##### Table of Contents





UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
    Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to  Commission file number
    0-25033
  SUPERIOR BANCORP
  (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware(State or Other Jurisdiction
    of
    Incorporation or Organization)

63-1201350(I.R.S. Employer
    Identification No.)17 North 20th Street
    Birmingham, Alabama(Address of Principal
    Executive Offices)

35203(Zip
    Code)   (205) 327-1400
 (Registrants Telephone
    Number, Including Area Code)
   Title of each Class

Name of each exchange on which registeredCommon Stock, par value $.001 per share

NASDAQ Global Market   NONE
  o þ
  o þ
  Indicate by check mark whether the
    registrant: þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large
    accelerated
    filer  o
    Accelerated
    filer  þ
    Non-accelerated
    filer  o
    Smaller reporting
    company  o (Do     not check if a smaller reporting company)
  Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




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##### 





TABLE OF
    CONTENTS
   
 PagePART I


2Item 1.


Business


2Item 1A.


Risk Factors


16Item 1B.


Unresolved Staff Comments


18Item 2.


Properties


19Item 3.


Legal Proceedings


19Item 4.


Submission of Matters to a Vote of Security
    Holders


19PART II


19Item 5.


Market for The Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


19Item 6.


Selected Financial Data


23Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


25Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


75Item 8.


Financial Statements and Supplementary Data


75Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


137Item 9A.


Controls and Procedures


137Item 9B.


Other Information


139PART III


139Item 10.


Directors and Executive Officers of the
    Registrant


139Item 11.


Executive Compensation


139Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


139Item 13.


Certain Relationships and Related Transactions


139Item 14.


Principal Accounting Fees and Services


139PART IV


139Item 15.


Exhibits, Financial Statement Schedules


139SIGNATURES


144EX-10.23EX-10.24EX-10.25EX-10.26EX-10.27EX-10.28EX-21EX-23.1EX-23.2EX-31.01EX-31.02EX-32.01EX-32.02




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##### Table of Contents



PART I  Item 1.
    Business.  General
  (205) 327-1400.
        Strategy
  Operations.
  Products and Services.
    Market Areas.
 2




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##### Table of Contents



Alabama(45)

Florida(32)Albertville

Andalusia

Altha

ApalachicolaArab

Athens

Beverly Hills

BlountstownBirmingham

Blountsville

Bradenton

BristolBoaz

Chelsea

Brooksville

CarrabelleChildersburg

Cleveland

Clearwater

DunnellonCullman

Decatur

Homosassa

InvernessElkmont

Falkville

Marianna

Mexico BeachFrisco City

Gadsden

New Port Richey

Palm HarborGardendale

Guntersville

Panama City Beach

Port RicheyGurley

Haleyville

Port St. Joe

SarasotaHamilton

Hartselle

Siesta Key

Spring HillHoover

Huntsville(3)

Sun City Center(4)

Tallahassee (2)Madison

Meridianville

Tampa(2)

VeniceMonroeville

Montgomery

Wesley ChapelMountain Brook

New HopeOneonta(2)

OppPelham

Rainbow CityRogersville

SamsonSnead

SylacaugaTrussville

UniontownWarrior(2)     Growth.
    Operating
    Segments
   3




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##### Table of Contents



Lending
    Activities
  General.
      follow-up
 4




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Loan
    Portfolio
    Amount


PercentCommercial and industrial

$
207,372



8.95
%Real estate:Construction and land developmentResidential development  Alabama


173,579



7.48
%
    Florida


141,003



6.09
%
    Other


122



0.01
%Total residential development


314,704



13.58
%Commercial development  Alabama


76,315



3.29
%
    Florida


201,688



8.71
%
    Other


13,477



0.58
%Total commercial development


291,480



12.58
%Other development


31,403



1.36
%Total construction and land development


637,587



27.52
%Single-family mortgages


655,216



28.28
%Nonresidential mortgages


757,891



32.71
%Total real estate portfolio


2,050,694



88.51
%Consumer


57,877



2.50
%Other


972



0.04
%Total loans

$
2,316,915



100.00
%     Nonresidential Mortgage Loans. 30-year
  Single-Family Mortgage Loans.
 5




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Construction and Land Development Loans.
        Commercial and Industrial Loans.
 6




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##### Table of Contents



Consumer Loans.
  Credit
    Review and Procedures
      Deposits
    and Other Funding
        Competition
   7




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Employees
    Supervision
    and Regulation
  General.
  Holding Company Regulation.
   8




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Change in Bank Control Act.
  Regulation of Business Activities.
  Capital Requirements.
      Prompt Corrective Regulatory Action.
 9




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##### Table of Contents



Insurance of Deposit Accounts.
      Loans to One Borrower.
  QTL Test. 12-month
   10




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Limitations on Capital Distributions.
  Transactions with Related Parties. i.e.
    Standards for Safety and Soundness.
  Enforcement. and/or
 11




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Federal Home Loan Bank System.
  Federal Reserve System.
  Community Reinvestment Act.
  Confidentiality of Customer
    Information.
  Bank Secrecy Act.
  USA Patriot Act. non-U.S. owned
 12




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Consumer Laws and Regulations.
  Emergency Economic Stabilization Act.
      
    No golden parachute payments.  Golden
    parachute payment under the CPP means a severance payment
    resulting from involuntary termination of employment, or from
    bankruptcy of the employer, that exceeds three times the
    terminated employees average annual base salary over the
    five years prior to termination. Superior Bancorps senior
    executive officers have agreed to forego all golden parachute
    payments for as long as: (i) They remain senior
    executive officers (CEO, CFO and the next three
    highest-paid executive officers); (ii) and the Treasury
    Department continues to hold our equity or debt securities we
    issued to it under the CPP (the Covered Period).
    Recovery of Bonuses and Incentive Compensation if Based on
    Certain Material Inaccuracies.  Superior
    Bancorps officers have also agreed to a clawback
    provision, which means that we can recover incentive
    compensation paid during our participation in the CPP that is
    later found to have been based on materially inaccurate
    financial statements or other materially inaccurate measurements
    of performance.
    No Compensation Arrangements That Encourage Excessive
    Risks.  During the Covered Period, we are not
    allowed to enter into compensation arrangements that encourage
    senior executive officers to take 13




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unnecessary and excessive risks that threaten the
    value of our company. To make sure this does not happen,
    Superior Bancorps Compensation Committee is required to
    meet at least once a year with our senior risk officers to
    review our executive compensation arrangements in the light of
    our risk management policies and practices. Our senior executive
    officers written agreements include their obligation to
    execute whatever documents we may require in order to make any
    changes in compensation arrangements resulting from the
    Compensation Committees review.  
    Limit on Federal Income Tax Deductions.  During
    the Covered Period, we are not allowed to take federal income
    tax deductions for compensation paid to senior executive
    officers in excess of $500,000 per year, with certain exceptions
    that do not apply to our senior executive officers.  American Recovery and Reinvestment Act of
    2009.
  
    No severance payments.  Under the ARRA
    golden parachutes were redefined as any payment for
    departure from the Company for any reason, except for payments
    for services performed or benefits accrued. Consequently under
    the ARRA Superior Bancorp is prohibited from making any
    severance payment to our senior executive officers
    (defined in the ARRA as the five highest paid senior executive
    officers) and our next five most highly compensated employees
    during the Covered Period).
    Recovery of Incentive Compensation if Based on Certain
    Material Inaccuracies.  The ARRA also contains the
    clawback provision discussed above but extends its
    application to any bonus awards and other incentive compensation
    paid to any senior executive officers or the next 20 most highly
    compensated employees during the Covered Period that is later
    found to have been based on materially inaccurate financial
    statements or other materially inaccurate measurements of
    performance.
    No Compensation Arrangements That Encourage Earnings
    Manipulation. During the Covered Period, the ARRA prohibits
    compensation arrangements that encourage manipulation of
    reported earnings to enhance the compensation of any employees.
    Limit on Incentive Compensation.  The ARRA
    contains a provision that prohibits the payment or accrual of
    any bonus, retention award or incentive compensation to any
    senior executive officers the Covered Period other than awards
    of long-term restricted stock that (i) do not fully vest
    during the Covered Period, (ii) have a value not greater
    than one-third of the total annual compensation of the officer
    and (iii) are subject to such other restrictions as
    determined by the Secretary of the Treasury Department. The
    prohibition on bonus, incentive compensation and retention
    awards does not preclude payments required under written
    employment contracts entered into on or prior to
    February 11, 2009.
    Compensation and Human Resources Committee
    Functions.  The ARRA requires that our
    Compensation Committee comprise solely independent directors and
    that it meet at least semiannually to discuss and evaluate our
    employee compensation plans in light of an assessment of any
    risk posed to us from such compensation plans.
    Compliance Certifications.  The ARRA also
    requires a written certification by CEOs and CFOs of compliance
    with the provisions of the ARRA.
    Treasury Department Review Excessive Bonuses Previously
    Paid.  The ARRA directs the Secretary of the
    Treasury Department to review all compensation paid to our
    senior executive officers and our next 20 most highly
    compensated employees to determine whether any such payments
    were inconsistent with the purposes of the ARRA or were
    otherwise contrary to the public interest. If the Secretary of
    the Treasury Department makes such a finding, the Secretary of
    the Treasury Department is directed to negotiate with the 14




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CPP recipient and the subject employee for appropriate
    reimbursements to the federal government with respect to the
    compensation and bonuses.  
    Say on Pay Vote.  Under the ARRA the Securities
    and Exchange Commission is required to promulgate rules
    requiring a non-binding say on pay vote by the
    shareholders on executive compensation at the annual meeting
    during the Covered Period. Superior Bancorp has included such a
    proposal in its Proxy Statement for its upcoming 2009 annual
    stockholders meeting.  Temporary Liquidity Guarantee Program.
  Instability
    of Regulatory Structure
    Effect on
    Economic Environment
      Available
    Information
  www.superiorbank.com. Form 10-K, Form 10-Q, Form 8-K, www.superiorbank.com 1-800-SEC-0330
 15




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Code of
    Ethics
    Item 1A.
    Risk
    Factors.    Risks
    Relating To Our Business
  Recent Negative Developments in the Financial Services
    Industry and U.S. and Global Credit Markets May Adversely
    Impact Our Operations and Results.
  If the interest payments we make on our deposits increase
    relative to our interest income, we may be less
    profitable.
      An increase in loan prepayments may adversely affect our
    profitability.
 16




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If our allowance for loan losses is inadequate, our
    profitability will be reduced.
    Events in our geographic markets could adversely affect
    us.
      We face substantial competition.
  We are subject to extensive regulation.
    Federal regulation of banking industry may change
    significantly due to the unprecedented economic decline and
    conditions in the banking industry.
 17




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We may require additional capital to fund our growth
    plans.
  We are dependent upon the services of our management
    team.
  Risks
    Related To an Investment in Our Common Stock
  Superior Bancorps stock price may be volatile due to
    limited trading volume and general market
    conditions.
    Our ability to pay dividends is limited.
  Use of our common stock for future acquisitions or to raise
    capital may be dilutive to existing
    stockholders.
  Item 1B.
    Unresolved
    Staff Comments.   18




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Item 2.
    Properties.      Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    Of Matters To A Vote Of Security Holders.   PART II  Item 5.
    Market
    For The Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities.  Market
    for Common Stock
    High


Low2007First Quarter

$
47.48


$
42.28Second Quarter


43.96



38.56Third Quarter


41.72



32.40Fourth Quarter


37.40



20.002008First Quarter

$
24.24


$
17.00Second Quarter


22.64



8.30Third Quarter


12.50



5.41Fourth Quarter


9.00



2.532009First Quarter (through March 12, 2009)

$
4.00


$
1.69    19




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##### Table of Contents



Issuer
    Purchases of Equity Securities
  Form 10-K,
  Dividends
        Equity
    Compensation Plan Information
    Number of





Number of SharesSecurities


Weighted-


Remaining Available forto be Issued Upon


Average Exercise


Future Issuance UnderExercise of


Price of


Equity CompensationOutstanding


Outstanding


Plans (ExcludingOptions, Warrants


Options, Warrants


Securities ReflectedPlan Category

and Rights


and Rights


in Column (a))(a)


(b)


(c)Equity Compensation Plans Approved by Security Holders (1)


457,897


$
27.00



217,302Equity Compensation Plans not Approved by Security Holders (2)


391,025



33.39



53,011Total


848,922



29.94



270,313     (1)
    
    Excludes 78,507 shares of restricted stock granted under
    the Third Amended and Restated 1998 Stock Incentive Plan of The
    Banc Corporation.(2)
    
    Includes options covering (a) 390,735 shares issued to
    Messrs. Bailey, Scott and Gardner and three other
    management employees in connection with their employment
    agreements, (b) 53,011 shares reserved for issuance to
    other new management hires, and (c) 290 shares
    authorized and issued under the Commerce Bank of 20




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Alabama Stock Option Plan, which we assumed in the merger with
    Commerce Bank of Alabama in November 1998. We do not intend to
    grant any additional options under this plan.  2008 Incentive Compensation Plan.
    Third Amended and Restated 1998 Stock Incentive
    Plan.
  The Commerce Bank of Alabama Stock Incentive Compensation
    Plan.
 21




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Performance
    Graph
    
  Period EndingIndex

12/31/03

12/31/04

12/31/05

12/31/06

12/31/07

12/31/08Superior Bancorp


100.00



96.82



134.24



133.41



63.18



9.32NASDAQ Composite


100.00



108.59



110.08



120.56



132.39



78.72SNL Southeast Thrift Index


100.00



118.21



107.57



126.43



54.44



31.00    22




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##### Table of Contents



Item 6.
    Selected
    Financial Data.  Form 10-K.
  As of and For The Year Ended December 31,2008


2007


2006


2005


2004(Amounts in thousands, except per share data)Selected Statement of Financial Condition Data:Total assets

$
3,052,701


$
2,885,425


$
2,440,990


$
1,415,469


$
1,423,128Loans, net of unearned income


2,314,921



2,017,011



1,639,528



963,253



934,868Allowance for loan losses


28,850



22,868



18,892



12,011



12,543Investment securities


347,142



361,171



354,716



242,595



288,308Deposits


2,342,988



2,200,611



1,870,841



1,043,695



1,067,206Advances from FHLB and other borrowings


361,324



222,828



211,255



214,496



205,546Notes payable


7,000



9,500



5,545



3,755



3,965Subordinated debentures


60,884



53,744



44,006



31,959



31,959Stockholders equity


251,239



350,042



276,087



105,065



100,539Selected Statement of Operations Data:Interest income

$
167,888


$
171,929


$
108,777


$
77,280


$
66,160Interest expense


84,603



96,767



61,383



38,255



28,123Net interest income


83,285



75,162



47,394



39,025



38,037Provision for loan losses


13,112



4,541



2,500



3,500



975Noninterest income


16,767



19,357



11,811



9,583



10,527Insurance proceeds














5,114



Management separation costs










265



15,467



Goodwill impairment charge


160,306















Noninterest expense


94,372



78,223



49,520



45,153



47,198(Loss) income before income taxes (benefit)


(167,738
)


11,755



6,920



(10,398
)


391Income tax (benefit) expense


(4,588
)


4,134



1,923



(4,612
)


(796
)Net (loss) income


(163,150
)


7,621



4,997



(5,786
)


1,187Preferred stock dividends


311











305



446Effect of early conversion of preferred stock














2,006



Net (loss) income applicable to common stockholders

$
(163,461
)

$
7,621


$
4,997


$
(8,097
)

$
741Per Share Data:(8)Net (loss) income  basic

$
(16.31
)

$
0.82


$
0.85


$
(1.69
)

$
0.17 diluted(1)


(16.31
)


0.82



0.83



(1.69
)


0.17Weighted average shares outstanding  basic


10,021



9,244



5,852



4,789



4,396Weighted average shares outstanding  diluted(1)


10,021



9,333



6,008



4,789



4,396Common book value at period end

$
17.83


$
34.91


$
31.87


$
20.83


$
21.24Tangible book value per share


15.74



16.21



16.92



18.44



18.48Preferred shares outstanding at period end


69















62Common shares outstanding at period end


10,075



10,027



8,663



5,043



4,438Performance Ratios and Other Data:Return on average assets


(5.42
)%


0.29
%


0.30
%


(0.41
)%


0.09
%Return on average tangible assets


(5.78
)


0.31



0.30



N/A



N/AReturn on average stockholders equity


(46.58
)


2.47



3.55



(5.68
)


1.18Return on average tangible equity


(99.05
)


4.91



4.89



N/A



N/ANet interest margin(2)(3)


3.27



3.37



3.17



3.14



3.31Net interest spread(3)(4)


3.06



3.04



2.93



3.00



3.20Noninterest income to average assets(5)


0.70



0.67



0.66



0.77



0.82Noninterest expense to average assets(6)


2.99



2.83



2.84



3.14



3.52Efficiency ratio(7)


85.67



79.48



81.46



87.99



91.72Average loan to average deposit ratio


97.50



92.80



93.12



88.82



92.16Average interest-earning assets to average interest bearing
    liabilities


106.38



107.54



106.01



104.58



104.88Assets Quality Ratios:Allowance for loan losses to nonperforming loans


44.12
%


90.31
%


219.88
%


252.76
%


169.36
%Allowance for loan losses to loans, net of unearned income


1.25



1.13



1.15



1.25



1.34Nonperforming assets (NPAs) to loans plus NPAs, net
    of unearned income


3.67



1.47



0.63



0.68



1.32NPAs to total assets


2.81



1.03



0.43



0.47



0.87Net loan charge-offs to average loans


0.33



0.24



0.20



0.43



1.52Net loan charge-offs as a percentage of:Provision for loan losses


54.38



94.30



92.64



115.20



1,395.49Allowance for loan losses


24.71



18.72



12.26



33.57



108.47  23




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(1)-
    
    Common stock equivalents of 65,226,
    250,500 and 193,750 shares were not included in computing
    diluted earnings per share for the twelve-month periods ended
    December 31, 2008, 2005 and 2004, respectively, because
    their effects were antidilutive.(2)-
    
    Net interest income divided by
    average earning assets.(3)-
    
    Calculated on a taxable equivalent
    basis.(4)-
    
    Yield on average interest-earning
    assets less rate on average interest-bearing liabilities.(5)-
    
    Noninterest income has been
    adjusted for changes in fair value of derivatives, investment
    security gains(losses), and gain on extinguishment of
    liabilities.(6)-
    
    Noninterest expense has been
    adjusted for core deposit intangible (CDI) amortization,
    extinguishment of debt, termination of ESOP, merger-related
    costs, management separation costs, goodwill impairment charge,
    losses on other real estate and the loss on sale of assets.(7)-
    
    Efficiency ratio is calculated by
    dividing noninterest expense (adjusted for CDI amortization,
    merger-related costs, extinguishment of debt, termination of
    ESOP, goodwill impairment charge, losses on other real estate
    and the loss on sale of assets) by noninterest income (adjusted
    for changes in fair values of derivatives, investment security
    gains (losses), plus net interest income on a fully tax
    equivalent basis, and gain on extinguishment of liabilities).(8)-
    
    Per-share data for all previous
    periods presented have been retroactively restated to reflect a
    1-for-4
    reverse stock split effective April 28, 2008. 24




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation.  General
    Overview
           25




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30-89 days
     26




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Critical
    Accounting Estimates
    Allowance
    for Loan Losses
    Income
    Taxes
      Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
  Intangible
    and Long-lived Assets
   27




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##### Table of Contents



build-up
        Fair
    Value Measurements
  No. 157-2 No. 157-2),
  No. 157-2
 28




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Assets
    and Liabilities Recorded at Fair Value on a Recurring
    Basis
   Quoted Prices in





SignificantFair Value at


Active Markets for


Significant Other


UnobservableDecember 31,


Identical Assets


Observable Inputs


Inputs2008


(Level 1)


(Level 2)


(Level 3)Available for sale securities

$
347,142


$
164


$
328,481


$
18,497Derivative assets


1,427







1,427



Total recurring basis measured assets

$
348,569


$
164


$
329,908


$
18,497Derivative liabilities

$
1,534


$



$
1,534


$
Total recurring basis measured liabilities

$
1,534


$



$
1,534


$
   Valuation
    Techniques  Recurring Basis
  Securities Available for Sale.
  Derivative financial instruments.
 29




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Changes in Level 3 fair value
    measurements.
  Level 3
    Assets Measured at Fair Value on a Recurring Basis
  Available forSale Securities(In thousands)Balance at January 1, 2008 (date of adoption)

$
Transfer into Level 3 during third quarter 2008


25,956Total net losses for the year-to-date included in other
    comprehensive loss


(7,459
)Balance at December 31, 2008

$
18,497Net realized losses included in net loss for the year-to-date
    relating to Level 3 assets held at December 31, 2008

$
   Assets
    Recorded at Fair Value on a Nonrecurring Basis
    Quoted PricesinFair Value


Active Markets for


Significant Other


Significantat


Identical


Observable


UnobservableDecember 31,


Assets


Inputs


Inputs2008


(Level 1)


(Level 2)


(Level 3)Mortgage loans held for sale

$
22,040


$



$
22,040


$
Impaired loans, net of specific allowance


47,774











47,774Total nonrecurring basis measured assets

$
69,814


$



$
22,040


$
47,774   Valuation
    Techniques  Nonrecurring Basis
  Mortgage Loans Held for Sale.
  Impaired Loans. and/or and/or
 30




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Results
    of Operations
  Year
    ended December 31, 2008, compared with year ended
    December 31, 2007
  Earnings.
  Three Months


YearEnded December 31,


Ended December 31,2008


2007


2008


2007(Dollars in thousands, except per share data)Superior Bancorp and SubsidiariesNet (loss) income

$
(158,179
)

$
1,904


$
(163,150
)

$
7,621Net (loss) income per common share (diluted)


(15.80
)


0.19



(16.31
)


0.82Net interest margin


3.29
%


3.20
%


3.27
%


3.37
%Net interest spread


3.12



2.88



3.06



3.04Return on average assets


NCM



0.26



(5.42
)


0.29Return on average stockholders equity


NCM



2.16



(46.58
)


2.47Return on average tangible equity


NCM



4.66



(99.05
)


4.91Common book value per share

$
17.83


$
34.91


$
17.83


$
34.91Tangible book value per share


15.74



16.21



15.74



16.21         31




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##### Table of Contents



Net Interest Income.
  Increase (Decrease) inFourth Quarter


Year Ended December 31,2008 vs. 2007


2008 vs. 2007Average


Income/


Yield/


Average


Income/


Yield/Balance


Expense


Rate


Balance


Expense


Rate(Dollars in thousands)Interest-earning assets:Loans, net of unearned income

$
217,863


$
(4,215
)


(1.49
)%

$
333,746



(3,281
)


(1.41
)%Investment securitiesTaxable


(38,187
)


(361
)


0.20



(23,110
)


(864
)


0.11Tax-exempt


5,776



108



0.17



18,595



1,242



0.19Total investment securities


(32,411
)


(253
)


0.23



(4,515
)


378



0.17Federal funds sold


(4,208
)


(89
)


(3.79
)


(3,929
)


(349
)


(2.83
)Other investments


10,414



(101
)


(1.58
)


5,025



(366
)


(1.28
)Total interest -earning assets

$
191,658



(4,658
)


(1.21
)

$
330,327



(3,618
)


(1.12
)Interest-bearing liabilities:Demand deposits

$
(34,149
)


(3,098
)


(1.84
)

$
69,675



(6,086
)


(1.35
)Savings deposits


119,548



799



0.39



70,993



1,913



0.64Time deposits


(5,328
)


(4,276
)


(1.30
)


78,530



(7,089
)


(0.87
)Other borrowings


126,849



(330
)


(1.88
)


106,796



(867
)


(1.80
)Subordinated debentures


7,120



141



0.02



7,179



(35
)


(1.15
)Total interest-bearing liabilities

$
214,040



(6,764
)


(1.45
)

$
333,173



(12,164
)


(1.14
)Net interest income/net interest spread






2,106



0.24
%






8,546



(0.02
)%Net yield on earning assets










0.09
%










(0.10
)%Taxable equivalent adjustment:Investment securities






36











423Net interest income





$
2,070











8,123  32




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##### Table of Contents



Three Months Ended December 31,2008


2007Average


Income/


Yield/


Average


Income/


Yield/Balance


Expense


Rate


Balance


Expense


Rate(Dollars in thousands)ASSETSInterest-earning assets:Loans, net of unearned income(1)

$
2,263,676


$
36,445



6.40
%

$
2,045,813


$
40,660



7.89
%Investment securitiesTaxable


293,409



4,008



5.43



331,596



4,369



5.23Tax-exempt(2)


39,223



645



6.54



33,447



537



6.37Total investment securities


332,632



4,653



5.56



365,043



4,906



5.33Federal funds sold


4,292



8



0.74



8,500



97



4.53Other investments


59,214



539



3.62



48,800



640



5.20Total interest-earning assets


2,659,814



41,645



6.23



2,468,156



46,303



7.44Noninterest-earning assets:Cash and due from banks


61,967











48,618Premises and equipment


104,341











99,190Accrued interest and other assets


298,477











290,894Allowance for loan losses


(27,845
)










(22,095
)Total assets

$
3,096,754










$
2,884,763LIABILITIES AND STOCKHOLDERS EQUITYInterest-bearing liabilities:Demand deposits

$
601,222


$
2,559



1.69
%

$
635,371


$
5,657



3.53
%Savings deposits


179,494



1,113



2.47



59,946



314



2.08Time deposits


1,273,648



11,761



3.67



1,278,976



16,037



4.97Other borrowings


397,657



3,006



3.01



270,808



3,336



4.89Subordinated debentures


60,919



1,207



7.88



53,799



1,066



7.86Total interest-bearing liabilities


2,512,940



19,646



3.11



2,298,900



26,410



4.56Noninterest-bearing liabilities:Demand deposits


218,685











206,977Accrued interest and other liabilities


15,222











29,834Stockholders equity


349,907











349,052Total liabilities and stockholders equity

$
3,096,754










$
2,884,763Net interest income/net interest spread






21,999



3.12
%






19,893



2.88
%Net yield on earning assets










3.29
%










3.20
%Taxable equivalent adjustment:Investment securities(2)






219











183Net interest income





$
21,780










$
19,710     (1)
    
    Nonaccrual loans are included in loans, net of unearned income.
    No adjustment has been made for these loans in the calculation
    of yields.(2)
    
    Interest income and yields are presented on a fully taxable
    equivalent basis using a tax rate of 34%. 33




---



##### Table of Contents



Three Months Ended December 31,2008 vs. 2007(1)Increase


Changes Due To(Decrease)


Rate


Volume(Dollars in thousands)Increase (decrease) in:Income from interest-earning assets:Interest and fees on loans

$
(4,215
)

$
(8,221
)

$
4,006Interest on securities:Taxable


(361
)


160



(521
)Tax-exempt


108



14



94Interest on federal funds


(89
)


(56
)


(33
)Interest on other investments


(101
)


(219
)


118Total interest income


(4,658
)


(8,322
)


3,664Expense from interest-bearing liabilities:Interest on demand deposits


(3,098
)


(2,808
)


(290
)Interest on savings deposits


799



69



730Interest on time deposits


(4,276
)


(4,209
)


(67
)Interest on other borrowings


(330
)


(1,554
)


1,224Interest on subordinated debentures


141



3



138Total interest expense


(6,764
)


(8,499
)


1,735Net interest income

$
2,106


$
177


$
1,929     (1)
    
    The change in interest due to both rate and volume has been
    allocated to rate and volume changes in proportion to the
    relationship of the absolute dollar amounts of the changes in
    each. 34




---



##### Table of Contents



Year Ended December 31,2008


2007


2006Interest


Average





Interest


Average





Interest


AverageAverage


Earned/


Yield/


Average


Earned/


Yield/


Average


Earned/


Yield/Balance


Paid


Rate


Balance


Paid


Rate


Balance


Paid


Rate(Dollars in thousands)ASSETSInterest-earning assets:Loans, net of unearned income(1)

$
2,172,775


$
147,162



6.77
%

$
1,839,029


$
150,443



8.18
%

$
1,176,844


$
92,659



7.87
%Investment securities:Taxable


305,783



16,310



5.33



328,893



17,174



5.22



264,031



12,994



4.92Tax-exempt(2)


40,263



2,601



6.46



21,668



1,359



6.27



10,093



589



5.84Total investment securities


346,046



18,911



5.46



350,561



18,533



5.29



274,124



13,583



4.96Federal funds sold


5,047



122



2.42



8,975



471



5.25



11,102



570



5.13Other investments


52,637



2,578



4.90



47,612



2,944



6.18



37,227



2,165



5.82Total interest-earning assets


2,576,505



168,773



6.55



2,246,177



172,391



7.67



1,499,297



108,977



7.27Noninterest-earning assets:Cash and due from banks


61,208











45,142











32,730Premises and equipment


103,614











95,289











64,378Accrued interest and other assets


294,245











254,785











100,514Allowance for loan losses


(25,527
)










(20,431
)










(13,594
)Total assets

$
3,010,045










$
2,620,962










$
1,683,325LIABILITIES AND STOCKHOLDERS EQUITYInterest-bearing liabilities:Demand deposits

$
637,800


$
14,705



2.31
%

$
568,125


$
20,791



3.66
%

$
359,262


$
11,857



3.30
%Savings deposits


121,645



2,731



2.25



50,652



819



1.61



27,968



177



0.63Time deposits


1,250,472



50,969



4.08



1,171,942



58,057



4.95



764,787



34,477



4.51Other borrowings


356,239



12,104



3.40



249,443



12,971



5.20



228,631



11,603



5.07Subordinated debentures


55,736



4,094



7.35



48,557



4,129



8.50



33,642



3,269



9.72Total interest-bearing liabilities


2,421,892



84,603



3.49



2,088,719



96,767



4.63



1,414,290



61,383



4.34Noninterest-bearing liabilities:Demand deposits


218,486











191,066











111,757Accrued interest and other liabilities


19,438











32,905











16,451Total liabilities


2,659,816











2,312,690











1,542,498Stockholders equity


350,229











308,272











140,827Total liabilities and stockholders equity

$
3,010,045










$
2,620,962










$
1,683,325Net interest income/net interest spread






84,170



3.06
%






75,624



3.04
%






47,594



2.93
%Net yield on earning assets










3.27
%










3.37
%










3.17
%Taxable equivalent adjustment:Investment securities(2)






885











462











200Net interest income





$
83,285










$
75,162










$
47,394     (1)
    
    Nonaccrual loans are included in loans, net of unearned income.
    No adjustment has been made for these loans in the calculation
    of yields.(2)
    
    Interest income and yields are presented on a fully taxable
    equivalent basis using a tax rate of 34 percent. 35




---



##### Table of Contents



Year Ended December 31,(1)2008 vs. 2007


2007 vs. 2006Increase


Changes Due to


Increase


Changes Due to(Decrease)


Rate


Volume


(Decrease)


Rate


Volume(Dollars in thousands)Income from earning assets:Interest and fees on loans

$
(3,281
)

$
(28,269
)

$
24,988


$
57,784


$
3,780


$
54,004Interest on securities:Taxable


(864
)


359



(1,223
)


4,180



831



3,349Tax-exempt


1,242



42



1,200



770



46



724Interest on federal funds


(349
)


(193
)


(156
)


(99
)


13



(112
)Interest on other investments


(366
)


(655
)


289



779



141



638Total interest income


(3,618
)


(28,716
)


25,098



63,414



4,811



58,603Expense from interest-bearing liabilities:Interest on demand deposits


(6,086
)


(8,405
)


2,319



8,934



1,412



7,522Interest on savings deposits


1,913



423



1,490



641



421



220Interest on time deposits


(7,089
)


(10,777
)


3,688



23,581



3,651



19,930Interest on other borrowings


(867
)


(5,367
)


4,500



1,368



301



1,067Interest on subordinated debentures


(35
)


(601
)


566



860



(450
)


1,310Total interest expense


(12,164
)


(24,727
)


12,563



35,384



5,335



30,049Net interest income

$
8,546


$
(3,989
)

$
12,535


$
28,030


$
(524
)

$
28,554     (1)
    
    The changes in net interest income due to both rate and volume
    have been allocated to rate and volume changes in proportion to
    the relationship of the absolute dollar amounts of the changes
    in each.  Provision for Loan Losses and 2008 Loan
    Charge-offs.
 36




---



##### Table of Contents



2008 Quarters EndedMarch 31


June 30


September 30


December 31(Dollars in thousands)Beginning allowance of loan losses

$
22,868


$
23,273


$
27,242


$
27,670Provision for loan losses


1,872



5,967



2,305



2,969Total charge-offs


1,745



2,482



2,247



1,971Total recoveries


(278
)


(485
)


(370
)


(182
)Net charge-offs


1,467



1,997



1,877



1,789Ending allowance of loan losses

$
23,273


$
27,243


$
27,670


$
28,850Total loans, net of unearned income

$
2,066,192


$
2,148,750


$
2,219,041


$
2,314,921Ratio: Allowance for loan losses to total loans, net of unearned
    income


1.13
%


1.27
%


1.25
%


1.25
%     Noninterest income.
  Three Months Ended December 31,2008


2007


% Change(Dollars in thousands)Service charges and fees on deposits

$
2,574


$
2,183



17.91
%Mortgage banking income


855



808



5.82Investment securities (losses) gains(1)


(1,381
)


66



NAChange in fair value of derivatives


467



1,141



(59.07
)Increase in cash surrender value of life insurance


585



514



13.81Other noninterest income


1,274



1,096



16.24Total

$
4,374


$
5,808



(24.69
)%   Year Ended December 31,2008


2007


% Change(Dollars in thousands)Service charges and fees on deposits

$
9,295


$
7,957



16.82
%Mortgage banking income


3,972



3,860



2.90Investment securities (losses) gains(1)


(8,453
)


308



NAChange in fair value of derivatives


1,240



1,310



5.34Increase in cash surrender value of life insurance


2,274



1,895



20.00Gain on extinguishment of liabilities


2,918







NAOther noninterest income


5,521



4,027



37.10Total

$
16,767


$
19,357



(13.38
)%     (1)
    
    Includes a non-cash
    other-than-temporary
    impairment charge. See Financial Condition 
    Investment Securities 37




---



##### Table of Contents



17-year
  Noninterest expenses.
  Three Months Ended December 31,2008


2007


% Change(Dollars in thousands)Noninterest ExpensesSalaries and employee benefits

$
13,094


$
11,357



15.29
%Occupancy, furniture and equipment expense


4,583



3,742



22.47Amortization of core deposit intangibles


896



588



52.38Merger-related costs






108



NAProfessional fees


745



720



3.36Goodwill impairment charge


160,306







NAInsurance expense


1,048



638



64.26Postage, stationery and supplies


559



570



(1.97
)Communications expense


549



538



2.05Advertising expense


666



638



4.42Other operating expense


2,787



1,951



42.88Total

$
185,233


$
20,850



331.30
%    38




---



##### Table of Contents



Year Ended December 31,2008


2007


% Change(Dollars in thousands)Noninterest ExpensesSalaries and employee benefits

$
49,672


$
42,316



17.38
%Occupancy, furniture and equipment expense


17,197



13,391



28.42Amortization of core deposit Intangibles


3,585



1,691



112.00Loss on extinguishment of debt






1,469



NAMerger-related costs


118



639



(81.53
)Loss on termination of ESOP






158



NAProfessional fees


2,637



2,269



16.21Goodwill impairment charge


160,306







NAInsurance expense


3,486



2,189



59.28Postage, stationery and supplies


2,114



2,252



(6.15
)Communications expense


2,203



2,007



9.75Advertising expense


2,977



2,397



24.18Other operating expense


10,383



7,445



39.48Total

$
254,678


$
78,223



103.74
%   Income tax expense.
    Balance at January 1, 2008

$
459,000Additions based upon tax positions related to the current year


Additions for tax positions of prior years


Reductions for tax positions of prior years


(123,000
)Settlements


Balance at December 31, 2008 (see below  settled
    in first quarter of 2009)

$
336,000      39




---



##### Table of Contents



other-than-temporary
    Year
    Ended December 31, 2007, Compared with Year Ended
    December 31, 2006
  Earnings.
  Three Months


YearEnded December 31,


Ended December 31,2007


2006


2007


2006(Dollars in thousands, except per share data)Superior Bancorp and SubsidiariesNet income

$
1,904


$
2,059


$
7,621


$
4,997Net income per common share (diluted)


0.19



0.24



0.82



0.83Net interest margin


3.20
%


3.34
%


3.37
%


3.17
%Net interest spread


2.88



3.01



3.04



2.93Return on average assets


0.26



0.37



0.29



0.30Return on average stockholders equity


2.16



3.71



2.47



3.55Return on average tangible equity


4.66



6.52



4.91



4.89Book value per share

$
34.91


$
31.87


$
34.91


$
31.87Tangible book value per share


16.21



16.92



16.21



16.92    40




---



##### Table of Contents



Net Interest Income.
  Increase (Decrease) inFourth Quarter


Year Ended December 31,2007 vs. 2006


2007 vs. 2006Average


Income/


Yield/


Average


Income/


Yield/Balance


Expense


Rate


Balance


Expense


Rate(Dollars in thousands)Interest-earning assets:Loans, net of unearned income

$
545,413


$
9,978



(0.22
)%

$
662,185


$
57,784



0.31
%Investment securitiesTaxable


(5,051
)


131



0.24



64,862



4,180



0.30Tax-exempt


21,494



361



0.54



11,575



770



0.43Total investment securities


16,443



492



0.31



76,437



4,950



0.33Federal funds sold


(18,110
)


(244
)


(0.53
)


(2,128
)


(99
)


0.12Other investments


1,761



(106
)


(1.08
)


10,385



779



0.36Total interest -earning assets

$
545,507



10,120



(0.03
)

$
746,879



63,414



0.40Interest-bearing liabilities:Demand deposits

$
192,738



1,769



0.05


$
208,863



8,934



0.36Savings deposits


11,752



187



1.04



22,684



641



0.98Time deposits


280,020



4,374



0.34



407,155



23,581



0.44Other borrowings


16,770



(55
)


(0.41
)


20,812



1,368



0.13Subordinated debentures


18,347



135



(2.55
)


14,915



860



(1.22
)Total interest-bearing liabilities

$
519,627



6,410



0.10


$
674,429



35,384



0.29Net interest income/net interest spread






3,710



(0.13
)%






28,030



0.11
%Net yield on earning assets










(0.14
)%










0.20
%Taxable equivalent adjustment:Investment securities






123











262Net interest income





$
3,587










$
27,768  41




---



##### Table of Contents



Three Months Ended December 31,2007


2006Average


Income/


Yield/


Average


Income/


Yield/Balance


Expense


Rate


Balance


Expense


Rate(Dollars in thousands)ASSETSInterest-earning assets:Loans, net of unearned income(1)

$
2,045,813


$
40,660



7.89
%

$
1,500,400


$
30,682



8.11
%Investment securitiesTaxable


331,596



4,369



5.23



336,647



4,238



4.99Tax-exempt(2)


33,447



537



6.37



11,953



176



5.83Total investment securities


365,043



4,906



5.33



348,600



4,414



5.02Federal funds sold


8,500



97



4.53



26,610



341



5.06Other investments


48,800



640



5.20



47,039



746



6.28Total interest-earning assets


2,468,156



46,303



7.44



1,922,649



36,183



7.47Noninterest-earning assets:Cash and due from banks


48,618











32,628Premises and equipment


99,190











81,068Accrued interest and other assets


290,894











164,232Allowance for loan losses


(22,095
)










(17,152
)Total assets

$
2,884,763










$
2,183,425LIABILITIES AND STOCKHOLDERS EQUITYInterest-bearing liabilities:Demand deposits

$
635,371


$
5,657



3.53
%

$
442,633


$
3,888



3.48
%Savings deposits


59,946



314



2.08



48,194



127



1.04Time deposits


1,278,976



16,037



4.97



998,956



11,663



4.63Other borrowings


270,808



3,336



4.89



254,038



3,391



5.30Subordinated debentures


53,799



1,066



7.86



35,452



931



10.41Total interest-bearing liabilities


2,298,900



26,410



4.56



1,779,273



20,000



4.46Noninterest-bearing liabilities:Demand deposits


206,977











159,239Accrued interest and other liabilities


29,834











24,759Stockholders equity


349,052











220,154Total liabilities and stockholders equity

$
2,884,763










$
2,183,425Net interest income/net interest spread






19,893



2.88
%






16,183



3.01
%Net yield on earning assets










3.20
%










3.34
%Taxable equivalent adjustment:Investment securities(2)






183











60Net interest income





$
19,710










$
16,123     (1)
    
    Nonaccrual loans are included in loans, net of unearned income.
    No adjustment has been made for these loans in the calculation
    of yields.(2)
    
    Interest income and yields are presented on a fully taxable
    equivalent basis using a tax rate of 34%. 42




---



##### Table of Contents



Three Months Ended December 31,2007 vs. 2006(1)Increase


Changes Due To(Decrease)


Rate


Volume(Dollars in thousands)Increase (decrease) in:Income from interest-earning assets:Interest and fees on loans

$
9,978


$
(856
)

$
10,834Interest on securities:Taxable


131



197



(66
)Tax-exempt


361



18



344Interest on federal funds


(244
)


(33
)


(211
)Interest on other investments


(106
)


(133
)


27Total interest income


10,120



(807
)


10,928Expense from interest-bearing liabilities:Interest on demand deposits


1,769



57



1,712Interest on savings deposits


187



150



37Interest on time deposits


4,374



908



3,466Interest on other borrowings


(55
)


(271
)


216Interest on subordinated debentures


135



(266
)


401Total interest expense


6,410



578



5,832Net interest income

$
3,710


$
(1,385
)

$
5,096   Twelve Months Ended December 31,2007 vs. 2006(1)Increase


Changes Due To(Decrease)


Rate


Volume(Dollars in thousands)Increase (decrease) in:Income from interest-earning assets:Interest and fees on loans

$
57,784


$
3,780


$
54,004Interest on securities:Taxable


4,180



831



3,349Tax-exempt


770



46



724Interest on federal funds


(99
)


13



(112
)Interest on other investments


779



141



638Total interest income


63,414



4,811



58,603Expense from interest-bearing liabilities:Interest on demand deposits


8,934



1,412



7,522Interest on savings deposits


641



421



220Interest on time deposits


23,581



3,651



19,930Interest on other borrowings


1,368



301



1,067Interest on subordinated debentures


860



(450
)


1,310Total interest expense


35,384



5,335



30,049Net interest income

$
28,030


$
(524
)

$
28,554     (1)
    
    The change in interest due to both rate and volume has been
    allocated to rate and volume changes in proportion to the
    relationship of the absolute dollar amounts of the changes in
    each. 43




---



##### Table of Contents



Provision for Loan Losses.
  Noninterest income.
  Three Months Ended December 31,2007


2006


% Change(Dollars in thousands)Service charges and fees on deposits

$
2,183


$
1,530



42.68
%Mortgage banking income


808



839



(3.69
)Investment securities gains


66







NAChange in fair value of derivatives


1,141



331



244.71Increase in cash surrender value of life insurance


514



357



43.98Other noninterest income


1,096



549



99.64Total

$
5,808


$
3,606



61.06
%   Year Ended December 31,2007


2006


% Change(Dollars in thousands)Service charges and fees on deposits

$
7,957


$
4,915



61.89
%Mortgage banking income


3,860



2,997



28.80Investment securities gains


308







NAChange in fair value of derivatives


1,310



374



250.27Increase in cash surrender value of life insurance


1,895



1,580



19.94Other noninterest income


4,027



1,945



107.04Total

$
19,357


$
11,811



63.89
%    44




---



##### Table of Contents



Noninterest expenses.
  Three Months Ended December 31,2007


2006


% Change(Dollars in thousands)Noninterest ExpensesSalaries and employee benefits

$
11,357


$
8,738



29.97
%Occupancy, furniture and equipment expense


3,742



2,430



53.99Management separation costs






265



NAAmortization of core deposit intangibles


588



209



181.34Merger-related costs


108



285



(62.11
)Professional fees


720



738



(2.32
)Insurance expense


638



588



8.56Postage, stationery and supplies


570



438



30.11Communications expense


538



401



34.08Advertising expense


638



432



47.49Other operating expense


1,951



1,593



22.47Total

$
20,850


$
16,117



29.37
%     Year Ended December 31,2007


2006


% Change(Dollars in thousands)Noninterest ExpensesSalaries and employee benefits

$
42,316


$
26,805



57.87
%Occupancy, furniture and equipment expense


13,391



7,754



72.70Management separation costs






265



NAAmortization of core deposit Intangibles


1,691



442



282.58Loss on extinguishment of debt


1,469







NAMerger-related costs


639



635



.63Loss on termination of ESOP


158







NASubsidiary startup costs






135



NAProfessional fees


2,269



2,598



(12.65
)Insurance expense


2,189



1,899



15.29Postage, stationery and supplies


2,252



1,250



80.20Communications expense


2,007



988



103.04Advertising expense


2,397



1,352



77.34Other operating expense


7,445



5,662



31.47Total

$
78,223


$
49,785



57.12
%   Income tax expense.
 45




---



##### Table of Contents



Results
    of Segment Operations
    2008


2007


2006(In thousands)Alabama region

$
(58,159
)

$
15,096


$
15,621Florida region


(81,600
)


23,448



18,165Administrative and other


(27,979
)


(26,789
)


(26,866
)Income tax (benefit) expense


(4,588
)


4,134



1,923Consolidated net (loss) income

$
(163,150
)

$
7,621


$
4,997   Alabama Region.
             46




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##### Table of Contents



Florida Region
              Market
    Risk
       47




---



##### Table of Contents



ChangeChange (in Basis Points) in Interest Rates

EVE


Amount


Percent(Dollars in thousands)+ 200 BP

$
534,869


$
27,676



5.5
%+ 100 BP


523,846



16,653



3.30 BP


507,193







− 100 BP


490,942



(16,251
)


(3.2
)     Derivative
    Positions.
  Overview.
 48




---



##### Table of Contents



Interest Rate Swaps.
  Fair Value Hedges.
  Cash Flow Hedges. 3-month
  Interest Rate Floors. 3-year 3-month
  Commitments to Originate Mortgage Loans. Amendment to Statement 133
    on Derivatives Instruments and Hedging Activities
 49




---



##### Table of Contents



Liquidity,
    Contractual Obligations and Off Balance Sheet
    Arrangements
  Overview. loan-to-deposit
  Short-term liquid assets.
  Maturity Distribution of Investment
    Securities.
  MaturingAfter One ButWithin One


Within Five


After Five But Within Ten


AfterYear


Years


Years


Ten Years


TotalAmount


Yield


Amount


Yield


Amount


Yield


Amount


Yield


Amount


Yield(Dollars in thousands)Securities available for sale:U.S. agencies

$







$
356



4.82
%

$
3,487



5.83
%

$







$
3,843



5.74
%State and political subdivision


253



3.20



3,173



4.05



5,814



4.08



31,382



4.33



40,622



4.26Mortgage-backed securities


455



5.91



23,792



4.65



14,245



5.34



241,632



5.20



280,124



5.17Other securities










5,746



5.54











16,807



6.27



22,553



6.13Total

$
708



4.94
%

$
33,067



4.75
%

$
23,546



5.10
%

$
289,821



5.19
%

$
347,142



5.14
%  50




---



##### Table of Contents



Selected Loan Maturity and Interest Rate
    Sensitivity.
  Rate Structure for LoansOver One Year








Maturing Over One YearOne Year


through Five


Over Five





Fixed


Floating oror Less


Years


Years


Total


Interest Rate


Adjustable Rate(Dollars in thousands)Commercial and industrial

$
142,138


$
61,413


$
3,821


$
207,372


$
26,518


$
38,716Real estate  construction and land development


441,400



161,280



34,907



637,587



89,523



106,664Real estate  mortgagesSingle-family


160,349



118,726



376,141



655,216



161,874



332,993Commercial


194,589



286,894



210,664



692,147



219,511



278,047Other


23,904



24,847



16,993



65,744



20,223



21,617Consumer


13,830



43,010



1,037



57,877



43,162



885Other


972











972







Total loans

$
977,182


$
696,170


$
643,563


$
2,316,915


$
560,811


$
778,922Percent to total loans


42.2
%


30.0
%


27.8
%


100.0
%


24.2
%


33.6
%   Maturities of Time Deposits of $100,000 or
    More.
  At December 31, 2008Under


3-6


6-12


Over3 Months


Months


Months


12 Months


Total(Dollars in thousands)$
199,223


$
152,223


$
204,002


$
106,727


$
662,175     Cash Flow Analysis.
   51




---



##### Table of Contents



Contractual Cash Obligations.
    Payments Due by PeriodLess than


One to


Four to


After FiveTotal


One Year


Three Years


Five Years


Years(Dollars in thousands)Contractual Cash ObligationsAdvances from FHLB(1)

$
361,324


$
142,984


$
85,000


$
101,340


$
32,000Operating leases(2)


21,025



3,080



4,690



2,632



10,623Capitalized leases(2)


4,826



301



544



521



3,460Note payable(3)


7,000



7,000











Repurchase agreements(4)


3,563



3,563











Subordinated debentures(5)


62,579















62,579Cumulative preferred stock dividends through first call date(6)


17,250



3,258



10,350



3,642



Limited partnership investments(7)


2,241



2,241











Deferred compensation agreements(8)


2,312















2,312Other employment related contract obligations incurred in
    business combinations(9)


1,943



1,113



830







Benefit Restoration Plan(10)


491



56



108



103



224Income tax obligations under FIN 48(11)


800



800











Total contractual cash obligations

$
485,354


$
164,396


$
101,522


$
108,238


$
111,198     (1)
    
    See Note 8 to the Consolidated Financial Statements.(2)
    
    See Note 6 to the Consolidated Financial Statements.(3)
    
    See Note 10 to the Consolidated Financial Statements.(4)
    
    See Note 9 to the Consolidated Financial Statements.(5)
    
    See Note 11 to the Consolidated Financial Statements.(6)
    
    See Note 27 to the Consolidated Financial Statements.(7)
    
    See Note 1 to the Consolidated Financial Statements.(8)
    
    See Note 13 to the Consolidated Financial Statements.(9)
    
    See Note 2 to the Consolidated Financial Statements.(10)
    
    See Note 20 to the Consolidated Financial Statements.(11)
    
    See Note 14 to the Consolidated Financial Statements.  52




---



##### Table of Contents



Payments Due by PeriodLess than


One to


Four to


After FiveTotal


One Year


Three Years


Five Years


Years(Dollars in thousands)Commercial CommitmentsCommitments to extend credit(1)

$
355,243


$
195,373


$
105,622


$
14,184


$
40,064Standby letters of credit(1)


35,636



27,765



7,737



134



Total commercial commitments

$
390,879


$
223,138


$
113,359


$
14,318


$
40,064     (1)
    
    See Note 17 to the Consolidated Financial Statements.      Financial
    Condition
    Recent
    Acquisitions
  Peoples Acquisition.
   53




---



##### Table of Contents



Amount(In thousands)Cash and due from banks

$
3,854Federal funds sold


4,200Investment securities


47,684Loans, net


254,047Premises and equipment, net


2,318Goodwill


47,313Core deposit intangibles


9,810Other assets


10,478Deposits


(245,459
)Federal funds purchased and repurchase agreements


(6,905
)Advances from FHLB


(37,983
)Junior subordinated debentures


(3,962
)Other liabilities


(8,966
)Total consideration paid for Peoples

$
76,429   Community Acquisition.
      Amount(In thousands)Cash and due from banks

$
23,167Federal funds sold


35,273Investment securities


117,424Loans, net


337,148Premises and equipment, net


22,529Goodwill


60,148Core deposit intangibles


10,142Other assets


21,185Deposits


(431,334
)FHLB advances


(68,801
)Junior subordinated debentures


(12,047
)Other liabilities


(17,634
)Total consideration paid for Community

$
97,200   Kensington Acquisition.
 54




---



##### Table of Contents



Amount(In thousands)Cash and due from banks

$
4,454Federal funds sold


964Investment securities


180,151Loans, net


136,826Premises and equipment, net


5,397Goodwill


44,470Core deposit intangibles


3,544Other assets


5,128Deposits


(276,186
)Repurchase agreements


(30,050
)Other liabilities


(3,326
)Total consideration paid for Kensington

$
71,372   Loans,
    net of unearned income.
  Composition of Loan Portfolios, Yield Changes and
    Diversification
   55




---



##### Table of Contents



Distribution
    of Loans by Category
  December 31,2008


2007


2006


2005


2004(Dollars in thousands)Commercial and industrial

$
207,372


$
183,013


$
172,872


$
135,454


$
134,688Real estate  construction and land development(1)


637,587



665,303



547,772



326,418



249,715Real estate  mortgagesSingle-family(2)


655,216



540,277



456,341



243,183



250,758Commercial


692,147



533,611



362,542



210,611



242,884Other


65,744



41,535



46,895



27,503



25,764Consumer


57,877



53,377



54,462



21,122



32,009Other


972



1,235



438



498



567Total loans


2,316,915



2,018,351



1,641,322



964,789



936,385Unearned income


(1,994
)


(1,340
)


(1,794
)


(1,536
)


(1,517
)Allowance for loan losses


(28,850
)


(22,868
)


(18,892
)


(12,011
)


(12,543
)Net loans

$
2,286,071


$
1,994,143


$
1,620,636


$
951,242


$
922,325     (1)
    
    A further analysis of the components of our real estate
    construction and land development loans as of December 31,
    2008 is as follows:  Residential


CommercialGeographic Location

Development


Development


Other


Total(Dollars in thousands)December 31, 2008Alabama

$
173,579


$
76,315


$
17,830


$
267,724Florida


141,003



201,688



13,573



356,264Other


122



13,477







13,599Total

$
314,704


$
291,480


$
31,403


$
637,587December 31, 2007Alabama

$
192,133


$
60,407


$
16,003


$
268,543Florida


195,460



162,286



18,564



376,310Other


7,929



12,521







20,450Total

$
395,522


$
235,214


$
34,567


$
665,303   (2)
    
    During the second quarter of 2008 we purchased a pool of
    seasoned residential mortgage loans totaling approximately
    $52 million.      December 31,


December 31,


Percent2008


2007


Change(Dollars in thousands)Total loans, net of unearned income

$
2,314,921


$
2,017,011



14.77
%Alabama Region


980,418



908,292



7.94Florida Region


1,060,994



932,478



13.78Other  see note 2 above


273,509



176,241



55.19  56




---



##### Table of Contents



Allowance
    for Loan Losses
  Overview.
  SFAS 5.
  
    trends in volume.
    effects of changes in credit concentrations.
    levels of and trends in delinquencies, classified loans, and
    non-performing assets.
    levels of and trends in charge-offs and recoveries.
    changes in lending policies and underwriting guidelines.
    national and local economic trends and condition.
    mergers and acquisitions.  SFAS 114. and/or
  Allocation of the Allowance for loan
    losses.
     57




---



##### Table of Contents



Allocation
    of the Allowance for Loan Losses
  December 31,2008


2007


2006


2005


2004Percent





Percent





Percent





Percent





Percentof Loans





of Loans





of Loans





of Loans





of Loansin Each





in Each





in Each





in Each





in EachCategory





Category





Category





Category





Categoryto Total





to Total





to Total





to Total





to TotalAmount


Loans


Amount


Loans


Amount


Loans


Amount


Loans


Amount


Loans(Dollars in thousands)Commercial and industrial

$
2,136



8.9
%

$
2,697



9.1
%

$
3,719



10.5
%

$
3,805



14.0
%

$
3,736



14.1
%Real estate  construction and land development


12,168



27.5



9,396



33.0



3,425



33.4



1,275



33.8



1,009



26.6Real estate  mortgagesSingle-family


7,159



28.3



2,360



26.8



2,910



27.8



1,395



25.2



1,582



26.8Commercial


5,155



29.9



6,781



26.4



6,206



22.0



4,194



21.8



4,594



25.9Other


532



2.9



155



2.1



530



2.9



215



2.9



257



2.7Consumer


1,700



2.5



1,479



2.6



2,102



3.4



1,127



2.3



1,365



3.9$
28,850



100.0
%

$
22,868



100.0
%

$
18,892



100.0
%

$
12,011



100.0
%

$
12,543



100.0
%     and/or
     58




---



##### Table of Contents



59




---



##### Table of Contents



Summary of Loan Loss Experience.
  Summary
    of Loan Loss Experience
  Year2008


2007


2006


2005


2004(Dollars in thousands)Allowance for loan losses at beginning of year

$
22,868


$
18,892


$
12,011


$
12,543


$
25,174Allowance of acquired banks






3,717



6,697







Charge-offs:Commercial and industrial


504



1,162



1,450



2,097



7,690Real estate  construction and land development


2,095



301



378



358



765Real estate  mortgagesSingle-family


2,460



1,149



625



795



1,012Commercial


411



724



416



1,432



5,820Other


241



206



15



85



86Consumer


2,490



2,117



860



630



1,881Other


243



63



2



345



87Total charge-offs


8,444



5,722



3,746



5,742



17,341Recoveries:Commercial and industrial


646



398



465



413



1,468Real estate  construction and land development


44



286



126



37



4Real estate  mortgagesSingle-family


89



174



102



335



470Commercial


128



70



363



526



737Other


71



82



73



118



97Consumer


181



382



301



280



549Other


155



48







1



410Total recoveries


1,314



1,440



1,430



1,710



3,735Net charge-offs


7,130



4,282



2,316



4,032



13,606Provision for loan losses


13,112



4,541



2,500



3,500



975Allowance for loan losses at end of year

$
28,850


$
22,868


$
18,892


$
12,011


$
12,543Loans at end of period, net of unearned income

$
2,314,921


$
2,017,011


$
1,639,528


$
963,253


$
934,868Average loans, net of unearned income


2,147,524



1,814,032



1,176,844



947,212



894,406Ratio of ending allowance to ending loans


1.25
%


1.13
%


1.15
%


1.25
%


1.34
%Ratio of net charge-offs to average loans


0.33



0.24



0.20



0.43



1.52Net charge-offs as a percentage of:Provision for loan losses


54.38



94.30



92.64



115.20



1,395.49Allowance for loan losses


24.71



18.72



12.26



33.57



108.47Allowance for loan losses as a percentage of nonperforming loans


44.12



90.31



219.88



252.76



169.36   Nonperforming Assets.
 60




---



##### Table of Contents



and/or
  Nonperforming
    Assets
  December 31,2008


2007


2006


2005


2004(Dollars in thousands)Nonaccrual

$
54,712


$
22,533


$
7,773


$
4,550


$
6,344Accruing loans 90 days or more delinquent


8,033



2,117



514



49



431Restructured


2,643



671



305



153



631Total nonperforming loans


65,388



25,321



8,592



4,752



7,406Other real estate owned


19,971



4,277



1,684



1,842



4,906Repossessed assets


332



138



137







103Total nonperforming assets

$
85,691


$
29,736


$
10,413


$
6,594


$
12,415Nonperforming loans as a percentage of loans


2.82
%


1.26
%


.52
%


.49
%


.79
%Nonperforming assets as a percentage of loans plus nonperforming
    assets


3.67
%


1.47
%


.63
%


.68
%


1.32
%Nonperforming assets as a percentage of total assets


2.81
%


1.03
%


.43
%


.47
%


.87
%     December 31,2008


2007


2006


2005


2004(Dollars in thousands)Commercial and industrial

$
2,809


$
1,058


$
704


$
988


$
2,445Real estate  construction and land development


20,976



10,569



2,067



469



187Real estate  mortgagesSingle-family


22,730



8,069



2,805



2,448



2,060Commercial


14,686



4,045



1,765



675



2,273Other


2,981



805



688



11



183Consumer


723



775



559



161



250Other


483







4







8Total nonperforming loans

$
65,388


$
25,321


$
8,592


$
4,752


$
7,406    61




---



##### Table of Contents



December 31,


December 31,2008


2007(Dollars in thousands)Real estate  construction and land development

$
13,915


$
1,253Real estate  mortgagesSingle-family


4,505



2,874Commercial


896



90Other


987



198Other real estate owned and repossessed assets

$
20,303


$
4,415   Impaired Loans.
    December 31, 2008


December 31, 2007Outstanding


Specific


Outstanding


SpecificBalance


Allowance


Balance


Allowance(Dollars in thousands)Commercial and industrial

$
515


$
42


$
877


$
56Real estate  construction and land development


18,155



1,570



11,105



881Real estate  mortgagesSingle-family


18,063



2,251



4,553



19Commercial


15,615



1,173



4,972



464Other


532



70



787



94Total

$
52,880


$
5,106


$
22,294


$
1,514   Potential Problem Loans.
  Changes in Lending Policies and Procedures, Including
    Underwriting Standards.
 62




---



##### Table of Contents



Investment
    Portfolio.
      Investment
    Portfolio
  December 31,Available for Sale2008


2007


2006(Dollars in thousands)U.S. agency securities

$
3,713


$
93,207


$
113,259State, county and municipal securities


41,379



40,738



12,977Mortgage-backed securities


280,447



191,202



185,814Corporate debt


30,334



32,404



38,883Other securities


563



4,480



6,675Total investment securities

$
356,436


$
362,031


$
357,608   Other-Than-Temporary Impairment
    (OTTI).
  December 31, 2008Less Than 12 Months


More Than 12 Months


TotalUnrealized





Unrealized





UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In thousands)U.S. agency securities

$



$



$
249


$
2


$
249


$
2State, county and municipal securities










20,937



1,202



20,937



1,202Mortgage-backed securities










46,100



4,249



46,100



4,249Corporate debt and other securities










22,553



8,344



22,553



8,344Total

$



$



$
89,839


$
13,797


$
89,839


$
13,797   63




---



##### Table of Contents



December 31, 2007Less Than 12 Months


More Than 12 Months


TotalUnrealized





Unrealized





UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In thousands)U.S. agency securities

$
500


$



$
36,633


$
75


$
37,133


$
75State, county and municipal securities


15,170



331



3,659



64



18,829



395Mortgage-backed securities


10,310



69



59,162



819



69,472



888Corporate debt and other securities


19,224



1,056



12,874



847



32,098



1,903Total

$
45,204


$
1,456


$
112,328


$
1,805


$
157,532


$
3,261     December 31, 2008Total Number of SecuritiesLess Than


More Than12 Months


12 Months


TotalU.S. agency securities






1



1State, county and municipal securities






59



59Mortgage-backed securities






35



35Corporate debt and other securities






15



15Total






110



110     Net UnrealizedAmortized Cost


Fair Value


Gain (Loss)(In thousands)U.S. agency and agency MBS  AAA rated

$
257,946


$
261,790


$
3,844State, county and municipal securities


41,379



40,622



(757
)Non-agency MBS  AAA rated


24,179



20,142



(4,037
)Non-agency MBS  A and B2 rated


2,035



2,035



Bank and pooled trust preferred securities


24,390



16,643



(7,747
)Corporate securities


5,944



5,746



(198
)Fannie Mae and Freddie Mac preferred stock


563



164



(399
)Total

$
356,436


$
347,142


$
(9,294
)          64




---



##### Table of Contents



Tax lien certificates.
  Property and Equipment.
     65




---



##### Table of Contents



Deposits.
      December 31,


December 31,


Percent2008


2007


Change(Dollars in thousands)Noninterest-bearing demand

$
212,732


$
207,602



2.47
%Alabama segment


127,115



128,009



(0.70
)Florida segment


78,639



73,061



7.63Other


6,978



6,532



6.83Interest-bearing demand


632,430



657,809



(3.86
)Alabama segment


298,405



295,794



0.88Florida segment


178,850



253,017



(29.31
)Other


155,175



108,998



42.36Savings


185,522



59,507



211.77Alabama segment


106,946



33,919



215.30Florida segment


76,449



25,056



205.11Other


2,127



532



299.81Time deposits


1,312,304



1,275,693



2.87Alabama segment


608,056



694,380



(12.43
)Florida segment


490,266



462,071



6.10Other


213,982



119,242



79.45Total deposits

$
2,342,988


$
2,200,611



6.47
%Alabama segment

$
1,140,522


$
1,152,102



(1.01
)%Florida segment

$
842,204


$
813,205



1.35
%Other

$
378,262


$
235,304



60.75
%    66




---



##### Table of Contents



Average
    Deposits
  Average for the Year2008


2007


2006Average





Average





AverageAmount


Average


Amount


Average


Amount


AverageOutstanding


Rate Paid


Outstanding


Rate Paid


Outstanding


Rate Paid(Dollars in thousands)Noninterest-bearing demand deposits

$
218,486




%

$
191,066




%

$
111,757




%Interest-bearing demand deposits


637,800



2.31



568,125



3.66



359,262



3.30Savings deposits


121,645



2.25



50,652



1.61



27,968



.63Time deposits-customer


1,096,841



4.07



1,023,573



4.90



575,065



4.40Total average customer deposits


2,074,772



3.00



1,833,416



3.92



1,074,052



3.48Time deposits-brokered


153,631



4.08



148,369



5.31



189,722



4.83Total average deposits

$
2,228,403



3.07
%

$
1,981,785



4.02
%

$
1,263,774



3.68
%     Borrowed Funds.
    2008


2007Weighted





WeightedYear

Average Rate


Balance


Average Rate


Balance(Dollars in thousands)2008



%

$




4.62
%

$
74,4882009


1.03



142,984



4.33



30,0322010


6.41



5,000



4.83



25,0002011


2.69



75,000



4.80



4,9682012


4.44



5,000



4.49



30,0002013


3.46



35,000







2015


4.58



66,340



5.39



26,3402020


4.28



32,000



4.28



32,000Total


2.67
%

$
361,324



4.63
%

$
222,828      67




---



##### Table of Contents



Subordinated
    Debentures
  Issuance of Subordinated Debt and Related
    Warrant.
    Junior subordinated debentures.
     68




---



##### Table of Contents



December 31,2008


200710.6% junior subordinated debentures owed to TBC Capital
    Statutory Trust II due September 7, 2030

$
15,464


$
15,46410.875% junior subordinated debentures owed to Community Capital
    Trust I due March 8, 2030


10,310



10,3103-month
    LIBOR plus 1.33% junior subordinated debentures owed to Superior
    Capital Trust I due September 15, 2037(1)


22,681



22,6816.41% junior subordinated debentures owed to Peoples Community
    Capital Trust I due December 15, 2035(2)


4,124



4,124Purchase accounting adjustment


819



1,165Total junior subordinated debentures owed to unconsolidated
    subsidiary trusts

$
53,398


$
53,744     (1)
    
    Current interest rate is equal to 3.33% at December 31,
    2008. The Corporation has entered into interest rate swap
    agreements for an average effective fixed rate of 4.42%.(2)
    
    Converts to quarterly floating rate of LIBOR plus 1.45% in
    December 2010.  Stockholders
    Equity
  Overview.
  1-for-4 1-for-4
 69




---



##### Table of Contents



Other Comprehensive (Loss) Income.
  Pre-Tax


Income Tax


Net ofAmount


Expense


Income Tax(In thousands)2008Unrealized loss on available for sale securities

$
(16,885
)

$
6,203


$
(10,682
)Less reclassification adjustment for losses realized in net loss


8,453



(3,128
)


5,325Unrealized loss on derivatives


(955
)


354



(601
)Defined benefit pension plan  net loss arising during
    the period


(3,398
)


1,260



(2,141
)Net unrealized loss

$
(12,785
)

$
4,689


$
(8,099
)2007Unrealized gain on available for sale securities

$
2,344


$
(918
)

$
1,426Less reclassification adjustment for gains realized in net income


(308
)


120



(188
)Defined benefit pension plan  net gain arising during
    the period


615



(227
)


388Net unrealized gain

$
2,651


$
(1,025
)

$
1,626     Issuance of Preferred Stock and Related
    Warrant.
  pari passu
 70




---



##### Table of Contents



and/or
    Stock Repurchase Plan.
    Stock Incentive Plan. 1-for-4
 71




---



##### Table of Contents



Weighted-Weighted-


AverageAverage


RemainingExercise


Contractual


AggregateFor the Year Ended December 31, 2008

Number


Price


Term


Intrinsic ValueUnder option, beginning of period


802,048


$
33.08Granted


114,875



9.45Exercised






Forfeited


(68,001
)


(32.35
)Under option, end of period


848,922


$
29.94



6.19


$
Exercisable at end of period


634,028


$
31.72



3.94


$
Weighted-average fair value per option of options granted during
    the period

$
3.95     24-month
  Superior Bancorp ESOP.
  Community Bancshares ESOP. No. 93-6 (SOP 93-6),
 72




---



##### Table of Contents



SOP 93-6
      December 31,2008


2007Allocated shares


86,443



83,460Estimated shares committed to be released


3,908



2,983Unreleased shares


9,774



13,682Total ESOP shares


100,125



100,125Fair value of unreleased shares

$
43,000


$
294,000   Regulatory Capital.
     73




---



##### Table of Contents



To Be WellFor Capital


Capitalized UnderAdequacy


Prompt CorrectiveActual


Purposes


ActionAmount


Ratio


Amount


Ratio


Amount


RatioAs of December 31, 2008Tier 1 Core Capital (to Adjusted Total Assets)

$
271,146



9.00
%

$
120,510



4.00
%

$
150,638



5.00
%Total Capital (to Risk Weighted Assets)


304,892



12.15



200,761



8.00



250,951



10.00Tier 1 Capital (to Risk Weighted Assets)


271,146



10.80



N/A



N/A



150,571



6.00Tangible Capital (to Adjusted Total Assets)


271,146



9.00



45,191



1.50



N/A



N/A   Impact of
    Inflation
    Forward-Looking
    Statements
  Form 10-K,
     74




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risks.    Item 8.
    Financial
    Statements and Supplementary Data.  Regulation S-X Form 10-K.
 75




---



##### 



SUPERIOR
    BANCORP AND SUBSIDIARIES
  CONSOLIDATED
    FINANCIAL STATEMENTS
 Years
    ended December 31, 2008, 2007 and 2006
  CONTENTS
   
 Report of Independent Registered Public
    Accounting Firm as of December 31, 2008 and 2007 and for
    each of the two years ended December 31, 2008


77Report of Independent Registered Public
    Accounting Firm for the year ended December 31, 2006


78Consolidated Statements of Financial Condition


79Consolidated Statements of Operations


80Consolidated Statements of Changes in
    Stockholders Equity


81Consolidated Statements of Cash Flows


82Notes to Consolidated Financial Statements


83   76




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             GRANT
    THORNTON LLP
    77




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           
    78




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF FINANCIAL CONDITION  December 31,2008


2007(In Thousands)ASSETSCash and due from banks

$
74,237


$
52,983Interest-bearing deposits in other banks


10,042



6,916Federal funds sold


5,169



3,452Investment securities available for sale


347,142



361,171Tax lien certificates


23,786



15,615Mortgage loans held for sale


22,040



33,408Loans


2,316,915



2,018,351Unearned income


(1,994
)


(1,340
)Loans, net of unearned income


2,314,921



2,017,011Allowance for loan losses


(28,850
)


(22,868
)Net loans


2,286,071



1,994,143Premises and equipment, net


104,085



104,799Accrued interest receivable


14,794



16,512Stock in FHLB and Federal Reserve Bank


21,410



14,945Cash surrender value of life insurance


48,291



45,277Goodwill and intangible assets


21,052



187,520Other real estate


19,971



4,277Other assets


54,611



44,407Total assets

$
3,052,701


$
2,885,425LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Noninterest-bearing demand

$
212,732


$
207,602Interest-bearing demand


632,430



657,809Savings


185,522



59,507Time deposits $100,000 and over


662,175



620,718Other time deposits


650,129



654,975Total deposits


2,342,988



2,200,611Advances from FHLB


361,324



222,828Federal funds borrowed and security repurchase agreements


3,563



17,075Notes payable


7,000



9,500Subordinated debentures, net


60,884



53,744Accrued expenses and other liabilities


25,703



31,625Total liabilities


2,801,462



2,535,383Commitments and contingencies (Notes 6 and 17)Stockholders equity:Preferred stock, par value $.001 per share; shares authorized
    5,000,000:Series A, fixed rate cumulative perpetual preferred stock,
    69,000 and -0- shares issued and outstanding at
    December 31, 2008, and 2007 respectively






Common stock, par value $.001 per share; shares authorized
    15,000,000; shares issued 10,403,087 in 2008 and 10,380,658 in
    2007; outstanding 10,074,999 in 2008 and 10,027,079 in 2007


10



10Surplus  preferred


62,978



 warrants


8,646



 common


329,461



329,232Accumulated (deficit) retained earnings


(129,904
)


33,557Accumulated other comprehensive (loss) gain


(7,925
)


174Treasury stock, at cost  321,485 and
    347,536 shares, respectively


(11,373
)


(12,309
)Unearned ESOP stock


(443
)


(622
)Unearned restricted stock


(211
)


Total stockholders equity


251,239



350,042Total liabilities and stockholders equity

$
3,052,701


$
2,885,425    79




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF OPERATIONS  Year Ended December 31,2008


2007


2006(In Thousands, Except Per Share Data)Interest income:Interest and fees on loans

$
147,162


$
150,443


$
92,659Interest on taxable securities


16,310



17,174



12,994Interest on tax-exempt securities


1,716



897



389Interest on federal funds sold


122



471



570Interest and dividends on other investments


2,578



2,944



2,165Total interest income


167,888



171,929



108,777Interest expense:Interest on deposits


68,405



79,667



46,511Interest on other borrowed funds


12,104



12,971



11,603Interest on subordinated debentures


4,094



4,129



3,269Total interest expense


84,603



96,767



61,383Net interest income


83,285



75,162



47,394Provision for loan losses


13,112



4,541



2,500Net interest income after provision for loan losses


70,173



70,621



44,894Noninterest income:Service charges and fees on deposits


9,295



7,957



4,915Mortgage banking income


3,972



3,860



2,997Investment securities (loss) gain


(8,453
)


308



Change in fair value of derivatives


1,240



1,310



374Increase in cash surrender value of life insurance


2,274



1,895



1,580Gain on extinguishment of liabilities


2,918







Other income


5,521



4,027



1,945Total noninterest income


16,767



19,357



11,811Noninterest expenses:Salaries and employee benefits


49,672



42,316



26,805Occupancy, furniture and equipment


17,197



13,391



7,754Management separation costs










265Amortization of core deposit intangibles


3,585



1,691



442Loss on extinguishment of debt






1,469



Merger-related costs


118



639



635Loss on termination of ESOP






158



Subsidiary startup costs










135Goodwill impairment charge


160,306







Other expenses


23,800



18,559



13,749Total noninterest expenses


254,678



78,223



49,785(Loss) income before income taxes


(167,738
)


11,755



6,920Income tax (benefit) expense


(4,588
)


4,134



1,923Net (loss) income


(163,150
)


7,621



4,997Preferred stock dividends


311







Net (loss) income applicable to common stockholders

$
(163,461
)

$
7,621


$
4,997Weighted average common shares outstanding


10,021



9,244



5,852Weighted average common shares outstanding, assuming dilution


10,021



9,333



6,008Basic net (loss) income per common share

$
(16.31
)

$
0.82


$
0.85Diluted net (loss) income per common share


(16.31
)


0.82



0.83    80




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY  Accumulated

Accumulated(Deficit)

Other



Unearned

Unearned

TotalPreferred

Common

Surplus

Retained

Comprehensive

Treasury

ESOP

Restricted

StockholdersStock

Stock

Preferred

Warrants

Common

Earnings

(Loss) Gain

Stock

Stock

Stock

Equity(In Thousands, Except Share Data)Balance at January 1, 2006
$


$
5

$


$


$
87,994

$
21,494

$
(2,544
)
$
(341
)
$
(1,543
)
$


$
105,065Comprehensive income:Net income
















4,997














4,997Other comprehensive income, net of tax expense of $556,
    unrealized gain on securities available for sale, arising during
    the period, net of reclassification adjustment



















831











831Change in accumulated gain on cash flow hedge, net of tax



















(23
)










(23
)Defined benefit pension plan  net gain



















284











284Comprehensive income































6,089Issuance of 1,218 shares of treasury stock













20








32








52Issuance of 1,556,680 shares for Kensington purchase




1








70,970

















70,971Issuance of 14,044 shares related to board compensation













569

















569Issuance of 2,018,045 shares for Community




2








93,051








(407
)

(759
)




91,887Stock options exercised  38,955 shares













992

















992Compensation expense related to stock options













159

















159Release of 6,675 shares by ESOP













87











216





303Balance at December 31, 2006




8








253,842


26,491


(1,452
)

(716
)

(2,086
)




276,087Adoption of FIN 48
















(555
)













(555
)Comprehensive income:Net income
















7,621














7,621Other comprehensive income, net of tax expense of $798,
    unrealized gain on securities available for sale, arising during
    the period, net of reclassification adjustment



















1,238











1,238Defined benefit pension plan  net gain



















388











388Comprehensive income































9,247Repurchase of 295,500 shares of treasury stock






















(10,428
)







(10,428
)Issuance of 1,658,781 shares for Peoples purchase




2








73,802

















73,804Issuance of 6,941 shares related to board compensation













278

















278Stock options exercised  21,250 shares













640

















640Compensation expense related to stock options













472

















472Release of 12,284 shares by ESOP













198











299





497Termination of ESOP  31,867 shares transferred






















(1,165
)

1,165





Balance at December 31, 2007




10








329,232

$
33,557


174


(12,309
)

(622
)




350,042Comprehensive income:Net loss
















(163,150
)













(163,150
)Other comprehensive loss, net of tax benefit of $3,075
    unrealized loss on securities available for sale, arising during
    the period, net of reclassification adjustment



















(5,357
)










(5,357
)Change in accumulated loss on cash flow hedging instrument, net
    of tax expense of $354



















(601
)










(601
)Defined benefit pension plan  net loss



















(2,141
)










(2,141
)Comprehensive loss































(171,249
)Issuance of warrant to purchase 1,000,000 shares of common
    stock related to subordinated notes










2,553




















2,553Issuance of 69,000 shares of cumulative preferred stock







69,000























69,000Issuance of warrant to purchase 1,923,392 shares of common
    stock related to preferred stock







(6,093
)

6,093




















Cumulative preferred stock dividend of $240: Net of amortization







71








(311
)













(240
)Transfer of treasury stock to restricted













(447
)







944





(497
)

Amortization of unearned restricted stock






















(8
)




286


278Issuance of 26,795 shares related to board compensation













292

















292Compensation expense related to stock options













623

















623Fractional shares and issuance costs













(94
)
















(94
)Release of 3,881 shares by ESOP













(145
)










179





34Balance at December 31, 2008
$


$
10

$
62,978

$
8,646

$
329,461

$
(129,904
)
$
(7,925
)
$
(11,373
)
$
(443
)
$
(211
)
$
251,239    81




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended December 31,2008


2007


2006(In Thousands)Operating activitiesNet (loss) income

$
(163,150
)

$
7,621


$
4,997Adjustments to reconcile net (loss) income to net cash provided
    by operations:Goodwill impairment charge


160,306







Depreciation


6,576



4,630



3,245Amortization of core deposit and other intangibles


4,001



1,868



Net (discount) premium amortization on securities


(63
)


(116
)


298Loss (gain) on sale of investment securities


8,453



(308
)


(Gain) on sale of interest rate floors


(678
)






Loss on foreclosed assets


528



170



181Provision for loan losses


13,112



4,541



2,500Increase (decrease) in accrued interest receivable


1,718



(386
)


(750
)Deferred income tax (benefit) expense


(4,736
)


4,021



1,923Gain on sale of assets


(11
)


(139
)


(254
)(Gain) loss on extinguishment of liabilities


(2,918
)


1,469



Net gain on mortgage loans held for sale


(1,930
)


(1,543
)


(1,203
)Origination of mortgage loans held for sale


(396,330
)


(335,424
)


(266,848
)Proceeds from sale of mortgage loans held for sale


409,628



327,992



266,058Other operating activities, net


(8,538
)


(10,653
)


(3,781
)Net cash provided by operating activities


25,968



3,743



6,366Investing activities(Increase) decrease in interest bearing deposits in other banks


(3,126
)


4,078



1,222(Increase) decrease in federal funds sold


(1,717
)


25,933



11,052Proceeds from sales of investment securities available for sale


44,620



18,378



215,717Proceeds from maturities of investment securities available for
    sale


112,106



82,873



39,233Purchase of investment securities available for sale


(159,430
)


(59,910
)


(72,319
)Net increase in loans


(328,452
)


(132,769
)


(200,837
)Net cash received in business combinations






1,231



18,642Redemptions of tax lien certificates


27,242



20,499



5,721Purchase of tax lien certificates


(35,413
)


(19,801
)


(21,745
)Purchase of premises and equipment


(12,045
)


(23,833
)


(13,813
)Proceeds from sale of premises and equipment


7,643



5,630



1,835Proceeds from sale of foreclosed assets


6,996



7,327



1,722Increase in stock of FHLB


(6,465
)


(2,563
)


(1,416
)Other investing activities, net


177



4,005



3,503Net cash used in investing activities


(347,864
)


(68,922
)


(11,483
)Financing activitiesNet increase (decrease) in demand and savings deposits


105,222



(7,824
)


59,375Net increase in time deposits


36,611



92,150



60,766Increase (decrease) in FHLB advances


138,496



(2,995
)


(62,051
)Proceeds from note payable


10,000



10,000



2,000Principal payment on note payable


(12,500
)


(6,045
)


(210
)Net decrease in other borrowed funds


(13,679
)


(13,304
)


(41,060
)Proceeds from issuance of subordinated debentures


10,000



22,680



Principal payment on junior subordinated debentures






(16,495
)


Purchase of treasury stock






(10,428
)


Proceeds from issuance of common stock






640



992Proceeds from issuance of preferred stock


69,000







Net cash provided by financing activities


343,150



68,379



19,812Increase in cash and due from banks


21,254



3,200



14,695Cash and due from banks at beginning of year


52,983



49,783



35,088Cash and due from banks at end of year

$
74,237


$
52,983


$
49,783Supplemental disclosures of cash flow informationCash paid (received) during the year for:Interest

$
86,229


$
97,848


$
56,831Income taxes


(1,432
)


(564
)


(1,706
)Transfer of foreclosed assets


28,419



9,239



935Assets acquired in business combinations






376,061



1,006,674Liabilities assumed in business combinations






303,487



838,102Issuance of common stock in acquisitions






73,804



162,858    82




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 December 31,
    2008, 2007 and 2006
  1.
    Summary
    of Significant Accounting Policies    Basis of
    Presentation and Variable Interest Entities
    and/or
      Restatement
    to Reflect
    1-for-4
    Reverse Stock Split
  1-for-4
  Use of
    Estimates
   83




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Cash and
    Cash Equivalents
      Investment
    Securities
          Tax lien
    certificates
    Loans and
    Allowance for Loan Losses
     84




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Statement of Financial
    Accounting Standards
      
    trends in volume.
    effects of changes in credit concentrations.
    levels of and trends in delinquencies, classified loans, and
    non-performing assets.
    levels of and trends in charge-offs and recoveries.
    changes in lending policies and underwriting guidelines.
    national and local economic trends and condition.
    mergers and acquisitions.  and/or
   85




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)      Acquired
    Loans
  03-3, Accounting for Certain Loans or Debt Securities Acquired in a
    Transfer (SOP 03-3).
    Mortgage
    Loans Held for Sale
    Premises
    and Equipment
     86




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Intangible
    Assets
    Goodwill and Other Intangible Assets
    build-up
      87




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)  Alabama


FloridaRegion


RegionDiscount rate used in income approach


14.0
%


14.5
%Transaction method multiplier  Price to tangible
    book(1)


2.00
x


1.35
x Premium to deposit valuation(2)


5.0
%


4.0
%Implied premium to trading prices(3)


30.0
%


30.0
%     (1)
    
     This multiplier is applied to tangible book value.(2)
    
     This multiplier is applied to tangible book value
    plus deposits.(3)
    
     Average based on bank and thrift transactions in
    Southeast Region announced since January 1, 2003    December 31,2008


2007(In Thousands)Alabama Region

$



$
65,899Florida Region






96,568Total

$



$
162,467     2008


2007(In Thousands)Core deposit intangible

$
26,355


$
26,355Accumulated amortization


(6,823
)


(3,238
)Net core deposit intangible

$
19,532


$
23,117     Year

Annual Expense(In Thousands)2009

$
3,9422010


3,4792011


3,0492012


2,4922013


2,235Total

$
15,197   Other
    Real Estate
   88




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Security
    Repurchase Agreements
    Income
    Taxes
  Accounting for Income Taxes.
  Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
  Off-Balance
    Sheet Financial Instruments
    Per Share
    Amounts
      Stock-Based
    Compensation
  Share-Based Payment Accounting for Stock-Based
    Compensation
 89




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Pension
    Plan
    Derivative
    Financial Instruments and Hedging Activities
  Accounting for Derivative Instruments
    and Hedging Activities
           90




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)      Recent
    Accounting Pronouncements
  FASB
    Interpretation No. 48
  Accounting for Uncertainty in Income Taxes (FIN 48). Accounting for Income Taxes.
  FSP
    No. 48-1
    Definition of Settlement in FASB Interpretation
    No. 48.
  FSP 48-1 FSP 48-1
  Emerging
    Issues Task Force Issue
    No. 06-05
  No. 06-05, Accounting for Purchases of Life Insurance 
    Determining the Amount That Could Be Realized in Accordance with
    FASB Technical
    Bulletin No. 85-4. Bulletin No. 85-4, Accounting for Purchases of Life Insurance
 91




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)  No. 06- No. 06-05
  Staff
    Accounting Bulletin No. 108
  Quantifying Financial Misstatements,
  Statement
    of Financial Accounting Standards (SFAS)
    No. 158
  Employers Accounting for Defined Benefit Pension and
    Other Postretirement Plans  an amendment of FASB
    Statements No. 87, 88, 106 and 132(R)
    (SFAS 158).
  Emerging
    Issues Task Force Issue (EITF)
    No. 06-04
  No. 06-04, Accounting for Deferred Compensation and Postretirement
    Benefit Aspects of Endorsement Split-Dollar Life Insurance
    Arrangement Employers Accounting for
    Postretirement Benefits Other Than Pensions. No. 06-04.
 92




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Statement
    of Financial Accounting Standards No. 160
  SFAS No. 160, Noncontrolling Interest in
    Consolidated Financial Statements, an amendment of ARB Statement
    No. 51
  Statement
    of Financial Accounting Standards No. 157
  Fair Value
    Measurements
  Statement
    of Financial Accounting Standards No. 159
  The
    Fair Value Option for Financial Assets and Financial Liabilities
  Statement
    of Financial Accounting Standards No. 141(R)
  Business Combinations  a replacement of FASB
    No. 141 Business Combinations
 93




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)  Accounting for Costs Associated with Exit
    or Disposal Activities Accounting for Contingencies
  Staff
    Accounting Bulletin No. 109
  Written Loan
    Commitments Recorded at Fair Value Through Earnings Application of Accounting Principles to Loan
    Commitments
  Statement
    of Financial Accounting Standards No. 161
  Disclosures About Derivative Instruments and Hedging
    Activities, an Amendment of FASB Statement No. 133 Accounting for Derivative Instruments and Hedging Activities
  2.
    Business
    Combinations  Peoples
    Acquisition
  1-for-4
   94




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2.
    Business
    Combinations  (Continued)    Amount(In thousands)Cash and due from banks

$
3,854Federal funds sold


4,200Investment securities


47,684Loans, net


254,047Premises and equipment, net


2,318Goodwill


47,313Core deposit intangibles


9,810Other assets


10,478Deposits


(245,459
)Federal funds purchased and repurchase agreements


(6,905
)Advances from FHLB


(37,983
)Junior subordinated debentures


(3,962
)Other liabilities


(8,966
)Total consideration paid for Peoples

$
76,429   Community
    Acquisition
       95




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2.
    Business
    Combinations  (Continued)    Amount(In thousands)Cash and due from banks

$
23,167Federal funds sold


35,273Investment securities


117,424Loans, net


337,148Premises and equipment, net


22,529Goodwill


60,148Core deposit intangibles


10,142Other assets


21,185Deposits


(431,334
)FHLB advances


(68,801
)Junior subordinated debentures


(12,047
)Other liabilities


(17,634
)Total consideration paid for Community

$
97,200   Kensington
    Acquisition
     96




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2.
    Business
    Combinations  (Continued)    Amount(In thousands)Cash and due from banks

$
4,454Federal funds sold


964Investment securities


180,151Loans, net


136,826Premises and equipment, net


5,397Goodwill


44,470Core deposit intangibles


3,544Other assets


5,128Deposits


(276,186
)Repurchase agreements


(30,050
)Other liabilities


(3,326
)Total consideration paid for Kensington

$
71,372   Pro Forma
    Results of Operations
    2007


2006(Dollars in thousands, except per share data)Net interest income and noninterest income

$
101,620


$
104,149Net income


7,413



9,215Earnings per common share  basic

$
0.72


$
0.92Earnings per common share  diluted

$
0.72


$
0.88  97




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2.
    Business
    Combinations  (Continued)  3.
    Investment
    Securities    Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In Thousands)Investment securities available for sale:U.S. agency securities

$
3,713


$
132


$
2


$
3,843State, county and municipal securities


41,379



445



1,202



40,622Mortgage-backed securities


280,447



3,926



4,249



280,124Corporate debt and trust preferred securities


30,334







7,945



22,389Other securities


563







399



164Total

$
356,436


$
4,503


$
13,797


$
347,142     Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In Thousands)Investment securities available for sale:U.S. agency securities

$
93,207


$
1,086


$
75


$
94,218State, county and municipal securities


40,738



222



395



40,565Mortgage-backed securities


191,202



1,082



888



191,396Corporate debt and trust preferred securities


32,404



11



1,030



31,385Other securities


4,480







873



3,607Total

$
362,031


$
2,401


$
3,261


$
361,171       Securities AvailableFor SaleAmortized


EstimatedCost


Fair Value(In Thousands)Due in one year or less

$
250


$
253Due after one year through five years


9,406



9,275Due after five years through ten years


8,971



9,300Due after ten years


57,362



48,190Mortgage-backed securities


280,447



280,124$
356,436


$
347,142  98




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    Securities  (Continued)        December 31, 2008Less Than 12 Months


More Than 12 Months


TotalUnrealized





Unrealized





UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In Thousands)U.S. agency securities

$



$



$
249


$
2


$
249


$
2State, county and municipal securities










20,937



1,202



20,937



1,202Mortgage-backed securities










46,100



4,249



46,100



4,249Corporate debt and other securities










22,553



8,344



22,553



8,344Total

$



$



$
89,839


$
13,797


$
89,839


$
13,797   December 31, 2007Less Than 12 Months


More Than 12 Months


TotalUnrealized





Unrealized





UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In Thousands)U.S. agency securities

$
500


$



$
36,633


$
75


$
37,133


$
75State, county and municipal securities


15,170



331



3,659



64



18,829



395Mortgage-backed securities


10,310



69



59,162



819



69,472



888Corporate debt and other securities


19,224



1,056



12,874



847



32,098



1,903Total

$
45,204


$
1,456


$
112,328


$
1,805


$
157,532


$
3,261  99




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    Securities  (Continued)    December 31, 2008Total Number of SecuritiesLess Than


More Than12 Months


12 Months


TotalU.S. agency securities






1



1State, county and municipal securities






59



59Mortgage-backed securities






35



35Corporate debt and other securities






15



15Total






110



110     Amortized


Fair


UnrealizedCost


Value


Gain (Loss)(In Thousands)U.S. agency and agency MBS  AAA rated

$
257,946


$
261,790


$
3,844Municipal securities


41,379



40,622



(757
)Non-agency MBS  AAA rated


24,179



20,142



(4,037
)Non-agency MBS  A and B2 rated


2,035



2,035



Bank and pooled trust preferred securities


24,390



16,643



(7,747
)Corporate securities


5,944



5,746



(198
)Fannie Mae and Freddie Mac preferred stock


563



164



(399
)Total

$
356,436


$
347,142


$
(9,294
)            100




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    Securities  (Continued)      4.
    Loans    2008


2007(In Thousands)Commercial and industrial

$
207,372


$
183,013Real estate  construction and land development


637,587



665,303Real estate  mortgages:Single family


655,216



540,277Commercial


692,147



533,611Other


65,744



41,535Consumer


57,877



53,377All other loans


972



1,235Total loans

$
2,316,915


$
2,018,351       SOP 03-3
 101




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   4.
    Loans  (Continued)    December 31,2008


2007(In Thousands)Contractually required principal and interest at acquisition





$
5,677Nonaccretable difference (expected losses and forgone interest)






(1,443
)Cash flows expected to be collected at acquisition






4,234Accretable yield






(209
)Basis in acquired loans at date of acquisition





$
4,025Accretable yield, beginning of year

$
305


$
174Additions






209Accretion


(135
)


(216
)Transfer for nonaccretable yield to accretable yield






138Disposals


(17
)


Accretable yield, end of the year

$
153


$
305   5.
    Allowance
    for Loan Losses    2008


2007


2006(In Thousands)Balance at beginning of year

$
22,868


$
18,892


$
12,011Allowance of acquired banks






3,717



6,697Provision for loan losses


13,112



4,541



2,500Loan charge-offs


(8,444
)


(5,722
)


(3,746
)Recoveries


1,314



1,440



1,430Balance at end of year

$
28,850


$
22,868


$
18,892   6.
    Premises
    and Equipment    2008


2007(In Thousands)Land

$
21,575


$
19,834Premises


83,986



76,733Furniture and equipment


27,646



22,956133,207



119,523Less accumulated depreciation and amortization


(31,253
)


(24,842
)Net book value of premises and equipment in service


101,954



94,681Construction in process (also includes land for branch expansion)


2,132



10,118Total

$
104,085


$
104,799      102




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6.
    Premises
    and Equipment  (Continued)    2008


2007Buildings

$
2,450


$
2,450Accumulated depreciation


(180
)


(98
)Total

$
2,270


$
2,352     OperatingYears ending December 31,

Property


Equipment


Total


Capitalized(In Thousands)2009

$
2,829


$
251


$
3,080


$
3012010


2,432



151



2,583



2752011


2,064



43



2,107



2692012


1,425



2



1,427



2632013


1,205







1,205



2582014 and thereafter


10,623







10,623



3,460Total minimum lease payments

$
20,578


$
447


$
21,025



4,826Amount representing interest














(1,253
)Present value of net minimum lease payments













$
3,573       Property
    Classified as Held-for-Sale
      Sale-Leaseback
    Transactions
   103




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6.
    Premises
    and Equipment  (Continued)          7.
    Deposits    Year Ended December 312008


2007


2006(In Thousands)Interest-bearing demand

$
14,705


$
20,791


$
11,857Savings


2,731



819



177Time deposits $100,000 and over


19,356



21,122



11,170Other time deposits


31,613



36,935



23,307Total

$
68,405


$
79,667


$
46,511  104




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   7.
    Deposits  (Continued)    2009

$
1,083,1762010


144,1962011


18,0472012


16,5332013 and thereafter


50,352$
1,312,304   8.
    Advances
    from Federal Home Loan Bank    2008


2007Weighted





WeightedYear

Average Rate


Balance


Average Rate


Balance(Dollars in Thousands)2008



%

$




4.62
%

$
74,4882009


1.03



142,984



4.33



30,0322010


6.41



5,000



4.83



25,0002011


2.69



75,000



4.80



4,9682012


4.44



5,000



4.49



30,0002013


3.46



35,000







2015


4.58



66,340



5.39



26,3402020


4.28



32,000



4.28



32,000Total


2.67
%

$
361,324



4.63
%

$
222,828         WeightedCurrent


Average RateWeighted


BeforeMatures

Average Rate


Refinancing


Balance2011


2.77
%


4.60
%

$
25,0002013


3.46



4.21



35,0002015


4.05



4.57



40,000Total


3.52
%


4.45
%

$
100,000    105




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   8.
    Advances
    from Federal Home Loan
    Bank  (Continued)    9.
    Federal
    Funds Borrowed and Security Repurchase Agreements    2008


2007Balance at December 31:Federal funds borrowed

$



$
10,000Security repurchase agreements


3,563



7,075Maximum outstanding at any month end:Federal funds borrowed


3,135



10,000Security repurchase agreements


7,817



28,545Daily average amount outstanding:Federal funds borrowed


1,145



1,263Security repurchase agreements


6,367



15,798Weighted daily average interest rate:Federal funds borrowed


2.93
%


5.43
%Security repurchase agreements


2.14



5.28Weighted daily interest rate for amounts outstanding at December
    31:Federal funds borrowed



%


3.65
%Security repurchase agreements


0.29



4.22     10.
    Notes
    Payable    2008


2007Balance at December 31:

Principal


Rate


Principal


RateNote payable to bank, borrowed under $10,000,000 line of credit,
    due September 3, 2009; interest is based on the
    lenders base rate, secured by 100% of the outstanding
    Superior Bank stock(1)

$
7,000



4.50
%

$





%Note payable to bank, borrowed under $10,000,000 line of credit,
    due January 26, 2008; interest is based on the
    30-day LIBOR
    plus 1.25%, secured by 51% of the outstanding Superior Bank
    stock(2)










9,500



6.06Total notes payable

$
7,000



4.50
%

$
9,500



6.06
%     (1)
    
    Borrowings under this line are subject to certain customary
    affirmative and negative covenants on capital levels,
    indebtedness, mergers and other related matters. As of
    December 31, 2008, the Corporation was in compliance with
    all covenants.(2)
    
    Extended for successive
    90-day
    periods and paid-off September 4, 2008. 106




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    Subordinated
    Debentures  Subordinated
    Debt and Related Warrant
      Junior
    Subordinated Debentures
         107




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    Subordinated
    Debentures  (Continued)      December 31,2008


200710.6% junior subordinated debentures owed to TBC Capital
    Statutory Trust II due September 7, 2030

$
15,464


$
15,46410.875% junior subordinated debentures owed to Community Capital
    Trust I due March 8, 2030


10,310



10,3103-month
    LIBOR plus 1.33% junior subordinated debentures owed to Superior
    Capital Trust I due September 15, 2037(1)


22,681



22,6816.41% junior subordinated debentures owed to Peoples Community
    Capital Trust I due December 15, 2035(2)


4,124



4,124Purchase accounting adjustment


819



1,165Total junior subordinated debentures owed to unconsolidated
    subsidiary trusts

$
53,398


$
53,744     (1)
    
    Interest rate is equal to 3.33% at December 31, 2008. The
    Corporation has entered into interest rate swap agreements to an
    average effective fixed rate of 4.42%. (see Note 15)(2)
    
    Converts to quarterly floating rate of LIBOR plus 1.45% in
    December 2010.  12.
    Stock
    Incentive Plans  Share-Based Payment Accounting for
    Stock-Based Compensation
   108




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   12.
    Stock
    Incentive Plans  (Continued)  1-for-4
  1-for-4
      2008


2007


2006Risk-free interest rate


3.65
%


4.49
%


4.54
%Volatility factor


35.19
%


29.11
%


30.16
%Expected term (in years)


5.00



5.00



5.00Dividend yield


0.00
%


0.00
%


0.00
%  109




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   12.
    Stock
    Incentive Plans  (Continued)    Weighted-Weighted-


AverageAverage


RemainingExercise


Contractual


AggregateFor the Year Ended December 31, 2008

Number


Price


Term


Intrinsic ValueUnder option, beginning of period


802,048


$
33.08Granted


114,875



9.45Exercised






Forfeited


(68,001
)


(32.35
)Under option, end of period


848,922


$
29.94



6.19


$
Exercisable at end of period


634,028


$
31.72



3.94


$
Weighted-average fair value per option of options granted during
    the period

$
3.95   Weighted-Weighted-


AverageAverage


RemainingExercise


Contractual


AggregateFor the Year Ended December 31, 2007

Number


Price


Term


Intrinsic ValueUnder option, beginning of period


760,649


$
32.28Granted


69,149



40.20Exercised


(21,250
)


25.48Forfeited


(6,500
)


41.40Under option, end of period


802,048


$
33.08



6.70


$
Exercisable at end of period


691,649


$
31.76



5.44


$
Weighted-average fair value per option of options granted during
    the period

$
13.80   Weighted-Weighted-


AverageAverage


RemainingExercise


Contractual


AggregateFor the Year Ended December 31, 2006

Number


Price


Term


Intrinsic ValueUnder option, beginning of period


757,987


$
31.24Granted


46,625



43.36Exercised


(38,955
)


25.48Forfeited


(5,008
)


28.24Under option, end of period


760,649


$
32.28



7.39


$
9,940,257Exercisable at end of period


715,274


$
31.60



6.82


$
9,847,002Weighted-average fair value per option of options granted during
    the period

$
15.16  110




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   12.
    Stock
    Incentive Plans  (Continued)  30-months
  24-month
  Employee
    Stock Ownership Plans
  Superior
    Bancorp ESOP
    Wall
    Street Journal
 111




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   12.
    Stock
    Incentive Plans  (Continued)  Community
    Bancshares ESOP
  No. 93-6 (SOP 93-6), SOP 93-6
      December 31,2008


2007Allocated shares


86,443



83,460Estimated shares committed to be released


3,908



2,983Unreleased shares


9,774



13,682Total ESOP shares


100,125



100,125Fair value of unreleased shares

$
43,000


$
294,000   13.
    Profit-Sharing
    Plan and Other Agreements     112




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   13.
    Profit-Sharing
    Plan and Other Agreements  (Continued)    17-year
  14.
    Income
    Taxes    2008


2007


2006Current:Federal

$
73


$
88


$
State


75



25



Total current expense


148



113



Deferred:Federal


(4,243
)


3,529



1,555State


(493
)


492



368Deferred income tax (benefit) expense


(4,736
)


4,021



1,923Total income tax (benefit) expense

$
(4,588
)

$
4,134


$
1,923     2008


2007Deferred income tax assets:Rehabilitation tax credit

$
5,981


$
5,981Allowance for loan losses


10,601



8,367Deferred compensation


1,423



3,910Net operating loss carryforwards


12,562



12,226Alternative minimum tax credit carryover


1,243



1,122Purchase accounting basis differences


1,234



2,770Other-than-temporary impairment loss on securities


3,761



Unrealized loss on securities


3,439



365Other


3,989



2,194Total deferred income tax assets


44,233



36,935Less: valuation allowance on net operating loss carryforwards


(1,207
)


(1,207
)Deferred income tax liabilities:Difference in book and tax basis of premises and equipment


4,389



4,127Excess purchase price and intangibles


5,848



9,901Other


466



838Total deferred income tax liabilities


10,703



14,866Net deferred income tax asset

$
32,323


$
20,862  113




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14.
    Income
    Taxes  (Continued)  Accounting for Income Taxes
    2008


2007


2006Expected tax (benefit) expense at statutory rate of income
    (loss) before taxes

$
(57,031
)

$
3,996


$
2,353Add (deduct):State income tax (benefit) expense, net of federal tax


(276
)


341



243Effect of interest income exempt from Federal income taxes


(665
)


(468
)


(251
)Increase in cash surrender value of life insurance


(654
)


(644
)


(537
)Effect of nondeductible goodwill impairment charge


53,656







Taxable exchange of cash surrender value of life insurance






256



Other items  net


382



653



115Income tax (benefit) expense

$
(4,588
)

$
4,134


$
1,923Federal statutory rate


34
%


34
%


34
%  114




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14.
    Income
    Taxes  (Continued)      Year of expiration:

Federal


Alabama2010

$



$
1,7952011






13,1472012






14,7682013






22,1102014






6,7502015






3,4532016






3,1372017 through 2022






9782023


5,303



532024


13,043



2025


5,812



2026


5,721



2027


143



2028


9



$
30,031


$
66,191     Year of expiration:2018

$
1,7342019


7382020


1,2612021


5222022


3662023


9602024


400$
5,981        115




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14.
    Income
    Taxes  (Continued)    Balance at January 1, 2008

$
459,000Additions based upon tax positions related to the current year


Additions for tax positions of prior years


Reductions for tax positions of prior years


(123,000
)Settlements


Balance at December 31, 2008

$
336,000       15.
    Derivatives    Interest
    Rate Swaps
    Fair
    Value Hedges
   116




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   15.
    Derivatives  (Continued)    Cash Flow
    Hedges
  3-month
  Interest
    Rate Floors
  3-year 3-month
  Commitments
    to Originate Mortgage Loans
  Amendment to Statement 133 on Derivatives Instruments and
    Hedging Activities
  16.
    Related
    Party Transactions   117




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   16.
    Related
    Party Transactions  (Continued)     BalanceDecember 31,







Other

Balance2007

Loans Originated

Advances

Repayments

Changes

December 31, 2008$
24,381


$
24,583


$
7,297


$
22,464


$
14,617


$
48,414         17.
    Commitments
    and Contingencies    December 312008


2007Commitments to extend credit

$
355,243


$
355,579Standby letters of credit


35,636



29,107        118




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  18.
    Regulatory
    Restrictions            To Be WellFor Capital


CapitalizedAdequacy


Under PromptActual


Purposes


Corrective ActionAmount


Ratio


Amount


Ratio


Amount


RatioAs of December 31, 2008Tier 1 Core Capital
    (to Adjusted Total Assets)

$
271,146



9.00
%

$
120,510



4.00
%

$
150,638



5.00
%Total Capital (to Risk Weighted Assets)


304,892



12.15



200,761



8.00



250,951



10.00Tier 1 Capital (to Risk Weighted Assets)


271,146



10.80



N/A



N/A



150,571



6.00Tangible Capital (to Adjusted Total Assets)


271,146



9.00



45,191



1.50



N/A



N/AAs of December 31, 2007Tier 1 Core Capital (to Adjusted Total Assets)

$
204,145



7.64
%

$
106,872



4.00
%

$
133,591



5.00
%Total Capital (to Risk Weighted Assets)


225,602



10.42



172,683



8.00



215,854



10.00Tier 1 Capital (to Risk Weighted Assets)


204,145



9.43



N/A



N/A



129,513



6.00Tangible Capital (to Adjusted Total Assets)


204,145



7.64



40,077



1.50



N/A



N/A  119




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  19.
    Fair
    Values of Financial Instruments  No. 157-2 No. 157-2),
  No. 157-2
    Assets
    and Liabilities Recorded at Fair Value on a Recurring
    Basis
    Quoted Prices in





SignificantFair Value at


Active Markets for


Significant Other


UnobservableDecember 31,


Identical Assets


Observable Inputs


Inputs2008


(Level 1)


(Level 2)


(Level 3)Available for sale securities

$
347,142


$
164


$
328,481


$
18,497Derivative assets


1,427







1,427



Total recurring basis measured assets

$
348,569


$
164


$
329,908


$
18,497Derivative liabilities

$
1,534


$



$
1,534


$
Total recurring basis measured liabilities

$
1,534


$



$
1,534


$
   Valuation
    Techniques  Recurring Basis
  Securities Available for Sale.
 120




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    Fair
    Values of Financial
    Instruments  (Continued)    Derivative financial instruments.
  Changes in Level 3 fair value
    measurements.
  Level 3
    Assets Measured at Fair Value on a Recurring Basis
  Available forSale Securities(In thousands)Balance at January 1, 2008 (date of adoption)

$
Transfer into Level 3 during third quarter 2008


25,956Total net losses for the year-to-date included in other
    comprehensive loss


(7,459
)Balance at December 31, 2008

$
18,497Net realized losses included in net loss for the year-to-date
    relating to Level 3 assets held at December 31, 2008

$
   Assets
    Recorded at Fair Value on a Nonrecurring Basis
    Quoted PricesinFair Value


Active Markets for


Significant Other


Significantat


Identical


Observable


UnobservableDecember 31,


Assets


Inputs


Inputs2008


(Level 1)


(Level 2)


(Level 3)Mortgage loans held for sale

$
22,040


$



$
22,040


$
Impaired loans, net of specific allowance


47,774











47,774Total nonrecurring basis measured assets

$
69,814


$



$
22,040


$
47,774   Valuation
    Techniques  Nonrecurring Basis
  Mortgage Loans Held for Sale.
 121




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    Fair
    Values of Financial
    Instruments  (Continued)  Impaired Loans. and/or and/or
    Tax lien certificates.
  Net loans.
  Deposits
  Advances from FHLB.
  Federal funds borrowed and security repurchase
    agreements.
  Notes payable.
  Subordinated debentures.
  Limitations.
 122




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    Fair
    Values of Financial
    Instruments  (Continued)    December 31, 2008


December 31, 2007Carrying


Fair


Carrying


FairAmount


Value


Amount


Value(In thousands)Financial assets:Cash and due from banks

$
74,237


$
74,237


$
52,983


$
52,983Interest-bearing deposits in other banks


10,042



10,042



6,916



6,916Federal funds sold


5,169



5,169



3,452



3,452Securities available for sale


347,142



347,142



361,171



361,171Tax lien certificates


23,786



23,786



15,615



15,615Mortgage loans held for sale


22,040



22,040



33,408



33,408Net loans


2,314,921



2,374,637



2,017,011



2,010,120Stock in FHLB


21,410



21,410



14,945



14,945Accrued interest receivable


14,794



14,794



16,512



16,512Derivative assets


1,427



1,427



657



657Financial liabilities:Deposits


2,342,988



2,363,270



2,200,611



2,204,371Advances from FHLB


361,324



382,547



222,828



229,042Federal funds borrowed and security repurchase agreements


3,563



3,563



17,075



17,075Note payable


7,000



7,000



9,500



9,500Subordinated debentures


60,884



46,839



53,744



53,526Derivative liabilities


1,534



1,534







   20.
    Pension
    Plan       123




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   20.
    Pension
    Plan  (Continued)    Pension
    Plan:
  December 31,2008


2007(Dollars in thousands)Change in benefit obligationBenefit obligation as of December 31, 2007 and 2006
    respectively

$
10,070


$
10,301Interest cost


602



590Benefits paid (including expenses)


(602
)


(556
)Actuarial (gain)/loss


564



(265
)Benefit obligation at end of year

$
10,634


$
10,070Change in plan assetsFair value of plan assets as of December 31, 2007 and 2006
    respectively

$
10,537


$
10,096Actual return on plan assets


(2,026
)


997Benefits paid (including expenses)


(602
)


(556
)Fair value of plan assets at end of year

$
7,909


$
10,537Funded status at end of yearNet amount recognized in statement of financial condition (after
    SFAS 158)

$
(2,725
)

$
467Amounts Recognized in the Statement of Financial Condition
    consist of:Assets

$



$
467Liabilities


(2,725
)


Net amount recognized in statement of financial condition (after
    SFAS 158)

$
(2,725
)

$
467Amounts not yet reflected in net periodic benefit cost and
    included in accumulated other comprehensive (loss) income:Transition (obligation) cost

$



$
Prior service (cost) credit






Net (loss) gain


(2,327
)


979Accumulated other comprehensive (loss) income (AOCI)


(2,327
)


979Cumulative employer contributions in excess of net periodic
    benefit cost


(398
)


(512
)Net amount recognized in statement of financial condition

$
(2,725
)

$
467Additional year-end information for pension plans with
    accumulated benefit obligations in excess of plan assets:Projected benefit obligation

$
10,634


$
N/AAccumulated benefit obligation

$
10,634


$
N/AFair value of plan assets

$
7,909


$
N/AWeighted-average assumptions used to determine net periodic
    benefit obligationsProjected benefit obligation


5.76
%


6.11
%Rate of compensation increase


N/A



N/A 124




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   20.
    Pension
    Plan  (Continued)  December 31,2008


2007(Dollars in thousands)Expected Cash FlowsExpected return of assets to employer in next year

$



$
Expected employer contribution for next fiscal year

$



$
Expected benefit paymentsYear ending December 31, 2009

$
613


$Year ending December 31, 2010


627Year ending December 31, 2011


613Year ending December 31, 2012


614Year ending December 31, 2013


601Next five years


3,286Components of net periodic benefit costInterest cost

$
602


$
590Expected return on plan assets


(716
)


(687
)Net periodic benefit cost

$
(114
)

$
(97
)Weighted-average assumptions used to determine net periodic
    benefit costDiscount rate


6.11
%


5.84
%Expected long-term return on plan assets


7.00
%


7.00
%Rate of compensation increase

$
N/A


$
N/A          125




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   20.
    Pension
    Plan  (Continued)    Percentage ofPension PlanAssets atDecember 31,


Long-term2008


2007


target


RangeAsset Category:Cash and equivalents


6.0
%


3.3
%


3.0
%


0-10
%Equity securities


50.5



48.2



62.0



40-65Debt securities


43.5



48.5



35.0



30-55Total


100.0
%


100.0
%


100.0
%   Benefit
    Restoration Plan:
  December 31,2008


2007(Dollars in thousands)Change in benefit obligationBenefit obligation as of December 31, 2007 and 2006,
    respectively

$
2,829


$
2,771Interest cost


90



158Benefits paid (including expenses)


(57
)


(60
)Forfeiture of benefits


(2,224
)


Actuarial (gain)/loss


(28
)


(40
)Benefit obligation at end of year

$
610


$
2,829Change in plan assetsFair value of plan assets as of December 31, 2007 and 2006
    respectively

$



$
Actual return on plan assets






Employer contribution


57



60Benefits paid (including expenses)


(57
)


(60
)Fair value of plan assets at end of year

$



$
Funded status at end of yearNet amount recognized in statement of financial condition (after
    SFAS 158)

$
(610
)

$
(2,829
)Amounts Recognized in the Statement of Financial Condition
    consist of:Assets

$



$
Current liabilities


(56
)


(265
)Noncurrent liabilities


(554
)


(2,564
)Net amount recognized in statement of financial position (after
    SFAS 158)

$
(610
)

$
(2,829
)Amounts not yet reflected in net periodic benefit cost and
    included in accumulated other comprehensive (loss) income:Transition (obligation) cost

$



$
Prior service (cost) credit






Net (loss) gain


(4
)


88Accumulated other comprehensive (loss) income (AOCI)


(4
)


88Cumulative employer contributions in excess of net periodic
    benefit cost


(606
)


(2,917
)Net amount recognized in statement of financial condition

$
(610
)

$
(2,829
) 126




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   20.
    Pension
    Plan  (Continued)  December 31,2008


2007(Dollars in thousands)Additional year-end information for pension plans with
    accumulated benefit obligations in excess of plan assets:Projected benefit obligation

$
610


$
2,829Accumulated benefit obligation

$
610


$
2,829Fair value of plan assets

$



$
Weighted-average assumptions used to determine net periodic
    benefit obligationsProjected benefit obligation


5.76
%


6.11
%Rate of compensation increase


N/A



N/AComponents of net periodic benefit costInterest cost


90



158Net periodic benefit cost

$
90


$
158Weighted-average assumptions used to determine net periodic
    benefit costDiscount rate


6.11
%


5.84
%Expected long-term return on plan assets


N/A



N/ARate of compensation increase


N/A



N/AExpected Cash FlowsExpected return of assets to employer in next year

$



$
Expected employer contribution for next fiscal year


56



265Expected benefit paymentsYear ending December 31, 2009

$
56Year ending December 31, 2010


55Year ending December 31, 2011


54Year ending December 31, 2012


52Year ending December 31, 2013


51Next five years


224   21.
    Other
    Noninterest Expense    Year Ended December 31,2008


2007


2006Professional fees

$
2,637


$
2,269


$
2,593Directors fees


438



397



345Insurance and assessments


3,486



2,189



1,898Postage, stationery and supplies


2,114



2,252



1,251Communications


2,203



2,007



988Advertising


2,977



2,397



1,348Foreclosure losses


540



227



210Other operating expense


9,405



6,821



5,116Total

$
23,800


$
18,559


$
13,749  127




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  22.
    Concentrations
    of Credit Risk      23.
    Net
    (Loss) Income Per Common Share    2008


2007


2006Numerator:Net (loss) income

$
(163,150
)

$
7,621


$
4,997Less preferred dividends


311







For basic and diluted, net (loss) income applicable to common
    stockholders

$
(163,461
)

$
7,621


$
4,997Denominator:For basic, weighted average common shares outstanding


10,021



9,243



5,852Effect of dilutive stock options






90



156Average common shares outstanding, assuming dilution


10,021



9,333



6,008Basic net (loss) income per common share

$
(16.31
)

$
0.82


$
0.85Diluted net (loss) income per common share

$
(16.31
)

$
0.82


$
0.83      128




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  24.
    Parent
    Company    December 31,2008


2007Statements of financial conditionAssets:Cash

$
1,414


$
662Investment in subsidiaries


294,377



392,865Intangibles, net






214Premises and equipment  net


787



4,252Other assets


18,115



20,851$
314,693


$
418,844Liabilities:Accrued expenses and other liabilities

$
3,057


$
5,558Note payable


7,000



9,500Subordinated debentures


53,397



53,744Stockholders equity


251,239



350,042$
314,693


$
418,844   129




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   24.
    Parent
    Company  (Continued)  Year Ended December 31,2008


2007


2006Statements of operationsIncome:Dividends from subsidiaries

$
4,000


$
7,000


$
1,750Interest


156



156



116Other income


3,160



404



4157,316



7,560



2,281Expense:Directors fees


293



269



276Salaries and benefits


1,147



1,384



708Occupancy expense


265



362



512Interest expense


4,231



4,569



3,566Other


766



2,373



8866,702



8,957



5,948Income (loss) before income taxes and equity in undistributed
    earnings of subsidiaries


614



(1,397
)


(3,667
)Income tax benefit


1,948



3,513



1,409Income (loss) before equity in undistributed (loss) earnings of
    subsidiaries


2,562



2,116



(2,258
)Equity in undistributed (loss) earnings of subsidiaries


(165,712
)


5,505



7,255Net (loss) income

$
(163,150
)

$
7,621


$
4,997   130




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   24.
    Parent
    Company  (Continued)  Year Ended December 31,2008


2007


2006Statements of cash flowsOperating activitiesNet (loss) income

$
(163,150
)

$
7,621


$
4,997Adjustments to reconcile net income (loss) to net cash used by
    operating activities:Amortization and depreciation expense


60



184



245Equity in undistributed loss (earnings) of subsidiaries


165,712



(5,505
)


(7,255
)Other (decrease) increase


(2,079
)


(1,120
)


1,392Net cash provided (used) by operating activities


543



1,180



(621
)Investing activitiesInvestment in subsidiary


(66,550
)






Proceeds from sale of premises and equipment


316



339



947Purchases of premises and equipment


(57
)






(5
)Net cash paid in business combinations






(2,527
)


(3,855
)Net cash used by investing activities


(66,291
)


(2,188
)


(2,913
)Financing activitiesProceeds from issuance of common stock






640



992Proceeds from issuance of preferred stock


69,000







Proceeds from note payable


10,000



10,000



2,000Principal payment on note payable


(12,500
)


(6,045
)


(210
)Proceeds from issuance of junior subordinated debentures






22,680



Principal payment on junior subordinated debentures






(16,495
)


Purchase of treasury stock






(10,428
)


Net cash provided by financing activities


66,500



352



2,782Net increase (decrease) in cash


752



(656
)


(752
)Cash at beginning of year


662



1,318



2,070Cash at end of year

$
1,414


$
662


$
1,318  131




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   24.
    Parent
    Company  (Continued)  25.
    Selected
    Quarterly Results of Operations (Unaudited)    First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter2008Total interest income

$
42,552


$
42,032


$
41,880


$
41,424Total interest expense


24,060



20,644



20,254



19,645Net interest income


18,492



21,388



21,626



21,779Provision for loan losses


1,872



5,967



2,305



2,968Securities gain (loss)


402



1,068



(8,541
)


(1,382
)Changes in fair value of derivatives


1,050



(418
)


141



467Goodwill impairment charge














160,306Income (loss) before income taxes


957



1,151



(7,800
)


(162,046
)Net income (loss)


695



841



(6,508
)


(158,178
)Basic net income (loss) per common share


0.07



0.08



(0.65
)


(15.80
)Diluted net income (loss) per common share


0.07



0.08



(0.65
)


(15.80
)2007Total interest income

$
39,744


$
40,067


$
45,999


$
46,120Total interest expense


21,710



22,554



26,093



26,410Net interest income


18,034



17,513



19,906



19,710Provision for loan losses


705



1,000



1,179



1,657Securities gains


243











66Changes in fair value of derivatives


(152
)


118



202



1,141Income before income taxes


3,389



2,993



2,361



3,011Net income


2,298



1,969



1,450



1,904Basic net income per common share


0.27



0.23



0.15



0.19Diluted net income per common share


0.26



0.23



0.15



0.19   year-to-date
  26.
    Segment
    Reporting     132




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   26.
    Segment
    Reporting  (Continued)    Total





SuperiorAlabama


Florida


Alabama and


Administrative


BancorpRegion


Region


Florida


and Other


Combined2008Net interest income

$
33,114


$
38,151


$
71,265


$
12,020


$
83,285Provision for loan losses


4,393



3,464



7,857



5,255



13,112Noninterest income


7,589



1,934



9,523



7,244



16,767Noninterest expense


30,654



21,730



52,384



41,988



94,372Goodwill impairment charge(1)


63,815



96,491



160,306







160,306Operating (loss) profit

$
(58,159
)

$
(81,600
)

$
(139,759
)

$
(27,979
)


(167,738
)Income tax benefit


















(4,588
)Net loss

















$
(163,150
)Total assets

$
1,062,230


$
1,109,011


$
2,171,241


$
881,460


$
3,052,701(1)  See Note 1 Intangible
    Assets for additional information.2007Net interest income

$
36,844


$
38,059


$
74,903


$
259


$
75,162Provision for loan losses


3,845



1,632



5,477



(936
)


4,541Noninterest income


7,021



1,723



8,744



10,613



19,357Noninterest expense


24,924



14,702



39,626



38,597



78,223Operating profit (loss)

$
15,096


$
23,448


$
38,544


$
(26,789
)


11,755Income tax expense


















4,134Net income

















$
7,621Total assets

$
1,029,652


$
1,124,816


$
2,154,468


$
730,957


$
2,885,4252006Net interest income

$
27,369


$
25,379


$
52,748


$
(5,354
)

$
47,394Provision for loan losses


2,152



1,150



3,302



(802
)


2,500Noninterest income


4,468



1,092



5,560



6,251



11,811Noninterest expense


14,064



7,156



21,220



28,565



49,785Operating profit (loss)

$
15,621


$
18,165


$
33,786


$
(26,866
)


6,920Income tax expense


















1,923Net income

















$
4,997Total assets

$
985,423


$
862,462


$
1,847,885


$
593,105


$
2,440,990  133




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   26.
    Segment
    Reporting  (Continued)  27.
    Stockholders
    Equity  1-for-4
    Reverse Stock Split
  1-for-4 1-for-4
  Stock
    Repurchase Plan
      Issuance
    of Preferred Stock and Related Warrant
    pari passu
 134




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   27.
    Stockholders
    Equity  (Continued)    and/or
   135




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  28.
    Other
    Comprehensive Income    Pre-Tax


Income Tax


Net ofAmount


Expense


Income Tax(In thousands)2008Unrealized loss on available for sale securities

$
(16,885
)

$
6,203


$
(10,682
)Less reclassification adjustment for losses realized in net loss


8,453



(3,128
)


5,325Unrealized loss on derivatives


(955
)


354



(601
)Defined benefit pension plan  net loss arising during
    the period


(3,398
)


1,257



(2,141
)Net unrealized loss

$
(12,785
)

$
4,686


$
(8,099
)2007Unrealized gain on available for sale securities

$
2,344


$
(918
)

$
1,426Less reclassification adjustment for gains realized in net income


(308
)


120



(188
)Defined benefit pension plan  net gain arising during
    the period


615



(227
)


388Net unrealized gain

$
2,651


$
(1,025
)

$
1,6262006Unrealized gain on available for sale securities


1,387



556



831Less reclassification adjustment for losses realized in net
    income










Unrealized loss on derivatives

$
(39
)

$
(16
)

$
(23
)Defined benefit pension plan  net gain arising during
    the period


451



167



284Net unrealized gain

$
1,799


$
707


$
1,092  136




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##### Table of Contents



28.
    Other
    Comprehensive Income  (Continued)  Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    And Procedures  Officer
    Certifications
  Rule 13a-14
  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
    Rule 13a-l5(e)
    Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f) Form 10-K,
 137




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
     Internal Control  Integrated Fram
        Internal Control  Integrated Framework
    
    138




---



##### Table of Contents



Changes
    in Internal Control Over Financial Reporting
    Item 9B.
    Other
    Information.   PART III  Items 10,
    11, 12, 13 and 14.
    Directors,
    Executive Officers and Corporate Governance; Executive
    Compensation; Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters; Certain
    Relationships and Related Transactions, and Director
    Independence; and Principal Accountant Fees and
    Services.   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules.  Financial Statements and Financial Schedules.
  (l)
    The consolidated financial statements of Superior Bancorp and
    its subsidiaries filed as a part of this Annual Report on
    Form 10-K
    are listed in Item 8 of this Annual Report on
    Form 10-K,
    which is hereby incorporated by reference herein.  (2)
    All schedules to the consolidated financial statements of
    Superior Bancorp and its subsidiaries have been omitted because
    they are not required under the related instructions or are
    inapplicable, or because the required information has been
    provided in the consolidated financial statements or the notes
    thereto.  Exhibits.
  Regulation S-K Form 10-K
  (3)-l

Restated Certificate of Incorporation of Superior Bancorp, filed
    as Exhibit 3 to Superior Bancorps Current Report on Form
    8-K dated April 28, 2008, is hereby incorporated herein by
    reference.(3)-2

Bylaws of Superior Bancorp, filed as Exhibit 3 to Superior
    Bancorps Current Report on Form 8-K dated November 20,
    2007, is hereby incorporated herein by reference.(3)-3

Certificate of Designations of Superior Bancorp Fixed Rate
    Cumulative Perpetual Preferred Stock, Series A, filed as Exhibit
    3 to Superior Bancorps Current Report on Form 8-K dated
    November 26, 2008, is hereby incorporated herein by reference. 139




---



##### Table of Contents



(4)-1

Amended and Restated Declaration of Trust, dated as of September
    7, 2000, by and among State Street Bank and Trust Company of
    Connecticut, National Association, as Institutional Trustee, The
    Banc Corporation, as Sponsor, David R. Carter and James A.
    Taylor, Jr., as Administrators, filed as
    Exhibit(4)-l
    to The Banc Corporations Annual Report on Form 10-K for
    the year ended December 3l, 2000, is hereby incorporated
    herein by reference.(4)-2

Guarantee Agreement, dated as of September 7, 2000, by and
    between The Banc Corporation and State Street Bank and Trust
    Company of Connecticut, National Association, filed as
    Exhibit(4)-2 to The Banc Corporations Annual Report on
    Form 10-K for the year ended December 31, 2000, is hereby
    incorporated herein by reference.(4)-3

Indenture, dated as of September 7, 2000, by and among The Banc
    Corporation as issuer and State Street Bank and Trust Company of
    Connecticut, National Association, as Trustee, filed as
    Exhibit(4)-3 to The Banc Corporations Annual Report on
    Form 10-K for the year ended December 31, 2000, is hereby
    incorporated herein by reference.(4)-4

Placement Agreement, dated as of August 31, 2000, by and among
    The Banc Corporation, TBC Capital Statutory Trust II, Keefe
    Bruyette & Woods, Inc., and First Tennessee Capital
    Markets, filed as Exhibit(4)-4 to The Banc Corporations
    Annual Report on Form 10-K for the year ended December 31, 2000,
    is hereby incorporated herein by reference.(4)-5

Amended and Restated Declaration of Trust, dated as of July 16,
    2001, by and among The Banc Corporation, The Bank of New York,
    David R. Carter, and James A. Taylor, Jr. filed as Exhibit(4)-5
    to The Banc Corporations Registration Statement on Form
    S-4 (Registration No. 333-69734) is hereby incorporated herein
    by reference.(4)-6

Guarantee Agreement, dated as of July 16, 2001, by The Banc
    Corporation and The Bank of New York filed as Exhibit(4)-6 to
    The Banc Corporations Registration Statement on Form S-4
    (Registration No. 333-69734) is hereby incorporated herein by
    reference.(4)-7

Indenture, dated as of July 16, 2001, by The Banc Corporation
    and The Bank of New York filed as Exhibit #(4)-7 to The Banc
    Corporations Registration Statement on Form S-4
    (Registration
    No. 333-69734)
    is hereby incorporated herein by reference.(4)-8

Placement Agreement, dated as of June 28, 2001, among TBC
    Capital Statutory Trust III, and The Banc Corporation and
    Sandler ONeill & Partners, L.P. filed as Exhibit
    #(4)-8 to The Banc Corporations Registration Statement on
    Form S-4 (Registration No. 333-69734) is hereby incorporated
    herein by reference.(4)-9

Indenture, dated March 23, 2000, by and between Community
    Bancshares, Inc. and The Bank of New York filed as Exhibit 4.4
    to Community Bancshares Form 10-Q for the quarter ended
    March 31, 2000, is hereby incorporated herein by reference.(4)-10

Amended and Restated Declaration of Trust, dated March 23, 2000,
    by and among The Bank of New York (Delaware), The Bank of New
    York, Community Bancshares, Inc. and Community (AL) Capital
    Trust I filed as Exhibit 10.1 to Community Bancshares Form
    10-Q for the quarter ended March 31, 2000, is hereby
    incorporated herein by reference.(4)-11

Guarantee Agreement, dated March 23, 2000, by and between
    Community Bancshares, Inc. and The Bank of New York filed as
    Exhibit 10.2 to Community Bancshares Form 10-Q for the
    quarter ended March 31, 2000, is hereby incorporated herein by
    reference.(4)-12

Stock Purchase Agreement, dated January 24, 2005, between The
    Banc Corporation and the investors named therein, filed as
    Exhibit 4-1 to The Banc Corporations Current Report on
    Form 8-K dated January 24, 2005, is hereby incorporated herein
    by reference.(4)-13

Registration Rights Agreement, dated January 24, 2005, between
    The Banc Corporation and the investors named therein, filed as
    Exhibit 4-2 to The Banc Corporations Current Report on
    Form 8-K dated January 24, 2005, is hereby incorporated herein
    by reference.(4)-14

Indenture, dated as of December 15, 2005, by and between Peoples
    Community Bancshares, Inc. and Wilmington Trust Company, filed
    as Exhibit 4.14 to Superior Bancorps Annual Report on Form
    10-K for the fiscal year ended December 31, 2007, is hereby
    incorporated herein by reference. 140




---



##### Table of Contents



(4)-15

Placement Agreement, dated as of December 7, 2005, by and among
    Peoples Community Bancshares, Inc., Peoples Community Statutory
    Trust I, FTN Financial Capital Markets and Keefe, Bruyette
    & Woods, Inc, filed as Exhibit 4.15 to Superior
    Bancorps Annual Report on Form 10-K for the fiscal year
    ended December 31, 2007, is hereby incorporated herein by
    reference .(4)-16

Guarantee Agreement, dated as of December 15, 2005, by and
    between Peoples Community Bancshares, Inc. and Wilmington Trust
    Company, filed as Exhibit 4.16 to Superior Bancorps Annual
    Report on Form 10-K for the fiscal year ended December 31, 2007,
    is hereby incorporated herein by reference.(4)-17

Amended and Restated Declaration of Trust, dated as of December
    15, 2005, by and among Wilmington Trust Company, Peoples
    Community Bancshares, Inc., Neil D. McCurry, Jr. and Dorothy S.
    Barth, filed as Exhibit 4.17 to Superior Bancorps Annual
    Report on Form 10-K for the fiscal year ended December 31, 2007,
    is hereby incorporated herein by reference.(4)-18

Declaration of Trust, dated July 10, 2007, by and among Superior
    Bancorp, Wilmington Trust Company, Mark A. Tarnakow, William H.
    Caughran and Rick D. Gardner filed as Exhibit 4.01 to Superior
    Bancorps Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2007, is hereby incorporated herein by
    reference.(4)-19

Indenture, dated as of July 19, 2007, between Superior Bancorp
    and Wilmington Trust Company filed as Exhibit 4.02 to Superior
    Bancorps Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2007, is hereby incorporated herein by
    reference.(4)-20

Guarantee Agreement, dated as of July 19, 2007, between Superior
    Bancorp and Wilmington Trust Company filed as Exhibit 4.03 to
    Superior Bancorps Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2007, is hereby incorporated herein
    by reference.(4)-21

Placement Agreement, dated July 18, 2007, by and among Superior
    Bancorp, FTN Capital Markets and Keefe, Bruyette & Woods,
    Inc. filed as Exhibit 4.04 to Superior Bancorps Quarterly
    Report on
    Form 10-Q
    for the quarter ended September 30, 2007, is hereby incorporated
    herein by reference.(4)-22

Summary Description of Non-Employee Directors Stock Plan., filed
    as Exhibit 4 to Superior Bancorps Registration Statement
    on Form S-8, dated May 30, 2006 (Registration No. 333-134561),
    is hereby incorporated herein by reference.(10)-1*

Third Amended and Restated 1998 Stock Incentive Plan of The Banc
    Corporation, filed as
    Exhibit (10)-1
    to The Banc Corporations Annual Report on Form 10-K for
    the fiscal year ended December 31, 2005, is hereby incorporated
    herein by reference.(10)-2*

Commerce Bank of Alabama Incentive Stock Compensation Plan,
    filed as Exhibit(4)-3 to The Banc Corporations
    Registration Statement on Form S-8, dated February 22, 1999
    (Registration No. 333-72747), is hereby incorporated herein by
    reference.(10)-3*

Employment Agreement, dated January 24, 2005, by and between The
    Banc Corporation, The Bank and C. Stanley Bailey, filed as
    Exhibit 10-5 to The Banc Corporations Current Report on
    Form 8-K dated January 24, 2005, is hereby incorporated herein
    by reference.(10)-4*

Employment Agreement, dated January 24, 2005, by and between The
    Banc Corporation, The Bank and C. Marvin Scott, filed as Exhibit
    10-6 to The Banc Corporations Current Report on Form 8-K
    dated January 24, 2005, is hereby incorporated herein by
    reference.(10)-5*

Employment Agreement, dated January 24, 2005, by and between The
    Banc Corporation, The Bank and Rick D. Gardner, filed as Exhibit
    10-7 to The Banc Corporations Current Report on Form 8-K
    dated January 24, 2005, is hereby incorporated herein by
    reference.(10)-6*

Agreement between Superior Bank and William H. Caughran, dated
    August 31, 2006, filed as Exhibit 10.4 to Amendment No. 1 to
    Superior Bancorps Registration Statement on Form S-4
    (Registration No. 333-136419) is hereby incorporated herein by
    reference.(10)-7*

Management Incentive Compensation Plan, filed as Exhibit 10.1 to
    The Banc Corporations Current Report on Form 8-K, dated
    April 26, 2005, is hereby incorporated herein by reference.(10)-8*

Change in Control Agreement, dated March 10, 2008, by and among
    Superior Bancorp, Superior Bank and William H. Caughran, filed
    as Exhibit 10.22 to Superior Bancorps Annual Report on
    Form 10-K for the fiscal year ended December 31, 2007, is hereby
    incorporated herein by reference. 141




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##### Table of Contents



(10)-9

Loan Agreement, dated as of September 4, 2008, between Superior
    Bancorp and Colonial Bank, filed as Exhibit 10.1 to Superior
    Bancorps Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2008, is hereby incorporated herein by
    reference.(10)-10

Revolving Credit Note, dated September 4, 2008, between Superior
    Bancorp and Colonial Bank,, filed as Exhibit 10.2 to Superior
    Bancorps Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2008, is hereby incorporated herein by
    reference.(10)-11

Stock Pledge Agreement, dated as of September 4, 2008, given by
    Superior Bancorp, filed as Exhibit 10.3 to Superior
    Bancorps Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2008, is hereby incorporated herein by
    reference.(10)-12

Agreement to Purchase Subordinated Notes, dated as of September
    17, 2008, by and among Superior Bank, Superior Bancorp and
    Durden Enterprises, LLC, filed as Exhibit 10.4 to Superior
    Bancorps Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2008, is hereby incorporated herein by
    reference.(10)-13

Letter to Durden Enterprises, LLC, dated as of September 17,
    2008, filed as Exhibit 10.5 to Superior Bancorps Quarterly
    Report on Form 10-Q for the quarter ended September 30, 2008, is
    hereby incorporated herein by reference.(10)-14

9.5% Subordinated Note Due September 15, 2018 given by
    Superior Bank, filed as Exhibit 10.6 to Superior Bancorps
    Quarterly Report on Form 10-Q for the quarter ended September
    30, 2008, is hereby incorporated herein by reference.(10)-15

Warrant to Purchase Common Stock of Superior Bancorp dated as of
    September 17, 2008, filed as Exhibit 10.7 to Superior
    Bancorps Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2008, is hereby incorporated herein by
    reference.(10)-16*

Agreement, dated as of September 8, 2008, between Superior
    Bancorp and James A. White, filed as Exhibit 10.8 to Superior
    Bancorps Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2008, is hereby incorporated herein by
    reference.(10)-17*

Change in Control Agreement, dated as of September 8, 2008, by
    and among Superior Bancorp, Superior Bank and James A. White,
    filed as Exhibit 10.8 to Superior Bancorps Quarterly
    Report on Form 10-Q for the quarter ended September 30, 2008, is
    hereby incorporated herein by reference.(10)-18

Warrant, dated December 5, 2008, to purchase up to
    1,923,792 shares of common stock of Superior Bancorp, filed
    as Exhibit 3 to Superior Bancorps Current Report on Form
    8-K dated December 5, 2008, is hereby incorporated herein by
    reference.(10)-19

Letter Agreement, dated December 5, 2008, including Securities
    Purchase Agreement  Standard Terms incorporated
    by reference therein, between the Company and the United States
    Department of the Treasury, filed as Exhibit 10.1 to Superior
    Bancorps Current Report on Form 8-K dated December 5,
    2008, is hereby incorporated herein by reference.(10)-20

Form of Waiver, executed as of December 5, 2008, by each of the
    Senior Executive Officers of Superior Bancorp, filed as Exhibit
    10.2 to Superior Bancorps Current Report on Form 8-K dated
    December 5, 2008, is hereby incorporated herein by reference.(10)-21

Form of Letter Agreement, executed as of December 5, 2008, by
    each of the Senior Executive Officers of Superior Bancorp, filed
    as Exhibit 10.3 to Superior Bancorps Current Report on
    Form 8-K dated December 5, 2008, is hereby incorporated herein
    by reference.(10)-22*

Superior Bancorp 2008 Incentive Compensation Plan, filed as
    Exhibit 10.1 to Superior Bancorps Quarterly Report on Form
    10-Q for the quarter ended June 30, 2008, is hereby incorporated
    herein by reference.(10)-23*

Amended and Restated Employment Agreement, dated December 29,
    2008, between Superior Bancorp and C. Stanley Bailey.(10)-24*

Amended and Restated Employment Agreement, dated December 29,
    2008, between Superior Bancorp and C. Marvin Scott.(10)-25*

Amended and Restated Employment Agreement, dated December 29,
    2008, between Superior Bancorp and Rick D. Gardner.(10)-26*

Amendment to Third Amended and Restated 1998 Stock Incentive
    Plan of The Banc Corporation(10)-27*

Agreement, dated as of January 1, 2006, between The Banc
    Corporation and James Mailon Kent, Jr. 142




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##### Table of Contents



(10)-28*

Amendment to Agreement, dated as of November 3, 2008, between
    Superior Bancorp and James Mailon Kent, Jr.(21)

Subsidiaries of Superior Bancorp.(23)-1

Consent of Grant Thornton, LLP.(23)-2

Consent of Carr, Riggs & Ingram, LLC.(31)

Certifications of Chief Executive Officer and Principal
    Financial Officer pursuant to Rule 13a-14(a).(32)

Certifications of Chief Executive Officer and Principal
    Financial Officer pursuant to 18 U.S.C. Section 1350.     *
    
    Compensatory plan or arrangement(c)
    
    Financial Statement Schedules.  Form 10-K Form 10-K,
 143




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##### Table of Contents



SIGNATURES      By
    /s/  C.
    Stanley Bailey   Chief Executive Officer
    Form 10-K 11-K Form 10-K;
    Signature

Title

Date/s/  C.
    Stanley
    BaileyC.
    Stanley Bailey

Chairman of the Board and Chief Executive Officer (Principal
    Executive Officer) and Director

March 16, 2009/s/  James
    A.
    WhiteJames
    A. White

Chief Financial Officer (Principal Financial Officer)

March 16, 2009/s/  James
    C.
    GossettJames
    C. Gossett

Chief Accounting Officer (Principal Accounting Officer)

March 16, 2009/s/  Roger
    BarkerRoger
    Barker

Director

March 16, 2009/s/  Rick
    D.
    GardnerRick
    D. Gardner

Director and Chief Operating Officer

March 16, 2009/s/  Thomas
    E. Jernigan,
    Jr.Thomas
    E. Jernigan, Jr.

Director

March 16, 2009/s/  James
    Mailon Kent,
    Jr.James
    Mailon Kent, Jr.

Director

March 16, 2009/s/  Mark
    A.
    LeeMark
    A. Lee

Director

March 16, 2009/s/  James
    M.
    LinkJames
    M. Link

Director

March 16, 2009 144




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##### Table of Contents



Signature

Title

Date/s/  Peter
    L.
    LowePeter
    L. Lowe

Director

March 16, 2009/s/  John
    C.
    MetzJohn
    C. Metz

Director

March 16, 2009/s/  D.
    Dewey
    MitchellD.
    Dewey Mitchell

Director

March 16, 2009/s/  Barry
    MortonBarry
    Morton

Director

March 16, 2009/s/  Robert
    R. Parrish,
    Jr.Robert
    R. Parrish, Jr.

Director

March 16, 2009/s/  Charles
    W.
    Roberts, IIICharles
    W. Roberts, III

Director

March 16, 2009/s/  C.
    Marvin
    ScottC.
    Marvin Scott

Director and President

March 16, 2009/s/  James
    C. White,
    Sr.James
    C. White, Sr.

Director

March 16, 2009  145