STERLING BANCSHARES INC - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - CURRENT REPORT - STERLING BANCSHARES INC	v208278_8-k.htm

EXHIBIT 99.1

NEWS RELEASE

For More Information Contact:	For Release - January 18, 2011
Chris Reid, Vice President and Director of Investor Relations, (713) 507-2873 Media: Graham Painter, Executive Vice President and Director of Corporate Communication, (713) 507-2770

STERLING BANCSHARES REPORTS FOURTH QUARTER 2010 RESULTS

HOUSTON, TX, January 18, 2011 – Sterling Bancshares, Inc. (Nasdaq: SBIB) today reported net income of $1.9 million, or $0.02 per diluted common share, for the fourth quarter ended December 31, 2010, as compared to net income of $4.5 million, or $0.04 per diluted common share, for the third quarter of 2010.

Net income for the year ended December 31, 2010, was $704 thousand, or $0.01 per diluted common share, compared to a net loss of $13 million for 2009. Net loss applicable to common shareholders for the year ended December 31, 2009, was $22.3 million, or $0.28 per diluted common share, which included total preferred dividends of $9.3 million, or $0.12 per diluted common share.

Key items and metrics include the following:

·	Total nonperforming loans decreased $30.5 million, or 19% over the prior quarter;

·	Real estate acquired by foreclosure increased $22.5 million due to work out efforts on problem loans;

·	Period-end allowance for loan losses to period-end loans was 2.80% at December 31, 2010, compared to 2.81% at September 30, 2010;

·	Annual deposit growth of $162 million or 4%; and

·	Tangible capital ratio was 8.77% and all regulatory capital ratios were in excess of those considered to be well-capitalized at December 31, 2010.

At December 31, 2010, total loans were $2.8 billion, a decrease of $490 million or 15.1% compared to December 31, 2009. This decrease was due primarily to reductions in commercial real estate and construction and development loans of $157 million and $140 million, respectively, resulting from the Company’s decision to reduce exposure to these loan categories. The remaining decrease in loans was related to commercial and industrial loans which were impacted by reductions in the energy lending portfolio of approximately $100 million and continued low loan demand.

At December 31, 2010, total deposits were $4.3 billion, an increase of $162 million or 4.0% compared to December 31, 2009. Noninterest-bearing deposits increased $178 million or 15.6% for December 31, 2010, compared to December 31, 2009. Due to continued growth in core deposits during 2010, the Company was able to reduce higher-cost certificates of deposit by $150 million for the year.

Overall credit quality improved during the fourth quarter of 2010 with total nonperforming assets decreasing $8.1 million to $170 million at December 31, 2010, including a decrease in nonperforming loans of $30.5 million. Foreclosed assets increased $22.5 million on a linked-quarter basis due to problem loans transitioning into this category. Potential problem loans were $166 million at December 31, 2010, a decrease of $3.2 million over the prior quarter.

Sterling Bancshares, Inc., News Release

January 18, 2011

Page 2

At December 31, 2010, the total allowance for loan losses was $77.1 million or 2.80% of period-end total loans, down from $80.8 million or 2.81% of period-end total loans at September 30, 2010, and up from $74.7 million or 2.30% of period-end total loans at December 31, 2009.

Net charge-offs for the fourth quarter of 2010 were $9.7 million or 1.36% of average total loans, compared to $7.4 million or 1.01% of average total loans for the third quarter of 2010. Net charge-offs for the year ended December 31, 2010, were $44.5 million or 1.48% of average total loans, down from $60.9 million or 1.72% for 2009.

Tax-equivalent net interest income for the fourth quarter of 2010 was $40.1 million, down $2.5 million on a linked-quarter basis. Tax-equivalent net interest margin was 3.39% for the fourth quarter of 2010, down 29 basis points from 3.68% for the third quarter of 2010. Net interest income and margin during the fourth quarter of 2010 were negatively impacted by a decrease in average loans and a reduction in interest income from the interest rate hedge that was fully amortized during the third quarter of 2010.

Noninterest income for the fourth quarter of 2010 was $8.9 million, an increase of $3.4 million compared to the same period in 2009. The fourth quarter of 2009 was negatively impacted by $1.6 million in losses on sale of loans classified as held for sale and $1.8 million of losses on the sale of securities. Noninterest income was $33.4 million for 2010, a decrease of $2.5 million compared to 2009. This decrease was primarily related to gains from interest rate hedge ineffectiveness recorded in 2009.

Total noninterest expense for the fourth quarter of 2010 was $41.5 million, an increase of $2.0 million compared to the same period in 2009. The increase in noninterest expense was primarily due to an increase in professional fees of $937 thousand and FDIC assessments of $811 thousand. Noninterest expense was $159 million for 2010, a decrease of $4.1 million compared to 2009 which was primarily related to reductions in salary and benefits of $5.3 million.

As of December 31, 2010, Sterling had total assets of $5.2 billion, total loans of $2.8 billion and total deposits of $4.3 billion. Shareholders’ equity of $622 million at December 31, 2010, was 11.98% of total assets. Book value per common share at period-end was $6.10.

Additional Information

Management of Sterling will not be hosting a conference call. For more financial information on Sterling refer to the Investor Relations section of the Company’s web site at www.banksterling.com. The previous conference call scheduled for January 26, 2011, will no longer take place.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and are based on beliefs and assumptions of management at the time that this release was prepared. The Company does not assume any obligation to update the forward-looking statements. There are several factors, many beyond the Company’s control, that could cause results to differ significantly from expectations including: adverse changes in the loan portfolio and the resulting credit risk-related losses and expenses; potential inadequacy of the allowance for credit losses; any adjustments to the Company’s final reviews by the Company’s independent registered public accounting firm; the ability to maintain or improve origination volumes; competitive influences on product pricing; the ability to integrate acquisitions and realize expected cost savings and revenue enhancements; effects of changes in interest rates on net interest margin; and changes in federal and state regulations and laws. Additional factors can be found in the Company's 2009 Annual Report on Form 10-K which has been filed with the Securities and Exchange Commission and is available at the Securities and Exchange Commission’s web site (www.sec.gov).

Sterling Bancshares, Inc., News Release

January 18, 2011

Page 3

About Sterling Bancshares

Sterling Bancshares, Inc. is a Houston-based bank holding company with total assets of $5.2 billion, which operates 57 banking centers in the greater metropolitan areas of Houston, San Antonio, Dallas and Fort Worth, Texas. The Company’s common stock is traded through the NASDAQ Global Select Market under the symbol “SBIB”. For more information on Sterling Bancshares, please visit the Company’s web site at http://www.banksterling.com.

–Tables to follow–

STERLING BANCSHARES, INC.

SELECTED FINANCIAL INFORMATION (Unaudited)

(dollars in thousands, except for per share data)

Page 4


	Quarter Ended									Year Ended
	Dec. 31,			Sep. 30,			Dec. 31,
	2010			2010			2009			2010			2009
Profitability
Net income (loss)	$	1,901		$	4,455		$	1,736		$	704		$	(12,974	)
Net income (loss) applicable to common shareholders	$	1,901		$	4,455		$	1,736		$	704		$	(22,316	)

Earnings (loss) per common share (1)
Basic	$	0.02		$	0.04		$	0.02		$	0.01		$	(0.28	)
Diluted	$	0.02		$	0.04		$	0.02		$	0.01		$	(0.28	)

Return on average common equity (2)		1.20	%		2.80	%		1.24	%		0.11	%		(4.01	)%
Return on average assets (2)		0.15	%		0.35	%		0.14	%		0.01	%		(0.26	)%

Tax equivalent net interest margin (3)		3.39	%		3.68	%		4.11	%		3.70	%		4.22	%

Efficiency Ratio (4):
Consolidated		84.49	%		72.53	%		70.60	%		77.93	%		69.17	%
Sterling Bank		80.60	%		70.74	%		67.64	%		75.27	%		66.97	%

Liquidity and Capital Ratios
Average loans to average deposits		67.16	%		71.63	%		80.29	%		72.63	%		88.83	%
Period-end stockholders' equity to total assets		11.98	%		12.44	%		10.95	%		11.98	%		10.95	%
Average stockholders' equity to average assets		12.28	%		12.53	%		11.12	%		12.19	%		11.92	%
Period-end tangible capital to total tangible assets		8.77	%		9.13	%		7.48	%		8.77	%		7.48	%
Tier 1 capital to risk-weighted assets		15.43	%		15.23	%		11.61	%		15.43	%		11.61	%
Total capital to risk-weighted assets		18.10	%		17.88	%		14.41	%		18.10	%		14.41	%
Tier 1 leverage ratio (Tier 1 capital to average assets)		10.32	%		10.53	%		8.89	%		10.32	%		8.89	%

Other Data
Shares used in computing earnings (loss) per common share
Basic shares		101,967			101,934			81,771			98,617			78,696
Diluted shares		102,331			102,212			82,019			98,827			78,696
End of period common shares outstanding		101,984			101,952			81,853			101,984			81,853

Book value per common share at period-end	$	6.10		$	6.15		$	6.60		$	6.10		$	6.60
Cash dividends paid per common share	$	0.015		$	0.015		$	0.015		$	0.060		$	0.180
Common stock dividend payout ratio		80.53	%		34.35	%		70.74	%		827.32	%		(106.36	)%
Full-time equivalent employees		946			986			1,012			946			1,012
Number of banking centers		57			56			58			57			58

STERLING BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS (Unaudited)

(dollars in thousands)

Page 5

	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,
	2010			2010			2010			2010			2009
ASSETS
Cash and cash equivalents	$	502,894		$	366,590		$	359,388		$	361,199		$	246,215
Available-for-sale securities, at fair value		1,287,555			1,169,519			1,069,964			920,082			846,216
Held-to-maturity securities, at amortized cost		265,080			280,215			280,658			267,503			222,845

Loans held for sale		2,691			7,123			6,509			18,055			11,778
Loans held for investment		2,752,349			2,862,952			2,992,370			3,096,261			3,233,273
Total loans		2,755,040			2,870,075			2,998,879			3,114,316			3,245,051
Allowance for loan losses		(77,141	)		(80,754	)		(80,983	)		(76,646	)		(74,732	)
Loans, net		2,677,899			2,789,321			2,917,896			3,037,670			3,170,319

Premises and equipment, net		49,421			48,507			47,812			47,396			48,816
Real estate acquired by foreclosure		37,064			14,571			18,151			17,282			16,763
Goodwill		173,210			173,210			173,210			173,210			173,210
Core deposits and other intangibles, net		9,477			10,004			10,540			11,077			11,626
Accrued interest receivable		14,673			14,356			14,951			15,462			16,502
Other assets		174,680			173,328			183,429			192,498			184,536
TOTAL ASSETS	$	5,191,953		$	5,039,621		$	5,075,999		$	5,043,379		$	4,937,048

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand	$	1,322,492		$	1,248,321		$	1,266,781		$	1,167,602		$	1,144,133
Interest-bearing demand		2,138,822			2,014,207			1,962,854			2,031,399			2,004,539
Certificates and other time deposits		796,116			840,683			921,495			925,427			946,279
Total deposits		4,257,430			4,103,211			4,151,130			4,124,428			4,094,951
Other borrowed funds		112,202			106,546			100,770			99,012			97,245
Subordinated debt		78,059			78,624			78,247			77,737			77,338
Junior subordinated debt		82,734			82,734			82,734			82,734			82,734
Accrued interest payable and other liabilities		39,604			41,704			38,722			39,944			44,247
Total liabilities		4,570,029			4,412,819			4,451,603			4,423,855			4,396,515

COMMITMENTS AND CONTINGENCIES		—			—			—			—			—

SHAREHOLDERS' EQUITY
Common stock		103,852			103,820			103,795			103,745			83,721
Capital surplus		239,940			238,536			238,186			237,439			170,848
Retained earnings		290,800			290,429			287,503			288,436			295,909
Treasury stock		(21,399	)		(21,399	)		(21,399	)		(21,399	)		(21,399	)
Accumulated other comprehensive income, net of tax		8,731			15,416			16,311			11,303			11,454
Total shareholders' equity		621,924			626,802			624,396			619,524			540,533
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	5,191,953		$	5,039,621		$	5,075,999		$	5,043,379		$	4,937,048

STERLING BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(dollars in thousands, except for per share data)
Page 6

	Quarter Ended													Year Ended
	Dec. 31,			Sep. 30,		Jun. 30,		Mar. 31,			Dec. 31,
	2010			2010		2010		2010			2009			2010			2009
Interest income:
Loans, including fees	$	37,003		$	40,153	$	42,087	$	43,649		$	46,876		$	162,892		$	201,225
Securities:
Taxable		9,342			9,841		9,602		9,117			9,758			37,902			36,417
Non-taxable		1,028			1,013		915		925			929			3,881			3,616
Deposits in financial institutions		258			157		231		115			90			761			154
Other interest-earning assets		2			1		3		1			19			7			80
Total interest income		47,633			51,165		52,838		53,807			57,672			205,443			241,492

Interest expense:
Demand and savings deposits		3,158			3,583		4,319		4,212			4,243			15,272			16,024
Certificates and other time deposits		2,328			2,823		3,159		3,352			4,577			11,662			24,051
Other borrowed funds		781			784		768		448			314			2,781			1,897
Subordinated debt		714			747		705		687			713			2,853			3,325
Junior subordinated debt		1,043			1,071		1,040		1,028			1,045			4,182			4,486
Total interest expense		8,024			9,008		9,991		9,727			10,892			36,750			49,783
Net interest income		39,609			42,157		42,847		44,080			46,780			168,693			191,709
Provision for credit losses		5,250			7,716		9,336		22,936			11,000			45,238			87,631
Net interest income after provision for credit losses		34,359			34,441		33,511		21,144			35,780			123,455			104,078

Noninterest income:
Customer service fees		3,569			3,728		3,591		3,488			3,722			14,376			15,431
Net gain (loss) on securities		(136	)		43		17		20			(1,823	)		(56	)		(1,806	)
Wealth management fees		1,997			1,733		2,102		2,098			2,049			7,930			7,953
Other		3,447			3,986		2,815		931			1,543			11,179			14,317
Total noninterest income		8,877			9,490		8,525		6,537			5,491			33,429			35,895

Noninterest expense:
Salaries and employee benefits		19,933			20,722		20,453		20,503			19,496			81,611			86,930
Occupancy		6,083			5,566		5,709		5,790			5,822			23,148			23,826
Technology		2,176			2,267		2,332		2,417			2,375			9,192			9,850
Professional fees		2,220			1,452		1,372		2,005			1,283			7,049			4,702
Postage, delivery and supplies		606			661		719		708			685			2,694			2,866
Marketing		216			198		271		269			443			954			1,930
Core deposits and other intangibles amortization		527			537		537		549			552			2,150			2,247
Acquisition costs		—			—		—		—			980			—			1,134
FDIC insurance assessments		2,667			2,478		2,438		2,547			1,856			10,130			8,830
Other		7,076			3,899		6,975		4,165			5,998			22,115			20,869
Total noninterest expense		41,504			37,780		40,806		38,953			39,490			159,043			163,184

Income (loss) before income taxes		1,732			6,151		1,230		(11,272	)		1,781			(2,159	)		(23,211	)
Income tax provision (benefit)		(169	)		1,696		634		(5,024	)		45			(2,863	)		(10,237	)
Net income (loss)	$	1,901		$	4,455	$	596	$	(6,248	)	$	1,736		$	704		$	(12,974	)
Preferred stock dividends		—			—		—		—			—			—			9,342
Net income (loss) applicable to common shareholders	$	1,901		$	4,455	$	596	$	(6,248	)	$	1,736		$	704		$	(22,316	)

Earnings (loss) per common share (1):
Basic	$	0.02		$	0.04	$	0.01	$	(0.07	)	$	0.02		$	0.01		$	(0.28	)
Diluted	$	0.02		$	0.04	$	0.01	$	(0.07	)	$	0.02		$	0.01		$	(0.28	)

STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 7

	Quarter Ended
	Dec. 31,							Sep. 30,
	2010							2010
	Average Balance		Interest		Yield/Rate			Average Balance		Interest		Yield/Rate
Interest-Earning Assets:
Loans held for sale	$	6,728	$	36		2.15	%	$	5,390	$	28		2.06	%
Loans held for investment:
Taxable		2,807,348		36,967		5.22	%		2,930,124		40,122		5.43	%
Non-taxable (3)		75		1		6.61	%		295		4		5.52	%
Securities:
Taxable		1,348,061		9,342		2.75	%		1,286,050		9,841		3.04	%
Non-taxable (3)		112,733		1,527		5.37	%		112,188		1,497		5.30	%
Deposits in financial institutions		416,917		258		0.25	%		260,167		157		0.24	%
Other interest-earning assets		4,859		2		0.14	%		566		1		0.84	%
Total interest-earning assets		4,696,721		48,133		4.07	%		4,594,780		51,650		4.46	%
Noninterest-earning assets		435,743							438,522
Total Assets	$	5,132,464						$	5,033,302

Interest-Bearing Liabilities:
Deposits:
Demand and savings	$	2,069,470	$	3,158		0.61	%	$	2,003,914	$	3,583		0.71	%
Certificates and other time		827,574		2,328		1.12	%		870,041		2,823		1.29	%
Other borrowed funds		108,810		781		2.85	%		103,902		784		2.99	%
Subordinated debt		78,517		714		3.61	%		78,472		747		3.78	%
Junior subordinated debt		82,734		1,043		5.00	%		82,734		1,071		5.14	%
Total interest-bearing liabilities		3,167,105		8,024		1.01	%		3,139,063		9,008		1.12	%
Noninterest-bearing sources:
Noninterest-bearing liabilities		1,335,051							1,263,481
Shareholders' equity		630,308							630,758
Total Liabilities and Shareholders' Equity	$	5,132,464						$	5,033,302

Tax Equivalent Net Interest Income and Margin (3)				40,109		3.39	%				42,642		3.68	%

Non-GAAP to GAAP Reconciliation:
Tax Equivalent Adjustment:
Loans				1							1
Securities				499							484
Total tax equivalent adjustment				500							485
Net Interest Income			$	39,609						$	42,157

STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 8

	Year Ended
	2010							2009
	Average Balance		Interest		Yield/Rate			Average Balance		Interest		Yield/Rate
Interest-Earning Assets:
Loans held for sale	$	9,256	$	165		1.79	%	$	11,335	$	156		1.37	%
Loans held for investment:
Taxable		2,986,519		162,643		5.45	%		3,532,002		200,860		5.69	%
Non-taxable (3)		2,347		124		5.28	%		5,089		306		6.01	%
Securities:
Taxable		1,191,352		37,902		3.18	%		820,887		36,417		4.44	%
Non-taxable (3)		106,685		5,733		5.37	%		98,278		5,262		5.35	%
Deposits in financial institutions		308,882		761		0.25	%		86,673		154		0.18	%
Other interest-earning assets		2,174		7		0.33	%		28,703		80		0.28	%
Total interest-earning assets		4,607,215		207,335		4.50	%		4,582,967		243,235		5.31	%
Noninterest-earning assets		440,708							421,964
Total Assets	$	5,047,923						$	5,004,931

Interest-Bearing Liabilities:
Deposits:
Demand and savings	$	2,023,670	$	15,272		0.75	%	$	1,757,305	$	16,024		0.91	%
Certificates and other time		888,939		11,662		1.31	%		1,105,055		24,051		2.18	%
Other borrowed funds		103,419		2,781		2.69	%		207,766		1,897		0.91	%
Subordinated debt		78,139		2,853		3.65	%		77,643		3,325		4.28	%
Junior subordinated debt		82,734		4,182		5.05	%		82,734		4,486		5.42	%
Total interest-bearing liabilities		3,176,901		36,750		1.16	%		3,230,503		49,783		1.54	%

Noninterest-bearing sources:
Noninterest-bearing liabilities		1,255,896							1,177,999
Shareholders' equity		615,126							596,429
Total Liabilities and Shareholders' Equity	$	5,047,923						$	5,004,931

Tax Equivalent Net Interest Income and Margin (3)				170,585		3.70	%				193,452		4.22	%

Non-GAAP to GAAP Reconciliation:
Tax Equivalent Adjustment:
Loans				40							97
Securities				1,852							1,646
Total tax equivalent adjustment				1,892							1,743
Net Interest Income			$	168,693						$	191,709

STERLING BANCSHARES, INC.
SELECTED FINANCIAL INFORMATION (Unaudited)
(dollars in thousands)
Page 9

	Quarter Ended
	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
	2010		2010		2010		2010		2009
Condensed Average Balance Sheet
Loans held for sale	$	6,728	$	5,390	$	11,454	$	13,572	$	38,844
Loans held for investment		2,807,423		2,930,419		3,041,030		3,181,345		3,262,525
Total loans		2,814,151		2,935,809		3,052,484		3,194,917		3,301,369
Available-for-sale securities, at fair value		1,188,610		1,113,780		953,742		860,466		897,733
Held-to-maturity securities, at amortized cost		272,184		284,458		271,967		241,894		168,940
Deposits in financial institutions		416,917		260,167		362,429		194,104		163,195
Other interest-earning assets		4,859		566		840		2,418		26,825
Total interest-earning assets		4,696,721		4,594,780		4,641,462		4,493,799		4,558,062
Goodwill		173,210		173,210		173,210		173,210		173,210
Core deposits and other intangibles, net		9,732		10,262		10,800		11,340		11,890
All other noninterest-earning assets		252,801		255,050		260,923		259,198		236,710
Total assets	$	5,132,464	$	5,033,302	$	5,086,395	$	4,937,547	$	4,979,872

Noninterest-bearing demand	$	1,293,021	$	1,224,402	$	1,197,400	$	1,144,754	$	1,158,023
Interest-bearing deposits:
Interest-bearing demand		2,069,470		2,003,914		2,027,133		1,993,546		1,946,308
Jumbo certificates of deposit		509,458		539,094		582,727		549,723		576,984
Regular certificates of deposit		220,615		227,490		233,592		241,649		264,388
Brokered certificates of deposit		97,501		103,457		118,622		133,101		166,319
Total deposits		4,190,065		4,098,357		4,159,474		4,062,773		4,112,022
Other borrowed funds		108,810		103,902		100,976		99,884		107,211
Subordinated debt		78,517		78,472		77,831		77,724		77,824
Junior subordinated debt		82,734		82,734		82,734		82,734		82,734
Accrued interest payable and other liabilities		42,030		39,079		40,952		40,216		46,348
Total liabilities		4,502,156		4,402,544		4,461,967		4,363,331		4,426,139
Total shareholders' equity		630,308		630,758		624,428		574,216		553,733
Total liabilities and shareholders' equity	$	5,132,464	$	5,033,302	$	5,086,395	$	4,937,547	$	4,979,872

	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,
	2010		2010		2010		2010		2009
Period-end Loans:
Loans held for sale	$	2,691	$	7,123	$	6,509	$	18,055	$	11,778
Loans held for investment:
Commercial and industrial		623,487		597,205		658,141		697,998		806,542
Real Estate:
Commercial		1,511,846		1,590,081		1,632,213		1,672,562		1,669,118
Construction and development		220,076		268,691		310,689		330,855		360,444
Residential mortgage		354,310		362,404		343,894		346,400		344,838
Consumer/other		42,630		44,571		47,433		48,446		52,331
Loans held for investment		2,752,349		2,862,952		2,992,370		3,096,261		3,233,273
Total period-end loans	$	2,755,040	$	2,870,075	$	2,998,879	$	3,114,316	$	3,245,051

Period-End Deposits:
Noninterest-bearing demand	$	1,322,492	$	1,248,321	$	1,266,781	$	1,167,602	$	1,144,133
Interest-bearing demand		2,138,822		2,014,207		1,962,854		2,031,399		2,004,539
Certificates and other time deposits:
Jumbo		487,037		512,178		587,377		560,093		549,588
Regular		215,867		224,290		231,404		234,010		252,682
Brokered		93,212		104,215		102,714		131,324		144,009
Total period-end deposits	$	4,257,430	$	4,103,211	$	4,151,130	$	4,124,428	$	4,094,951

STERLING BANCSHARES, INC.

SELECTED FINANCIAL INFORMATION (Unaudited)

(dollars in thousands)

Page 10

	Quarter Ended															Year Ended
	Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,
	2010			2010			2010			2010			2009			2010			2009
Allowance For Credit Losses
Allowance for loan losses at beginning of period	$	80,754		$	80,983		$	76,646		$	74,732		$	70,059		$	74,732		$	49,177
Charge-offs:
Commercial, financial and industrial		1,845			1,034			1,687			1,968			1,536			6,534			22,068
Real estate, mortgage and construction		8,535			7,314			5,786			20,214			5,448			41,849			40,253
Consumer		323			285			205			262			477			1,075			1,589
Total Charge-offs		10,703			8,633			7,678			22,444			7,461			49,458			63,910
Recoveries:
Commercial, financial and industrial		342			481			433			483			536			1,739			1,713
Real estate, mortgage and construction		631			633			845			821			488			2,930			789
Consumer		67			72			51			118			110			308			530
Total Recoveries		1,040			1,186			1,329			1,422			1,134			4,977			3,032
Net charge-offs		9,663			7,447			6,349			21,022			6,327			44,481			60,878
Provision for loan losses		6,050			7,218			10,686			22,936			11,000			46,890			86,433
Allowance for loan losses at end of period	$	77,141		$	80,754		$	80,983		$	76,646		$	74,732		$	77,141		$	74,732

Allowance for unfunded loan commitments at beginning of period	$	2,000		$	1,502		$	2,852		$	2,852		$	2,852		$	2,852		$	1,654
Provision for losses on unfunded loan commitments		(800	)		498			(1,350	)		—			—			(1,652	)		1,198
Allowance for unfunded loan commitments at end of period		1,200			2,000			1,502			2,852			2,852			1,200			2,852
Total allowance for credit losses	$	78,341		$	82,754		$	82,485		$	79,498		$	77,584		$	78,341		$	77,584

Nonperforming Assets
Nonperforming loans:
Loans held for sale	$	—		$	1,665		$	3,491		$	10,883		$	9,896		$	—		$	9,896
Loans held for investment		133,264			162,096			162,669			125,025			92,668			133,264			92,668
Real estate acquired by foreclosure		37,064			14,571			18,151			17,282			16,763			37,064			16,763
Other repossessed assets		3			50			20			60			38			3			38
Total nonperforming assets	$	170,331		$	178,382		$	184,331		$	153,250		$	119,365		$	170,331		$	119,365

Restructured loans - accruing	$	27,699		$	17,495		$	15,001		$	10,675		$	69,857		$	27,699		$	69,857

Potential problem loans	$	166,442		$	169,646		$	142,123		$	172,020		$	187,513		$	166,442		$	187,513

Accruing loans 30 to 89 days past due	$	23,680		$	16,234		$	19,307		$	46,410		$	34,243		$	23,680		$	34,243

Accruing loans past due 90 days or more	$	507		$	953		$	441		$	306		$	41		$	507		$	41

Ratios
Period-end allowance for credit losses to period-end loans		2.84	%		2.88	%		2.75	%		2.55	%		2.39	%		2.84	%		2.39	%
Period-end allowance for loan losses to period-end loans		2.80	%		2.81	%		2.70	%		2.46	%		2.30	%		2.80	%		2.30	%
Period-end allowance for loan losses to nonperforming loans		57.89	%		49.31	%		48.74	%		56.40	%		72.86	%		57.89	%		72.86	%
Nonperforming loans to period-end loans		4.84	%		5.71	%		5.54	%		4.36	%		3.16	%		4.84	%		3.16	%
Nonperforming assets to period-end assets		3.28	%		3.54	%		3.63	%		3.04	%		2.42	%		3.28	%		2.42	%
Net charge-offs to average loans (2)		1.36	%		1.01	%		0.83	%		2.67	%		0.76	%		1.48	%		1.72	%

STERLING BANCSHARES, INC.

FOOTNOTES TO EARNINGS RELEASE

Page 11

(1)

Earnings per share in each quarter is computed individually using the weighted-average number of shares outstanding during that quarter while earnings per share for the full period is computed using the weighted-average number of shares outstanding during the year. Thus, the sum for all quarters does not necessarily equal the full period earnings per share.

(2)	Interim periods annualized.

(3)

Taxable-equivalent basis assuming a 35% tax rate. The Company presents net interest income on a tax-equivalent basis. Accordingly, net interest income from tax-exempt securities and loans is presented in the net interest income results on a basis comparable to taxable securities and loans. This non-GAAP financial measure allows management to assess the comparability of net interest income arising from both taxable and tax-exempt sources.

(4)	The efficiency ratio is calculated by dividing noninterest expense less acquisition costs and a one-time severance charge by tax equivalent basis net interest income plus noninterest income less net gain (loss) on investment securities.

STERLING BANCSHARES INC - FORM 8-K - EX-99.1 - PRESS RELEASE - January 18, 2011

Attached files

STERLING BANCSHARES INC Reports