"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," Comerica Chairman and CEO Ralph W. Babb Jr said in a statement.
The transaction also gives Comerica about $3 billion in loans and $4 billion in deposits.
Sterling Bancshares of Houston, Texas, had been facing a proxy fight from its largest shareholder and had reportedly put itself on the auction block.
Each outstanding Sterling share will be exchanged for 0.2365 shares of Comerica. The deal values each Sterling share at $10 apiece, which is a 30 percent premium to the stock's Friday closing price of $7.70.
Sterling shares rose $1.60, or 20.7 percent, to $9.30 a share in pre-market trading.
Sterling Chairman and CEO J. Downey Bridgwater is expected to become Comerica's Houston market president once the transaction is complete. He will report to Comerica's Texas market president, J. Patrick Faubion.
Comerica anticipates break-even earnings in the first full fiscal year when removing about $80 million in acquisition-related costs. The company also reported on Tuesday that made money in its fourth-quarter. Comerica earned $95 million, or 53 cents per share, compared with a loss of $62 million, or 42 cents per share, a year earlier.
Sterling Bancshares also posted its fourth-quarter results, which rose 12 percent to $1.9 million, or 2 cents per share, from $1.7 million, or 2 cents per share, a year ago.
Both companies' boards have approved the transaction, which is expected to close by midyear. The deal still needs the approval of Sterling shareholders.