Buy - Price 8.21 on Aug. 26
by Wunderlich Securities

On Aug. 18, we visited management at Houston headquarters. We came away with a sense that economic conditions have stabilized, as has credit quality. And opportunities to gain market share are abundant, as evidenced by the recently announced (and reasonably priced) branch acquisition from First Banks...[plus] strong management, abundant capital, and an enviable funding mix...SBIB is currently trading at a modest discount to the median for a select group of non-TARP [Troubled Asset Relief Program] banks headquartered in the South. Our 9 target approximates 1.9 times '09 projected TBV/share, which is a slight premium to peers that reflects the franchise value inherent in Sterling's strong core funding base. Market cap: $670 million.

Sterling Bancshares (SBIB0 was downgraded from Outperform to Neutral, Robert Baird said. $13 price target. Valuation call, as the stock has held up better than its peers this year.

given to me

Nice Houston footprint. Wachovia calling?

Date: 12-15-2006
Split ratio: 3-2

LACK OF GROWTH