UPDATE 1-TAC Capital seeks 5 Sterling Bancshares board seats

Thu Nov 4, 2010 5:56pm EDT

* TAC sends letter to Sterling shareholders with details

* Sterling shares rise 6 pct after market

Nov 4 (Reuters) - TAC Capital LLC, the largest shareholder in Sterling Bancshares Inc SBIB.O, said it plans to nominate five members to the bank's board at its upcoming 2011 annual meeting.

Privately owned investment firm TAC Capital, with a stake of more than 8 percent in Sterling, does not have any nominee currently on the board and said it has "lost confidence in the bank's current board and executive team." "Sterling's stock price, earnings and operational performance have significantly lagged the performance of its peers," TAC Capitals said in a letter to the Sterling shareholders.

Sterling was not immediately available for comment.

Houston-based Sterling is a bank holding company with total assets of $5 billion and has a market value of about $543.3 million.

Year to date, Sterling's shares have risen about 4 percent, but have declined to their current levels of about $5.44 from a high of $6.33 in April.

Last week, Sterling reported a third-quarter profit of 4 cents a share, from a loss of 30 cents last year.

Sterling shares rose about 6 percent to $5.77 Thursday in after-hours trading. (Reporting by Brenton Cordeiro in Bangalore; Editing by Gopakumar Warrier)