<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10 - Q/A
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[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarter ended March 31, 1997
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-20750
STERLING BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Texas 74-2175590
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(State of Incorporation) (IRS Employer ID Number)
15000 Northwest Freeway, Suite 200
Houston, Texas 77040
(Address of principal executive office)
713-466-8300
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 ("Act") during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days
Yes [X] No [ ]
The number of shares outstanding of each class of the registrant's capital
stock as of March 31, 1997:
Class of Stock Shares Outstanding
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Common Stock, Par Value $1.00 12,004,400
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PART I. FINANCIAL INFORMATION
On March 18, 1997, the Company entered into an Agreement and Plan of Merger
(the "Merger Agreement") to acquire First Houston Bancshares, Inc. ("First
Houston") and its subsidiary, Houston National Bank, in a stock-for-stock
merger (the "Merger"). The Merger Agreement, which is subject to approval of
First Houston's shareholders and various banking regulatory authorities,
provides that the Company will issue approximately 1.72 million shares of the
Company's common stock to the stockholders of First Houston in exchange for all
of the issued and outstanding shares of First Houston. The final purchase price
is subject to certain closing adjustments. The transaction is expected to be
accounted for as a pooling of interests and is expected to close in the third
quarter of 1997.
The pro forma consolidated financial statements of the Company and First
Houston are presented as if the Merger had occurred on January 1, 1995, after
giving effect to the pro forma adjustments described in the notes to the pro
forma consolidated financial statements included elsewhere in this Form 10-QA.
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ITEM I. PRO FORMA FINANCIAL STATEMENTS
STERLING BANCSHARES, INC. AND SUBSIDIARIES
FIRST HOUSTON BANCSHARES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
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(In thousands)
<S> <C> <C>
ASSETS
Cash and due from banks $ 59,031 $ 85,291
Federal funds sold 35,362 40,563
Interest bearing deposits in financial institutions 25,427 22
Investment securities:
Available-for-sale 58,251 57,382
Held-to-maturity 168,573 148,083
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Total investment securities 226,824 205,465
Investment in unconsolidated subsidiary 2,266 2,316
Loans:
Loans held for sale 30,000 40,969
Loans held for investment 542,752 513,356
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Total loans 572,752 554,325
Allowance for credit losses (7,565) (7,053)
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Total loans, net 565,187 547,272
Real estate acquired by foreclosure and certain other
real estate 1,704 2,072
Premises and equipment, net 27,869 25,873
Goodwill 1,758 1,839
Accrued interest receivable and other assets 11,124 11,617
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Total assets $ 956,552 $ 922,330
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LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 869,318 $ 840,344
Securities sold under agreements to repurchase 7,822 3,751
Accrued interest payable and other liabilities 6,459 7,231
Notes payable 3,600 4,000
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Total liabilities 887,199 855,326
Shareholders' equity:
Preferred stock, $1 par value, 1 million shares auth 88 88
Common stock, $1 par value, 20 million shares auth. (1) 13,728 13,673
Capital surplus 23,655 23,470
Retained earnings 32,157 29,998
Net unrealized gain (loss) on held-to-maturity
securities transferred from available-for-sale (275) (225)
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Total shareholders' equity 69,353 67,004
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Total liabilities and shareholders' equity $ 956,552 $ 922,330
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</TABLE>
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STERLING BANCSHARES, INC., AND SUBSIDIARIES
FIRST HOUSTON BANCSHARES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Years Ended
Ended March 31, December 31,
1997 1996 1996 1995
-------- -------- -------- --------
(In thousands)
<S> <C> <C> <C> <C>
Interest income $ 17,369 $ 14,467 $ 62,171 $ 54,268
Interest expense 5,448 4,674 19,807 17,271
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Net interest income 11,921 9,793 42,364 36,997
Provision for credit losses 692 561 2,343 1,149
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Net interest income after provision 11,229 9,232 40,021 35,848
Non-interest income 2,110 2,085 8,598 8,068
Non-interest expense 9,097 7,331 32,354 29,829
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Income before income taxes 4,242 3,986 16,265 14,087
Provision for income taxes 1,404 1,282 5,112 4,404
-------- -------- -------- --------
Net income $ 2,838 $ 2,704 $ 11,153 $ 9,683
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Net income per shares (fully diluted) $ 0.20 $ 0.19 $ 0.79 $ 0.70
Weighted average common and common
equivalent shares (2) 14,077 13,940 14,064 13,841
</TABLE>
(1) Common stock has been adjusted for the conversion and elimination of
21,375 shares of $40.00 par value preferred stock and the elimination of
2,098,000 shares of common stock of First Houston, and the issuance of
1,724,000 shares of the Company's common stock . The excess par value of
the retired shares over the issued shares has been adjusted to capital
surplus.
(2) Per share data for all periods and dates have been adjusted retroactively
to give effect to the 1.72 million shares to be issued in conjunction with
the merger with First Houston, and a three-for-two stock split in the form
of a stock dividend to common shareholders distributed on February 24,
1997.
ITEM 2. RECENT SALES OF UNREGISTERED SECURITIES
NONE.
