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) --


(CMA) - Get Comerica Incorporated Report

agreed to acquire

Sterling Bancshares


in a deal that values Sterling at $10 a share, or $1.027 billion.

Each Sterling share will be exchanged for 0.2365 a share of Comerica. The $10 valuation of Sterling's shares is based on Comerica's 15-day average closing price of $42.28 through Jan. 11.

The acquisition price is a 30% premium to Sterling's closing stock price Friday of $7.70.

"Sterling has a very appealing branch network which almost doubles our presence in Houston, provides an entry into the San Antonio market, one of the fastest growing metropolitan areas in the country, and complements our banking center network in Dallas-Fort Worth," said Ralph Babb, Comerica's chairman and CEO, in a statement Tuesday.

The acquisition is expected to be completed by the middle of the year.

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Last week it was reported Comerica and


(BBT) - Get BB&T Corporation Report

were in the running for


, a bank that ran into trouble when it expanded beyond its home turf of Texas and began making commercial real-estate loans in Arizona, Florida and California, according to the

Wall Street Journal


-- Written by Joseph Woelfel

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.chief executive officer. "Sterling also has a very attractive deposit base, with a relatively large component of noninterest-bearing deposits. We believe this gives us the ability to leverage additional marketing capacity to offer a wide array of products through a larger distribution network, particularly to middle market and small business companies."Today's announcement is consistent with our strategy of growth and balance," added Babb. "It significantly bolsters our presence in Texas, one of this nation's most attractive growth markets, while accelerating our geographic balance. It is a strategically compelling fit. Like Comerica, the Sterling team shares our focus on relationship banking and serving the community. We look forward to a seamless integration and offering Sterling customers the resources of a larger bank, with the continued touch and feel of a community bank." "The combination with Comerica is good news for Sterling shareholders, customers and employees," said J. Downey Bridgwater, chairman and chief executive officer of Sterling. "It brings us together with a banking company that shares our vision and values, and our passion for doing business in the great state of Texas. This combination is the right one for Sterling and offers our customers an outstanding array of products and services from Comerica, the largest U.S. banking company headquartered in Texas."Bridgwater is expected to become Comerica's Houston market president following completion of the acquisition, reporting to J. Patrick Faubion, Comerica's Texas market president.On a pro forma basis, Comerica will continue to have a solid capital position, including a Tier 1 capital ratio of about 10 percent.The transaction is expected to be break even to Comerica's earnings in the first full fiscal year, excluding merger and integration costs of approximately $80 million after-tax, and be accretive thereafter. Estimated synergies include expense savings of $56 million, to be fully realized on a run-rate basis by year-end 2012.The transaction, which has been approved by the Comerica and Sterling Boards of Directors, is expected to be completed by mid-year 2011. The transaction is subject to customary closing conditions, including approval by Sterling shareholders and regulatory approvals.Comerica would grow from having 95 banking centers in Texas to 152 banking centers in the state, including 65 in Houston, 63 in Dallas/Fort Worth, 13 in San Antonio and 11 in Austin. In addition, the acquisition adds about $3 billion in loans and $4 billion in deposits.