Sterling Bancshares Inc · 8-K · For 3/12/01

Filed On 3/12/01 5:14pm ET   ·   SEC File 0-20750   ·   Accession Number 899243-1-553

Current Report   ·   Form 8-K
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Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         6     30K 

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SECURITIES AND EXCHANGE COMMISSION  
WASHINGTON, D.C. 20549  

_____________________ 

FORM 8-K  

CURRENT REPORT  

Pursuant to Section 13 or 15(d) of the  

Securities Exchange Act of 1934 

_____________________ 

Date of Report (Date of earliest event reported): March 12, 2001  

STERLING BANCSHARES, INC. 
(Exact name of registrant as specified in its charter)

 Texas                         0-20750                  74-2175590
(State or other jurisdiction  (Commission file number)        (IRS employer     
of incorporation)                                          identification no.)

15000 Northwest Freeway 
Houston, Texas 77040  
(Address Of Principal Executive Office and Zip Code)  

(713) 466-8300  
(Registrant's telephone number, including area code)  

_____________________ 

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   This document includes "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities     
Exchange Act of 1934.  Other than statements of historical fact, all statements 
regarding the consummation of the transactions described in this document and   
the expectations of Sterling Bancshares, Inc. regarding the future performance  
of its business and its financial position are forward-looking statements.      
These forward-looking statements may include a statement of the assumptions or  
bases underlying the forward-looking statements.  We believe that we have chosen
these assumptions or bases in good faith and that they are reasonable.  However,
we caution you that assumptions or bases almost always vary from actual results,
and the differences between assumptions or bases and actual results can be      
material.  These forward-looking statements are subject to numerous risks and   
uncertainties.  We will not update these statements unless otherwise required by
applicable securities laws.                                                     

ITEM 5.  OTHER EVENTS.                                                          

On February 15, 2001, Sterling Bancshares, Inc., Sterling Bancshares  
Capital Trust II ("Sterling Capital Trust II") and Sterling Bancshares Capital  
Trust III ("Sterling Capital Trust III") filed with the Securities and Exchange 
Commission a Registration Statement on Form S-3 (File No. 333-55724) relating to
the offering, from time to time, of trust preferred securities of Sterling      
Capital Trust II and Sterling Capital Trust III, junior subordinated debentures 
of Sterling Bancshares, and guarantees of the trust preferred securities by     
Sterling Bancshares.  The Registration Statement was amended by Amendment No. 1 
to Form S-3 filed with the SEC on March 5, 2001.                                

    On March 12, 2001, Sterling Bancshares and Sterling Capital Trust II filed
with the SEC a preliminary prospectus supplement relating to an offering of     
trust preferred securities by Sterling Capital Trust II (the "Preliminary       
Prospectus Supplement").                                                        

Included in the Preliminary Prospectus Supplement are our preliminary 
unaudited financial results for the year ended December 31, 2000.  Also included
within the Preliminary Prospectus Supplement is additional information          
concerning the proposed acquisition by Sterling Bancshares of CaminoReal        
Bancshares of Texas, Inc. which was previously announced on October 24, 2000 and
reported in our Form 8-K filed with the SEC on October 30, 2000. This Current   
Report on Form 8-K is being filed by us to provide the additional information   
concerning the proposed merger and our preliminary unaudited financial results  
for the year ended December 31, 2000 as included in the Preliminary Prospectus  
Supplement.                                                                     

PRELIMINARY FINANCIAL RESULTS FOR YEAR ENDED DECEMBER 31, 2000                  

 On January 18, 2001, we announced unaudited preliminary results for the
year ended December 31, 2000.                                                   

Preliminary net income for the year ended December 31, 2000 was $26.6 
million, an increase of 24.3% over the $21.4 million in net income in 1999.     
Preliminary net income per diluted share was $1.00 in 2000, increasing 23.5%    
over the $0.81 net income per diluted share in 1999, and represents an 18.1%    
return on average equity for the year.                                          

   As of December 31, 2000, total assets were $1.93 billion as compared with
$1.96 billion on December 31, 1999.  The slight decrease in total assets        
resulted from a reduction in investment securities owned and related borrowings.
Total deposits increased $162 million or 11.5% to $1.6 billion, from $1.4       
billion on December 31, 1999.  Total loans on December 31, 2000 were $1.4       
billion, an increase of $173 million or 14.5%, from $1.2 billion on December 31,
1999.  Total investment securities were $291 million, a decrease of $234 million
or 44.6%.  Other borrowings were $147 million, a decrease of $215 million or    
59.5%.                                                                          

 Net income for the quarter ended December 31, 2000 was $7.0 million, an
increase of 12.5% over the $6.2 million in net income for the quarter ended     
December 31, 1999.  Fourth quarter earnings represent a 17.7% return on equity. 
Fourth quarter earnings per diluted share were $0.26 compared with $0.23 for    
fourth quarter 1999, an increase of 11.2%.                                      

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  For the quarter ended December 31, 2000, our tax equivalent net interest
margin was 5.77%.                                                               

At December 31, 2000, nonperforming loans of $10.0 million represented
0.73% of our $1.4 billion loan portfolio.  Net charge-offs for the year ended   
December 31, 2000 were $6.6 million or 0.53% of our loan portfolio, while the   
provision for loan losses for the same period was $9.1 million.  At December 31,
2000, the allowance for loan losses was 1.15% of total loans.                   

                                                                [Download Table]

                                                  At or For the Year Ended     
                                                         December 31,          
                                               ------------------------------- 
                                                  2000                 1999    
                                               ----------           ---------- 
                                                    (dollars in thousands,     
                                                   except per share amounts)   

                                               (unaudited)                     
                                                                               
Summary of Income:                                                             
   Interest income..................           $  156,430           $  123,621 
   Interest expense.................               58,109               35,132 
   Net interest income..............               98,321               88,489 
   Provision for loan losses........                9,100                8,643 
   Noninterest income...............               39,567               29,268 
   Noninterest expense..............               89,927               78,026 
   Income before income taxes.......               38,861               31,088 
   Net income.......................               26,580               21,423 

Common Share Data:                                                             
   Diluted earnings per share.......           $     1.00           $     0.81 
   Book value per share.............                 6.05                 5.12 
   Tangible book value per share....                 5.82                 4.88 
   Weighted average common and                                                 
    common equivalent shares........               26,555               26,337 

Balance Sheet Data:                                                            
   Total assets.....................           $1,925,131           $1,959,480 
   Loans, net of unearned discount..            1,368,129            1,194,981 
   Allowance for loan losses........               15,693               13,187 
   Total securities.................              291,181              525,239 
   Deposits.........................            1,577,735            1,415,551 
   Other borrowed funds.............              146,919              362,332 
   Company-obligated mandatorily                                               
    redeemable 9.28% trust                                                     
    preferred securities of                                                    
    Sterling Bancshares Capital                                                
    Trust I due June 6, 2027........               28,750               28,750 
   Shareholders' equity.............              159,134              134,543 

Selected Performance Ratios:                                                   
   Return on average assets.........                 1.36%                1.31%
   Return on average shareholders'                                             
    equity..........................                18.08                16.89 
   Dividend payout ratio............                19.73                21.06 
   Net interest margin (tax                                                    
    equivalent).....................                 5.63                 6.09 

Asset Quality Ratios:                                                          
   Period-end nonperforming loans                                              
    to total loans..................                 0.73%                0.51%
   Period-end nonperforming assets                                             
    to total assets.................                 0.62                 0.39 
   Period-end allowance for loan                                               
    losses to nonperforming loans...               157.20               217.25 
   Period-end allowance for loan                                               
    losses to total loans...........                 1.15                 1.10 
   Net charge-offs to average loans....              0.53                 0.58 

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                                                                [Download Table]

                                                  At or For the Year Ended     
                                                         December 31,          
                                               ------------------------------- 
                                                  2000                 1999    
                                               ----------           ---------- 
                                                    (dollars in thousands,     
                                                   except per share amounts)   

                                               (unaudited)                     
                                                                               
Liquidity and Capital Ratios:                                                  
   Average loans to average                                                    
    deposits........................                83.65%               78.37%
   Period-end shareholders' equity                                             
    to total assets.................                 8.27                 6.87 
   Average shareholders' equity to                                             
    average assets..................                 7.50                 7.75 
   Period-end Tier 1 capital to                                                
    risk weighted assets............                10.78                10.92 
   Period-end total capital to risk                                            
    weighted assets.................                11.51                11.83 
   Period-end Tier 1 leverage ratio                                            
    (Tier 1 capital to total                                                   
    average assets).................                 9.39                 8.28 

MERGER WITH CAMINOREAL BANCSHARES OF TEXAS, INC.                                

 On October 23, 2000, we entered into a definitive agreement and plan of
merger to acquire CaminoReal Bancshares of Texas, Inc. and its subsidiary bank, 
CaminoReal Bank, National Association, for an aggregate cash purchase price of  
$51.8 million.  The shareholders of CaminoReal Bancshares approved the merger on
February 15, 2001.  We have received necessary regulatory approval for the      
merger and are subject to the expiration of the waiting period which expires on 
March 14, 2001.  We expect to close the merger by the end of the first quarter  
of 2001.                                                                        

   The following summary additional consolidated financial data combines the
historical consolidated financial statements of Sterling Bancshares and         
CaminoReal Bancshares as if the merger had occurred on December 31, 2000.  In   
contemplation of the merger, CaminoReal Bancshares recorded $6.6 million in     
expenses related to the exchange of options and elimination of existing         
goodwill.  An aggregate amount of $5.8 million of junior subordinated debentures
issued by CaminoReal Bancshares were converted into equity.  We anticipate that 
the merger will generate goodwill of $27.1 million.  The following also reflects
our proposed issuance of $25 million of junior subordinated debentures relating 
to Sterling Capital Trust II's offering of its trust preferred securities.      

                                                                [Download Table]

                                                         At or For the     
                                                          Year Ended       
                                                       December 31, 2000   
                                                     ----------------------
                                                     (dollars in thousands)

                                                           (unaudited)     
                                                                           
Balance Sheet Data:                                                        
 Total assets.......................................       $2,215,645      
 Loans, net of unearned discount....................        1,517,721      
 Allowance for loan losses..........................           17,566      
 Total securities...................................          389,716      
 Deposits...........................................        1,836,259      
 Other borrowed funds...............................          152,436      
 Company-obligated mandatorily redeemable                                  
  9.28% trust preferred securities of                                      
  Sterling Bancshares Capital Trust I                                      
  due June 6, 2027..................................           28,750      
 Company-obligated mandatorily redeemable                                  
      % trust preferred securities of                                      
  Sterling Bancshares Capital Trust II                                     
  due         , 2031................................           25,000      
 Shareholders' equity...............................          159,134      

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                                                                [Download Table]

                                                         At or For the      
                                                           Year Ended       
                                                        December 31, 2000   
                                                      ----------------------
                                                      (dollars in thousands)
                                                           (unaudited)      
                                                                            
Asset Quality Ratios:                                                       
 Period-end nonperforming loans to total                                    
  loans.............................................            0.66%       
 Period-end nonperforming assets to total assets....            0.56        
 Period-end allowance for loan losses to                                    
  nonperforming loans...............................          174.93        
 Period-end allowance for loan losses to total                              
  loans.............................................            1.16        
 Net-charge-offs to average loans...................            0.53        

Liquidity and Capital Ratios:                                               
 Average loans to average deposits..................           83.64%       
 Period-end shareholders' equity to total assets....            7.18        
 Average shareholders' equity to average assets.....            7.50        
 Period-end Tier 1 capital to risk weighted assets..            9.62        
 Period-end total capital to risk weighted assets...           10.41        
 Period-end Tier 1 leverage ratio (Tier 1 capital to                        
  total average assets).............................            9.25        

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SIGNATURE 

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

Dated: March 12, 2001.        STERLING BANCSHARES, INC.                         

           By: /s/ EUGENE S. PUTNAM, JR.
                             -----------------------------------------
                   Eugene S. Putnam, Jr.
                     Chief Financial Officer

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Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 8-K Filing		Date		First		Last			Other Filings
		12/31/99		2					10-K405
		10/23/00		4
		10/24/00		2					8-K
		10/30/00		2					8-K
		12/31/00		2		5			10-K405
		1/18/01		2
		2/15/01		2		4			S-3
		3/5/01		2					S-3/A
Filed On / Filed As Of / For The Period Ended		3/12/01		1		6			424B3
		3/14/01		4
		6/6/27		3		4
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