.32			3.20			—			(0.31	)		—			(0.31	)
Year Ended September 30, 2011		$14.98		(0.18	)		(0.47	)		(0.65	)		—			(0.10	)		—			(0.10	)
Year Ended September 30, 2010		$13.89		(0.16	)		1.25			1.09			—			—			—			—
Year Ended September 30, 2009		$14.66		(0.06	)		(0.05	)		(0.11	)		—	(e)		(0.57	)		(0.09	)		(0.66	)
Sterling Capital Equity Income Fund
Year Ended September 30, 2013		$15.92		0.16			2.22			2.38			(0.13	)		(0.16	)		—			(0.29	)
Year Ended September 30, 2012		$13.17		0.13			2.70			2.83			(0.08	)		—			—			(0.08	)
Year Ended September 30, 2011		$12.98		0.15			0.13	(i)		0.28			(0.09	)		—			—			(0.09	)
Year Ended September 30, 2010		$11.37		0.21			1.56			1.77			(0.16	)		—			—			(0.16	)
Year Ended September 30, 2009		$12.30		0.22			(0.99	)		(0.77	)		(0.13	)		(0.03	)		—			(0.16	)
Sterling Capital Short-Term Bond Fund
Year Ended September 30, 2013		$  9.47		0.09			(0.09	)		—			(0.23	)		—			—			(0.23	)
February 1, 2012 to September 30, 2012(f)		$  9.45		0.08			0.10			0.18			(0.16	)		—			—			(0.16	)
Sterling Capital Intermediate U.S. Government Fund
Year Ended September 30, 2013		$10.84		0.08			(0.43	)		(0.35	)		(0.22	)		—			—			(0.22	)
Year Ended September 30, 2012		$10.77		0.11			0.17			0.28			(0.21	)		—			—			(0.21	)
Year Ended September 30, 2011		$10.79		0.16			0.05			0.21			(0.23	)		—			—			(0.23	)
Year Ended September 30, 2010		$10.53		0.21			0.29			0.50			(0.24	)		—			—			(0.24	)
Year Ended September 30, 2009		$10.01		0.24			0.55			0.79			(0.27	)		—			—			(0.27	)

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

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

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

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

(c) Annualized for periods less than one year.

(d) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 10.72%.

(e) Amount is less than $0.005.

(f) Period from commencement of operations.

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

(h) Net investment loss per share reflects a special dividend which amounted to $0.02 per share. Excluding the special dividend, the ratio of net investment loss to average net assets would have been (0.55)% per share.

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

See accompanying Notes to the Financial Statements.

138

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge) (b)			Net Assets, End of Period (000)			Ratio of net expenses to average net assets (c)			Ratio of net investment income (loss) to average net assets (c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
	$13.81		10.88	%(d)		$	199		1.84	%		0.21	%		1.94	%		164.27	%
	$12.49		29.51	%		$	167		1.83	%		0.22	%		1.95	%		68.75	%
	$  9.67		(5.72	)%		$	176		1.84	%		0.13	%		1.99	%		66.29	%
	$10.28		4.75	%		$	110		1.84	%		0.23	%		1.99	%		119.85	%
	$  9.85		(10.43	)%		$	93		1.81	%		0.49	%		1.95	%		92.97	%
	$17.72		31.37	%		$	1,309		1.92	%		0.04	%		1.92	%		34.03	%
	$13.51		25.67	%		$	538		1.94	%		0.03	%		1.95	%		21.62	%
	$10.78		(6.26	)%		$	398		1.93	%		(0.42	)%		1.97	%		38.30	%
	$11.50		11.26	%		$	436		1.95	%		(0.42	)%		2.06	%		45.02	%
	$10.34		2.08	%		$	176		1.96	%		(0.59	)%		2.01	%		46.83	%
	$14.88		27.77	%		$	216		2.03	%		(0.38	)%		2.03	%		176.62	%
	$11.79		20.33	%		$	108		2.08	%		(0.52	)%		2.11	%		32.86	%
	$10.69		(4.30	)%		$	81		2.09	%		(1.13	)%		2.19	%		63.02	%
	$11.17		5.93	%(g)		$	57		2.16	%		(0.11	)%		2.38	%		95.89	%
	$19.55		20.69	%		$	94,718		1.99	%		(0.46	)%(h)		1.99	%		53.76	%
	$17.12		22.75	%		$	82,536		2.04	%		(0.75	)%		2.04	%		19.38	%
	$14.23		(4.43	)%		$	71,564		2.03	%		(1.10	)%		2.03	%		31.51	%
	$14.98		7.85	%		$	73,282		2.04	%		(1.12	)%		2.05	%		25.65	%
	$13.89		0.97	%		$	58,479		2.03	%		(0.51	)%		2.04	%		45.22	%
	$18.01		15.17	%		$	280,841		1.95	%		0.93	%		1.95	%		30.56	%
	$15.92		21.54	%		$	194,345		1.94	%		0.86	%		1.94	%		21.30	%
	$13.17		2.13	%		$	104,208		1.93	%		1.05	%		1.93	%		16.64	%
	$12.98		15.62	%		$	69,549		1.94	%		1.69	%		1.95	%		21.63	%
	$11.37		(6.10	)%		$	39,164		1.93	%		2.18	%		1.95	%		37.13	%
	$  9.24		(0.03	)%		$	556		1.52	%		1.02	%		1.56	%		56.09	%
	$  9.47		1.90	%		$	216		1.57	%		1.22	%		1.57	%		85.13	%
	$10.27		(3.29	)%		$	1,080		1.68	%		0.74	%		1.68	%		66.16	%
	$10.84		2.64	%		$	1,097		1.72	%		1.06	%		1.75	%		71.68	%
	$10.77		1.99	%		$	658		1.71	%		1.54	%		1.83	%		83.62	%
	$10.79		4.80	%		$	536		1.71	%		2.00	%		1.84	%		83.92	%
	$10.53		8.00	%		$	426		1.70	%		2.31	%		1.82	%		47.13	%

139

Sterling Capital Funds

Financial Highlights, Class C Shares

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

			Investment Activities								Distributions
	Net Asset Value, Beginning of Period		Net investment income(a)		Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital Total Return Bond Fund
Year Ended September 30, 2013		$11.17		0.21		(0.46	)		(0.25	)		(0.30	)		(0.08	)		(0.38	)
Year Ended September 30, 2012		$11.07		0.21		0.46			0.67			(0.30	)		(0.27	)		(0.57	)
Year Ended September 30, 2011		$11.34		0.30		0.01			0.31			(0.37	)		(0.21	)		(0.58	)
Year Ended September 30, 2010		$10.79		0.34		0.63			0.97			(0.41	)		(0.01	)		(0.42	)
Year Ended September 30, 2009		$  9.89		0.37		0.90			1.27			(0.37	)		—			(0.37	)
Sterling Capital Corporate Fund
February 1, 2013 to September 30, 2013(d)		$10.53		0.18		(0.39	)		(0.21	)		(0.17	)		—			(0.17	)
Sterling Capital Securitized Opportunities Fund
February 1, 2013 to September 30, 2013(d)		$10.16		0.08		(0.23	)		(0.15	)		(0.17	)		—			(0.17	)
Sterling Capital Kentucky Intermediate Tax-Free Fund
Year Ended September 30, 2013		$11.16		0.16		(0.43	)		(0.27	)		(0.16	)		(0.06	)		(0.22	)
February 1, 2012 to September 30, 2012(d)		$11.08		0.11		0.09			0.20			(0.12	)		—			(0.12	)
Sterling Capital Maryland Intermediate Tax-Free Fund
Year Ended September 30, 2013		$11.56		0.11		(0.45	)		(0.34	)		(0.11	)		(0.15	)		(0.26	)
February 1, 2012 to September 30, 2012(d)		$11.47		0.09		0.09			0.18			(0.09	)		—			(0.09	)
Sterling Capital North Carolina Intermediate Tax-Free Fund
Year Ended September 30, 2013		$11.35		0.16		(0.53	)		(0.37	)		(0.16	)		(0.08	)		(0.24	)
February 1, 2012 to September 30, 2012(d)		$11.25		0.11		0.11			0.22			(0.12	)		—			(0.12	)
Sterling Capital South Carolina Intermediate Tax-Free Fund
Year Ended September 30, 2013		$11.36		0.13		(0.43	)		(0.30	)		(0.13	)		(0.08	)		(0.21	)
February 1, 2012 to September 30, 2012(d)		$11.25		0.10		0.11			0.21			(0.10	)		—			(0.10	)
Sterling Capital Virginia Intermediate Tax-Free Fund
Year Ended September 30, 2013		$12.44		0.15		(0.55	)		(0.40	)		(0.15	)		(0.10	)		(0.25	)
February 1, 2012 to September 30, 2012(d)		$12.37		0.11		0.07			0.18			(0.11	)		—			(0.11	)

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

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

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

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

(c) Annualized for periods less than one year.

(d) Period from commencement of operations.

See accompanying Notes to the Financial Statements.

140

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge) (b)			Net Assets, End of Period (000)			Ratio of net expenses to average net assets (c)			Ratio of net investment income to average net assets (c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
	$10.54		(2.24	)%		$	5,362		1.57	%		1.92	%		1.59	%		149.09	%
	$11.17		6.32	%		$	5,845		1.63	%		1.90	%		1.66	%		110.82	%
	$11.07		2.91	%		$	4,224		1.70	%		2.68	%		1.82	%		131.87	%
	$11.34		9.18	%		$	2,140		1.71	%		3.09	%		1.85	%		122.94	%
	$10.79		13.14	%		$	400		1.71	%		3.61	%		1.83	%		122.26	%
	$10.15		(2.02	)%		$	15		1.59	%		2.58	%		1.59	%		99.48	%
	$  9.84		(1.49	)%		$	3		1.64	%		1.17	%		1.64	%		193.21	%
	$10.67		(2.47	)%		$	67		1.71	%		1.48	%		1.71	%		22.05	%
	$11.16		1.82	%		$	209		1.71	%		1.45	%		1.71	%		16.52	%
	$10.96		(3.04	)%		$	1,206		1.70	%		0.95	%		1.70	%		70.60	%
	$11.56		1.57	%		$	1,321		1.71	%		1.12	%		1.71	%		34.94	%
	$10.74		(3.27	)%		$	4,776		1.67	%		1.48	%		1.67	%		22.38	%
	$11.35		1.93	%		$	3,251		1.67	%		1.49	%		1.67	%		19.76	%
	$10.85		(2.67	)%		$	899		1.69	%		1.14	%		1.69	%		35.38	%
	$11.36		1.86	%		$	507		1.69	%		1.29	%		1.69	%		26.49	%
	$11.79		(3.25	)%		$	2,687		1.68	%		1.22	%		1.68	%		40.00	%
	$12.44		1.48	%		$	2,884		1.68	%		1.36	%		1.68	%		21.63	%

141

Sterling Capital Funds

Financial Highlights, Class C Shares

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

			Investment Activities								Distributions
	Net Asset Value, Beginning of Period		Net investment income (loss)(a)		Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital West Virginia Intermediate Tax-Free Fund
Year Ended September 30, 2013		$10.51		0.14		(0.48	)		(0.34	)		(0.14	)		(0.12	)		(0.26	)
February 1, 2012 to September 30, 2012(d)		$10.38		0.11		0.14			0.25			(0.12	)		—			(0.12	)
Sterling Capital Strategic Allocation Conservative Fund(e)
Year Ended September 30, 2013		$  9.64		0.14		0.28			0.42			(0.16	)		—			(0.16	)
Year Ended September 30, 2012		$  8.71		0.12		0.94			1.06			(0.13	)		—			(0.13	)
Year Ended September 30, 2011		$  9.03		0.15		(0.26	)		(0.11	)		(0.21	)		—			(0.21	)
Year Ended September 30, 2010		$  8.47		0.20		0.57			0.77			(0.21	)		—			(0.21	)
Year Ended September 30, 2009		$  8.41		0.17		0.21			0.38			(0.18	)		(0.14	)		(0.32	)
Sterling Capital Strategic Allocation Balanced Fund(e)
Year Ended September 30, 2013		$  8.98		0.09		0.63			0.72			(0.10	)		—			(0.10	)
Year Ended September 30, 2012		$  7.82		0.08		1.16			1.24			(0.08	)		—			(0.08	)
Year Ended September 30, 2011		$  8.26		0.08		(0.40	)		(0.32	)		(0.12	)		—			(0.12	)
Year Ended September 30, 2010		$  7.68		0.12		0.59			0.71			(0.13	)		—			(0.13	)
Year Ended September 30, 2009		$  7.67		0.11		0.01			0.12			(0.11	)		—			(0.11	)
Sterling Capital Strategic Allocation Growth Fund(e)
Year Ended September 30, 2013		$  8.24		0.04		0.87			0.91			(0.06	)		—			(0.06	)
Year Ended September 30, 2012		$  7.01		0.04		1.24			1.28			(0.05	)		—			(0.05	)
Year Ended September 30, 2011		$  7.50		0.04		(0.46	)		(0.42	)		(0.07	)		—			(0.07	)
Year Ended September 30, 2010		$  6.94		0.08		0.56			0.64			(0.08	)		—			(0.08	)
Year Ended September 30, 2009		$  7.17		0.07		(0.22	)		(0.15	)		(0.08	)		—			(0.08	)

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

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

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

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

(c) Annualized for periods less than one year.

(d) Period from commencement of operations.

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

See accompanying Notes to the Financial Statements.

142

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge) (b)			Net Assets, End of Period (000)			Ratio of net expenses to average net assets (c)			Ratio of net investment income (loss) to average net assets (c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
	$  9.91		(3.28	)%		$	764		1.68	%		1.38	%		1.68	%		22.18	%
	$10.51		2.41	%		$	729		1.64	%		1.63	%		1.64	%		26.70	%
	$  9.90		4.40	%		$	241		1.28	%		1.42	%		1.44	%		60.51	%
	$  9.64		12.23	%		$	207		1.44	%		1.33	%		1.44	%		7.99	%
	$  8.71		(1.30	)%		$	152		1.39	%		1.57	%		1.47	%		8.36	%
	$  9.03		9.17	%		$	127		1.21	%		2.28	%		1.47	%		33.33	%
	$  8.47		5.09	%		$	101		1.17	%		2.19	%		1.43	%		21.56	%
	$  9.60		8.10	%		$	570		1.25	%		0.94	%		1.41	%		81.00	%
	$  8.98		15.88	%		$	420		1.41	%		0.91	%		1.41	%		17.65	%
	$  7.82		(3.97	)%		$	367		1.35	%		0.93	%		1.42	%		9.96	%
	$  8.26		9.34	%		$	186		1.16	%		1.49	%		1.42	%		47.76	%
	$  7.68		1.85	%		$	89		1.13	%		1.58	%		1.38	%		22.46	%
	$  9.09		11.07	%		$	452		1.27	%		0.50	%		1.43	%		96.94	%
	$  8.24		18.29	%		$	294		1.43	%		0.55	%		1.43	%		20.21	%
	$  7.01		(5.78	)%		$	226		1.36	%		0.50	%		1.43	%		9.06	%
	$  7.50		9.33	%		$	157		1.17	%		1.07	%		1.43	%		57.35	%
	$  6.94		(1.90	)%		$	99		1.14	%		1.13	%		1.39	%		24.08	%

143

Sterling Capital Funds

Financial Highlights, Institutional Shares

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

			Investment Activities									Distributions
	Net Asset Value, Beginning of Period		Net investment income (loss)(a)			Net realized/ unrealized gains (losses) on investments			Total from investment Activities			Net Investment income			Net realized gains on investments			Return of capital			Total Distributions
Sterling Capital Large Cap Value Diversified Fund
Year Ended September 30, 2013		$12.87		0.16			1.36			1.52			(0.16	)		—			—			(0.16	)
Year Ended September 30, 2012		$  9.95		0.14			2.92			3.06			(0.14	)		—			—			(0.14	)
Year Ended September 30, 2011		$10.57		0.14			(0.62	)		(0.48	)		(0.14	)		—			—			(0.14	)
Year Ended September 30, 2010		$10.13		0.13			0.45			0.58			(0.14	)		—			—			(0.14	)
Year Ended September 30, 2009		$11.36		0.13			(1.22	)		(1.09	)		(0.14	)		—			—			(0.14	)
Sterling Capital Mid Value Fund
Year Ended September 30, 2013		$14.37		0.17			4.50			4.67			(0.13	)		—			—			(0.13	)
Year Ended September 30, 2012		$11.43		0.14			2.94			3.08			(0.14	)		—			—			(0.14	)
Year Ended September 30, 2011		$12.14		0.08			(0.71	)		(0.63	)		(0.08	)		—			—			(0.08	)
Year Ended September 30, 2010		$10.86		0.07			1.27			1.34			(0.06	)		—			—			(0.06	)
Year Ended September 30, 2009		$10.56		0.04			0.29			0.33			(0.03	)		—			—			(0.03	)
Sterling Capital Small Cap Value Diversified Fund
Year Ended September 30, 2013		$12.08		0.08			3.39			3.47			(0.06	)		(0.15	)		—			(0.21	)
Year Ended September 30, 2012		$10.82		0.06			2.18			2.24			—			(0.98	)		—			(0.98	)
Year Ended September 30, 2011		$11.19		(0.02	)		(0.35	)		(0.37	)		—			—			—			—
Year Ended September 30, 2010		$10.27		0.06			0.92			0.98			(0.06	)		—			—			(0.06	)
Year Ended September 30, 2009		$  9.89		0.02			0.65			0.67			—			(0.29	)		—			(0.29	)
Sterling Capital Special Opportunities Fund
Year Ended September 30, 2013		$18.99		0.11	(f)		3.87			3.98			(0.06	)		(0.95	)		—			(1.01	)
Year Ended September 30, 2012		$15.60		0.04			3.66			3.70			—			(0.31	)		—			(0.31	)
Year Ended September 30, 2011		$16.25		(0.02	)		(0.53	)		(0.55	)		—			(0.10	)		—			(0.10	)
Year Ended September 30, 2010		$14.92		(0.02	)		1.35			1.33			—			—			—			—
Year Ended September 30, 2009		$15.58		0.04			(0.01	)		0.03			—	(g)		(0.58	)		(0.11	)		(0.69	)
Sterling Capital Equity Income Fund
Year Ended September 30, 2013		$16.06		0.33			2.25			2.58			(0.30	)		(0.16	)		—			(0.46	)
Year Ended September 30, 2012		$13.27		0.28			2.74			3.02			(0.23	)		—			—			(0.23	)
Year Ended September 30, 2011		$13.07		0.29			0.14	(h)		0.43			(0.23	)		—			—			(0.23	)
Year Ended September 30, 2010		$11.44		0.33			1.57			1.90			(0.27	)		—			—			(0.27	)
Year Ended September 30, 2009		$12.37		0.32			(0.99	)		(0.67	)		(0.23	)		(0.03	)		—			(0.26	)
Sterling Capital Ultra Short Bond Fund
November 30, 2012 to September 30, 2013(i)		$10.00		0.05			(0.01	)		0.04			(0.06	)		—			—			(0.06	)
Sterling Capital Short-Term Bond Fund
Year Ended September 30, 2013		$9.47		0.19			(0.10	)		0.09			(0.32	)		—			—			(0.32	)
Year Ended September 30, 2012		$9.36		0.22			0.24			0.46			(0.35	)		—			—			(0.35	)
Year Ended September 30, 2011		$9.68		0.20			(0.19	)		0.01			(0.33	)		—			—			(0.33	)
Year Ended September 30, 2010		$9.67		0.19			0.09			0.28			(0.27	)		—			—			(0.27	)
Year Ended September 30, 2009		$9.54		0.25			0.22			0.47			(0.34	)		—			—			(0.34	)

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

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

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

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

(c) Annualized for periods less than one year.

(d) Includes proceeds received from a settlement of litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 11.78%.

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

(f) Net investment income per share reflects a special dividend which amounted to $0.02 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 0.45% per share.

(g) Amount is less than $0.005.

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

(i) Period from commencement of operations.

See accompanying Notes to the Financial Statements.

144

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (b)			Net Assets, End of Period (000)			Ratio of net expenses to average net assets (c)			Ratio of net investment income (loss) to average net assets (c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
	$14.23		11.94	%(d)		$	194,921		0.84	%		1.23	%		0.94	%		164.27	%
	$12.87		30.89	%		$	189,252		0.83	%		1.22	%		0.95	%		68.75	%
	$  9.95		(4.74	)%		$	156,832		0.83	%		1.18	%		0.98	%		66.29	%
	$10.57		5.71	%		$	183,791		0.84	%		1.23	%		0.99	%		119.85	%
	$10.13		(9.40	)%		$	177,725		0.81	%		1.51	%		0.95	%		92.97	%
	$18.91		32.65	%		$	548,624		0.92	%		1.03	%		0.92	%		34.03	%
	$14.37		27.00	%		$	340,577		0.93	%		1.02	%		0.95	%		21.62	%
	$11.43		(5.29	)%		$	299,032		0.93	%		0.58	%		0.97	%		38.30	%
	$12.14		12.39	%		$	319,451		0.94	%		0.58	%		1.05	%		45.02	%
	$10.86		3.21	%		$	200,331		0.96	%		0.44	%		1.02	%		46.83	%
	$15.34		29.03	%		$	101,999		1.04	%		0.61	%		1.04	%		176.62	%
	$12.08		21.65	%		$	71,711		1.08	%		0.47	%		1.11	%		32.86	%
	$10.82		(3.31	)%		$	64,962		1.08	%		(0.14	)%		1.19	%		63.02	%
	$11.19		9.59	%(e)		$	60,073		1.20	%		0.56	%		1.42	%		95.89	%
	$10.27		8.68	%		$	25,790		1.42	%		0.23	%		1.79	%		89.00	%
	$21.96		21.90	%		$	452,155		0.99	%		0.53	%(f)		0.99	%		53.76	%
	$18.99		23.97	%		$	386,543		1.04	%		0.25	%		1.04	%		19.38	%
	$15.60		(3.46	)%		$	330,913		1.04	%		(0.09	)%		1.04	%		31.51	%
	$16.25		8.91	%		$	254,834		1.04	%		(0.13	)%		1.05	%		25.65	%
	$14.92		1.91	%		$	228,421		1.03	%		0.30	%		1.04	%		45.22	%
	$18.18		16.33	%		$	936,400		0.95	%		1.92	%		0.95	%		30.56	%
	$16.06		22.80	%		$	635,360		0.94	%		1.86	%		0.94	%		21.30	%
	$13.27		3.17	%		$	392,660		0.93	%		2.06	%		0.93	%		16.64	%
	$13.07		16.77	%		$	236,580		0.94	%		2.68	%		0.95	%		21.63	%
	$11.44		(5.18	)%		$	177,281		0.93	%		3.19	%		0.95	%		37.13	%
	$  9.98		0.35	%		$	40,625		0.48	%		0.65	%		0.48	%		55.18	%
	$  9.24		0.98	%		$	62,115		0.52	%		2.08	%		0.56	%		56.09	%
	$  9.47		4.94	%		$	47,235		0.56	%		2.30	%		0.58	%		85.13	%
	$  9.36		0.05	%		$	55,680		0.60	%		2.07	%		0.70	%		120.09	%
	$  9.68		2.90	%		$	60,089		0.70	%		1.93	%		0.86	%		55.50	%
	$  9.67		4.94	%		$	59,123		0.70	%		2.58	%		0.85	%		89.57	%

145

Sterling Capital Funds

Financial Highlights, Institutional Shares

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

			Investment Activities								Distributions
	Net Asset Value, Beginning of Period		Net investment income(a)		Net realized/ unrealized gains (losses) on investment			Total from Investment Activities			Net investments income			Net realized gains on investments			Total Distributions
Sterling Capital Intermediate U.S. Government Fund
Year Ended September 30, 2013		$10.87		0.19		(0.44	)		(0.25	)		(0.32	)		—			(0.32	)
Year Ended September 30, 2012		$10.80		0.23		0.16			0.39			(0.32	)		—			(0.32	)
Year Ended September 30, 2011		$10.82		0.27		0.05			0.32			(0.34	)		—			(0.34	)
Year Ended September 30, 2010		$10.57		0.32		0.28			0.60			(0.35	)		—			(0.35	)
Year Ended September 30, 2009		$10.05		0.35		0.55			0.90			(0.38	)		—			(0.38	)
Sterling Capital Total Return Bond Fund
Year Ended September 30, 2013		$11.16		0.32		(0.46	)		(0.14	)		(0.41	)		(0.08	)		(0.49	)
Year Ended September 30, 2012		$11.06		0.32		0.46			0.78			(0.41	)		(0.27	)		(0.68	)
Year Ended September 30, 2011		$11.33		0.41		0.01			0.42			(0.48	)		(0.21	)		(0.69	)
Year Ended September 30, 2010		$10.78		0.46		0.62			1.08			(0.52	)		(0.01	)		(0.53	)
Year Ended September 30, 2009		$  9.89		0.47		0.89			1.36			(0.47	)		—			(0.47	)
Sterling Capital Corporate Fund
Year Ended September 30, 2013		$10.70		0.37		(0.44	)		(0.07	)		(0.37	)		(0.11	)		(0.48	)
Year Ended September 30, 2012		$  9.94		0.36		0.77			1.13			(0.36	)		(0.01	)		(0.37	)
June 30, 2011 to September 30, 2011(d)		$10.00		0.08		(0.07	)		0.01			(0.07	)		—			(0.07	)
Sterling Capital Securitized Opportunities Fund
Year Ended September 30, 2013		$10.29		0.24		(0.34	)		(0.10	)		(0.34	)		—			(0.34	)
Year Ended September 30, 2012		$10.11		0.26		0.30			0.56			(0.37	)		(0.01	)		(0.38	)
June 30, 2011 to September 30, 2011(d)		$10.00		0.06		0.12			0.18			(0.07	)		—			(0.07	)
Sterling Capital Kentucky Intermediate Tax-Free Fund
Year Ended September 30, 2013		$11.15		0.27		(0.44	)		(0.17	)		(0.27	)		(0.06	)		(0.33	)
Year Ended September 30, 2012		$10.79		0.29		0.39			0.68			(0.29	)		(0.03	)		(0.32	)
Year Ended September 30, 2011		$10.81		0.32		0.03	(e)		0.35			(0.32	)		(0.05	)		(0.37	)
Year Ended September 30, 2010		$10.67		0.32		0.24			0.56			(0.32	)		(0.10	)		(0.42	)
Year Ended September 30, 2009		$  9.87		0.35		0.90			1.25			(0.35	)		(0.10	)		(0.45	)
Sterling Capital Maryland Intermediate Tax-Free Fund
Year Ended September 30, 2013		$11.58		0.22		(0.46	)		(0.24	)		(0.22	)		(0.15	)		(0.37	)
Year Ended September 30, 2012		$11.25		0.26		0.41			0.67			(0.26	)		(0.08	)		(0.34	)
Year Ended September 30, 2011		$11.22		0.31		0.06			0.37			(0.30	)		(0.04	)		(0.34	)
Year Ended September 30, 2010		$10.99		0.30		0.23			0.53			(0.30	)		—	(f)		(0.30	)
Year Ended September 30, 2009		$10.06		0.33		1.01			1.34			(0.33	)		(0.08	)		(0.41	)
Sterling Capital North Carolina Intermediate Tax-Free Fund
Year Ended September 30, 2013		$11.36		0.28		(0.54	)		(0.26	)		(0.28	)		(0.08	)		(0.36	)
Year Ended September 30, 2012		$11.02		0.30		0.40			0.70			(0.29	)		(0.07	)		(0.36	)
Year Ended September 30, 2011		$11.01		0.31		0.07			0.38			(0.31	)		(0.06	)		(0.37	)
Year Ended September 30, 2010		$10.87		0.33		0.20			0.53			(0.33	)		(0.06	)		(0.39	)
Year Ended September 30, 2009		$10.09		0.36		0.88			1.24			(0.36	)		(0.10	)		(0.46	)

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

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

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

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

(c) Annualized for periods less than one year.

(d) Period from commencement of operations.

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

(f) Amount is less than $0.005.

See accompanying Notes to the Financial Statements.

146

						Ratios/Supplementary Data
Net Asset Value, End of Period			Total Return (b)			Net Assets, End of Period (000)			Ratio of net expenses to average net assets (c)			Ratio of net investment income to average net assets (c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
	$	10.30		(2.30	)%		$	46,686		0.68	%		1.76	%		0.68	%		66.16	%
	$	10.87		3.67	%		$	77,460		0.72	%		2.12	%		0.77	%		71.68	%
	$	10.80		3.02	%		$	155,814		0.71	%		2.55	%		0.83	%		83.62	%
	$	10.82		5.74	%		$	176,096		0.71	%		3.00	%		0.84	%		83.92	%
	$	10.57		9.06	%		$	177,141		0.70	%		3.35	%		0.82	%		47.13	%
	$	10.53		(1.26	)%		$	436,641		0.57	%		2.93	%		0.59	%		149.09	%
	$	11.16		7.39	%		$	514,368		0.62	%		2.90	%		0.66	%		110.82	%
	$	11.06		3.94	%		$	383,070		0.70	%		3.73	%		0.82	%		131.87	%
	$	11.33		10.27	%		$	383,868		0.71	%		4.19	%		0.84	%		122.94	%
	$	10.78		14.16	%		$	339,730		0.71	%		4.61	%		0.83	%		122.26	%
	$	10.15		(0.65	)%		$	85,609		0.51	%		3.54	%		0.59	%		99.48	%
	$	10.70		11.54	%		$	92,946		0.34	%		3.52	%		0.59	%		73.74	%
	$	9.94		0.12	%		$	46,328		0.30	%		3.27	%		0.58	%		6.86	%
	$	9.85		(0.97	)%		$	58,503		0.51	%		2.33	%		0.62	%		193.21	%
	$	10.29		5.61	%		$	88,523		0.34	%		2.54	%		0.59	%		113.69	%
	$	10.11		1.84	%		$	33,905		0.34	%		2.50	%		0.64	%		26.17	%
	$	10.65		(1.59	)%		$	11,859		0.71	%		2.47	%		0.71	%		22.05	%
	$	11.15		6.39	%		$	14,546		0.70	%		2.68	%		0.72	%		16.52	%
	$	10.79		3.34	%		$	13,757		0.68	%		3.01	%		0.79	%		15.73	%
	$	10.81		5.42	%		$	15,284		0.69	%		3.01	%		0.90	%		20.68	%
	$	10.67		13.00	%		$	12,814		0.67	%		3.44	%		0.87	%		33.56	%
	$	10.97		(2.14	)%		$	34,574		0.70	%		1.94	%		0.70	%		70.60	%
	$	11.58		6.05	%		$	33,974		0.70	%		2.31	%		0.72	%		34.94	%
	$	11.25		3.44	%		$	25,174		0.67	%		2.77	%		0.78	%		21.89	%
	$	11.22		4.97	%		$	26,322		0.68	%		2.77	%		0.89	%		12.26	%
	$	10.99		13.70	%		$	20,704		0.65	%		3.10	%		0.87	%		37.11	%
	$	10.74		(2.38	)%		$	159,039		0.67	%		2.49	%		0.67	%		22.38	%
	$	11.36		6.51	%		$	190,055		0.67	%		2.64	%		0.67	%		19.76	%
	$	11.02		3.60	%		$	161,486		0.67	%		2.92	%		0.72	%		15.15	%
	$	11.01		5.05	%		$	147,848		0.68	%		3.05	%		0.84	%		19.19	%
	$	10.87		12.63	%		$	130,113		0.67	%		3.42	%		0.82	%		38.42	%

147

Sterling Capital Funds

Financial Highlights, Institutional Shares

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

				Investment Activities								Distributions
	Net Asset Value, Beginning of Year			Net investment income(a)		Net realized/ unrealized gains (losses) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital South Carolina Intermediate Tax-Free Fund
Year Ended September 30, 2013		$	11.28		0.24		(0.42	)		(0.18	)		(0.24	)		(0.08	)		(0.32	)
Year Ended September 30, 2012		$	10.90		0.27		0.45			0.72			(0.27	)		(0.07	)		(0.34	)
Year Ended September 30, 2011		$	10.86		0.29		0.06			0.35			(0.28	)		(0.03	)		(0.31	)
Year Ended September 30, 2010		$	10.61		0.32		0.25			0.57			(0.32	)		—			(0.32	)
Year Ended September 30, 2009		$	9.89		0.35		0.89			1.24			(0.35	)		(0.17	)		(0.52	)
Sterling Capital Virginia Intermediate Tax-Free Fund
Year Ended September 30, 2013		$	12.44		0.27		(0.55	)		(0.28	)		(0.27	)		(0.10	)		(0.37	)
Year Ended September 30, 2012		$	12.12		0.31		0.39			0.70			(0.31	)		(0.07	)		(0.38	)
Year Ended September 30, 2011		$	12.14		0.34		0.02			0.36			(0.34	)		(0.04	)		(0.38	)
Year Ended September 30, 2010		$	12.07		0.36		0.18			0.54			(0.36	)		(0.11	)		(0.47	)
Year Ended September 30, 2009		$	11.10		0.39		1.06			1.45			(0.39	)		(0.09	)		(0.48	)
Sterling Capital West Virginia Intermediate Tax-Free Fund
Year Ended September 30, 2013		$	10.52		0.24		(0.48	)		(0.24	)		(0.24	)		(0.12	)		(0.36	)
Year Ended September 30, 2012		$	10.17		0.29		0.39			0.68			(0.29	)		(0.04	)		(0.33	)
Year Ended September 30, 2011		$	10.18		0.34		—			0.34			(0.34	)		(0.01	)		(0.35	)
Year Ended September 30, 2010		$	10.05		0.36		0.15			0.51			(0.36	)		(0.02	)		(0.38	)
Year Ended September 30, 2009		$	9.37		0.36		0.68			1.04			(0.35	)		(0.01	)		(0.36	)
Sterling Capital Strategic Allocation Conservative Fund(b)
Year Ended September 30, 2013		$	9.79		0.24		0.28			0.52			(0.26	)		—			(0.26	)
Year Ended September 30, 2012		$	8.83		0.22		0.96			1.18			(0.22	)		—			(0.22	)
Year Ended September 30, 2011		$	9.15		0.25		(0.27	)		(0.02	)		(0.30	)		—			(0.30	)
Year Ended September 30, 2010		$	8.58		0.29		0.57			0.86			(0.29	)		—			(0.29	)
Year Ended September 30, 2009		$	8.50		0.30		0.17			0.47			(0.25	)		(0.14	)		(0.39	)
Sterling Capital Strategic Allocation Balanced Fund(b)
Year Ended September 30, 2013		$	9.18		0.18		0.66			0.84			(0.19	)		—			(0.19	)
Year Ended September 30, 2012		$	8.00		0.17		1.18			1.35			(0.17	)		—			(0.17	)
Year Ended September 30, 2011		$	8.44		0.19		(0.43	)		(0.24	)		(0.20	)		—			(0.20	)
Year Ended September 30, 2010		$	7.83		0.20		0.61			0.81			(0.20	)		—			(0.20	)
Year Ended September 30, 2009		$	7.81		0.24		(0.04	)		0.20			(0.18	)		—			(0.18	)
Sterling Capital Strategic Allocation Growth Fund(b)
Year Ended September 30, 2013		$	8.48		0.13		0.90			1.03			(0.14	)		—			(0.14	)
Year Ended September 30, 2012		$	7.21		0.12		1.27			1.39			(0.12	)		—			(0.12	)
Year Ended September 30, 2011		$	7.70		0.13		(0.49	)		(0.36	)		(0.13	)		—			(0.13	)
Year Ended September 30, 2010		$	7.12		0.15		0.58			0.73			(0.15	)		—			(0.15	)
Year Ended September 30, 2009		$	7.34		0.22		(0.31	)		(0.09	)		(0.13	)		—			(0.13	)

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

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

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

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

See accompanying Notes to the Financial Statements.

148

						Ratios/Supplementary Data
Net Asset Value, End of Year			Total Return			Net Assets, End of Year (000)			Ratio of net expenses to average net assets			Ratio of net investment income to average net assets			Ratio of expenses to average net assets*			Portfolio turnover rate**
	$	10.78		(1.62	)%		$	49,340		0.69	%		2.17	%		0.69	%		35.38	%
	$	11.28		6.68	%		$	52,526		0.70	%		2.41	%		0.70	%		26.49	%
	$	10.90		3.37	%		$	39,863		0.71	%		2.68	%		0.76	%		25.83	%
	$	10.86		5.53	%		$	30,183		0.73	%		3.05	%		0.89	%		14.60	%
	$	10.61		13.01	%		$	17,274		0.73	%		3.45	%		0.88	%		42.06	%
	$	11.79		(2.28	)%		$	81,703		0.68	%		2.23	%		0.68	%		40.00	%
	$	12.44		5.87	%		$	91,770		0.68	%		2.50	%		0.68	%		21.63	%
	$	12.12		3.11	%		$	78,535		0.68	%		2.90	%		0.73	%		15.33	%
	$	12.14		4.65	%		$	77,222		0.69	%		3.05	%		0.85	%		9.54	%
	$	12.07		13.39	%		$	71,599		0.67	%		3.36	%		0.82	%		35.90	%
	$	9.92		(2.30	)%		$	68,936		0.68	%		2.38	%		0.68	%		22.18	%
	$	10.52		6.85	%		$	85,125		0.68	%		2.85	%		0.68	%		26.70	%
	$	10.17		3.48	%		$	72,451		0.69	%		3.44	%		0.69	%		23.34	%
	$	10.18		5.13	%		$	70,760		0.69	%		3.58	%		0.70	%		6.60	%
	$	10.05		11.41	%		$	63,599		0.68	%		3.71	%		0.68	%		24.19	%
	$	10.05		5.35	%		$	3,153		0.29	%		2.42	%		0.44	%		60.51	%
	$	9.79		13.47	%		$	3,346		0.44	%		2.33	%		0.44	%		7.99	%
	$	8.83		(0.31	)%		$	3,954		0.37	%		2.61	%		0.47	%		8.36	%
	$	9.15		10.22	%		$	4,798		0.21	%		3.26	%		0.47	%		33.33	%
	$	8.58		6.28	%		$	5,316		0.14	%		3.84	%		0.39	%		21.56	%
	$	9.83		9.28	%		$	321		0.26	%		1.85	%		0.39	%		81.00	%
	$	9.18		16.94	%		$	474		0.42	%		1.98	%		0.42	%		17.65	%
	$	8.00		(3.02	)%		$	475		0.29	%		2.13	%		0.41	%		9.96	%
	$	8.44		10.53	%		$	1,169		0.16	%		2.52	%		0.41	%		47.76	%
	$	7.83		2.91	%		$	1,322		0.13	%		3.61	%		0.38	%		22.46	%
	$	9.37		12.27	%		$	1,007		0.28	%		1.46	%		0.42	%		96.94	%
	$	8.48		19.40	%		$	936		0.43	%		1.54	%		0.43	%		20.21	%
	$	7.21		(4.86	)%		$	1,127		0.32	%		1.62	%		0.43	%		9.06	%
	$	7.70		10.39	%		$	1,684		0.17	%		2.05	%		0.43	%		57.35	%
	$	7.12		(0.87	)%		$	1,650		0.14	%		3.54	%		0.38	%		24.08	%

149

Sterling Capital Funds

Financial Highlights, Class R Shares

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

			Investment Activities									Distributions
	Net Asset Value, Beginning of Period		Net investment income (loss)(a)			Net realized/ unrealized gains (loss) on investments			Total from Investment Activities			Net investment income			Net realized gains on investments			Total Distributions
Sterling Capital Mid Value Fund
Year Ended September 30, 2013		$14.20		(0.18	)		4.51			4.33			(0.06	)		—			(0.06	)
Year Ended September 30, 2012		$11.36		0.08			2.90			2.98			(0.14	)		—			(0.14	)
Year Ended September 30, 2011		$12.12		0.05			(0.73	)		(0.68	)		(0.08	)		—			(0.08	)
February 1, 2010 to September 30, 2010(e)		$11.11		0.03			1.01			1.04			(0.03	)		—			(0.03	)
Sterling Capital Small Cap Value Diversified Fund
Year Ended September 30, 2013		$12.03		0.03			3.36			3.39			(0.06	)		(0.15	)		(0.21	)
Year Ended September 30, 2012		$10.79		0.05			2.17			2.22			—			(0.98	)		(0.98	)
Year Ended September 30, 2011		$11.18		(0.02	)		(0.37	)		(0.39	)		—			—			—
February 1, 2010 to September 30, 2010(e)		$10.55		0.06			0.62			0.68			(0.05	)		—			(0.05	)
Sterling Capital Special Opportunities Fund
Year Ended September 30, 2013		$18.83		0.01	(g)		3.83			3.84			—			(0.95	)		(0.95	)
Year Ended September 30, 2012		$15.54		(0.04	)		3.64			3.60			—			(0.31	)		(0.31	)
Year Ended September 30, 2011		$16.26		(0.11	)		(0.51	)		(0.62	)		—			(0.10	)		(0.10	)
February 1, 2010 to September 30, 2010(e)		$15.32		(0.03	)		0.97			0.94			—			—			—
Sterling Capital Equity Income Fund
Year Ended September 30, 2013		$15.95		0.24			2.22			2.46			(0.21	)		(0.16	)		(0.37	)
Year Ended September 30, 2012		$13.19		0.20			2.72			2.92			(0.16	)		—			(0.16	)
Year Ended September 30, 2011		$13.03		0.24			0.13			0.37			(0.21	)		—			(0.21	)
February 1, 2010 to September 30, 2010(e)		$11.94		0.23			1.04			1.27			(0.18	)		—			(0.18	)
Sterling Capital Total Return Bond Fund
Year Ended September 30, 2013		$11.11		0.25			(0.45	)		(0.20	)		(0.35	)		(0.08	)		(0.43	)
Year Ended September 30, 2012		$11.02		0.26			0.46			0.72			(0.36	)		(0.27	)		(0.63	)
Year Ended September 30, 2011		$11.32		0.37			(0.03	)		0.34			(0.43	)		(0.21	)		(0.64	)
February 1, 2010 to September 30, 2010(e)		$10.87		0.25			0.50			0.75			(0.30	)		—			(0.30	)

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

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

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

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

(c) Annualized for periods less than one year.

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

(e) Period from commencement of operations.

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

(g) Net investment income per share reflects a special dividend which amounted to $0.02 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been (0.05)% per share.

See accompanying Notes to the Financial Statements.

150

					Ratios/Supplementary Data
Net Asset Value, End of Period		Total Return (excludes sales charge)(b)			Net Assets, End of Period (000)				Ratio of net expenses to average net assets(c)			Ratio of net investment income loss to average net assets(c)			Ratio of expenses to average net assets*(c)			Portfolio turnover rate**(b)
	$18.47		30.65	%		$	—	(d)		1.42	%		(1.04	)%		1.42	%		34.03	%
	$14.20		26.17	%		$	—	(d)		1.44	%		0.59	%		1.44	%		21.62	%
	$11.36		(5.71	)%		$	—	(d)		1.44	%		0.36	%		1.56	%		38.30	%
	$12.12		9.47	%		$	—	(d)		1.44	%		0.42	%		1.68	%		45.02	%
	$15.21		28.48	%		$	—	(d)		1.55	%		0.24	%		1.55	%		176.62	%
	$12.03		21.49	%		$	—	(d)		1.57	%		0.44	%		1.59	%		32.86	%
	$10.79		(3.49	)%		$	—	(d)		1.57	%		(0.12	)%		1.58	%		63.02	%
	$11.18		6.46	%(f)		$	—	(d)		1.65	%		0.82	%		3.44	%		95.89	%
	$21.72		21.28	%		$	450			1.49	%		0.04	%(g)		1.49	%		53.76	%
	$18.83		23.41	%		$	357			1.54	%		(0.25	)%		1.54	%		19.38	%
	$15.54		(3.95	)%		$	289			1.54	%		(0.62	)%		1.54	%		31.51	%
	$16.26		6.20	%		$	—	(d)		1.54	%		(0.29	)%		1.57	%		25.65	%
	$18.04		15.69	%		$	2,781			1.45	%		1.40	%		1.45	%		30.56	%
	$15.95		22.19	%		$	1,454			1.44	%		1.35	%		1.44	%		21.30	%
	$13.19		2.74	%		$	604			1.43	%		1.72	%		1.43	%		16.64	%
	$13.03		10.76	%		$	—	(d)		1.45	%		2.86	%		1.49	%		21.63	%
	$10.48		(1.83	)%		$	5			1.07	%		2.34	%		1.08	%		149.09	%
	$11.11		6.79	%		$	6			1.12	%		2.41	%		1.16	%		110.82	%
	$11.02		3.24	%		$	6			1.20	%		3.32	%		1.33	%		131.87	%
	$11.32		7.03	%		$	42			1.21	%		3.45	%		1.37	%		122.94	%

151

Sterling Capital Funds

Notes to Financial Statements

September 30, 2013

  1. Organization:

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

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

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

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

The Funds are authorized to issue an unlimited amount of shares. As of September 30, 2013, the Funds discussed herein offered up to five classes of shares: Class A Shares, Class B Shares, Class C Shares, Class R Shares and Institutional Shares. Class B Shares of the Funds are closed to new accounts and additional purchases by existing shareholders. Sterling Capital Corporate Fund and Sterling Capital Securitized Opportunities Fund converted Class S Shares into Institutional Shares effective February 1, 2013. Sterling Capital Mid Value Fund, Sterling Capital Small Cap Value Diversified Fund, Sterling Capital Special Opportunities Fund, Sterling Capital Equity Income Fund and Sterling Capital Total Return Bond Fund offer Class R Shares. Class B Shares automatically convert to Class A Shares after eight years. Class A Shares of the Variable Net Asset Value Funds and Funds of Funds, excluding Sterling Capital Ultra Short Bond Fund, Sterling Capital Short-Term Bond Fund, Sterling Capital Intermediate U.S. Government Fund, Sterling Capital Corporate Fund, Sterling Capital Securitized Opportunities Fund, and the Tax-Free Funds, have a maximum sales charge of 5.75% as a percentage of original purchase price. Class A Shares of Sterling Capital Ultra Short Bond Fund has a maximum sales charge of 0.50%, Class A Shares of Sterling Capital Short-Term Bond Fund, Sterling Capital Intermediate U.S. Government Fund, Sterling Capital Corporate Fund, Sterling Capital Securitized Opportunities Fund, and the Tax-Free Funds have a maximum sales charge of 2.00%, as a percentage of the original purchase price. Prior to February 1, 2013 for Sterling Capital Short-Term Bond Fund, Sterling Capital Intermediate U.S. Government Fund, and the Tax-Free Funds, the maximum sales charge on Class A Shares were 2.50%. Purchases of $1 million or more of Class A Shares are not subject to a front-end sales charge but will be subject to a Contingent Deferred Sales Charge (“CDSC”) of 1.00% of the purchase price if redeemed within two years after purchase for all Funds except Tax-Free Funds, Intermediate U.S. Government Fund and Short-Term Bond Fund. With respect to Tax-Free Funds, Intermediate U.S. Government Fund and Short-Term Bond Fund, sales over $500,000 are not subject to a sales load but will be subject to a CDSC of 0.50% of the purchase price if redeemed within 18 months of purchase. This charge is based on the lower of the price paid for the shares or their net asset value at the time of redemption. In addition, a CDSC of up to 1.00% of the purchase price of Class A Shares will be charged to the following shareholders who received a sales charge waiver and then redeem their shares within two years after purchase: employees of the Trust, Sterling Capital Management LLC (“Sterling Capital” or the “Advisor”) and its

152

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

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

Each class of shares has identical rights and privileges except with respect to the fees paid under the distribution plan, voting rights on matters affecting a single class of shares and the exchange privilege of each class of shares.

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

  2. Significant Accounting Policies:

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

Recent Accounting Standards — In June 2013, the Financial Accounting Standards Board issued Accounting Standard Update No. 2013-08 (“ASU No. 2013-08”) that creates a two-tiered approach to assess whether an entity is an investment company. ASU No. 2013-08 will also require an investment company to measure noncontrolling ownership interests in other investment companies at fair value and will require additional disclosures relating to investment company status, any changes thereto and information about financial support provided or contractually required to be provided to any of the investment company’s investees. ASU No. 2013-08 is effective for financial statements with fiscal years beginning after December 15, 2013 and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statement disclosures.

Securities Valuation — Investments in securities held by the Variable Net Asset Value Funds, the principal market for which is a securities exchange or an over-the-counter market, are valued at their latest available sale price (except for those securities that are traded on NASDAQ, which will be valued at the NASDAQ official closing price) or in the absence of such a price, by reference to the latest available bid price in the principal market in which such securities are normally traded. The Variable Net Asset Value Funds may also use an independent pricing service approved by the Board of Trustees (the “Board”) to value certain securities, including the use of electronic and matrix techniques. Short-term obligations without significant credit risk that mature in 60 days or less are valued at either amortized cost or original cost plus interest, which approximates fair value. Investments in open-end investment companies, including underlying funds invested in by the Funds of Funds, are valued at their respective net asset values as reported by such companies. Investments in closed-end investment companies and exchange traded funds are valued at their market values based upon the latest available sale price or, absent such a price, by reference to the latest available bid prices in the principal market in which such securities are normally traded. The differences between cost and fair value of investments are reflected as either unrealized appreciation or depreciation. Securities for which market quotations are not readily available or deemed unreliable (e.g., an approved pricing service does not provide a price, a furnished price is in error, certain stale prices, or an event occurs that materially affects the furnished price) will be fair valued in accordance with procedures established in good faith under the general supervision of the Board. At September 30, 2013, Sterling Capital Special Opportunities Fund has a written option valued by Pricing Committee recorded at fair value of $3,000 and represents 0.000% of net assets.

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

153

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

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

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

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

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. During the fiscal year ended September 30, 2013, there were no significant changes to the valuation policies and procedures.

The summary of inputs used to determine the fair value of each Fund’s investments as of September 30, 2013 is as follows:

	Level 1– Quoted Prices		Level 2– Other Significant Observable Inputs		Level 3– Significant Unobservable Inputs		Total
Assets:
Investments in Securities
Sterling Capital Large Cap Value Diversified Fund	$	224,594,940(a)	$	—		$—	$	224,594,940
Sterling Capital Mid Value Fund		590,024,143(a)		—		—		590,024,143
Sterling Capital Small Cap Value Diversified Fund		112,028,312(a)		—		—		112,028,312
Sterling Capital Special Opportunities Fund		827,451,705(a)		—		—		827,451,705
Sterling Capital Equity Income Fund		1,936,814,424(a)		—		—		1,936,814,424
Sterling Capital Ultra Short Bond Fund		716,735(b)		55,336,393(a)		—		56,053,128
Sterling Capital Short-Term Bond Fund		1,645,978(b)		74,844,033(a)		—		76,490,011
Sterling Capital Intermediate U.S. Government Fund		557,710(b)		57,753,659(a)		—		58,311,369
Sterling Capital Total Return Bond Fund		9,344,471(b)		490,473,780(a)		—		499,818,251
Sterling Capital Corporate Fund		3,909,046(b)		81,300,220(a)		—		85,209,266
Sterling Capital Securitized Opportunities Fund		1,989,852(b)		63,750,041(a)		—		65,739,893
Sterling Capital Kentucky Intermediate Tax-Free Fund		549,575(b)		17,071,379(a)		—		17,620,954
Sterling Capital Maryland Intermediate Tax-Free Fund		1,916,989(b)		41,644,534(a)		—		43,561,523
Sterling Capital North Carolina Intermediate Tax-Free Fund		798,336(b)		212,241,817(a)		—		213,040,153
Sterling Capital South Carolina Intermediate Tax-Free Fund		1,126,531(b)		70,039,566(a)		—		71,166,097
Sterling Capital Virginia Intermediate Tax-Free Fund		3,437,170(b)		129,187,066(a)		—		132,624,236
Sterling Capital West Virginia Intermediate Tax-Free Fund		3,577,683(b)		101,874,150(a)		—		105,451,833
Sterling Capital Strategic Allocation Conservative Fund		18,774,528(a)		—		—		18,774,528
Sterling Capital Strategic Allocation Balanced Fund		34,831,657(a)		—		—		34,831,657
Sterling Capital Strategic Allocation Growth Fund		26,285,803(a)		—		—		26,285,803
Liabilities:
Other Financial Instruments-
Written Options (Equity Risk)
Sterling Capital Special Opportunities Fund (c)	$	1,163,900	$	3,000		$—	$	1,166,900

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

(b)   Represents money market funds and/or certain preferred stocks.

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

The Funds’ policy is to recognize transfers in and transfers out as of the beginning of the reporting period. There were no transfers between Level 1 and Level 2 during the fiscal year ended September 30, 2013.

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

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

154

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

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

Sterling Capital Special Opportunities and Sterling Capital Equity Income Funds invested in written options to economically hedge the downside exposure by collecting a premium when sold against the equity holding. Details of written option activity for the fiscal year ended September 30, 2013 are as follows:

	Sterling Capital
	Special							Sterling Capital
	Opportunities							Equity
	Fund							Income Fund
	Number of			Premiums				Number of			Premiums
Covered Call Options	Contracts			Received				Contracts			Received
Balance at beginning of year.		9,228			$	1,059,728			8,813			$	640,609
Options written		16,404				2,026,574			7,256				726,549
Options closed		(7,319	)			(997,824	)		(8,328	)			(495,142	)
Options expired		(7,078	)			(735,359	)		(1,900	)			(154,638	)
Options exercised		(7,500	)			(633,304	)		(5,841	)			(717,378	)
Options split		475				—			—				—
Balance at end of year		4,210			$	719,815			—			$	—

The following is a summary of written call options outstanding as of September 30, 2013:

	Number of Contracts		Value
Sterling Capital Special Opportunities Fund
Apple, Inc., $550.00, 4/19/14		60		$	(95,400	)
Broadcom Corp., Class A, $42.00, 11/16/13(a)		1,000			(3,000	)
EOG Resources, Inc., $165.00, 10/19/13		700			(437,500	)
EOG Resources, Inc., $175.00, 1/18/14		450			(342,000	)
Robert Half International, Inc., $40.00, 12/21/13		1,000			(135,000	)
UnitedHealth Group, Inc., $75.00, 12/21/13		1,000			(154,000	)
		4,210		$	(1,166,900	)

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

Derivative Instruments Categorized by Risk Exposure — Sterling Capital Special Opportunities Fund’s derivative contracts held at September 30, 2013, are not accounted for as hedging instruments under U.S. GAAP. The following is a summary of the location of the derivative instruments held by the Funds on the Statements of Assets and Liabilities and the category of primary risk exposure as of September 30, 2013:

FairValues of Derivative Instruments	Statements of Assets and Liabilities Location	Sterling Capital Special Opportunities Fund
Liabilities
Equity contracts	Call options written	$1,166,900

155

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

The effect of derivative financial instruments on the Statements of Operations for the fiscal year ended September 30, 2013:

Net Realized Gain	Sterling Capital Special Opportunities Fund			Sterling Capital Equity Income Fund
Written options (equity contracts)		$	121,014		$	498,868
Net Change in Unrealized Appreciation (Depreciation)	Sterling Capital Special Opportunities Fund			Sterling Capital Equity Income Fund
Written options (equity contracts)		$	139,446		$	766,221

For the fiscal year ended September 30, 2013, the average quarterly balance of derivative financial instruments were as follows:

	Sterling Capital Special Opportunities Fund			Sterling Capital Equity Income Fund
Written Options (Equity Risk)
Average number of written option contracts			4,570			2,082
Average premium		$	531,036		$	124,154

Securities Transactions and Related Income — During the period, security transactions are accounted for no later than one business day following the trade date. For financial reporting purposes, however, security transactions as of the last business day of the reporting period are accounted for on the trade date. Interest income is recognized on the accrual basis and includes, where applicable, the amortization/accretion of premium or discount. Dividend income is recorded on the ex-dividend date. Gains or losses realized from sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.

When-Issued and Forward Commitments — The Funds may purchase securities on a “when-issued” basis. Sterling Capital Large Cap Value Diversified Fund, Sterling Capital Mid Value Fund, Sterling Capital Small Cap Value Diversified Fund, Sterling Capital Special Opportunities Fund, and Sterling Capital Equity Income Fund may also purchase or sell securities on a forward commitment basis. The Funds record when-issued securities on the trade date and pledge assets with a value at least equal to the purchase commitment for payment of the securities purchased. The value of the securities underlying when-issued or forward commitments to purchase securities, and any subsequent fluctuation in their value, is taken into account when determining the net asset value of the Funds commencing with the date the Funds agree to purchase the securities. The Funds do not accrue interest or dividends on “when-issued” securities until the underlying securities are received.

Mortgage Dollar Rolls — The Variable Net Asset Value Funds may sell mortgage-backed securities for delivery in the current month and simultaneously contract to repurchase substantially similar (same type, coupon and maturity) securities on a specific future date at an agreed-upon price. The market value of the securities that the Fund is required to purchase may decline below the agreed upon repurchase price of those securities. Pools of mortgages collateralizing those securities may have different prepayment histories than those sold. During the period between the sale and repurchase, the Fund will not be entitled to receive interest and principal payments on the securities sold. Proceeds of the sale will be invested in additional instruments for the Fund, and the income from these investments will generate income for the Fund. If such income does not exceed the income, capital appreciation and gain or loss that would have been realized on the securities sold as part of the dollar roll, the use of this technique will diminish the investment performance of the Fund compared with what the performance would have been without the use of dollar rolls. The Funds account for mortgage dollar roll transactions as purchases and sales.

156

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

Expenses and Allocation Methodology — Expenses directly attributable to a Fund are charged to that Fund. Expenses not directly attributable to a Fund are allocated proportionately among all Funds daily in relation to the net assets of each

Fund or on another reasonable basis. Each class of shares bears its pro-rata portion of expenses attributable to its series, except that each class separately bears expenses related specifically to that class, such as distribution fees. Expenses that are attributable to both the Trust and the Sterling Capital Variable Insurance Funds are allocated across the Funds and Sterling Capital Variable Insurance Funds, based upon relative net assets or on another reasonable basis. Income and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets or another appropriate basis.

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

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

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

  3. Purchases and Sales of Securities:

Purchases and sales of securities (excluding U.S. Government securities and securities maturing less than one year from acquisition) for the fiscal year ended September 30, 2013 were as follows:

	Purchases		Sales
Sterling Capital Large Cap Value Diversified Fund	$	354,569,492	$	370,844,393
Sterling Capital Mid Value Fund		226,129,280		140,489,089
Sterling Capital Small Cap Value Diversified Fund		169,243,386		158,775,820
Sterling Capital Special Opportunities Fund		369,232,125		357,369,440
Sterling Capital Equity Income Fund		815,896,425		405,638,867
Sterling Capital Ultra Short Bond Fund		82,093,641		24,013,922
Sterling Capital Short-Term Bond Fund		63,067,837		36,569,987
Sterling Capital Intermediate U.S. Government Fund		4,756,962		16,470,914
Sterling Capital Total Return Bond Fund		639,228,014		651,926,014
Sterling Capital Corporate Fund		93,908,907		95,071,004
Sterling Capital Securitized Opportunities Fund		135,366,198		151,386,686
Sterling Capital Kentucky Intermediate Tax-Free Fund		5,220,411		12,330,734
Sterling Capital Maryland Intermediate Tax-Free Fund		32,058,025		31,448,358
Sterling Capital North Carolina Intermediate Tax-Free Fund		54,203,621		78,711,279
Sterling Capital South Carolina Intermediate Tax-Free Fund		29,714,304		26,617,603
Sterling Capital Virginia Intermediate Tax-Free Fund		56,198,742		61,953,890
Sterling Capital West Virginia Intermediate Tax-Free Fund		25,726,860		41,049,336
Sterling Capital Strategic Allocation Conservative Fund		11,264,748		12,186,898
Sterling Capital Strategic Allocation Balanced Fund		27,148,316		28,911,943
Sterling Capital Strategic Allocation Growth Fund		23,757,206		24,220,141

157

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

Purchases and sales of U.S. Government Securities (excluding securities maturing less than one year from acquisition) for the fiscal year ended September 30, 2013 were as follows:

	Purchases			Sales
Sterling Capital Short-Term Bond Fund		$	405,840		$	405,823
Sterling Capital Intermediate U.S. Government Fund			44,673,305			57,177,429
Sterling Capital Total Return Bond Fund			196,680,359			186,157,733
Sterling Capital Corporate Fund			1,232,389			1,226,035
Sterling Capital Securitized Opportunities Fund			17,992,018			13,365,224

  4. Investments in Affiliated Issuers:

A summary of the Funds’ transactions in the shares of affiliated issuers during the fiscal year ended September 30, 2013 is set forth below:

	Shares Held at September 30, 2012		Shares Purchased		Shares Sold		Shares Held at September 30, 2013		Value at September 30, 2013			Dividend Income October 1, 2012- September 30, 2013			Distributions and Net Realized Gain (Loss) October 1, 2012- September 30, 2013
Sterling Capital Strategic Allocation Conservative Fund
Sterling Capital Equity Income Fund, Institutional Class		32,730		215,906		41,302		207,334		$	3,769,324		$	47,794		$	48,363
Sterling Capital Mid Value Fund, Institutional Class		50,109		—		50,109		—			—			2,456			415,011
Sterling Capital Large Cap Value Diversified Fund, Institutional Class		112,321		18,454		130,775		—			—			7,613			356,600
Sterling Capital Small Cap Value Diversified Fund, Institutional Class		14,866		179		15,045		—			—			—			36,555
Sterling Capital Special Opportunities Fund, Institutional Class		17,928		187,834		31,121		174,641			3,835,116			819			62,610
Sterling Capital Total Return Bond Fund, Institutional Class		958,838		161,211		89,282		1,030,767			10,853,980			409,274			65,437
Sterling Capital U.S. Treasury Money Market Fund, Institutional Class		477,966		20,566,389		21,044,355		—			—			41			—
Sterling Capital Ultra Short Bond Fund, Institutional Class		—		62,691		62,691		—			—			392			(298	)
Total Affiliates		1,664,758		21,212,664		21,464,680		1,412,742		$	18,458,420		$	468,389		$	984,278
Sterling Capital Strategic Allocation Balanced Fund
Sterling Capital Equity Income Fund, Institutional Class		87,512		579,727		93,727		573,512		$	10,426,456		$	128,670		$	103,496
Sterling Capital Mid Value Fund, Institutional Class		134,044		—		134,044		—			—			6,384			1,029,081
Sterling Capital Large Cap Value Diversified Fund, Institutional Class		300,570		48,975		349,545		—			—			20,347			966,790

158

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

	Shares Held at September 30, 2012		Shares Purchased		Shares Sold		Shares Held at September 30, 2013		Value at September 30, 2013			Dividend Income October 1, 2012- September 30, 2013			Distributions and Net Realized Gain (Loss) October 1, 2012- September 30, 2013
Sterling Capital Small Cap Value Diversified Fund, Institutional Class		39,791		478		40,269		—		$	—		$	—		$	95,415
Sterling Capital Special Opportunities Fund, Institutional Class		47,953		500,098		64,996		483,055			10,607,895			2,098			108,777
Sterling Capital Total Return Bond Fund, Institutional Class		1,079,666		273,368		107,684		1,245,350			13,113,537			470,704			83,232
Sterling Capital U.S. Treasury Money Market Fund, Institutional Class		695,238		23,952,005		24,647,243		—			—			66			—
Sterling Capital Ultra Short Bond Fund, Institutional Class		—		55,154		55,154		—			—			539			(151	)
Total Affiliates		2,384,774		25,409,805		25,492,662		2,301,917		$	34,147,888		$	628,808		$	2,386,640
Sterling Capital Strategic Allocation Growth Fund
Sterling Capital Equity Income Fund, Institutional Class		77,829		524,166		60,981		541,014		$	9,835,643		$	119,470		$	59,089
Sterling Capital Mid Value Fund, Institutional Class		119,207		—		119,207		—			—			6,292			913,825
Sterling Capital Large Cap Value Diversified Fund, Institutional Class		267,337		78,418		345,755		—			—			19,504			866,774
Sterling Capital Small Cap Value Diversified Fund, Institutional Class		35,401		426		35,827		—			—			—			89,722
Sterling Capital Special Opportunities Fund, Institutional Class		42,644		462,320		49,262		455,702			10,007,224			2,095			86,894
Sterling Capital Total Return Bond Fund, Institutional Class		412,720		226,238		70,139		568,819			5,989,668			197,643			26,385
Sterling Capital U.S. Treasury Money Market Fund, Institutional Class		524,724		17,199,969		17,724,693		—			—			53			—
Sterling Capital Ultra Short Bond Fund, Institutional Class		—		49,147		49,147		—			—			525			(119	)
Total Affiliates		1,479,862		18,540,684		18,455,011		1,565,535		$	25,832,535		$	345,582		$	2,042,570

  5. Related Party Transactions:

Under the terms of the investment advisory agreement, Sterling Capital is entitled to receive fees based on a percentage of the average daily net assets of the Funds. These fees are accrued daily and payable on a monthly basis and are reflected on the Statements of Operations as “Investment advisory fees.” Sterling Capital waived investment advisory fees are included on the Statements of Operations as “Less expenses waived by the Investment Advisor.” Information regarding these transactions is as follows for the fiscal year ended September 30, 2013:

159

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

	Prior to February 1, 2013						Effective February 1, 2013
				Fee Rate after						Fee Rate after
	Contractual			Contractual			Contractual			Contractual
	Fee Rate			Waivers			Fee Rate			Waivers
Sterling Capital Large Cap Value Diversified Fund		0.70	%		0.60	%(1)		0.70	%		0.60	%(2)
Sterling Capital Mid Value Fund		0.70	%		0.70	%		0.70	%		0.70	%
Sterling Capital Small Cap Value Diversified Fund		0.80	%		0.80	%		0.75	%		0.75	%
Sterling Capital Special Opportunities Fund		0.80	%		0.80	%		0.75	%		0.75	%
Sterling Capital Equity Income Fund		0.70	%		0.70	%		0.70	%		0.70	%
Sterling Capital Ultra Short Bond Fund		0.20	%		0.20	%		0.20	%		0.20	%
Sterling Capital Short-Term Bond Fund		0.30	%		0.30	%		0.30	%		0.25	%(2)
Sterling Capital Intermediate U.S. Government Fund		0.48	%		0.48	%		0.43	%		0.43	%
Sterling Capital Total Return Bond Fund		0.37	%		0.37	%		0.37	%		0.34	%(2)
Sterling Capital Corporate Fund		0.40	%		0.15	%(3)		0.35	%		0.35	%
Sterling Capital Securitized Opportunities Fund		0.40	%		0.15	%(3)		0.35	%		0.35	%
Sterling Capital Kentucky Intermediate Tax-Free Fund		0.45	%		0.45	%		0.45	%		0.45	%
Sterling Capital Maryland Intermediate Tax-Free Fund		0.45	%		0.45	%		0.45	%		0.45	%
Sterling Capital North Carolina Intermediate Tax-Free Fund		0.45	%		0.45	%		0.45	%		0.45	%
Sterling Capital South Carolina Intermediate Tax-Free Fund		0.45	%		0.45	%		0.45	%		0.45	%
Sterling Capital Virginia Intermediate Tax-Free Fund		0.45	%		0.45	%		0.45	%		0.45	%
Sterling Capital West Virginia Intermediate Tax-Free Fund		0.45	%		0.45	%		0.45	%		0.45	%
Sterling Capital Strategic Allocation Conservative Fund		0.25	%		0.25	%		0.25	%		0.00	%(2)
Sterling Capital Strategic Allocation Balanced Fund		0.25	%		0.25	%		0.25	%		0.00	%(2)
Sterling Capital Strategic Allocation Growth Fund		0.25	%		0.25	%		0.25	%		0.00	%(2)

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

(2)     Sterling Capital contractually agreed to limit the advisory fees paid by the Fund from March 1, 2013 through January 31, 2014.

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

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

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

Prior to September 19, 2013, Sterling Capital’s Chief Compliance Officer (“CCO”) served as the Funds’ CCO. The CCO’s compensation is reviewed and approved by the Funds’ Board and paid by Sterling Capital. However, the Funds reimburse Sterling Capital for their allocable portion of the CCO’s salary. Expenses incurred for the Funds are reflected on the Statements of Operations as “Compliance service fees.”

For the fiscal year ended September 30, 2013, the Funds paid $74,419 in brokerage fees to BB&T Securities LLC (formerly known as Scott & Stringfellow LLC) on the execution of purchases and sales of the Funds’ portfolio investments.

The Funds have adopted a Distribution and Shareholder Services Plan (the “Plan”) in accordance with Rule 12b-1 under the 1940 Act. Sterling Capital Distributors, LLC (“the Distributor”) serves as distributor to the Funds pursuant to an underwriting agreement. The Plan provides for payments to the Distributor of up to 0.25%, 1.00%, 1.00% and 0.50% of the average daily net assets of the Class A Shares, Class B Shares, Class C Shares, and Class R Shares, respectively. The Distributor is entitled to receive commissions on sales of shares of the Variable Net Asset Value Funds. For the fiscal year ended September 30, 2013, the Distributor received $1,047,132 from commissions earned on sales of shares of the Variable Net Asset Value Funds. Commissions paid to affiliated broker-dealers during the fiscal year ended September 30, 2013 were $351,833. The fees may be used by the Distributor to pay banks, broker dealers and other institutions, including affiliates of the Advisor.

160

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

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

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

  6. Concentration of Credit Risk:

The Tax-Free Funds invest primarily in debt instruments of municipal issuers in their respective states. The issuers’ abilities to meet their obligations may be affected by economic developments in a specific state or region.

  7. Line of Credit:

U.S. Bank, N.A. has made available a credit facility to the Trust, pursuant to an umbrella credit agreement (“the Agreement”). The primary purpose of the Agreement is to allow the Trust to avoid security liquidations that Sterling Capital believes are unfavorable to shareholders. Under the Agreement, an aggregate commitment amount of $50,000,000 has been made available for use by all funds of the Trust. Outstanding principal amounts under the Agreement bear interest at a rate per annum equal to the Prime Rate minus two percent (2%), but never at a rate of less than one percent (1%) per annum. The Agreement expires on March 31, 2014. During the fiscal year ended September 30, 2013 the following Funds utilized lines of credit:

	Average			Average			Number of		Interest Expense			Maximum Amount
	Interest Rate			Loan Balance			Days Outstanding		Incurred			Borrowed
Sterling Capital Securitized Opportunities Fund		1.25	%		$	555,000		1		$	19		$	555,000
Sterling Capital South Carolina Intermediate Tax-Free Fund		1.25	%			834,000		3			87			834,000
Sterling Capital Virginia Intermediate Tax- Free Fund		1.25	%			470,000		1			16			470,000

  8. Federal Tax Information:

It is the policy of each Fund to continue to qualify as a regulated investment company (“RIC”) by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code of 1986, as amended, and to make distributions of net investment income and net realized capital gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income tax was required in the Funds’ financial statements.

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

161

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

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

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

At September 30, 2013, the following Funds had net capital loss carryforwards available to offset future net capital gains, if any, to the extent provided by the Treasury regulations:

	Amount With No Expiration*
	Short-term			Long-term
	Losses			Losses			Amount			Expires
Sterling Capital Large Cap Value Diversified Fund		$	—		$	—		$	53,582,400		2017
Sterling Capital Large Cap Value Diversified Fund			—			—			10,325,708		2018
Sterling Capital Mid Value Fund			—			—			12,708,364		2017
Sterling Capital Small Cap Value Diversified Fund			—			—			2,085,627		2016
Sterling Capital Small Cap Value Diversified Fund			—			—			2,655,981		2017
Sterling Capital Ultra Short Bond Fund			14,612			—			—		—
Sterling Capital Short-Term Bond Fund			—			—			1,246,269		2014
Sterling Capital Short-Term Bond Fund			—			—			3,940,976		2015
Sterling Capital Short-Term Bond Fund			—			—			160,380		2016
Sterling Capital Short-Term Bond Fund			—			—			385,647		2019
Sterling Capital Short-Term Bond Fund			731,499			348,335			—		—
Sterling Capital Intermediate U.S. Government Fund			—			—			7,417,640		2016
Sterling Capital Intermediate U.S. Government Fund			—			—			37,850		2019
Sterling Capital Securitized Opportunities Fund			1,495,375			5,299			—		—
Sterling Capital Strategic Allocation Conservative Fund			—			—			7,049,711		2018
Sterling Capital Strategic Allocation Balanced Fund			—			—			5,467,557		2018
Sterling Capital Strategic Allocation Balanced Fund			—			—			3,964,763		2019
Sterling Capital Strategic Allocation Growth Fund			—			—			6,627,772		2018
Sterling Capital Strategic Allocation Growth Fund			—			—			4,640,596		2019

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

Capital loss carryforwards utilized in the current year were $51,893,067, $6,900,884, $1,185,402, $827,680, $1,829,505, $4,400,714 and $3,727,036 for Sterling Capital Large Cap Value Diversified Fund, Sterling Capital Mid Value Fund, Sterling Capital Small Cap Value Diversified Fund, Sterling Capital Intermediate U.S. Government Fund, Sterling Capital Strategic Allocation Conservative Fund, Sterling Capital Strategic Allocation Balanced Fund and Sterling Capital Strategic Allocation Growth Fund, respectively. Sterling Capital Short-Term Bond Fund had capital loss carryforwards of $2,094,190 expire in the current year. For Sterling Capital Small Cap Value Diversified and Sterling Capital Mid Value Funds capital losses acquired in the reorganization are subject to limitations under Internal Revenue Code Section 381-384.

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

162

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

As of September 30, 2013, these reclassifications were as follows:

	Decrease Paid-in-Capital				Increase/ (Decrease) Net Investment Income (Loss)				Increase/ (Decrease) Realized Gain (Loss)
Sterling Capital Mid Value Fund		$	—			$	(39,809	)		$	39,809
Sterling Capital Small Cap Value Diversified Fund			—				(7,936	)			7,936
Sterling Capital Special Opportunities Fund			—				(188,325	)			188,325
Sterling Capital Equity Income Fund			—				(2,846,810	)			2,846,810
Sterling Capital Ultra Short Bond Fund			(8,294	)			19,500				(11,206	)
Sterling Capital Short-Term Bond Fund			(2,065,612	)			987,748				1,077,864
Sterling Capital Intermediate U.S. Government Fund			—				483,589				(483,589	)
Sterling Capital Total Return Bond Fund			—				4,772,486				(4,772,486	)
Sterling Capital Corporate Fund			—				(42,880	)			42,880
Sterling Capital Securitized Opportunities Fund			—				779,312				(779,312	)
Sterling Capital Kentucky Intermediate Tax-Free Fund			—				(1,694	)			1,694
Sterling Capital Maryland Intermediate Tax-Free Fund			—				(1,906	)			1,906
Sterling Capital North Carolina Intermediate Tax-Free Fund			—				(1,909	)			1,909
Sterling Capital South Carolina Intermediate Tax-Free Fund			—				(1,544	)			1,544
Sterling Capital Virginia Intermediate Tax-Free Fund			—				11,124				(11,124	)
Sterling Capital West Virginia Intermediate Tax-Free Fund			—				(16,003	)			16,003
Sterling Capital Strategic Allocation Conservative Fund			—				27,306				(27,306	)
Sterling Capital Strategic Allocation Balanced Fund			—				31,484				(31,484	)
Sterling Capital Strategic Allocation Growth Fund			—				13,097				(13,097	)

The tax character of distributions paid to shareholders during the fiscal year ended September 30, 2013 were as follows:

	Distributions paid from
	Ordinary Income			Net Long-Term Gains			Total Taxable Distributions			Tax Exempt Distributions			Total Distributions Paid*
Sterling Capital Large Cap Value Diversified Fund		$	2,627,430		$	—		$	2,627,430		$	—		$	2,627,430
Sterling Capital Mid Value Fund			3,163,869			—			3,163,869			—			3,163,869
Sterling Capital Small Cap Value Diversified Fund			390,002			958,642			1,348,644			—			1,348,644
Sterling Capital Special Opportunities Fund			3,138,407			29,974,373			33,112,780			—			33,112,780
Sterling Capital Equity Income Fund			22,799,561			12,358,244			35,157,805			—			35,157,805
Sterling Capital Ultra Short Bond Fund			210,844			—			210,844			—			210,844
Sterling Capital Short-Term Bond Fund			2,242,340			—			2,242,340			—			2,242,340
Sterling Capital Intermediate U.S. Government Fund			2,332,671			—			2,332,671			—			2,332,671
Sterling Capital Total Return Bond Fund			21,987,404			2,841,224			24,828,628			—			24,828,628
Sterling Capital Corporate Fund			4,269,831			195,109			4,464,940			—			4,464,940
Sterling Capital Securitized Opportunities Fund			2,486,095			—			2,486,095			—			2,486,095
Sterling Capital Kentucky Intermediate Tax-Free Fund			678			139,225			139,903			592,984			732,887
Sterling Capital Maryland Intermediate Tax-Free Fund			62,436			532,735			595,171			888,679			1,483,850
Sterling Capital North Carolina Intermediate Tax-Free Fund			186,244			1,685,743			1,871,987			6,046,630			7,918,617
Sterling Capital South Carolina Intermediate Tax-Free Fund			118,000			473,705			591,705			1,660,745			2,252,450
Sterling Capital Virginia Intermediate Tax-Free Fund			15,821			1,255,769			1,271,590			3,084,117			4,355,707
Sterling Capital West Virginia Intermediate Tax-Free Fund			89,006			1,368,572			1,457,578			2,786,247			4,243,825
Sterling Capital Strategic Allocation Conservative Fund			442,806			—			442,806			—			442,806
Sterling Capital Strategic Allocation Balanced Fund			574,997			—			574,997			—			574,997
Sterling Capital Strategic Allocation Growth Fund			302,995			—			302,995			—			302,995

* Total distributions paid may differ from the Statements of Changes in Net Assets because distributions are recognized when actually paid for tax purposes.

163

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

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

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

* Total distributions paid may differ from the Statements of Changes in Net Assets because distributions are recognized when actually paid for tax purposes.

As of September 30, 2013, the components of accumulated earnings (deficit) on a tax basis were as follows:

	Undistributed																					Total
	Ordinary			Undistributed										Accumulated				Unrealized				Accumulated
	Income/Tax			Long Term			Accumulated			Distributions				Capital and				Appreciation				Earnings
	Exempt Income			Capital Gains			Earnings			Payable				Other Losses				(Depreciation)*				(Deficit)
Sterling Capital Large Cap Value Diversified Fund		$	148,938		$	—		$	148,938		$	—			$	(63,908,108	)		$	13,837,764			$	(49,921,406	)
Sterling Capital Mid Value Fund			1,755,356			36,019,845			37,775,201			—				(12,708,364	)			118,982,909				144,049,746
Sterling Capital Small Cap Value Diversified Fund			4,431,134			10,213,989			14,645,123			—				(4,741,608	)			5,978,757				15,882,272
Sterling Capital Special Opportunities Fund			1,176,686			80,832,718			82,009,404			—				—				174,594,257				256,603,661
Sterling Capital Equity Income Fund			5,486,361			63,034,772			68,521,133			(2,588	)			—				285,736,230				354,254,775
Sterling Capital Ultra Short Bond Fund			18,949			—			18,949			(8,475	)			(14,612	)			(95,913	)			(100,051	)
Sterling Capital Short-Term Bond Fund			109,536			—			109,536			(125,796	)			(6,813,106	)			(1,057,454	)			(7,886,820	)
Sterling Capital Intermediate U.S. Government Fund			748,919			—			748,919			(93,620	)			(7,455,490	)			715,198				(6,084,993	)
Sterling Capital Total Return Bond Fund			1,541,843			—			1,541,843			(776,078	)			(3,360,087	)			(2,410,016	)			(5,004,338	)
Sterling Capital Corporate Fund			—			790,769			790,769			(60,031	)			(431,130	)			(213,607	)			86,001
Sterling Capital Securitized Opportunities Fund			34,096			—			34,096			(27,899	)			(1,500,674	)			(176,101	)			(1,670,578	)
Sterling Capital Kentucky Intermediate Tax-Free Fund			30,553			—			30,553			(28,094	)			(19,857	)			1,034,621				1,017,223

164

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

	Undistributed Ordinary Income/Tax Exempt Income			Undistributed Long Term Capital Gains			Accumulated Earnings			Distributions Payable				Accumulated Capital and Other Losses				Unrealized Appreciation (Depreciation)*			Total Accumulated Earnings (Deficit)
Sterling Capital Maryland Intermediate Tax-Free Fund		$	47,627		$	—		$	47,627		$	(43,979	)		$	(88,739	)		$	913,853		$	828,762
Sterling Capital North Carolina Intermediate Tax- Free Fund			398,560			—			398,560			(318,767	)			(689,792	)			7,165,789			6,555,790
Sterling Capital South Carolina Intermediate Tax- Free Fund			88,805			—			88,805			(81,724	)			(221,089	)			1,380,211			1,166,203
Sterling Capital Virginia Intermediate Tax-Free Fund			222,145			—			222,145			(159,582	)			(536,898	)			4,224,232			3,749,897
Sterling Capital West Virginia Intermediate Tax-Free Fund			118,078			—			118,078			(139,870	)			(71,814	)			2,217,923			2,124,317
Sterling Capital Strategic Allocation Conservative Fund			17,502			—			17,502			(7,817	)			(7,049,711	)			995,033			(6,044,993	)
Sterling Capital Strategic Allocation Balanced Fund			19,404			—			19,404			(1,583	)			(9,432,320	)			2,277,138			(7,137,361	)
Sterling Capital Strategic Allocation Growth Fund			8,791			—			8,791			(560	)			(11,268,368	)			1,912,348			(9,347,789	)

* The primary differences between book basis and tax basis unrealized appreciation (depreciation) were due to the deferral of losses on wash sales and straddles, mark-to-market adjustments on passive foreign investment companies, basis adjustments on partnership interests, hybrid securities and the deferral of market discount and premium until point of sale.

Under current tax law, capital losses realized after October 31 and ordinary losses realized after December 31 of a Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The following Funds had deferred qualified late-year losses, which will be treated as arising on the first business day of the fiscal year ending September 30, 2014:

	Qualified Late-Year Capital Losses
Sterling Capital Corporate Fund		$	431,130
Sterling Capital Total Return Bond Fund			3,360,087
Sterling Capital Kentucky Intermediate Tax-Free Fund			19,857
Sterling Capital Maryland Intermediate Tax-Free Fund			88,739
Sterling Capital North Carolina Intermediate Tax-Free Fund			689,792
Sterling Capital South Carolina Intermediate Tax-Free Fund			221,089
Sterling Capital Virginia Intermediate Tax-Free Fund			536,898
Sterling Capital West Virginia Intermediate Tax-Free Fund			71,814

At September 30, 2013, federal income tax cost, gross unrealized appreciation and gross unrealized depreciation on securities were as follows:

	Tax Cost			Gross Tax Unrealized Appreciation			Gross Tax Unrealized Depreciation				Net Tax Unrealized Appreciation (Depreciation)
Sterling Capital Large Cap Value Diversified Fund		$	210,757,176		$	17,048,912		$	(3,211,148	)		$	13,837,764
Sterling Capital Mid Value Fund			471,041,234			129,846,923			(10,864,014	)			118,982,909
Sterling Capital Small Cap Value Diversified Fund			106,049,555			8,401,122			(2,422,365	)			5,978,757
Sterling Capital Special Opportunities Fund			652,410,363			190,081,491			(15,040,149	)			175,041,342
Sterling Capital Equity Income Fund			1,651,078,194			299,658,965			(13,922,735	)			285,736,230

165

Sterling Capital Funds

Notes to Financial Statements — (continued)

September 30, 2013

	Tax Cost			Gross Tax Unrealized Appreciation			Gross Tax Unrealized Depreciation				Net Tax Unrealized Appreciation (Depreciation)
Sterling Capital Ultra Short Bond Fund		$	56,149,041		$	34,536		$	(130,449	)		$	(95,913	)
Sterling Capital Short-Term Bond Fund			77,547,465			322,145			(1,379,599	)			(1,057,454	)
Sterling Capital Intermediate U.S. Government Fund			57,596,171			1,881,391			(1,166,193	)			715,198
Sterling Capital Total Return Bond Fund			502,228,267			8,588,117			(10,998,133	)			(2,410,016	)
Sterling Capital Corporate Fund			85,422,873			1,291,004			(1,504,611	)			(213,607	)
Sterling Capital Securitized Opportunities Fund			65,915,994			548,257			(724,358	)			(176,101	)
Sterling Capital Kentucky Intermediate Tax-Free Fund			16,586,333			1,040,119			(5,498	)			1,034,621
Sterling Capital Maryland Intermediate Tax-Free Fund			42,647,670			1,121,381			(207,528	)			913,853
Sterling Capital North Carolina Intermediate Tax-Free Fund			205,874,364			8,380,960			(1,215,171	)			7,165,789
Sterling Capital South Carolina Intermediate Tax-Free Fund			69,785,886			1,926,686			(546,475	)			1,380,211
Sterling Capital Virginia Intermediate Tax-Free Fund			128,400,004			4,859,704			(635,472	)			4,224,232
Sterling Capital West Virginia Intermediate Tax-Free Fund			103,233,910			3,048,209			(830,286	)			2,217,923
Sterling Capital Strategic Allocation Conservative Fund			17,779,495			1,077,703			(82,670	)			995,033
Sterling Capital Strategic Allocation Balanced Fund			32,554,519			2,472,189			(195,051	)			2,277,138
Sterling Capital Strategic Allocation Growth Fund			24,373,455			2,135,538			(223,190	)			1,912,348

  9. Subsequent Events:

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

On November 21, 2013 the Board approved the re-name of the Sterling Capital Short-Term Bond Fund to the Sterling Capital Short Duration Bond Fund.

166

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of Sterling Capital Funds:

We have audited the accompanying statements of assets and liabilities of the Sterling Capital Large Cap Value Diversified Fund (formerly Sterling Capital Select Equity Fund), Sterling Capital Mid Value Fund, Sterling Capital Small Cap Value Diversified Fund (formerly Sterling Capital Small Value Fund), Sterling Capital Special Opportunities Fund, Sterling Capital Equity Income Fund, Sterling Capital Ultra Short Bond Fund, Sterling Capital Short-Term Bond Fund, Sterling Capital Intermediate U.S. Government Fund, Sterling Capital Total Return Bond Fund, Sterling Capital Corporate Fund, Sterling Capital Securitized Opportunities Fund, Sterling Capital Kentucky Intermediate Tax-Free Fund, Sterling Capital Maryland Intermediate Tax-Free Fund, Sterling Capital North Carolina Intermediate Tax-Free Fund, Sterling Capital South Carolina Intermediate Tax-Free Fund, Sterling Capital Virginia Intermediate Tax-Free Fund, Sterling Capital West Virginia Intermediate Tax-Free Fund, Sterling Capital Strategic Allocation Conservative Fund, Sterling Capital Strategic Allocation Balanced Fund, and Sterling Capital Strategic Allocation Growth Fund, twenty of the funds constituting Sterling Capital Funds (the “Funds”), including the schedules of portfolio investments, as of September 30, 2013, and the related statements of operations for the year or period then ended, the statements of changes in net assets for each of the years or periods in the two year period then ended, and the financial highlights for each of the years or periods in the five year period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2013, by correspondence with the custodian, transfer agent of the underlying funds and brokers or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the aforementioned funds of Sterling Capital Funds as of September 30, 2013, the results of their operations for the year then ended, the changes in their net assets for each of the years or periods in the two-year period then ended and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

November 22, 2013

167

Sterling Capital Funds

September 30, 2013

Notice to Shareholders (Unaudited)

All amounts and percentages below are based on financial information available as of the date of this annual report and, accordingly are subject to change. For each item it is the intention of the Funds to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.

For the fiscal year ended September 30, 2013, each Fund is reporting the following items with regard to distributions paid during the year.

	Long-Term Capital Gain			Qualified Dividend Income %			(for corporate shareholders) Dividends Received Deduction %			Exempt- Interest Dividend			U.S. Government Income
Sterling Capital Large Cap Value Diversified Fund		$	—		100.00	%		100.00	%		$	—		—
Sterling Capital Mid Value Fund			—		100.00	%		100.00	%			—		—
Sterling Capital Small Cap Value Diversified Fund			958,642		18.23	%		17.42	%			—		—
Sterling Capital Special Opportunities Fund			29,974,373		100.00	%		100.00	%			—		—
Sterling Capital Equity Income Fund			12,358,244		100.00	%		100.00	%			—		—
Sterling Capital Short-Term Bond Fund			—		0.24	%		0.43	%			—		—
Sterling Capital Intermediate U.S. Government Fund			—		—			—				—		23.26	%
Sterling Capital Total Return Bond Fund			2,841,224		0.86	%		0.86	%			—		1.05	%
Sterling Capital Corporate Fund			195,109		0.96	%		0.96	%			—		0.04	%
Sterling Capital Securitized Opportunities Fund			—		—			—				—		0.76	%
Sterling Capital Kentucky Intermediate Tax-Free Fund			139,225		—			—				592,984		—
Sterling Capital Maryland Intermediate Tax-Free Fund			532,735		—			—				888,679		—
Sterling Capital North Carolina Intermediate Tax-Free Fund			1,685,743		—			—				6,046,630		—
Sterling Capital South Carolina Intermediate Tax-Free Fund			473,705		—			—				1,660,745		—
Sterling Capital Virginia Intermediate Tax-Free Fund			1,255,769		—			—				3,084,117		—
Sterling Capital West Virginia Intermediate Tax-Free Fund			1,368,572		—			—				2,786,247		—
Sterling Capital Strategic Allocation Conservative Fund			—		22.98	%		15.11	%			—		0.93	%
Sterling Capital Strategic Allocation Balanced Fund			—		44.43	%		29.71	%			—		0.73	%
Sterling Capital Strategic Allocation Growth Fund			—		76.80	%		53.85	%			—		0.08	%

168

Sterling Capital Funds

September 30, 2013

Other Information (Unaudited)

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

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

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

169

Sterling Capital Funds

Information about Trustees and Officers (Unaudited)

Overall responsibility for the management of the Funds rests with its Board of Trustees (“Trustees”), who are elected by the Shareholders of the Funds. The Trustees elect the officers of the Funds to supervise actively its day-to-day operations. The names of the Trustees, birthdates, term of office and length of time served, principal occupations during the past five years, number of portfolios overseen and directorships held outside of the Funds are listed in the two tables immediately following. The business address of the persons listed below is 434 Fayetteville Street, 5th Floor, Raleigh, North Carolina 27601.

INDEPENDENT TRUSTEES

Name and Birthdate	Position(s) Held     With the Funds	Term of Office/     Length of Time Served	Principal Occupation             During the Last 5 Years	Number of Portfolios in Fund Complex Overseen     by Trustee*	Other Directorships Held by Trustee
Thomas W. Lambeth Birthdate: 01/35	Trustee, Chairman of the Board of Trustees	Indefinite, 08/92 — Present	From January 2001 to present, Senior Fellow, Z. Smith Reynolds Foundation	23	None
Drew T. Kagan Birthdate: 02/48	Trustee	Indefinite, 08/00 — Present	Retired; from September 2010 to March 2013, Chairman, Montecito Advisors, Inc.; from December 2003 to September 2010, CEO, Montecito Advisors, Inc.; from March 1996 to December 2003, President, Investment Affiliate, Inc.	23	None
Laura C. Bingham Birthdate: 11/56	Trustee	Indefinite, 02/01 — Present	From March 2013 to present, Partner, Newport Board Group; from July 2010 to February 2013, governance and leadership consultant; from July 1998 to June 2010, President of Peace College	23	None
Douglas R. Van Scoy Birthdate: 11/43	Trustee	Indefinite, 05/04 — Present	Retired; from November 1974 to July 2001, employee of Smith Barney (investment banking), most recently as Director of Private Client Group and Senior Executive Vice President	23	None
James L. Roberts Birthdate: 11/42	Trustee	Indefinite, 11/04 — Present	Retired; from November 2006 to present, Director, Grand Mountain Bancshares, Inc.; from January 1999 to December 2003, President, CEO and Director, Covest Bancshares, Inc.	23	None

170

Sterling Capital Funds

The following table shows information for the trustee who is an “interested person” of the Funds as defined in the 1940 Act:

INTERESTED TRUSTEES

Name and Birthdate	Position(s) Held     With the Funds	Term of Office/     Length of Time Served	Principal Occupation             During the Last 5 Years	Number of Portfolios in Fund Complex     by Trustee*	Other Directorships Held by Trustee
Alexander W. McAlister** Birthdate: 03/60	Trustee	Indefinite, 11/10 — Present	President, Sterling Capital Management LLC	23	Director, Sterling Capital Management LLC
Alan G. Priest*** Birthdate: 05/52	Trustee	Indefinite, 7/12 — Present	Retired; from April 1993 to April 2012, Partner, Ropes & Gray LLP	23	None

  * The Sterling Capital Funds Complex consists of two open-end investment management companies: Sterling Capital Funds and Sterling Capital Variable Insurance Funds.

  **  Mr. McAlister is treated by the Funds as an “interested person” (as defined in Section 2(a)(19) of the 1940 Act) of the Funds because he is an officer of the Advisor.

  *** Mr. Priest is treated by the Fund as an “interested person” (as defined in Section 2(a)(19) of the 1940 Act) of the Funds because he was a partner of a law firm that acted as counsel to the Funds in the Sterling Capital Funds Complex during the past two fiscal years.

The following table shows information for officers of Funds:

Name and Birthdate	Position(s) Held             With the Funds	Term of Office/         Length of Time Served	Principal Occupation During the Last 5 Years
James T. Gillespie Birthdate: 11/66	President	Indefinite, 12/12 — Present	From March 2012 to present, Executive Director, Sterling Capital Management LLC; From June 2010 to March 2012, Director, Sterling Capital Management LLC and its predecessors; from August 2008 to June 2010, Vice President Relationship Management, JPMorgan Chase & Co.; from February 2005 to August 2008, Senior Vice President and Manager of Mutual Fund Administration, Sterling Capital Management LLC and its predecessors
Kenneth R. Cotner Birthdate: 02/59	Treasurer	Indefinite, 12/12 — Present	From September 2013 to present, Chief Compliance Officer and from June 2001 to present, Chief Operating Officer, Sterling Capital Management LLC and its predecessors
Todd M. Miller Birthdate: 09/71	Vice President and Secretary	Indefinite, Vice President, 08/05 — Present; Secretary, 08/10 — Present	From June 2009 to present, Director, Sterling Capital Management LLC and its predecessors; from June 2005 to May 2009, Mutual Fund Administrator; from May 2001 to May 2005, Manager, BISYS Fund Services
Salvatore Faia Birthdate: 12/62	Chief Compliance and Anti-Money Laundering Officer	Indefinite, 09/13 — Present	President and Founder of Vigilant Compliance Services since 2004

171

Sterling Capital Funds

Name and Birthdate	Position(s) Held             With the Funds	Term of Office/         Length of Time Served	Principal Occupation During the Last 5 Years
Andrew J. McNally Birthdate: 12/70	Assistant Treasurer	Indefinite, Assistant Treasurer, 06/10 — Present; Treasurer, 04/07 — 06/10	From January 2007 to present, Vice President and Senior Director, and from July 2000 to December 2006, Vice President and Director, Fund Accounting and Administration Department, BNY Mellon Investment Servicing (US) Inc.
Julie M. Powers Birthdate: 10/69	Assistant Secretary	Indefinite, 11/11 — Present	From November 2011 to present, Vice President; from March 2009 to October 2011, Senior Manager and Vice President; from August 2005 to February 2009, Manager and Assistant Vice President, Regulatory Administration Department, BNY Mellon Investment Servicing (US) Inc.

The Funds’ Statement of Additional Information includes additional information about the Funds’ Trustees and Officers. To receive your free copy of the Statement of Additional Information, call toll free: 1-800-228-1872.

172

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INVESTMENT ADVISOR

Sterling Capital Management LLC

Two Morrocroft Centre

4064 Colony Road, Suite 300

Charlotte, NC 28211

DISTRIBUTOR

Sterling Capital Distributors, LLC

400 Berwyn Park

899 Cassatt Road

Berwyn, PA 19312

LEGALCOUNSEL

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199

TRANSFER AGENT

BNY Mellon Investment Servicing (US) Inc.

301 Bellevue Parkway

Wilmington, DE 19809

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

KPMG LLP

1601 Market Street

Philadelphia, PA 19103

Item 2. Code of Ethics.

(a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party (the “Code of Ethics”).

(c) There have been no amendments, during the period covered by this report, to a provision of the Code of Ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics definition enumerated in Item 2(b) of Form N-CSR.

(d) The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in Item 2(b) of Form N-CSR.

Item 3. Audit Committee Financial Expert.

As of the end of the period covered by the report, the registrant’s board of trustees has determined that Drew Kagan is qualified to serve as an audit committee financial expert serving on its audit committee and that he is “independent,” as defined by Item 3 of Form N-CSR.

Item 4. Principal Accountant Fees and Services.

Audit Fees

(a) The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $373,350 for 2013 and $402,600 for 2012.

Audit-Related Fees

(b) The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item are $2,500 for 2013 and $0 for 2012. These audit-related services include issuance of consents to use the name of the auditor in new Fund filings.

Tax Fees

(c) The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $92,980 for 2013 and $85,270 for 2012. Fees for both 2013 and 2012 relate to the preparation of federal income and excise tax returns and review of capital gains distribution calculations.

All Other Fees

(d) The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2013 and $0 for 2012.

(e)(1) Except as permitted by Rule 2-01(c)(7)(i)(C) of Regulation S-X, the Trust’s Audit Committee must pre-approve all audit and non-audit services provided by the independent accountants relating to the operations or financial reporting of the funds. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.

(e)(2) The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:

(b) 100%

(c) 100%

(d) N/A

(f) The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was zero percent.

(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $2,019,487 for 2013 and $154,000 for 2012.

(h) The audit committee of the registrant’s board of trustees has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Investments.

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

(b) Not applicable.

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

Not applicable.

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

Not applicable.

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

Not applicable.

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

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

Item 11. Controls and Procedures.

(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of this report, that the

design and operation of such procedures are effective to provide reasonable assurance that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that information required to be disclosed by the registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

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

Item 12. Exhibits.

(a)(1) The registrant’s Code of Ethics is attached hereto.

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

(a)(3) Not applicable.

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

(12.other) Not applicable.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant)	Sterling Capital Funds
By (Signature and Title)		/s/ James T. Gillespie
		James T. Gillespie, President
		(principal executive officer)
Date        12/4/13

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)	/s/ James T. Gillespie
	James T. Gillespie, President
	(principal executive officer)
Date        12/4/13
By (Signature and Title)	/s/ Kenneth R. Cotner
	Kenneth R. Cotner, Treasurer
	(principal financial officer)
Date        12/4/13

EX-99.CODE ETH

EX-99.CODE ETH

STERLING CAPITAL FUNDS

STERLING CAPITAL VARIABLE INSURANCE FUNDS

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND

PRINCIPAL FINANCIAL OFFICERS

I. Covered Officers/Purpose of the Code

The Sterling Capital Funds and the Sterling Capital Variable Insurance Funds, (together the “Funds”) code of ethics (this “Code”) applies to the Funds’ Principal Executive Officer (“President”) and Principal Financial Officer (“Treasurer”) (the “Covered Officers” each of whom is identified in Exhibit A) for the purpose of promoting:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

• full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Funds;

• compliance with applicable laws and governmental rules and regulations;

• the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

• accountability for adherence to the Code.

Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to apparent as well as actual conflicts of interest.

II. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest

Overview. A “conflict of interest” occurs when a Covered Officer’s private interest interferes with the interests of, or his service to, the Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position in the Companies.

Certain conflicts of interest arise out of the relationships between Covered Officers and the Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940, as amended (the“1940 Act”). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Fund because of their status as “affiliated persons” of the Fund. Each Covered Officer is an employee of the Fund’s Adviser or Sub-Administrator (“Service Provider”). The Fund’s and the Service Provider’s compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.

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Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Funds and the Service Provider of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Funds or for the Service Provider, or for both), be involved in establishing policies and implementing decisions which will have different effects on the Service Provider and the Funds. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Funds and the Service Provider and is consistent with the performance by the Covered Officers of their duties as officers of the Funds. Thus, if performed in conformity with the provisions of the 1940 Act, will be deemed to have been handled ethically. In addition, it is recognized by the Board of Trustees (the “Board”) that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other Codes.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the 1940 Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Funds.

Each Covered Officer must:

• not use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Funds whereby the Covered Officer would benefit personally to the detriment of the Funds;

• not cause the Funds to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than for the benefit of the Funds; and

• not use material non-public knowledge of portfolio transactions made or contemplated for the Funds to trade personally or cause others to trade personally in contemplation of the market effect of such transactions.

III. Disclosure & Compliance

• Each Covered Officer should familiarize himself with the disclosure requirements generally applicable to the Funds;

• each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Funds to others, whether within or outside the Funds, including to the Funds’ Trustees and auditors, and to governmental regulators and self-regulatory organizations;

• each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Funds and the Funds’ adviser or subadviser and administrator with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds files with, or submit to, the SEC and in other public communications made by the Funds; and

2

• it is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.

IV. Reporting and Accountability

Each Covered Officer must:

• upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that he/she has received, read, and understands the Code (see Exhibit B);

• annually thereafter affirm to the Board that he/she has complied with the requirements of the Code (see Exhibit C);

• not retaliate against any employee or Covered Officer or their affiliated persons for reports of potential violations that are made in good faith;

• notify the Qualified Legal Compliance Committee (“QLCC”) promptly if he knows of any violation of this Code. Failure to do so is itself a violation of this Code; and

• report at least annually any change in his affiliations from the prior year.

The QLCC is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation.

The Funds will follow these procedures in investigating and enforcing this Code:

• the QLCC will take all appropriate action to investigate any potential violations reported to it;

• if, after such investigation, the QLCC believes that no violation has occurred, the QLCC is not required to take any further action;

• if the QLCC concurs that a violation has occurred, it will inform and make a recommendation to the Board, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the Service Provider or its board; or a recommendation to dismiss the Covered Officer; and

• any changes to this Code will, to the extent required, be disclosed as provided by SEC rules.

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V. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, the Funds’ adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superceded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Funds’ and their investment adviser’s, principal underwriter’s and service providers’ codes of ethics under Rule 17j-1 under the 1940 Act and the adviser’s more detailed policies and procedures are separate requirements applying to the Covered Officers and others, and are not part of this Code.

VI. Amendments

Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Funds’ board, including a majority of independent directors/trustees.

VII. Confidentiality

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the appropriate Board and its counsel, the investment adviser and the respective Service Providers.

VIII. Internal Use

The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of the Funds, as to any fact, circumstance, or legal conclusion.

Date: November 19, 2003

As amended August 29, 2006, February 27, 2007, August 28, 2007 and February 24, 2009

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STERLING CAPITAL FUNDS

STERLING CAPITAL VARIABLE INSURANCE FUNDS

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND

PRINCIPAL FINANCIAL OFFICERS

Exhibit A - Persons Covered by this Code of Ethics

Principal Executive Officer and President

Principal Financial Officer and Treasurer

5

STERLING CAPITAL FUNDS

STERLING CAPITAL VARIABLE INSURANCE FUNDS

Exhibit B

INITIAL CERTIFICATION

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND

PRINCIPAL FINANCIAL OFFICERS

I,                                         , [Principal Executive Officer/Principal Financial Officer] of Sterling Capital Funds and the Sterling Capital Variable Insurance Funds, (together the “Funds”) hereby certify that I have received, read and understand the Code of Ethics for Principal Executive and Principal Financial Officers (“Code”) of the Funds.

Name:

Title:

Date:

6

STERLING CAPITAL FUNDS

STERLING CAPITAL VARIABLE INSURANCE FUNDS

Exhibit C

ANNUAL CERTIFICATION

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND

PRINCIPAL FINANCIAL OFFICERS

I,                                         , [Principal Executive Officer/Principal Financial Officer] of Sterling Capital Funds and the Sterling Capital Variable Insurance Funds, (together the “Funds”) hereby certify that I have received and read the Code of Ethics for Principal Executive and Principal Financial Officers (“Code”) of the Funds. I further certify to the Boards that I understand and have complied with the requirements of the Code.

Name:

Title:

Date:

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EX-99.CERT

Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the

Sarbanes-Oxley Act

I, James T. Gillespie, certify that:

1. I have reviewed this report on Form N-CSR of Sterling Capital Funds;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    12/4/13	/s/ James T. Gillespie
	James T. Gillespie, President
	(principal executive officer)

Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the

Sarbanes-Oxley Act

I, Kenneth R. Cotner, certify that:

1. I have reviewed this report on Form N-CSR of Sterling Capital Funds;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    12/4/13	/s/ Kenneth R. Cotner
	Kenneth R. Cotner, Treasurer
	(principal financial officer)

EX-99.906CERT

Certification Pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act

I, James T. Gillespie, President of Sterling Capital Funds (the “Registrant”), certify that, to the best of my knowledge:

1. The Form N-CSR of the Registrant for the period ended September 30, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:    12/4/13	/s/ James T. Gillespie
	James T. Gillespie, President
	(principal executive officer)

I, Kenneth R. Cotner, Treasurer of Sterling Capital Funds (the “Registrant”), certify that, to the best of my knowledge:

1. The Form N-CSR of the Registrant for the period ended September 30, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:    12/4/13	/s/ Kenneth R. Cotner
	Kenneth R. Cotner, Treasurer
	(principal financial officer)