EXHIBIT 99.1

Press Release

Sterling Bancshares Issues Trust Preferred Securities

HOUSTON -- Sterling Bancshares, Inc. (Nasdaq: SBIB) announced today the issuance
of $31,250,000 of 8.30% Cumulative Trust Preferred Securities (the "Trust
Preferred Securities") of Sterling Bancshares Capital Trust III with a
liquidation value of $25 per security. The securities represent undivided
beneficial interests in the trust, which was established by Sterling Bancshares
for the purpose of issuing the securities. The Trust Preferred Securities were
sold in a publicly underwritten offering, have a maturity of 30 years and will
pay quarterly cumulative cash distributions. The Trust Preferred Securities
began trading today on the Nasdaq National Market under the trading symbol
"SBIBN".

Sterling Bancshares Capital Trust III used the proceeds from the sale of the
Trust Preferred Securities to purchase junior subordinated debentures of the
company. The company expects to use the net proceeds to redeem in full the 9.28%
junior subordinated debentures previously sold to Sterling Bancshares Capital
Trust I in 1997. Sterling Bancshares Capital Trust I will then use the net
proceeds to redeem from the public all of its outstanding trust preferred
securities.

The Trust Preferred Securities were underwritten and sold by Legg Mason Wood
Walker, Incorporated and Stifel, Nicolaus & Company, Incorporated.

Sterling Bancshares, Inc. is a Houston-based bank holding company that operates
39 community-banking offices in the greater metro areas of Dallas, Houston, San
Antonio, and South Texas. Sterling also provides mortgage- banking services
through its 80 percent-owned subsidiary, Sterling Capital Mortgage Company.
Sterling's common stock is traded through the Nasdaq National Market System
under the symbol SBIB. For more information on Sterling Bancshares, please visit
the company's web site at www.banksterling.com.

Except for historical information contained herein, this press release contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties, including,
but not limited to, the following: general business and economic conditions in
the markets the Company serves may be less favorable than anticipated which
could decrease the demand for loan, deposit and other financial services and
increase loan delinquencies and defaults; changes in market rates and prices may
adversely impact the value of securities, loans, deposits and other financial
instruments; the Company's liquidity requirements could be adversely affected by
changes in its assets and liabilities; legislative or regulatory developments
including changes in laws concerning taxes, banking, securities, insurance and
other aspects of the financial securities industry; competitive factors may
increase, including product and pricing pressures among financial services
organizations; and changes in fiscal and governmental policies of the United
States federal government could have an adverse effect on the Company's
business. Please also read the additional risks and factors described from time
to time in the Company's reports filed with the Securities and Exchange
Commission, including the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2001.

     For More Information Contact:
     Eugene S. Putnam, Jr., Chief Financial Officer
     713-507-7292