5. Sterling Bancshares
Sterling Bancshares (SBIB) of Houston, Texas, saw its shares return 23% during the first quarter, to close at $8.61 Thursday.
The company announced a on January 18 an agreement to be acquired by Comerica (CMA) of Dallas, in an exchange of shares valued at $1 billion.Comerica agreed to exchange 0.2365 of its shares for each share of Sterling, and valued the deal at about $10 for each share for Sterling, whose stock had closed at $7.70 on January 18. Comerica agreed to pay about 2.3 times tangible book value for Sterling, according to SNL Financial, for a deal that was considered expensive in the current industry environment. Comerica's shares declined 13% during the first quarter, to close at $36.72 Thursday. When factoring-in the exchange ratio and the decline in Comerica's share price, Sterling's shareholders would have received value of $8.68 a share, if the merger had been completed on Thursday. The deal is expected to be completed by the end of the second quarter. Sterling is scheduled to announce its first-quarter results on April 19, with analysts expecting the company to earn two cents a share. One of the 14 analysts covering Sterling rates the shares a buy, while the all remaining analysts have neutral ratings.