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 WALTHAM, Mass., Oct. 11 /PRNewswire/ -- Fleet Financial Group (NYSE: FNG) today agreed to acquire the $1-billion Sterling Bancshares Corporation (NASDAQ: STLG), the holding company of Sterling Bank, for approximately $125 million in stock, representing a value of $39.50 for each share of Sterling common stock.
 The proposal, which is subject to approval by Sterling's stockholders and various federal and state regulatory agencies, was announced today by Terrence Murray, Fleet's chairman and chief executive officer, and John C. Warren, Sterling's chairman, president and chief executive officer.
 Sterling operates 13 banking offices in Middlesex County, Massachusetts. Following the completion of the transaction, which is expected to take place in the spring of 1994, Sterling's operations will be merged into Fleet Bank of Massachusetts, N.A.
 Middlesex County, a larger market than the entire state of Rhode Island, is one of New England's most attractive and affluent banking markets. Murray noted that Sterling represented one of the few and one of the best independent bank acquisition candidates in that market. This acquisition affords Fleet "real growth potential for our community lending efforts involving middle-market companies, our consumer services, and our investment services business."
 Fleet Bank of Massachusetts has 155 branches throughout the state, 22 of which are located in Middlesex County. As of Sept. 30, 1993, Fleet Bank of Massachusetts had assets of $8 billion.
 Under the terms of the acquisition agreement, Sterling stockholders will receive 1.1575 shares of Fleet Financial Group stock for each Sterling share, subject to a floating exchange rate that may fluctuate 15 percent in either direction. The transaction will be treated as a pooling of interests and is anticipated to be tax-free to Sterling shareholders.
 Murray said, "This combination is a highly attractive match, and one we believe will bring an outstanding array of products and services to Sterling's commercial and consumer customers."
 Leo R. Breitman, chairman and chief executive officer of Fleet Bank of Massachusetts, noted that the acquisition of Sterling Bank, "will permit us to expand our presence in Middlesex County, which is the state's leading market. It will enable us to expand our commercial and consumer banking franchise and increase our small business lending. We look forward to serving Sterling's customers."
 Warren said, "We believe that this transaction represents a wonderful opportunity for our stockholders. I am delighted that Sterling's customers will have the ability to avail themselves of a greatly expanded product line, including mutual funds, investment products and trust services, as well as the convenience of a significantly larger ATM and branch network throughout New England."
 For the first six months of 1993, Sterling Bancshares Corporation reported net income of $3.9 million, or $1.30 per share. The company's 1992 net income was $7.9 million or $2.68 per share.
 The $125 million purchase price represents 15.9 times Sterling's estimated 1993 earnings per share, and 187 percent of the company's anticipated fully diluted book value as of the closing.
 Fleet has a standard lock-up option to acquire additional shares of Sterling's stock at the signing of the merger agreement.
 Fleet Financial Group is a $45-billion diversified financial services company listed on the New York Stock Exchange (NYSE: FLT) with approximately 1,200 offices nationwide. Its lines of business include commercial and consumer banking, mortgage banking, consumer finance, asset-based lending, investment management, and student loan processing.
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 /CONTACT: John C. Warren, president, CEO and chairman or John F. Treanor, executive vice president and CFO, or Karen A. Wharton, senior vice president, investor relations all of Sterling Bancshares, 617-894-0022, x225, x202 (Monday only) or 617-894-7790 (Tuesday and thereafter)/

CO: Sterling Bancshares Corporation; Fleet Financial Group ST: Massachusetts, Rhode Island IN: FIN SU: TNM

DD -- NE008 -- 0584 10/11/93 09:50 EDT
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Publication:PR Newswire
Date:Oct 11, 1993

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