Sterling Bancshares

Investor’s Business Daily looks at one of my favorite regional banks, Sterling Bancshares (SBIB):

Sterling, with $3.7 billion in assets, focuses on Texas’ three largest markets: Houston, Dallas and San Antonio. It has 26 branches in its home base area of Houston and seven each in the Dallas and San Antonio markets.
The firm competes mostly with large banks based outside Texas. These banks, which tend to go after much bigger loans, include Bank of America, (BAC) JPMorgan Chase (JPM) and Wells Fargo. (WFC)
“It’s a bit of an underserved market that Sterling’s going after,” Cardenas said. “I think that’s a big part of their success.”
There’s still room to grow in those markets.
Sterling has less than 3% of Houston’s deposit market. It holds 1% or less in the Dallas and San Antonio markets.
“(Sterling’s) management team has had excess capital for many years, but they haven’t wasted it by overspending,” Arfstrom said. “They’ve been patient and prudent.”
The company could buy its way into a bigger share of its markets. Sterling has plenty of experience in this area, having acquired nine banks over the past seven years.
It also has been quick to hire folks away from banks that have been acquired by other firms.
“Our ability to pick up people from banks that have either announced they’re selling or (have been) sold to others has just been a windfall for us,” Bridgwater said on the conference call.

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Posted by on July 13th, 2006 at 10:24 am


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