Correction: Fitch Ratings Assigns 'BB+' To Sterling Bancshares, Inc.'s Capital Trust III

Business Wire, Oct 1, 2002

Business Editors

CHICAGO--(BUSINESS WIRE)--Oct. 1, 2002

(this is an amended version of a press release issued earlier today. The Rating Outlook on Sterling Bancshares Capital Trust III is Positive, not Stable)

Fitch Ratings has assigned a 'BB ' rating to the $31.3 million Sterling Bancshares Capital Trust III (SBIB). The Rating Outlook is Positive.

SBIB's ratings are based on the company's strong niche serving a well-defined customer base of owner/operator businesses in Texas. While concentrated in Houston, the company has focused on diversifying into the key markets of San Antonio and Dallas through acquisitions and de novo branching. Overall performance is characterized by elevated, yet generally stable chargeoffs reflective of the higher risk lending to small businesses. Strong margins compensate for asset quality and have contributed to stable returns. Capital has been adversely impacted by acquisitions, and remains a constraining factor to ratings.

SBIB issued earlier in September 2002 $20 million in trust preferred through a private placement to fund the acquisition of ENB Bankshares, Inc. and other general corporate purposes; however, the company intends to use the net proceeds from the issuance of Capital Trust III's securities to replace $28.8 million outstanding under Capital Trust I securities that were issued in 1997. As a result, leverage and capital are not expected to be materially impacted upon the completion of this transaction.

Rating Assigned:

Sterling Bancshares Capital Trust III

-- Trust preferred 'BB '.