##### 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, 2009oro

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-T o o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer  o
    Accelerated
    filer  o
    Non-accelerated
    filer  þ
    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 IItem 1.


Business


2Item 1A.


Risk Factors


15Item 1B.


Unresolved Staff Comments


20Item 2.


Properties


20Item 3.


Legal Proceedings


21Item 4.


Submission of Matters to a Vote of Security
    Holders


21PART IIItem 5.


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


21Item 6.


Selected Financial Data


25Item 7.


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


27Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


83Item 8.


Financial Statements and Supplementary Data


83Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


157Item 9A.


Controls and Procedures


157Item 9B.


Other Information


159PART IIIItem 10.


Directors and Executive Officers of the
    Registrant


159Item 11.


Executive Compensation


159Item 12.


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


159Item 13.


Certain Relationships and Related Transactions


159Item 14.


Principal Accounting Fees and Services


159PART IVItem 15.


Exhibits, Financial Statement Schedules


159SIGNATURES


164EX-(4)-23EX-(4)-24EX-(4)-25EX-(4)-26EX-(10)-29EX-(10)-30EX-(10)-31EX-21EX-23EX-31EX-32EX-99




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




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Alabama(45)



Florida(28)Albertville

Andalusia

Altha

ApalachicolaArab

Athens

Beverly Hills

BlountstownBirmingham

Blountsville

Bradenton

BristolChelsea

Childersburg

Brooksville

ClearwaterCleveland

Cullman

Dunnellon

HomosassaDecatur

Elkmont

Inverness

MariannaFalkville

Gadsden

New Port Richey

Palm HarborGardendale

Guntersville

Panama City

Port RicheyGurley

Haleyville

Port St. Joe

SarasotaHamilton

Hartselle

Spring Hill

Sun City Center(4)Hoover(2)

Huntsville(3)

Tallahassee(2)

Tampa(2)Madison(2)

Meridianville

Wesley ChapelMonroeville

MontgomeryMountain Brook

New HopeOneonta(2)

OppPelham

Rainbow CityRogersville

SamsonSnead

SylacaugaTrussville

UniontownWarrior(2)     Growth.
    Operating
    Segments
   3




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Lending
    Activities
  General.
      follow-up
  Loan
    Portfolio
    Amount


PercentCommercial and industrial

$
213,329



8.62
%Real estate:Construction and land developmentResidential development  Alabama


163,978



6.62
%
    Florida


129,590



5.24
%
    Other


7,856



0.32
%Total residential development


301,424



12.18
%Commercial development  Alabama


102,339



4.13
%
    Florida


265,767



10.74
%
    Other


10,915



0.44
%Total commercial development


379,021



15.31
%Total construction and land development


680,445



27.49
%Single-family mortgages


691,364



27.93
%Nonresidential mortgages


830,698



33.55
%Total real estate portfolio


2,202,507



88.97
%Consumer


58,785



2.37
%Other


969



0.04
%Total loans

$
2,475,590



100.00
%  4




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Nonresidential Mortgage Loans. loan-to-value 30-year
  Single-Family Mortgage Loans.
  Construction and Land Development Loans.
   5




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Commercial and Industrial Loans. loan-to-value
  Consumer Loans.
  Credit
    Review and Procedures
      Deposits
    and Other Funding
       6




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Competition
    Employees
    Supervision
    and Regulation
  General.
  Holding Company Regulation.
 7




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Change in Bank Control Act.
  Regulation of Business Activities.
  Capital Requirements.
  available-for-sale
 8




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Prompt Corrective Regulatory Action.
  Insurance of Deposit Accounts.
      Loans to One Borrower.
 9




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QTL Test. 12-month
    Limitations on Capital Distributions.
  Transactions with Related Parties. i.e.
    Standards for Safety and Soundness.
 10




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Enforcement. and/or
  FHLB System.
  Federal Reserve System.
  Community Reinvestment Act.
  Confidentiality of Customer
    Information.
  Bank Secrecy Act.
 11




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USA Patriot Act. non-U.S. owned
  Consumer Laws and Regulations.
  Emergency Economic Stabilization Act.
     12




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
    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 equity or debt securities Superior
    Bancorp 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 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 may be required 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 during 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 13




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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 the
    compensation committees of CPP recipients be composed solely of
    independent directors and that those compensation committees
    meet at least semiannually to discuss and evaluate employee
    compensation plans in light of an assessment of any risk posed
    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 of Excessive Bonuses Previously
    Paid.  The ARRA directs the Secretary of the
    Treasury Department to review all compensation paid to the
    senior executive officers and the next 20 most highly
    compensated employees of CPP participants 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 CPP participant 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 2010 annual
    stockholders meeting.  Temporary Liquidity Guarantee Program.
  Instability
    of Regulatory Structure
    Effect on
    Economic Environment
   14




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Available
    Information
  www.superiorbank.com. Form 10-K, Form 10-Q, Form 8-K www.superiorbank.com 1-800-SEC-0330 www.sec.gov
  Code of
    Ethics
    Item 1A.
    Risk
    Factors.  Enterprise
    Risk Management (ERM)
       15




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and/or
          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.
 16




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An increase in loan prepayments may adversely affect our
    profitability.
  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.
 17




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We are subject to extensive regulation.
    Federal regulation of the banking industry may change
    significantly due to the unprecedented economic decline and
    conditions in the banking industry.
    We may require additional capital to fund our growth plans
    and to augment our capital.
  We are dependent upon the services of our management
    team.
  Additional requirements under our regulatory framework,
    especially those imposed under ARRA, EESA or other legislation
    intended to strengthen the U.S. financial system, could
    adversely affect us.
  The imposition of certain restrictions on our executive
    compensation as a result of our decision to participate in the
    CPP may have material adverse effects on our business and
    results of operations.
 18




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gross-up
  The holders of our subordinated debentures have rights that
    are senior to those of our stockholders.
  Higher FDIC deposit insurance premiums and assessments could
    adversely affect our financial condition.
  If we defer payments of interest on our outstanding junior
    subordinated debentures or if certain defaults relating to those
    debentures occur, we will be prohibited from declaring or paying
    dividends or distributions on, and from making liquidation
    payments with respect to, our common stock.
 19




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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 to augment our existing capital base may be dilutive to
    existing stockholders.
  Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.   20




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Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.    BrokerFor

Against

Abstain

Non-Votes7,446,967



1,765,439



138,851



0  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


Low2008First Quarter

$
24.24


$
17.00Second Quarter


22.64



8.30Third Quarter


12.50



5.41Fourth Quarter


9.00



2.532009First Quarter

$
4.38


$
1.69Second Quarter


5.75



2.60Third Quarter


3.99



1.96Fourth Quarter


3.97



1.502010First Quarter (through March 3, 2010)

$
3.81


$
2.71     Issuer
    Purchases of Equity Securities
  Form 10-K,
 21




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##### Table of Contents



Dividends
      Equity
    Compensation Plan Information
    Number of





Number of SharesSecurities





Remaining Available forto be Issued Upon


Weighted-


Future Issuance UnderExercise of


Average Exercise


Equity CompensationOutstanding


Price of


Plans (ExcludingOptions, Warrants


Outstanding


Securities ReflectedPlan Category

and Rights


Options, Warrants


in Column (a))(a)


(b)


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


535,538


$
22.07



132,459Equity Compensation Plans not Approved by Security Holders(2)


391,025



33.39



53,011Total


926,563


$
26.85



185,470     (1)
    
    Excludes 74,301 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 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.
 22




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##### Table of Contents



Third Amended and Restated 1998 Stock Incentive
    Plan.
  The Commerce Bank of Alabama Stock Incentive Compensation
    Plan.
 23




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##### Table of Contents



Performance
    Graph
    
  Period EndingIndex

12/31/04

12/31/05

12/31/06

12/31/07

12/31/08

12/31/09Superior Bancorp


100.00



138.64



137.79



65.25



9.63



9.99NASDAQ Composite


100.00



101.37



111.03



121.92



72.49



104.31SNL Southeast Thrift Index


100.00



91.00



106.95



46.06



26.23



16.27    24




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##### Table of Contents



Item 6.
    Selected
    Financial Data.  Form 10-K.
  As of and For The Year Ended December 31,2009


2008


2007


2006


2005(Dollars in thousands, except per share data)Selected Statement of Financial Condition Data:Assets

$
3,221,869


$
3,052,701


$
2,885,425


$
2,440,990


$
1,415,469Loans, net of unearned income


2,472,697



2,314,921



2,017,011



1,639,528



963,253Allowance for loan losses


41,884



28,850



22,868



18,892



12,011Investment securities


286,310



347,142



361,171



354,716



242,595Deposits


2,656,573



2,342,988



2,200,611



1,870,841



1,043,695Advances from FHLB


218,322



361,324



222,828



187,840



181,090Notes payable


45,917



7,000



9,500



5,545



3,755Subordinated debentures


84,170



60,884



53,744



44,006



31,959Stockholders equity


191,704



251,239



350,042



276,087



105,065Selected Statement of Operations Data:Interest income

$
162,082


$
167,888


$
171,929


$
108,777


$
77,280Interest expense


69,520



84,603



96,767



61,383



38,255Net interest income


92,562



83,285



75,162



47,394



39,025Provision for loan losses


28,550



13,112



4,541



2,500



3,500Noninterest income, excluding
    other-than-temporary
    impairment of securities (OTTI)


29,325



26,709



19,357



11,811



9,583OTTI, net


(15,746
)


(9,942
)










Insurance Proceeds


















5,114Management separation costs














265



15,467Goodwill impairment charge






160,306











Noninterest expense


110,485



94,372



78,223



49,520



45,153(Loss) income before income (benefit) taxes


(32,894
)


(167,738
)


11,755



6,920



(10,398
)Income tax (benefit) expense


(13,005
)


(4,588
)


4,134



1,923



(4,612
)Net (loss) income


(19,889
)


(163,150
)


7,621



4,997



(5,786
)Preferred stock dividends and amortization


(4,193
)


(311
)










(305
)Gain on exchange of preferred stock to trust preferred securities


23,097















Effect of early conversion of preferred stock


















(2,006
)Net (loss) income applicable to common stockholders

$
(985
)

$
(163,461
)

$
7,621


$
4,997


$
(8,097
)Per Share Data:(5)Net (loss) income  basic

$
(0.09
)

$
(16.31
)

$
0.82


$
0.85


$
(1.69
) diluted(1)


(0.09
)


(16.31
)


0.82



0.83



(1.69
)Weighted average shares outstanding  basic


10,687



10,021



9,244



5,852



4,789Weighted average shares outstanding  diluted(1)


10,687



10,021



9,333



6,008



4,789Common book value at period end

$
15.69


$
17.83


$
34.91


$
31.87


$
20.83Preferred shares outstanding at period end






69











Common shares outstanding at period end


11,668



10,075



10,027



8,663



5,043Performance Ratios and Other Data:Return on average assets


(0.63
)%


(5.42
)%


0.29
%


0.30
%


(0.41
)%Return on average stockholders equity


(8.16
)


(46.58
)


2.47



3.55



(5.68
)Net interest margin(2)(3)


3.28



3.27



3.37



3.17



3.14Net interest spread(3)(4)


3.09



3.06



3.04



2.93



3.00Average loan to average deposit ratio


97.11



97.50



92.80



93.12



88.82Average interest-earning assets to average interest-bearing
    liabilities


107.57



106.38



107.54



106.01



104.58Assets Quality Ratios:Allowance for loan losses to nonperforming loans


26.25
%


45.98
%


92.77
%


227.97
%


261.17
%Allowance for loan losses to loans, net of unearned income


1.69



1.25



1.13



1.15



1.25Nonperforming assets (NPAs) to loans plus NPAs, net
    of unearned income


8.01



3.56



1.44



0.62



0.67NPAs to total assets


6.26



2.72



1.01



0.41



0.46Net loan charge-offs to average loans


0.65



0.33



0.24



0.20



0.43Net loan charge-offs as a percentage of:Provision for loan losses


54.35



54.38



94.30



92.64



115.20Allowance for loan losses


37.04



24.71



18.72



12.26



33.57  25




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(1)
    
    Common stock equivalents of
    159,561, 65,226 and 250,500 shares were not included in
    computing diluted earnings per share for the twelve-month
    periods ended December 31, 2009, 2008 and 2005,
    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-earnings
    assets less rate on average interest-bearing liabilities.(5)
    
    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. 26




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation.  General
    Overview
         27




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##### Table of Contents



other-than-temporary
    Managements
    Response to Current Economic Environment.
  Changes in Lending Polic
  
    Credit Approval.    
    Credit Administration and Loan Review.  sub-limits
  
    Problem Asset Management.    Loan Trends.
 28




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30-89 days
      Liquidity and Capital.
     29




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
    During the third quarter of 2009, we sold 1.5 million
    shares of our common stock at prices ranging from $2.21 to $2.71
    per share to approximately 20 accredited investors for total
    cash consideration of approximately $3.3 million.
    At a special shareholders meeting held on
    November 19, 2009, we received shareholder approval for an
    increase in authorized shares from 20 million to
    200 million.
    During the fourth quarter, we successfully completed a
    conversion of $69 million of our Preferred Stock held by
    the Treasury Department for an identical amount of trust
    preferred securities issued by our wholly-owned subsidiary,
    Superior Capital Trust II, which is reflected as
    subordinated debt in our statement of financial condition. As a
    result of this exchange transaction, we recorded an accounting
    gain of approximately $23.1 million after-tax, reflecting
    the net benefit of the favorable interest rate terms of the
    trust preferred securities compared to current market rates.
    This gain reduced the net loss to common shareholders by $1.98
    per common share.
    Additionally, in January 2010, we secured agreements from the
    holders of $7.5 million of our then-currently outstanding
    non-pooled trust preferred securities to exchange those
    securities for newly issued common stock. When completed, we
    expect to record a net after-tax gain of $1.8 million
    ($0.15 per common share) upon exchange of the trust preferred
    securities. The ultimate effect of the transactions will be to
    increase our common equity by approximately $6.5 million,
    consisting of both the increase in equity upon recording the
    gain, and the fair value of the shares of common stock issued in
    conjunction with the exchange.  Regulatory Reform and Costs.
    Critical
    Accounting Estimates
    Allowance
    for Loan Losses
   30




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Income
    Taxes
      three-year-cumulative
  
    Management forecasts sufficient taxable income in the next five
    years, even under stressed economic scenarios, to realize our
    DTA in the carryforward periods allowed under the respective
    federal and state revenue codes (see discussion below).
    Management has a history of extremely accurate forecasting of
    asset/liability growth and corresponding interest margin, as
    well as reasonably accurate forecasting of controllable income
    and expense.
    Our net interest margin remains strong and has steadily improved
    even in this weak economy.
    Our liquidity is strong due to a mature branch network which
    provides a reliable and low cost funding source to support our
    interest margin.
    We have stable levels of core operating noninterest income and
    noninterest expenses.
    Our executive team is experienced in managing through difficult
    credit cycles.
    A recent economic forecast indicates a strengthening real estate
    economy in Florida, which is the geographic focus of our credit
    concerns, and where we have approximately 49% of our loans and
    71% of our classified loans.
    Our general tax credit and federal net operating loss
    carryforwards do not begin expiring until the years 2018 and
    2023, respectively. Our AMT credit carryforwards have no
    expiration. In addition, we do not have a history of our
    operating or tax credit carryforwards expiring unused. 31




---



##### Table of Contents



available-for-sale
  Fair
    Value Measurements
    available-for-sale
   32




---



##### Table of Contents



and/or
  Recently
    Issued Accounting Standards
    Results
    of Operations
  Year
    ended December 31, 2009 compared with Year ended
    December 31, 2008
  Earnings.
  Three Months


YearEnded December 31,


Ended December 31,2009


2008


2009


2008(Dollars in thousands, except per share data)Net loss

$
(11,501
)

$
(158,178
)

$
(19,889
)

$
(163,150
)Net income (loss) applicable to common shareholders


10,880



(158,489
)


(985
)


(163,461
)Net income (loss) per common share (diluted)


0.92



(15.80
)


(0.09
)


(16.31
)Net interest margin


3.42
%


3.29
%


3.28
%


3.27
%Net interest spread


3.25



3.12



3.09



3.06Return on average assets


(1.43
)


NCM



(0.63
)


(5.42
)Return on average stockholders equity


(19.52
)


NCM



(8.16
)


(46.58
)Common book value per share

$
15.69


$
17.83


$
15.69


$
17.83       33




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##### Table of Contents



Net Interest Income.
  Increase (Decrease) inFourth Quarter


Year Ended December 31,2009 vs. 2008


2009 vs. 2008Average


Income/


Yield/


Average


Income/


Yield/Balance


Expense


Rate


Balance


Expense


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

$
248,765


$
521



(0.56
)%

$
290,339


$
(2,502
)


(0.90
)%Investment securitiesTaxable


(31,324
)


(1,070
)


(0.98
)


(30,718
)


(2,225
)


(0.21
)Tax-exempt


(8,529
)


(168
)


(0.37
)


(1,814
)


(162
)


(0.12
)Total investment securities


(39,853
)


(1,238
)


(0.93
)


(32,532
)


(2,387
)


(0.19
)Federal funds sold


(2,748
)


(7
)


(0.48
)


(1,534
)


(113
)


(2.16
)Other investments


9,309



(110
)


(1.14
)


13,567



(860
)


(2.30
)Total interest-earning assets

$
215,473



(834
)


(0.60
)

$
269,840



(5,862
)


(0.83
)Interest-bearing liabilities:Demand deposits

$
48,197


$
(511
)


(0.44
)%

$
15,571


$
(6,162
)


(1.00
)%Savings deposits


101,452



(160
)


(1.12
)


121,921



920



(0.75
)Time deposits


134,895



(2,718
)


(1.12
)


142,491



(8,803
)


(1.05
)Other borrowings


(126,109
)


(467
)


0.70



(62,217
)


(2,007
)


0.03Subordinated debentures


5,119



255



0.90



6,381



969



0.80Total interest-bearing liabilities

$
163,554



(3,601
)


(0.73
)

$
224,147



(15,083
)


(0.86
)Net interest income/net interest spread






2,767



0.13
%






9,221



0.03
%Net yield on earning assets










0.13
%










0.01
%Taxable equivalent adjustment:Investment securities






(58
)










(56
)Net interest income





$
2,825










$
9,277  34




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##### Table of Contents



Three Months Ended December 31,2009


2008Average


Income/


Yield/


Average


Income/


Yield/Balance


Expense


Rate


Balance


Expense


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

$
2,512,441


$
36,966



5.84
%

$
2,263,676


$
36,445



6.40
%Investment securitiesTaxable


262,085



2,937



4.45



293,409



4,007



5.43Tax-exempt(2)


30,694



477



6.17



39,223



645



6.54Total investment securities


292,779



3,414



4.63



332,632



4,652



5.56Federal funds sold


1,544



1



0.26



4,292



8



0.74Other investments


68,523



429



2.48



59,214



539



3.62Total interest-earning assets


2,875,287



40,810



5.63



2,659,814



41,644



6.23Noninterest-earning assets:Cash and due from banks


65,575











61,967Premises and equipment


104,842











104,341Accrued interest and other assets


171,006











298,477Allowance for loan losses


(34,420
)










(27,845
)Total assets

$
3,182,290










$
3,096,754LIABILITIES AND STOCKHOLDERS EQUITYInterest-bearing liabilities:Demand deposits

$
649,419


$
2,048



1.25
%

$
601,222


$
2,559



1.69
%Savings deposits


280,946



953



1.35



179,494



1,113



2.47Time deposits


1,408,543



9,042



2.55



1,273,648



11,760



3.67Other borrowings


271,548



2,539



3.71



397,657



3,006



3.01Subordinated debentures


66,038



1,462



8.78



60,919



1,207



7.88Total interest-bearing liabilities

$
2,676,494



16,044



2.38


$
2,512,940



19,645



3.11Noninterest-bearing liabilities:Demand deposits


256,320











218,685Accrued interest and other liabilities


15,739











15,222Total liabilities


2,948,553











2,746,847Stockholders equity


233,737











349,907Total liabilities and stockholders equity

$
3,182,290










$
3,096,754Net interest income/net interest spread






24,766



3.25
%






21,999



3.12
%Net yield on earning assets










3.42
%










3.29
%Taxable equivalent adjustment:Investment securities






162











220Net interest income





$
24,604










$
21,779     (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%. 35




---



##### Table of Contents



Three Months Ended December 31,2009 vs. 2008(1)Increase


Changes Due To(Decrease)


Rate


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

$
521


$
(3,327
)

$
3,848Interest on securities:Taxable


(1,070
)


(672
)


(398
)Tax-exempt


(168
)


(35
)


(133
)Interest on federal funds


(7
)


(4
)


(3
)Interest on other investments


(110
)


(187
)


77Total interest income


(834
)


(4,225
)


3,391Expense from interest-bearing liabilities:Interest on demand deposits


(511
)


(394
)


(117
)Interest on savings deposits


(160
)


(634
)


474Interest on time deposits


(2,718
)


(3,870
)


1,152Interest on other borrowings


(467
)


612



(1,079
)Interest on subordinated debentures


255



147



108Total interest expense


(3,601
)


(4,139
)


538Net interest income

$
2,767


$
(86
)

$
2,853     (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. 36




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##### Table of Contents



Year Ended December 31,2009


2008


2007Average


Income/


Yield/


Average


Income/


Yield/


Average


Income/


Yield/Balance


Expense


Rate


Balance


Expense


Rate


Balance


Expense


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

$
2,463,114


$
144,660



5.87
%

$
2,172,775


$
147,162



6.77
%

$
1,839,029


$
150,443



8.18
%Investment securitiesTaxable


275,065



14,085



5.12



305,783



16,310



5.33



328,893



17,174



5.22Tax-exempt(2)


38,449



2,439



6.34



40,263



2,601



6.46



21,668



1,359



6.27Total investment securities


313,514



16,524



5.27



346,046



18,911



5.46



350,561



18,533



5.29Federal funds sold


3,513



9



0.26



5,047



122



2.42



8,975



471



5.25Other investments


66,204



1,718



2.60



52,637



2,578



4.90



47,612



2,944



6.18Total interest-earning assets


2,846,345



162,911



5.72



2,576,505



168,773



6.55



2,246,177



172,391



7.67Noninterest-earning assets:Cash and due from banks


69,696











61,208











45,142Premises and equipment


105,191











103,614











95,289Accrued interest and other assets


163,986











294,245











254,785Allowance for loan losses


(31,823
)










(25,527
)










(20,431
)Total assets

$
3,153,395










$
3,010,045










$
2,620,962LIABILITIES AND STOCKHOLDERS EQUITYInterest-bearing liabilities:Demand deposits

$
653,371



8,543



1.31
%

$
637,800


$
14,705



2.31
%

$
568,125


$
20,791



3.66
%Savings deposits


243,566



3,651



1.50



121,645



2,731



2.25



50,652



819



1.61Time deposits


1,392,963



42,166



3.03



1,250,472



50,969



4.08



1,171,942



58,057



4.95Other borrowings


294,022



10,097



3.43



356,239



12,104



3.40



249,443



12,971



5.20Subordinated debentures


62,117



5,063



8.15



55,736



4,094



7.35



48,557



4,129



8.50Total interest-bearing liabilities

$
2,646,039



69,520



2.63


$
2,421,892



84,603



3.49


$
2,088,719



96,767



4.63Noninterest-bearing liabilities:Demand deposits


246,428











218,486











191,066Accrued interest and other liabilities


17,311











19,438











32,905Total liabilities


2,909,778











2,659,816











2,312,690Stockholders equity


243,617











350,229











308,272Total liabilities and stockholders equity

$
3,153,395










$
3,010,045










$
2,620,962Net interest income/net interest spread






93,391



3.09
%






84,170



3.06
%






75,624



3.04
%Net yield on earning assets










3.28
%










3.27
%










3.37
%Taxable equivalent adjustment:Investment securities






829











885











462Net interest income





$
92,562










$
83,285










$
75,162     (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%. 37




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##### Table of Contents



Year Ended December 31,2009 vs. 2008(1)


2008 vs. 2007(1)Increase


Changes Due To


Increase


Changes Due To(Decrease)


Rate


Volume


(Decrease)


Rate


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

$
(2,502
)

$
(20,853
)

$
18,351


$
(3,281
)

$
(28,269
)

$
24,988Interest on securities:Taxable


(2,225
)


(627
)


(1,598
)


(864
)


359



(1,223
)Tax-exempt


(162
)


(47
)


(115
)


1,242



42



1,200Interest on federal funds


(113
)


(84
)


(29
)


(349
)


(193
)


(156
)Interest on other investments


(860
)


(1,413
)


553



(366
)


(655
)


289Total interest income


(5,862
)


(23,024
)


17,162



(3,618
)


(28,716
)


25,098Expense from interest-bearing liabilities:Interest on demand deposits


(6,162
)


(6,514
)


352



(6,086
)


(8,405
)


2,319Interest on savings deposits


920



(1,140
)


2,060



1,913



423



1,490Interest on time deposits


(8,803
)


(14,160
)


5,357



(7,089
)


(10,777
)


3,688Interest on other borrowings


(2,007
)


107



(2,114
)


(867
)


(5,367
)


4,500Interest on subordinated debentures


969



472



497



(35
)


(601
)


566Total interest expense


(15,083
)


(21,235
)


6,152



(12,164
)


(24,727
)


12,563Net interest income

$
9,221


$
(1,789
)

$
11,010


$
8,546


$
(3,989
)

$
12,535     (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.  Noninterest income.
  Three Months Ended December 31,2009


2008


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

$
2,606


$
2,574



1.24
%Mortgage banking income


1,617



855



89.12Investment securities losses(1)


(596
)


(1,381
)


(56.84
)Change in fair value of derivatives


(996
)


467



NCMIncrease in cash surrender value of life insurance


575



585



(1.71
)Other noninterest income


1,303



1,274



2.28Total

$
4,509


$
4,374



3.09
%   38




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##### Table of Contents



Year Ended December 31,2009


2008


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

$
10,112


$
9,295



8.79
%Mortgage banking income


7,084



3,972



78.35Investment securities losses(1)


(10,102
)


(8,453
)


19.51Change in fair value of derivatives


(826
)


1,240



NCMIncrease in cash surrender value of life insurance


2,198



2,274



(3.34
)Gain on extinguishment of liabilities






2,918



NAOther noninterest income


5,113



5,521



(7.39
)Total

$
13,579


$
16,767



(19.01
)%     (1)
    
    Includes a non-cash
    other-than-temporary
    impairment charge. See Financial Condition 
    Investment Securities        Noninterest expenses.
 39




---



##### Table of Contents



Three Months Ended December 31,2009


2008


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

$
12,988


$
13,094



(0.81
)%Occupancy, furniture and equipment expense


5,246



4,583



14.47Amortization of core deposit intangibles


985



896



9.93Goodwill impairment charge






160,306



NAFDIC assessment


3,038



447



NCMForeclosure losses


4,462



354



NCMProfessional fees


1,595



745



NCMInsurance expense


652



601



8.49Postage, stationery and supplies


738



773



(4.53
)Communications expense


731



741



(1.35
)Advertising expense


578



774



(25.32
)Other operating expense


1,971



1,919



2.71Total

$
32,984


$
185,233



(82.19
)%            Year Ended December 31,2009


2008


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

$
49,962


$
49,672



0.58
%Occupancy, furniture and equipment expense


18,643



17,197



8.41Amortization of core deposit intangibles


3,941



3,585



9.93Goodwill impairment charge






160,306



NAFDIC assessment


6,348



1,105



NCMForeclosure losses


8,116



908



NCMProfessional fees


4,202



2,637



59.35Insurance expense


2,555



2,381



7.31Postage, stationery and supplies


3,002



2,964



1.28Communications expense


3,054



2,941



3.84Advertising expense


2,530



3,522



(28.17
)Merger-related costs






118



NAOther operating expense


8,132



7,342



10.76Total

$
110,485


$
254,678



(56.62
)%  40




---



##### Table of Contents



Income tax expense.
  Provision for Loan Losses and 2009 Loan
    Charge-offs.
    2009 Quarters EndedMarch 31


June 30


September 30


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

$
28,850


$
29,871


$
33,504


$
34,336Provision for loan losses


3,452



5,982



5,169



13,947
(1)Total charge-offs


2,809



2,513



4,546



6,793Total recoveries


(378
)


(164
)


(209
)


(394
)Net charge-offs


2,431



2,349



4,337



6,399Ending allowance for loan losses

$
29,871



33,504



34,336


$
41,884Total loans, net of unearned income

$
2,359,299


$
2,398,471


$
2,434,534


$
2,472,697Allowance for loan losses to total loans, net of unearned income


1.27
%


1.40
%


1.41
%


1.69
%     (1)
    
    A portion of this provision related to charged-off loans, but a
    majority was used to increase our allowance for loan losses
    based on managements estimate of loss in the loan
    portfolio based on managements ongoing assessment of
    certain areas of risk. See Financial Condition 
    Allowance for Loan Losses for additional discussion 41




---



##### Table of Contents



Year
    Ended December 31, 2008, Compared with Year Ended
    December 31, 2007
  Earnings. other-than-temporary
  Three Months


YearEnded December 31,


Ended December 31,2008


2007


2008


2007(Dollars in thousands, except per share data)Net (loss) income

$
(158,178
)

$
1,904


$
(163,150
)

$
7,621Net (loss) income applicable to common shareholders


(158,490
)


1,904



(163,461
)


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
)


2.47Common book value per share

$
17.83


$
34.91


$
17.83


$
34.91       42




---



##### 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)ASSETSInterest-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  43




---



##### 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



4,007



5.43



331,596



4,369



5.23Tax-exempt(2)


39,223



645



6.54



33,447



537



6.37Total investment securities


332,632



4,652



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



41,644



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



11,760



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



19,645



3.11


$
2,298,900



26,410



4.56Noninterest-bearing liabilities:Demand deposits


218,685











206,977Accrued interest and other liabilities


15,222











29,834Total liabilities


2,746,847











2,535,711Stockholders 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






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%. 44




---



##### 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.  Provision for Loan Losses and 2008 Loan
    Charge-offs.
 45




---



##### Table of Contents



2008 Quarters EndedMarch 31


June 30


September 30


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

$
22,868


$
23,273


$
27,243


$
27,671Provision for loan losses


1,872



5,967



2,305



2,968Total charge-offs


1,745



2,482



2,247



1,970Total recoveries


(278
)


(485
)


(370
)


(181
)Net charge-offs


1,467



1,997



1,877



1,789Ending allowance for loan losses

$
23,273


$
27,243


$
27,671



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



(5.34
)Increase 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 OTTI charge.   46




---



##### 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



3.47Goodwill impairment charge


160,306







NAInsurance expense


1,048



638



64.26Postage, stationery and supplies


559



570



(1.93
)Communications expense


549



538



2.04Advertising expense


666



638



4.39Other operating expense


2,787



1,951



42.85Total

$
185,233


$
20,850



NCM           47




---



##### 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



16.22Goodwill impairment charge


160,306







NAInsurance expense


3,486



2,189



59.25Postage, stationery and supplies


2,114



2,252



(6.13
)Communications expense


2,203



2,007



9.77Advertising expense


2,977



2,397



24.20Other operating expense


10,383



7,445



39.46Total

$
254,678


$
78,223



NCM
%   Income Tax Expense.
  Results
    of Segment Operations
    2009


2008


2007(Dollars in thousands)Alabama region

$
4,240


$
(58,159
)

$
15,096Florida region


5,099



(81,600
)


23,448Administrative and other


(42,233
)


(27,979
)


(26,789
)Income tax (benefit) expense


(13,005
)


(4,588
)


4,134Consolidated net (loss) income

$
(19,889
)

$
(163,150
)

$
7,621   Alabama Region.
 48




---



##### Table of Contents



Florida Region.
         49




---



##### Table of Contents



Market
    Risk
                December 31,12-Month Gap

2009

2008(Dollars in thousands)Interest-bearing liabilities in excess of interest-earning
    assets based on repricing date

$
(374,000
)

$
(297,000
)Cumulative Ratio


0.83



0.86   Increase in Net Interest IncomeDecember 31, 2009

December 31, 2008Change (in Basis Points) in Interest Rates (12-Month
    Projection)

Amount

Percent

Amount

Percent(Dollars in thousands)+ 200 BP(1)

$
2,200



2.3
%

$
1,200



1.7
%− 200 BP(2)


NCM



NCM



NCM



NCM     (1)
    
    Results are within our asset and liability management policy(2)
    
    Not considered meaningful in the current rate environment (NCM). 50




---



##### Table of Contents



ChangeChange (in Basis Points) in Interest Rates

EVE


Amount


Percent(Dollars in thousands)+ 200 BP

$
343,900


$
14,600



4.4
%+ 100 BP


339,400



10,100



3.10 BP


329,300







− 100 BP


334,600



5,000



1.6     Derivative
    Positions.
  Overview.
      Interest
    Rate Swaps
     51




---



##### Table of Contents



Fair
    Value Hedges
    Cash Flow
    Hedges
  3-month
  Interest
    Rate Lock Commitments
    Liquidity,
    Contractual Obligations and Off Balance Sheet
    Arrangements
  Overview. loan-to-deposit
  Short-term liquid assets.
  Maturity Distribution of Investment
    Securities.
 52




---



##### Table of Contents



MaturingAfter Five ButWithin One


After One But


Within Ten


AfterYear


Within Five Years


Years


Ten Years


TotalAmount


Yield


Amount


Yield


Amount


Yield


Amount


Yield


Amount


Yield(Dollars in thousands)Securities
    available-for-sale:U.S. Agency securities

$





%

$
242



4.76
%

$
53,914



3.99
%

$





%

$
54,156



3.99
%Mortgage-backed securities


3,699



4.68



1,500



4.85



766



5.16



186,938



4.47



192,903



4.48State, county and municipal securities


280



4.00



2,952



4.01



5,087



5.16



22,916



4.30



31,235



4.22Corporate obligations










4,138



6.03











13,255



2.40



17,393



4.97Other


























563



3.01



563



3.01Total amortized cost

$
3,979



4.60
%

$
8,832



4.94
%

$
59,767



4.01
%

$
223,672



4.39
%

$
296,250



4.36
%   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

$
143,334


$
65,574


$
4,421


$
213,329


$
56,384


$
13,611Real estate  construction and land
    development


508,564



158,311



13,570



680,445



84,969



86,912Real estate  mortgagesSingle-family


127,133



114,947



449,284



691,364



218,559



345,672Commercial


227,749



366,222



207,842



801,813



292,575



281,489Other


16,975



6,965



4,945



28,885



8,505



3,405Consumer


16,137



37,060



5,588



58,785



41,705



943Other


969











969







Total loans

$
1,040,861


$
749,079


$
685,650


$
2,475,590


$
702,697


$
732,032Percent to total loans


42.0
%


30.3
%


27.7
%


100.0
%


28.4
%


29.6
%   Maturities of Time Deposits of $100,000 or
    More.
  Under

Three to

Six to

OverThree

Six

Twelve

TwelveMonths

Months

Months

Months

Total(Dollars in thousands)$
146,399


$
157,901


$
288,202


$
169,083


$
761,585    53




---



##### Table of Contents



Cash Flow Analysis.
      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)

$
218,322


$
29,982


$
90,000


$
66,340


$
32,000Operating leases(2)


28,902



3,771



8,358



1,952



14,821Capitalized leases(2)


4,525



275



790



252



3,208Note payable(3)


47,000



7,000



40,000







Repurchase agreements(4)


841



841











Subordinated debentures(5)


131,679















131,679Limited partnership investments(6)


213



213











Deferred compensation agreements(7)


5,267



49



363



41



4,814Other employment related contract obligations incurred in
    business combinations(8)


830



420



410







Benefit Restoration Plan(9)


509



57



111



106



235Total contractual cash obligations

$
438,088


$
42,608


$
140,032


$
68,691


$
186,757     (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. 54




---



##### Table of Contents



(5)
    
    See Note 11 to the consolidated financial statements.(6)
    
    See Note 1 to the consolidated financial statements.(7)
    
    See Note 13 to the consolidated financial statements.(8)
    
    See Note 2 to the consolidated financial statements.(9)
    
    See Note 20 to the consolidated financial statements.  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)

$
266,550


$
152,083


$
67,251


$
9,612


$
37,604Standby letters of credit(1)


21,845



11,430



10,325



90



Total commercial commitments

$
288,395


$
163,513


$
77,576


$
9,702


$
37,604     (1)
    
    See Note 17 to the consolidated financial statements.    Financial
    Condition
    Investment
    Portfolio.
    available-for-sale.
     55




---



##### Table of Contents



available-for-sale
  Investment
    Portfolio
  December 31,


Percent2009


2008


Change(Dollars in thousands)Investment securities available for sale:U.S. agency securities

$
53,681


$
3,843



NCMMortgage-backed securities (MBS):U.S. Agency MBS  residential


163,724



237,508



(31.1
)%U.S. Agency MBS  collateralized mortgage obligation
    (CMO)


12,759



16,186



(21.2
)Private-label  CMO


16,191



26,430



(38.7
)Total MBS


192,674



280,124



(31.2
)State, county and municipal securities


31,462



40,622



(22.5
)Corporate obligations:Corporate debt


4,000



5,746



(30.4
)Pooled trust preferred securities


3,203



9,939



(67.8
)Single issue trust preferred securities


977



6,704



(85.4
)Total corporate obligations


8,180



22,389



(63.5
)Equity securities


313



164



90.9Total investment securities available for sale

$
286,310


$
347,142



(17.5
)%       56




---



##### Table of Contents



December 31, 2009Less Than 12 Months


More Than 12 Months


TotalUnrealized





Unrealized





UnrealizedFair Value


Losses(1)


Fair Value


Losses(1)


Fair Value


Losses(1)(Dollars in thousands)Temporarily ImpairedU.S. agency securities

$
48,409


$
505


$



$



$
48,409


$
505Mortgage-backed securities:U.S. Agency MBS  residential


75,493



272



239



10



75,732



282U.S. Agency MBS  CMO


6,036



97











6,036



97Private-label  CMO










12,059



1,753



12,059



1,753Total MBS


81,529



369



12,298



1,763



93,827



2,132State, county and municipal securities


7,360



121



1,019



102



8,379



223Corporate obligations:Corporate debt










4,000



138



4,000



138Single issue trust preferred securities










977



4,023



977



4,023Total corporate obligations










4,977



4,161



4,977



4,161Equity securities










314



250



314



250Total temporarily impaired securities


137,298



995



18,608



6,276



155,906



7,271Other-than-temporarily
    ImpairedMortgage-backed securities:Private-label  CMO










3,037



1,618



3,037



1,618Corporate obligations:Pooled trust preferred securities










3,203



5,052



3,203



5,052Total OTTI securities










6,240



6,670



6,240



6,670Total temporarily and
    other-than-temporarily
    impaired

$
137,298


$
995


$
24,848


$
12,946


$
162,146


$
13,941      (1)
    
    Unrealized losses are included in other comprehensive income
    (loss), net of unrealized gains and applicable income taxes. 57




---



##### Table of Contents



December 31, 2008Less Than 12 Months


More Than 12 Months


TotalUnrealized





Unrealized





UnrealizedFair Value


Losses(1)


Fair Value


Losses(1)


Fair Value


Losses(1)(Dollars in thousands)Temporarily ImpairedU.S. agency securities

$



$



$
249


$
2


$
249


$
2Mortgage-backed securities:U.S. Agency MBS  residential


21,602



178



3,655



32



25,257



210U.S. Agency MBS  CMO










700



3



700



3Private-label  CMO


17,126



3,912



3,017



124



20,143



4,036Total MBS


38,728



4,090



7,372



159



46,100



4,249State, county and municipal securities


17,275



831



3,662



371



20,937



1,202Corporate obligations:Corporate debt










5,745



198



5,745



198Pooled trust preferred securities


896



481



9,043



3,970



9,939



4,451Single issue trust preferred securities










6,705



3,296



6,705



3,296Total corporate obligations


896



481



21,493



7,464



22,389



7,945Equity securities


164



399











164



399Total temporarily impaired securities

$
57,063


$
5,801


$
32,776


$
7,996


$
89,839


$
13,797     (1)
    
    Unrealized losses are included in other comprehensive income
    (loss), net of unrealized gains and applicable income taxes.  Other-Than-Temporary
    Impairment.
  held-to-maturity 320-10 325-40
  other-than-temporary
   58




---



##### Table of Contents



Mortgage-backed
    Securities.
    Credit SupportCoverage


UnrealizedRating Moody/Fitch

Count


Ratios(1)


LossA1/AAA


1



3.07


$
(137
)Aaa/AAA


1



4.18



(5
)Aaa/NR


1



N/A



(1
)NR/AAA


1



6.29



(374
)NR/AA


1



2.84



(339
)NR/A+


1



3.08



(111
)Baa2/NR


1



N/A



(622
)B2/AAA


1



3.59



(162
)Caa1/NR(2)


1



1.43



(1,619
)Ca/NR(2)


1



0.00



NR/CCC(2)


2



0.26-0.53



151Total


12






$
(3,219
)     (1)
    
    The Credit Support Coverage Ratio, which is the ratio that
    determines the multiple of credit support, based on assumptions
    for the performance of the loans within the delinquency
    pipeline. The assumptions used are: Current Collateral Support/
    ((60 day delinquencies x.60) + (90 day delinquencies
    x.70) + (foreclosures x 1.00) + (other real estate x 1.00)) x
    .40 for loss severity.(2)
    
    Includes all private-label CMOs that have OTTI. See discussion
    that follows.   59




---



##### Table of Contents



Discount














Life-to-DateMargin











Actual


Other-Than-Temporary-ImpairmentPrice


Basis





Cumulative


Average


60+ Days


Credit PortionSecurity

(%)


Points


Yield


Default


Security


Delinquent


2008


2009


Other


TotalCMO 1


19.90



1698



18.00
%


58.60
%


50.00
%


15.31
%

$
(599
)

$
(1,231
)

$
(195
)

$
(2,025
)CMO 2


2.08



1777



18.00
%


59.70
%


60.00
%


31.52
%


(492
)


(1,443
)


(127
)


(2,062
)CMO 3


22.15



1598



17.00
%


47.65
%


45.00
%


26.13
%


(803
)


(1,558
)


(332
)


(2,693
)CMO 4


60.73



1362



17.00
%


27.60
%


45.00
%


14.82
%






(345
)


(1,619
)


(1,964
)$
(1,894
)

$
(4,577
)

$
(2,273
)

$
(8,744
)     State,
    county and municipal securities.
    Trust Preferred
    Securities.
    
    Detailed credit and structural evaluation for each piece of
    collateral in the CDO;
    Collateral performance projections for each piece of collateral
    in the CDO (default, recovery and prepayment/amortization
    probabilities);
    Terms of the CDO structure, as laid out in the indenture;
    The cash flow waterfall (for both interest and principal);
    Overcollateralization and interest coverage tests;
    Events of default/liquidation;
    Mandatory auction call;
    Optional redemption;
    Hedge agreements; and
    Discounted cash flow modeling.   60




---



##### Table of Contents



case-by-case
    325-40.
    Year-to-DateOther-Than-Temporary-ImpairmentSingle/


Class/


Amortized


Fair


Unrealized


CreditName

Pooled


Tranche


Cost


Value


Loss


Portion


Other


TotalMM Caps Funding I Ltd


Pooled



MEZ


$
1,895


$
745


$
(1,150
)

$
(245
)

$
(1,150
)

$
(1,395
)MM Community Funding Ltd


Pooled



B



2,110



881



(1,229
)


(2,921
)


(1,229
)


(4,150
)Preferred Term Securities V


Pooled



MEZ



1,218



436



(782
)


(165
)


(782
)


(947
)Tpref Funding III Ltd


Pooled



B-2



3,032



1,141



(1,891
)


(962
)


(1,891
)


(2,853
)Trapeza
    2007-13A LLC


Pooled



D















(1,876
)






(1,876
)New South Capital Corp(1)


Single



Sole















(5,000
)






(5,000
)Emigrant Capital Trust(2)


Single



Sole



5,000



977



(4,023
)










$
13,255


$
4,180


$
(9,075
)

$
(11,169
)

$
(5,052
)

$
(16,221
)   Original Collateral 


Performing Collateral Percent of Actual


Percent of ExpectedLowest


Performing


Deferrals and


Deferrals and


ExcessName

Rating


Banks


Defaults


Defaults


Subordination(3)MM Caps Funding I Ltd


Ca



23



15%



23%



0%MM Community Funding Ltd


Ca



8



21%



83%



0%Preferred Term Securities V


CC



1



5%



54%



0%Tpref Funding III Ltd


Ca



25



23%



24%



0%Trapeza
    2007-13A LLC


C



38



27%



27%



0%New South Capital Corp(1)


NR



NA



NA



NA



NAEmigrant Capital Trust(2)


CC



NA



NA



NA



NA   61




---



##### Table of Contents



Fair Value


Discount Margin


YieldName

(Price to Par)


(Basis Points)


(Basis Points)MM Caps Funding I Ltd

$
37.26



Swap + 1800



9.48% FixedMM Community Funding Ltd


17.61



LIBOR + 1300



LIBOR + 310Preferred Term Securities V


31.67



LIBOR + 1300



LIBOR + 210Tpref Funding III Ltd


28.53



LIBOR + 1200



LIBOR + 190Trapeza
    2007-13A LLC






NA



LIBOR + 120Emigrant Capital Trust(2)


19.53



LIBOR + 2342



LIBOR + 200     (1)
    
    Management received notification in April 2009 that interest
    payments on this issue will be deferred for up to 20 quarters.
    In addition, New Souths external auditor issued a going
    concern opinion on May 2, 2009. Management determined that
    there was not sufficient positive evidence that this issue will
    ever pay principal or interest. Therefore, OTTI was recognized
    on the full amount of the security during the first quarter of
    2009. In December 2009, the banking subsidiary of New South
    Capital was closed by its regulator and placed in receivership.(2)
    
    There has been no notification of deferral or default on this
    issue. An analysis of the company, including discussion with its
    management, indicates there is adequate capital and liquidity to
    service the debt. The discount margin of 2342 basis points
    was derived from implied credit spreads from certain publicly
    traded trust preferred securities within the issuers peer group.(3)
    
    Excess subordination represents the additional defaults in
    excess of both the current and projected defaults the issue can
    absorb before the security experiences any credit impairment.
    Excess subordination is calculated by determining what level of
    defaults an issue can experience before the security has any
    credit impairment and then subtracting both the current and
    projected future defaults.        For theYear EndedDecember 31, 2009(Dollars in thousands)Balance at beginning of period

$
Amounts related to credit losses for which an OTTI was not
    previously recognized


4,637Reductions for securities sold during the period


Increases in credit loss for which an OTTI was previously
    recognized when the investor does not intend to sell the
    security and it is not more likely than not that the entity will
    be required to sell the security before recovery of its
    amortized cost


4,232Reductions for securities where there is an intent to sale or
    requirement to sale


Reductions for increases in cash flows expected to be collected


Balance at end of period

$
8,869  62




---



##### Table of Contents



Stock in
    the FHLB of Atlanta (FHLB Atlanta).
  942-325-35-3.
    
    The significance of the decline in net assets of FHLB Atlanta as
    compared to the capital stock amount for FHLB Atlanta and the
    length of time this decline has persisted;
    Commitments by FHLB Atlanta to make payments required by law or
    regulation and the level of such payments in relation to the
    operating performance of FHLB Atlanta;
    The impact of legislative and regulatory changes on financial
    institutions and, accordingly, on the customer base of FHLB
    Atlanta; and
    The liquidity position of FHLB Atlanta.    Tax lien certificates.
  Property and Equipment.
 63




---



##### Table of Contents



Loans,
    net of unearned income.
  Composition of Loan Portfolios, Yield Changes and
    Diversification.
      Distribution
    of Loans by Category
  December 31,2009


2008


2007


2006


2005(Dollars in thousands)Commercial and industrial

$
213,329


$
207,372


$
183,013


$
172,872


$
135,454Real estate  construction and land development


680,445



637,587



665,303



547,772



326,418Real estate  mortgagesSingle-family


691,364



655,216



540,277



456,341



243,183Commercial


801,813



726,704



533,611



362,542



210,611Other


28,885



31,187



41,535



46,895



27,503Consumer


58,785



57,877



53,377



54,462



21,122Other


969



972



1,235



438



498Total loans


2,475,590



2,316,915



2,018,351



1,641,322



964,789Unearned income


(2,893
)


(1,994
)


(1,340
)


(1,794
)


(1,536
)Allowance for loan losses


(41,884
)


(28,850
)


(22,868
)


(18,892
)


(12,011
)Net loans

$
2,430,813


$
2,286,071


$
1,994,143


$
1,620,636


$
951,242  64




---



##### Table of Contents



December 31,


Percent2009


2008


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

$
2,472,697


$
2,314,921



6.8
%Alabama segment


996,545



935,232



6.6Florida segment


1,213,202



1,060,994



14.3Other


262,950



318,695



(17.5
)     Residential


CommercialReal Estate  Construction and Land
    Development

Development


Development


Total(Dollars in thousands)As of December 31, 2009Alabama segment

$
163,978


$
102,339


$
266,317Florida segment


129,590



265,767



395,357Other


7,856



10,915



18,771Total

$
301,424


$
379,021


$
680,445As of December 31, 2008Alabama segment

$
173,579


$
94,145


$
267,724Florida segment


141,003



215,261



356,264Other


122



13,477



13,599Total

$
314,704


$
322,883


$
637,587   Single-Real Estate  Mortgages

Family


Commercial(Dollars in thousands)As of December 31, 2009Alabama segment

$
461,365


$
296,520Florida segment


189,245



475,218Other


40,754



30,075Total

$
691,364


$
801,813As of December 31, 2008Alabama segment

$
416,129


$
305,714Florida segment


176,315



391,609Other


62,772



29,381Total

$
655,216


$
726,704     Allowance
    for Loan Losses.
  Overview.
 65




---



##### Table of Contents



450-20, 310-35
  ASC
    450-20. 450-20, 310-35
  
    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; and
    mergers and acquisitions.  ASC
    310-35. 310-35, Impaired Loans and/or
  Allocation of the Allowance for Loan
    Losses.
     66




---



##### Table of Contents



Allocation
    of the Allowance for Loan Losses
  December 31,2009


2008


2007


2006


2005Percent





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

$
2,356



8.6
%

$
2,136



8.9
%

$
2,697



9.1
%

$
3,719



10.5
%

$
3,805



14.0
%Real estate  construction and land development


17,971



27.5



12,168



27.5



9,396



33.0



3,425



33.4



1,275



33.8Real estate  mortgagesSingle-family


12,342



27.9



7,159



28.3



2,360



26.8



2,910



27.8



1,395



25.2Commercial


7,019



32.4



5,440



31.3



6,781



26.4



6,206



22.0



4,194



21.8Other


371



1.2



247



1.3



155



2.1



530



2.9



215



2.9Consumer


1,825



2.4



1,700



2.7



1,479



2.6



2,102



3.4



1,127



2.3Total

$
41,884



100.0
%

$
28,850



100.0
%

$
22,868



100.0
%

$
18,892



100.0
%

$
12,011



100.0
%     and/or
     67




---



##### Table of Contents



loan-to-value
  Past Due and NonaccrualPercent





Percent





Percent





Percent





Percentof Loans





of Loans





of Loans





of Loans





of Loansto





to





to





to





toTotal


Total





Total





Total





Total





TotalOutstanding


Single-


30-


Single-


90 days


Single-


Non-


Single-





Single-Balance


Family


89 days


Family


or more


Family


accrual


Family


Total


Family(Dollars in thousands)90% up to 100% LTV

$
31,751



4.6
%

$
260



0.0
%

$







$
1,446



0.2
%

$
1,706



0.2
%100% and greater LTV


4,937



0.7



469



0.1











392



0.1



861



0.2Total

$
36,688



5.3


$
729



0.1


$







$
1,838



0.3


$
2,567



0.4        68




---



##### Table of Contents



Summary of Loan Loss Experience.
  Summary
    of Loan Loss Experience
  December 31,2009


2008


2007


2006


2005(Dollars in thousands)Allowance for loan losses at beginning of period

$
28,850


$
22,868


$
18,892


$
12,011


$
12,543Allowance of acquired banks










3,717



6,697



Charge-offs:Commercial and industrial


1,390



504



1,162



1,450



2,097Real estate  construction and land development


4,870



2,095



301



378



358Real estate  mortgageSingle-family


5,372



2,460



1,149



625



795Commercial


1,094



411



724



416



1,432Other


210



241



206



15



85Consumer


3,346



2,490



2,117



860



630Other


379



243



63



2



345Total charge-offs


16,661



8,444



5,722



3,746



5,742Recoveries:Commercial and industrial


161



646



398



465



413Real estate  construction and land development


68



44



286



126



37Real estate  mortgageSingle-family


71



89



174



102



335Commercial


277



128



70



363



526Other


251



71



82



73



118Consumer


186



181



382



301



280Other


131



155



48







1Total recoveries


1,145



1,314



1,440



1,430



1,710Net charge-offs


15,516



7,130



4,282



2,316



4,032Provision for loan losses


28,550



13,112



4,541



2,500



3,500Allowance for loan losses at end of period

$
41,884


$
28,850


$
22,868


$
18,892


$
12,011Loans at end of period, net of unearned income

$
2,472,697


$
2,314,921


$
2,017,011


$
1,639,528


$
963,253Average loans, net of unearned income


2,401,805



2,147,524



1,814,032



1,176,844



947,212Ratio of ending allowance to ending loans


1.69
%


1.25
%


1.13
%


1.15
%


1.25
%Ratio of net charge-offs to average loans


0.65



0.33



0.24



0.20



0.43Net charge-offs as a percentage of:Provision for loan losses


54.35



54.38



94.30



92.64



115.20Allowance for loan losses


37.04



24.71



18.72



12.26



33.57Allowance for loan losses as a percentage of nonperforming loans


26.25



45.98



92.77



227.97



261.17   Nonperforming Assets.
 69




---



##### Table of Contents



loan-by-loan
  Nonperforming
    Assets
  December 31,2009


2008


2007


2006


2005(Dollars in thousands)Nonaccrual

$
155,631


$
54,712


$
22,533


$
7,773


$
4,550Accruing loans 90 days or more delinquent


3,920



8,033



2,117



514



49Total nonperforming loans


159,551



62,745



24,650



8,287



4,599Other real estate owned assets


41,618



19,971



4,277



1,684



1,842Repossessed assets


380



332



138



137



Total nonperforming assets

$
201,549


$
83,048


$
29,065


$
10,108


$
6,441Restructured and performing under restructured terms, net of
    specific allowance

$
110,777


$
2,643


$
671


$
305


$
153Nonperforming loans as a percentage of loans


6.45
%


2.71
%


1.22
%


0.51
%


0.48
%Nonperforming assets as a percentage of loans plus nonperforming
    assets


8.01
%


3.56
%


1.44
%


0.62
%


0.67
%Nonperforming assets as a percentage of total assets


6.26
%


2.72
%


1.01
%


0.41
%


0.46
%     December 31,2009


2008


2007


2006


2005(Dollars in thousands)Commercial and industrial

$
1,797


$
166


$
387


$
399


$
835Real estate  construction and land development


73,058



20,976



10,569



2,067



469Real estate  mortgagesSingle-family


52,323



22,730



8,069



2,805



2,448Commercial


30,343



15,378



4,045



1,765



675Other


436



2,289



805



688



11Consumer


734



723



775



559



161Other


860



483







4



Total nonperforming loans

$
159,551


$
62,745


$
24,650


$
8,287


$
4,599    70




---



##### Table of Contents



December 31,2009


2008(Dollars in thousands)Acreage

$
2,251


$
1,222Commercial buildings


5,226



656Residential condominiums


2,730



1,314Residential single-family homes


15,696



9,394Residential lots


14,613



7,277Other


1,102



108Other real estate owned

$
41,618


$
19,971   and/or
  Impaired Loans. 310-35
    December 31,2009


2008Outstanding


Specific


Outstanding


SpecificBalance


Allowance


Balance


Allowance(Dollars in thousands)Commercial and industrial

$
3,032


$
1,053


$
515


$
42Real estate  construction and land development


114,268



6,719



18,155



1,570Real estate  mortgagesSingle-family


53,229



5,005



18,063



2,251Commercial


109,222



1,686



15,615



1,173Other


500



62



532



70Consumer


97



2







Total

$
280,348


$
14,527


$
52,880


$
5,106   and/or
   71




---



##### Table of Contents



RestructuredPerforming


Not-Performingin Accordance


in Accordancewith Restructured Terms


with Restructured TermsOutstanding


Specific


Outstanding


SpecificBalance


Allowance


Balance


Allowance(Dollars in thousands)Alabama:Commercial and industrial

$



$



$



$
Real estate  construction and land development


924



1







Real estate  mortgagesSingle-family


8,317



287



1,106



93Commercial


22,580



222







Consumer


97



1







Total Alabama

$
31,918


$
511


$
1,106


$
93FloridaCommercial and industrial

$
1,212


$
883


$



$
Real estate  construction and land development


19,369



482







Real estate  mortgagesSingle-family


4,334



276



2,760



388Commercial


56,038



442



2,227



85Consumer














Total Florida

$
80,953


$
2,083


$
4,987


$
473TotalCommercial and industrial

$
1,212


$
883


$



$
Real estate  construction and land development


20,293



483







Real estate  mortgagesSingle-family


12,651



563



3,866



481Commercial


78,618



664



2,227



85Consumer


97



1







Total TDRs

$
112,871


$
2,594


$
6,093


$
566   Potential Problem Loans.
 72




---



##### Table of Contents



Deposits.
        December 31,


Percent2009


2008


Change(Dollars in thousands)Noninterest-bearing demand

$
257,744


$
212,732



21.2
%Alabama segment


137,160



127,115



7.9Florida segment


103,621



78,639



31.8Other


16,963



6,978



NCMInterest-bearing demand


690,677



632,430



9.2Alabama segment


385,246



298,405



29.1Florida segment


233,740



178,850



30.7Other


71,691



155,175



(53.8
)Savings


284,430



185,522



53.3Alabama segment


151,263



106,946



41.4Florida segment


131,185



76,449



71.6Other


1,982



2,127



(6.8
)Time deposits


1,423,722



1,312,304



8.5Alabama segment


663,510



608,056



9.1Florida segment


555,262



490,266



13.3Other


204,950



213,982



(4.2
)Total deposits

$
2,656,573


$
2,342,988



13.4
%Alabama segment

$
1,337,179


$
1,140,522



17.2
%Florida segment

$
1,023,808


$
824,204



24.2
%Other

$
295,586


$
378,262



(21.9
)%         73




---



##### Table of Contents



Average
    Deposits
  December 31,2009


2008


2007Average





Average





AverageAmount


Average


Amount


Average


Amount


AverageOutstanding


Rate Paid


Outstanding


Rate Paid


Outstanding


Rate Paid(Dollars in thousands)Noninterest-bearing demand

$
246,428




%

$
218,486




%

$
191,066




%Interest-bearing demand


653,371



1.31



637,800



2.31



568,125



3.66Savings


243,566



1.50



121,645



2.25



50,652



1.61Time deposits  customer


1,163,530



3.12



1,096,841



4.07



1,023,573



4.90Total average customer deposits


2,306,895



2.10



2,074,772



3.00



1,833,416



3.92Time deposits  brokered


229,433



2.60



153,631



4.08



148,369



5.31Total average deposits

$
2,536,328



2.14
%

$
2,228,403



3.07
%

$
1,981,785



4.02
%   loan-to-deposit
  Borrowings. loan-to-deposit
      2009


2008Weighted





WeightedYear:

Average Rate


Balance


Average Rate


Balance(Dollars in thousands)2009



%

$




1.03
%

$
142,9842010


3.36



29,982



6.41



5,0002011


2.66



50,000



2.69



75,0002012


4.44



5,000



4.44



5,0002013


3.46



35,000



3.46



35,0002015


4.58



66,340



4.58



66,3402020


4.28



32,000



4.28



32,000Total


3.74
%

$
218,322



2.67
%

$
361,324    74




---



##### Table of Contents



Subordinated
    Debentures.
  Issuance of Subordinated Debt and Related
    Warrant.
    Junior Subordinated Debentures.
     75




---



##### Table of Contents



December 31,2009


2008(Dollars in thousands)Junior Subordinated Debentures5.00% perpetual junior subordinated debentures owed to Superior
    Capital Trust II(3)(4)

$
69,100


$
10.6% 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



4,124Add (subtract):Purchase accounting adjustment


471



819Discount related to 5.00% perpetual junior subordinated
    debentures owed to Superior Capital Trust II(4)


(45,598
)


Total junior subordinated debentures owed to unconsolidated
    subsidiary trusts


76,552



53,398Other Subordinated Debt9.5% subordinated debentures owed to Durden Enterprises,
    LLC due September 15, 2013


10,000



10,000Add (subtract):Discount related to 9.5% subordinated debentures owed to
    Durden Enterprises, LLC


(2,382
)


(2,514
)Total other subordinated debt


7,618



7,486Total subordinated debentures

$
84,170


$
60,884     (1)
    
    Interest rate is equal to 1.58% at December 31, 2009. The
    Corporation has entered into interest rate swap agreements to an
    average effective fixed rate of 4.42%. (see Note 15 to the
    consolidated financial statements).(2)
    
    Converts to quarterly floating rate of LIBOR plus 1.45% in
    December 2010.(3)
    
    Converts to 9.00% on February 15, 2014 (see Note 29 to
    the consolidated financial statements).(4)
    
    Effective yield is equal to 20.22% (see Note 29 to the
    consolidated financial statements). 76




---



##### Table of Contents



Stockholders
    Equity.
  Overview.
      1-for-4 1-for-4
  Other Comprehensive (Loss) Income.
  Pre-Tax


Income Tax


Net ofAmount


Expense


Income Tax(Dollars in thousands)2009Unrealized loss on available for sale securities

$
(10,748
)

$
3,977


$
(6,771
)Less reclassification adjustment for losses realized in net loss


10,102



(3,738
)


6,364Unrealized gain on derivatives


189



(71
)


118Defined benefit pension plan  net gain arising during
    the period


617



(228
)


389Net unrealized gain

$
160


$
(60
)

$
1002008Unrealized 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
)    77




---



##### Table of Contents



Exchange of preferred stock held by the Treasury Department
    for trust preferred securities.
      pari passu
           78




---



##### Table of Contents



30-year
      AssetsOther assets  investment in common stock of trust





$
100 deferred income taxes (see Note 14 to the
    consolidated financial statements)






(16,544
)Total assets





$
(16,444
)LiabilitiesSubordinated debentures, net (see Note 11 to the
    consolidated financial statements):Issuance





$
69,100Discount






(44,714
)Total liabilities






24,386Stockholders equity (see Note 27 to the consolidated
    financial statements)Preferred stock, par value $.001 per share





$
Surplus  preferred ($69,000 less discount of $5,073)






(63,927
)Accumulated deficit (net of $16,544 deferred taxes)






23,097Total stockholders equity






(40,830
)Total liabilities and stockholders equity





$
(16,444
)   Exchange
    of non-pooled trust preferred securities for newly issued common
    stock
       79




---



##### Table of Contents



Stock Repurchase Plan.
    Stock Incentive Plan. 1-for-4
    Weighted-Weighted-


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicNumber


Price


Term


ValueUnder option, beginning of period


848,922


$
29.94Granted


104,100



2.97Exercised






Forfeited


(27,375
)


(31.77
)Under option, end of period


925,647


$
26.85



5.65


$
39Exercisable at end of period


625,903


$
31.76



2.90


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

$
1.47  80




---



##### Table of Contents



24-month
  Regulatory Capital.
        To Be WellFor Capital


Capitalized UnderAdequacy


Prompt CorrectiveActual


Purposes


ActionAmount


Ratio


Amount


Ratio


Amount


Ratio(Dollars in thousands)Tier 1 Core Capital (to Adjusted Total Assets)

$
249,253



7.79
%

$
127,957



4.00
%

$
159,947



5.00
%Total Capital (to Risk Weighted Assets)


286,748



10.69



214,517



8.00



268,146



10.00Tier 1 Capital (to Risk Weighted Assets)


249,253



9.30



NA



NA



160,888



6.00Tangible Capital (to Adjusted Total Assets)


249,253



7.79



47,984



1.50



NA



NA  81




---



##### Table of Contents



Impact of
    Inflation
    Forward-Looking
    Statements
  Form 10-K,
     82




---



##### 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.
 83




---



##### 



SUPERIOR
    BANCORP AND SUBSIDIARIES
  CONSOLIDATED
    FINANCIAL STATEMENTS
 Years
    ended December 31, 2009, 2008 and 2007
  CONTENTS
   
 PageReport of Independent Registered Public
    Accounting Firm as of December 31, 2009 and 2008 and for
    each of the three years ended December 31, 2009


85Consolidated Statements of Financial Condition


86Consolidated Statements of Operations


87Consolidated Statements of Changes in
    Stockholders Equity


88Consolidated Statements of Cash Flows


89Notes to Consolidated Financial Statements


90   84




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             GRANT
    THORNTON LLP
    85




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF FINANCIAL
    CONDITION
  December 31,2009


2008(Dollars in thousands, except per share amounts)ASSETSCash and due from banks

$
74,020


$
74,237Interest-bearing deposits in other banks


23,714



10,042Federal funds sold


2,036



5,169Total cash and cash equivalents


99,770



89,448Investment securities
    available-for-sale


286,310



347,142Tax lien certificates


19,292



23,786Mortgage loans held for sale


71,879



22,040Loans


2,475,590



2,316,915Unearned income


(2,893
)


(1,994
)Loans, net of unearned income


2,472,697



2,314,921Allowance for loan losses


(41,884
)


(28,850
)Net loans


2,430,813



2,286,071Premises and equipment, net


104,022



104,085Accrued interest receivable


15,581



14,794Stock in FHLB


18,212



21,410Cash surrender value of life insurance


50,142



48,291Core deposit and other intangible assets


16,694



21,052Other real estate


41,618



19,971Other assets


67,536



54,611Total assets

$
3,221,869


$
3,052,701LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Noninterest-bearing demand

$
257,744


$
212,732Interest-bearing demand


690,677



632,430Savings


284,430



185,522Time deposits $100,000 and over


761,585



662,175Other time deposits


662,137



650,129Total deposits


2,656,573



2,342,988Advances from FHLB


218,322



361,324Security repurchase agreements


841



3,563Notes payable


45,917



7,000Subordinated debentures, net


84,170



60,884Accrued expenses and other liabilities


24,342



25,703Total liabilities


3,030,165



2,801,462Commitments 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,
    -0- and 69,000 shares issued and outstanding as of
    December 31, 2009 and 2008, respectively






Common stock, par value $.001 per share; shares authorized
    200,000,000; shares issued 11,673,837 in 2009 and 10,403,087 in
    2008; outstanding 11,667,794 in 2009 and 10,074,999 in 2008


12



10Surplus  preferred






62,978 warrants


8,646



8,646 common


322,043



329,461Accumulated deficit


(130,889
)


(129,904
)Accumulated other comprehensive loss


(7,825
)


(7,925
)Treasury stock, at cost  321,485 shares
    outstanding as of December 31, 2008






(11,373
)Unearned ESOP stock


(263
)


(443
)Unearned restricted stock


(20
)


(211
)Total stockholders equity


191,704



251,239Total liabilities and stockholders equity

$
3,221,869


$
3,052,701    86




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF OPERATIONS  Year Ended December 31,2009


2008


2007(Dollars in thousands)Interest income:Interest and fees on loans

$
144,660


$
147,162


$
150,443Interest on taxable securities


14,085



16,310



17,174Interest on tax-exempt securities


1,610



1,716



897Interest on federal funds sold


9



122



471Interest and dividends on other investments


1,718



2,578



2,944Total interest income


162,082



167,888



171,929Interest expense:Interest on deposits


54,360



68,405



79,667Interest on other borrowed funds


10,097



12,104



12,971Interest on subordinated debentures


5,063



4,094



4,129Total interest expense


69,520



84,603



96,767Net interest income


92,562



83,285



75,162Provision for loan losses


28,550



13,112



4,541Net interest income after provision for loan losses


64,012



70,173



70,621Noninterest income:Service charges and fees on deposits


10,112



9,295



7,957Mortgage banking income


7,084



3,972



3,860Investment securities gains (losses)Gain on sale of securities


5,644



1,489



308Total
    other-than-temporary
    impairment losses (OTTI)


(23,079
)


(9,942
)


Portion of OTTI recognized in other comprehensiveincome


7,333







Investment securities (loss) gain


(10,102
)


(8,453
)


308Change in fair value of derivatives


(826
)


1,240



1,310Increase in cash surrender value of life insurance


2,198



2,274



1,895Gain on extinguishment of liabilities






2,918



Other income


5,113



5,521



4,027Total noninterest income


13,579



16,767



19,357Noninterest expenses:Salaries and employee benefits


49,962



49,672



42,316Occupancy, furniture and equipment


18,643



17,197



13,391Amortization of core deposit intangibles


3,941



3,585



1,691Goodwill impairment charge






160,306



FDIC assessments


6,348



1,105



282Foreclosure losses


8,116



908



227Loss on extinguishment of debt










1,469Other expenses


23,475



21,905



18,847Total noninterest expenses


110,485



254,678



78,223(Loss) income before income taxes


(32,894
)


(167,738
)


11,755Income tax (benefit) expense


(13,005
)


(4,588
)


4,134Net (loss) income


(19,889
)


(163,150
)


7,621Preferred stock dividends and amortization


(4,193
)


(311
)


Gain on exchange of preferred stock for trust preferred debt


23,097







Net (loss) income applicable to common stockholders

$
(985
)

$
(163,461
)

$
7,621Weighted average common shares outstanding


10,687



10,021



9,243Weighted average common shares outstanding, assuming dilution


10,687



10,021



9,333Basic net (loss) income per common share

$
(0.09
)

$
(16.31
)

$
0.82Diluted net (loss) income per common share


(0.09
)


(16.31
)


0.82    87




---



##### 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(Dollars in thousands, except per share data)Balance at January 1, 2007

$



$
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 loss: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; adjusted to 1,975,688










(6,093
)


6,093



























Cumulative preferred stock dividend of $240, net of amortization










71











(311
)


















(240
)Issuance of 26,788 shares of restricted stock


















(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
)


251,239Comprehensive loss:Net loss






















(19,889
)


















(19,889
)Other comprehensive loss, net of tax benefit of $239 on
    unrealized loss on securities available for sale, arising during
    the period, net of reclassification adjustment


























(407
)














(407
)Change in accumulated gain on cash flow hedging instrument, net
    of tax expense of $71


























118















118Defined benefit pension plan  net gain, net of tax
    expense of $228


























389















389Comprehensive loss










































(19,789
)Cumulative preferred stock dividend of $3,245, net of
    amortization










948











(4,193
)


















(3,245
)Exchange of preferred stock for trust preferred debt










(63,926
)










23,097



















(40,829
)Issuance of 1,491,618 shares






2











(8,036
)










11,333











3,299Issuance of restricted stock


















18











40







(52
)


6Amortization of unearned restricted stock






































243



243Issuance of 91,284 shares related to board compensation


















768























768Release of 3,938 shares by ESOP


















(168
)














180







12Balance at December 31, 2009

$



$
12


$



$
8,646


$
322,043


$
(130,889
)

$
(7,825
)

$



$
(263
)

$
(20
)

$
191,704    88




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CASH FLOWS  Year Ended December 31,2009


2008


2007(Dollars in thousands)Operating activitiesNet (loss) income

$
(19,889
)

$
(163,150
)

$
7,621Adjustments to reconcile net (loss) income to net cash (used)
    provided by operations:Goodwill impairment charge






160,306



Depreciation


7,249



6,576



4,630Amortization of core deposit and other intangibles


4,358



4,001



1,868Net (discount) premium amortization on securities


136



(63
)


(116
)OTTI


15,746



9,942



Gain on sale of investment securities


(5,644
)


(1,489
)


(308
)Gain on sale of interest rate floors






(678
)


Loss on the sale of foreclosed assets


5,670



528



170Provision for loan losses


28,550



13,112



4,541(Decrease) increase in accrued interest receivable


(787
)


1,718



(386
)Deferred income tax (benefit) expense


(13,739
)


(4,736
)


4,021Loss (gain) on sale of assets


130



(11
)


(139
)(Gain) loss on extinguishment of liabilities






(2,918
)


1,469Origination of mortgage loans held for sale


(729,716
)


(396,330
)


(335,424
)Proceeds from sale of mortgage loans held for sale


679,877



407,698



326,449Other operating activities, net


(17,495
)


(8,538
)


(10,653
)Net cash (used) provided by operating activities


(45,554
)


25,968



3,743Investing activitiesProceeds from sales of investment securities available for sale


157,614



44,620



18,378Proceeds from maturities of investment securities available for
    sale


65,848



112,106



82,873Purchase of investment securities available for sale


(173,556
)


(159,430
)


(59,910
)Net increase in loans


(215,153
)


(328,452
)


(132,769
)Net cash received in business combinations










1,231Redemptions of tax lien certificates


42,885



27,242



20,499Purchase of tax lien certificates


(38,391
)


(35,413
)


(19,801
)Purchase of premises and equipment


(8,476
)


(12,045
)


(23,833
)Proceeds from sale of premises and equipment


1,134



7,643



5,630Proceeds from sale of foreclosed assets


14,496



6,996



7,327Decrease (increase) in stock of FHLB


3,198



(6,465
)


(2,563
)Other investing activities, net






177



4,005Net cash used in investing activities


(150,401
)


(343,021
)


(98,933
)Financing activitiesNet increase (decrease) in demand and savings deposits


202,365



105,222



(7,824
)Net increase in time deposits


111,418



36,611



92,150(Decrease) increase in FHLB advances


(143,002
)


138,496



(2,995
)Proceeds from note payable


38,575



10,000



10,000Principal payment on note payable






(12,500
)


(6,045
)Net decrease in other borrowed funds


(2,870
)


(13,679
)


(13,304
)Proceeds from issuance of subordinated debentures






10,000



22,680Principal payment on junior subordinated debentures










(16,495
)Purchase of treasury stock










(10,428
)Proceeds from issuance of common stock


3,299







640Proceeds from issuance of preferred stock






69,000



Cash dividends paid


(3,508
)






Net cash provided by financing activities


206,277



343,150



68,379Increase in cash and cash equivalents


10,322



26,097



(26,811
)Cash and cash equivalents at beginning of year


89,448



63,351



90,162Cash and cash equivalents at end of year

$
99,770


$
89,448


$
63,351Supplemental disclosures of cash flow informationCash paid (received) during the year for:Interest

$
70,278


$
86,229


$
97,848Income taxes


941



(1,432
)


(564
)Exchange of preferred stock for trust preferred debt


69,000







Transfer of foreclosed assets


42,136



28,419



9,239Assets acquired in business combinations










376,061Liabilities assumed in business combinations










303,487Issuance of common stock in acquisitions










73,804    89




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 December 31,
    2009, 2008 and 2007
  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
   90




---



##### 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
          Other-Than-Temporary-Impairment
  other-than-temporary held-to-maturity 320-10 325-40.
  other-than-temporary
   91




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Tax lien
    certificates
    Loans and
    Allowance for Loan Losses
      450-20 310-35
    450-20, 310-35,
 92




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    
    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; and
    mergers and acquisitions  310-35, and/or
        Mortgage
    Loans Held for Sale
   93




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)  Premises
    and Equipment
        Intangible
    Assets
        build-up
 94




---



##### 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 31,2009


2008(Dollars in thousands)Core deposit intangible

$
26,355


$
26,355Accumulated amortization


(10,764
)


(6,823
)Net core deposit intangible

$
15,591


$
19,532     Year

Annual Expense(In thousands)2010

$
3,4792011


3,0492012


2,4922013


2,2352014


2,051Total

$
13,306   Other
    Real Estate
   95




---



##### 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
    Off-Balance
    Sheet Financial Instruments
    Per Share
    Amounts
      Stock-Based
    Compensation
    Pension
    Plan
    Derivative
    Financial Instruments and Hedging Activities
     96




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)                Fair
    Value Measurements
   97




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Accounting
    Pronouncements Recently Adopted
  Accounting Standards
    Codification (ASC)
    815-10,
    Disclosures About Derivative Instruments and Hedging Activities
    (ASC
    815-10), 815-10
      
    ASC
    820-10,
    Determining Fair Value When the Volume and Level of Activity for
    the Asset or Liability Have Significantly Decreased and
    Identifying Transactions That Are Not Orderly (ASC
    820-10)
    provides guidelines for making fair value measurements more
    consistent by emphasizing that even if there has been a
    significant decrease in the volume and level of activity for the
    asset or liability and regardless of the valuation technique
    used, the objective of a fair value measurement remains the
    same. Fair value is the price that would be received in a sale
    of an asset or paid to transfer a liability in an orderly
    transaction (that is, not a forced liquidation or distressed
    sale), between market participants at the measurement date under
    current market conditions. 98




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)   
    ASC
    320-10,
    Recognition and Presentation of
    Other-than-temporary
    impairments (ASC
    320-10)provides additional guidance designed to create greater
    clarity and consistency in accounting for and presenting
    impairment losses on securities. It amends OTTI impairment
    guidance for debt securities to make the guidance more
    operational and to improve the presentation and disclosure of
    OTTI on debt and equity securities in the financial statements.
    It does not amend existing recognition and measurement guidance
    related to OTTI of equity securities.
    ASC
    825-10 and
    ASC 270-10,
    Interim Disclosures about Fair Value of Financial Instruments
    (ASC
    825-10 and
    ASC
    270-10)enhance consistency in financial reporting by increasing the
    frequency of fair value disclosures.  820-10 320-10 825-10 270-10 320-10
  Standard Update
    (ASU)
    No. 2009-01 
    Generally Accepted Accounting Principles amendments based on
    FASB State The FASB Accounting
    Standards Codification and the Hierarchy of Generally Accepted
    Accounting Principles The Hierarchy of
    Generally Accepted Accounting Principles ( 2009-01.
  , ASU
    No. 2009-05 
    Fair Value Measurements and
    Disclosures  Measuring Liabilities at Fair Value
    (ASU
    2009-05) 820-10, Fair Value Measurements and Disclosures and/or
 99




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Accounting
    Pronouncements Not Yet Adopted
    2.
    Business
    Combinations  Peoples
    Acquisition
  1-for-4
      AmountCash 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   100




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##### Table of Contents



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


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(Dollars in thousands)Investment securities
    available-for-saleU.S. agency securities

$
54,156


$
30


$
505


$
53,681Mortgage-backed securities (MBS):U.S. Agency MBS  residential


160,713



3,293



282



163,724U.S. Agency MBS  collateralized mortgage obligation
    (CMO)


12,780



76



97



12,759Private-label  CMO


19,410



152



3,371



16,191Total MBS


192,903



3,521



3,750



192,674State, county and municipal securities


31,235



450



223



31,462Corporate obligations :Corporate debt


4,138







138



4,000Pooled trust preferred securities


8,255







5,052



3,203Single issue trust preferred securities


5,000







4,023



977Total corporate obligations


17,393







9,213



8,180Equity securities


563







250



313Total investment securities
    available-for-sale

$
296,250


$
4,001


$
13,941


$
286,310  101




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##### Table of Contents



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


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(Dollars in thousands)Investment securities
    available-for-saleU.S. agency securities

$
3,713


$
132


$
2


$
3,843Mortgage-backed securities:U.S. Agency MBS  residential


234,026



3,692



210



237,508U.S. Agency MBS  CMO


16,000



189



3



16,186Private-label  CMO


30,421



45



4,036



26,430Total MBS


280,447



3,926



4,249



280,124State, county and municipal securities


41,379



445



1,202



40,622Corporate obligations :Corporate debt


5,944







198



5,746Pooled trust preferred securities


14,390







4,451



9,939Single issue trust preferred securities


10,000







3,296



6,704Total corporate obligations


30,334







7,945



22,389Equity securities


563







399



164Total investment securities
    available-for-sale

$
356,436


$
4,503


$
13,797


$
347,142       Securities
    Available-for-SaleAmortized


EstimatedCost


Fair Value(Dollars in thousands)Due in one year or less

$
280


$
281Due after one year through five years


7,331



7,297Due after five years through ten years


59,001



58,566Due after ten years


36,735



27,492Mortgage-backed securities


192,903



192,674$
296,250


$
286,310    102




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    Securities  (Continued)  available-for-sale.
      December 31, 2009Less Than 12 Months


More Than 12 Months


TotalUnrealized





Unrealized





UnrealizedFair Value


Losses(1)


Fair Value


Losses(1)


Fair Value


Losses(1)(Dollars in thousands)Temporarily ImpairedU.S. Agency securities

$
48,409


$
505


$



$



$
48,409


$
505Mortgage-backed securities:U.S. Agency MBS  residential


75,493



272



239



10



75,732



282U.S. Agency MBS  CMO


6,036



97











6,036



97Private-label  CMO










12,059



1,753



12,059



1,753Total MBS


81,529



369



12,298



1,763



93,827



2,132State, county and municipal securities


7,360



121



1,019



102



8,379



223Corporate obligations:Corporate debt










4,000



138



4,000



138Single issue trust preferred securities










977



4,023



977



4,023Total corporate obligations










4,977



4,161



4,977



4,161Equity securities










314



250



314



250Total temporarily impaired securities


137,298



995



18,608



6,276



155,906



7,271Other-than-temporarily
    ImpairedMortgage-backed securities:Private-label  CMO










3,037



1,618



3,037



1,618Corporate obligations:Pooled trust preferred securities










3,203



5,052



3,203



5,052Total OTTI securities










6,240



6,670



6,240



6,670Total temporarily and other-than-temporarily impaired

$
137,298


$
995


$
24,848


$
12,946


$
162,146


$
13,941     (1)
    
    Unrealized losses are included in other comprehensive income
    (loss), net of unrealized gains and applicable income taxes.  103




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##### 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(1)


Fair Value


Losses(1)


Fair Value


Losses(1)(Dollars in thousands)Temporarily ImpairedU.S. agency securities

$



$



$
249


$
2


$
249


$
2Mortgage-backed securities:U.S. Agency MBS  residential


21,602



178



3,655



32



25,257



210U.S. Agency MBS  CMO










700



3



700



3Private-label  CMO


17,126



3,912



3,017



124



20,143



4,036Total MBS


38,728



4,090



7,372



159



46,100



4,249State, county and municipal securities


17,275



831



3,662



371



20,937



1,202Corporate obligations:Corporate debt










5,745



198



5,745



198Pooled trust preferred securities


896



481



9,043



3,970



9,939



4,451Single issue trust preferred securities










6,705



3,296



6,705



3,296Total corporate obligations


896



481



21,493



7,464



22,389



7,945Equity securities


164



399











164



399Total temporarily impaired securities

$
57,063


$
5,801


$
32,776


$
7,996


$
89,839


$
13,797     (1)
    
    Unrealized losses are included in other comprehensive income
    (loss), net of unrealized gains and applicable income taxes. 104




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    Securities  (Continued)     December 31, 2009Less Than


Greater Than12 Months


12 Months


TotalTemporarily ImpairedU.S. Agency securities


10







10Mortgage-backed securities:U.S. Agency MBS  residential


17



1



18U.S. Agency MBS  CMO


1







1Private-label  CMO






8



8Total MBS


18



9



27State, county and municipal securities


22



4



26Corporate obligations:Corporate debt






3



3Single issue trust preferred securities






1



1Total corporate obligations






4



4Equity securities






3



3Total temporarily impaired securities


50



20



70Other-than-temporarily
    ImpairedMortgage-backed securities:Private-label  CMO






4



4Corporate obligations:Pooled trust preferred securities






5



5Total OTTI securities






9



9Total temporarily and other-than-temporarily impaired


50



29



79   Other-Than-Temporary
    Impairment.
  held-to-maturity 320-10 325-40
  other-than-temporary
 105




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    Securities  (Continued)        Mortgage-backed
    Securities
    Credit SupportCoverage


UnrealizedRating Moody/Fitch

Count


Ratios(1)


LossA 1/A A A


1



3.07


$
(137
)Aaa/AAA


1



4.18



(5
)Aaa/NR


1



N/A



(1
)NR/AAA


1



6.29



(374
)NR/AA


1



2.84



(339
)NR/A+


1



3.08



(111
)Baa2/NR


1



N/A



(622
)B2/AAA


1



3.59



(162
)Caa1/NR(2)


1



1.43



(1,619
)Ca/NR(2)


1



0.00



NR/CCC(2)


2



0.26-0.53



151Total


12






$
(3,219
)  106




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    Securities  (Continued)    (1)
    
    The Credit Support Coverage Ratio, which is the ratio that
    determines the multiple of credit support, based on assumptions
    for the performance of the loans within the delinquency
    pipeline. The assumptions used are: Current Collateral Support/
    ((60 day delinquencies x.60) + (90 day delinquencies
    x.70) + (foreclosures x 1.00) + (other real estate x 1.00)) x
    .40 for loss severity.(2)
    
    Includes all private-label CMOs that have OTTI. See discussion
    that follows.    Discount














Life-to-DateMargin











Actual


Other-Than-Temporary-ImpairmentPrice


Basis





Cumulative


Average


60+ Days


Credit PortionSecurity

(%)


Points


Yield


Default


Security


Delinquent


2008


2009


Other


TotalCMO 1


19.90



1698



18.00
%


58.60
%


50.00
%


15.31
%

$
(599
)

$
(1,231
)

$
(195
)

$
(2,025
)CMO 2


2.08



1777



18.00
%


59.70
%


60.00
%


31.52
%


(492
)


(1,443
)


(127
)


(2,062
)CMO 3


22.15



1598



17.00
%


47.65
%


45.00
%


26.13
%


(803
)


(1,558
)


(332
)


(2,693
)CMO 4


60.73



1362



17.00
%


27.60
%


45.00
%


14.82
%






(345
)


(1,619
)


(1,964
)$
(1,894
)

$
(4,577
)

$
(2,273
)

$
(8,744
)     State,
    county and municipal securities
   107




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    Securities  (Continued)  Trust Preferred
    Securities
    
    Detailed credit and structural evaluation for each piece of
    collateral in the CDO;
    Collateral performance projections for each piece of collateral
    in the CDO (default, recovery and prepayment/amortization
    probabilities);
    Terms of the CDO structure, as laid out in the indenture;
    The cash flow waterfall (for both interest and principal);
    Overcollateralization and interest coverage tests;
    Events of default/liquidation;
    Mandatory auction call;
    Optional redemption;
    Hedge agreements; and
    Discounted cash flow modeling.  case-by-case
    325-40.
 108




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    Securities  (Continued)    Year-to-DateOther-Than-Temporary-ImpairmentSingle/

Class/

Amortized


Fair


Unrealized


CreditName

Pooled

Tranche

Cost


Value


Loss


Portion


Other





TotalMM Caps Funding I Ltd

Pooled

MEZ

$
1,895


$
745


$
(1,150
)

$
(245
)

$
(1,150
)





$
(1,395
)MM Community Funding Ltd

Pooled

B


2,110



881



(1,229
)


(2,921
)


(1,229
)






(4,150
)Preferred Term Securities V

Pooled

MEZ


1,218



436



(782
)


(165
)


(782
)






(947
)Tpref Funding III Ltd

Pooled

B-2


3,032



1,141



(1,891
)


(962
)


(1,891
)






(2,853
)Trapeza
    2007-13A LLC

Pooled

D














(1,876
)










(1,876
)New South Capital Corp(1)

Single

Sole














(5,000
)










(5,000
)Emigrant Capital Trust(2)

Single

Sole


5,000



977



(4,023
)














$
13,255


$
4,180


$
(9,075
)

$
(11,169
)

$
(5,052
)





$
(16,221
)   Original Collateral 

Performing Collateral Percent of Actual

Percent of ExpectedLowest

Performing

Deferrals and

Deferrals and

ExcessName

Rating

Banks

Defaults

Defaults

Subordination(3)MM Caps Funding I Ltd

Ca

23

15%

23%

0%MM Community Funding Ltd

Ca

8

21%

83%

0%Preferred Term Securities V

CC

1

5%

54%

0%Tpref Funding III Ltd

Ca

25

23%

24%

0%Trapeza
    2007-13A LLC

C

38

27%

27%

0%New South Capital Corp(1)

NR

NA

NA

NA

NAEmigrant Capital Trust(2)

CC

NA

NA

NA

NA   Fair Value


Discount Margin

YieldName

(Price to Par)


(Basis Points)

(Basis Points)MM Caps Funding I Ltd

$
37.26


Swap + 1800

9.48% FixedMM Community Funding Ltd


17.61


LIBOR + 1300

LIBOR + 310Preferred Term Securities V


31.67


LIBOR + 1300

LIBOR + 210Tpref Funding III Ltd


28.53


LIBOR + 1200

LIBOR + 190Trapeza
    2007-13A LLC





NA

LIBOR + 120Emigrant Capital Trust(2)


19.53


LIBOR + 2342

LIBOR + 200     (1)
    
    Management received notification in April 2009 that interest
    payments on this issue will be deferred for up to 20 quarters.
    In addition, New Souths external auditor issued a going
    concern opinion on May 2, 2009. Management determined that
    there was not sufficient positive evidence that this issue will
    ever pay principal or interest. Therefore, OTTI was recognized
    on the full amount of the security during the first quarter of
    2009. In December 2009, the banking subsidiary of New South
    Capital was closed by its regulator and placed in receivership.(2)
    
    There has been no notification of deferral or default on this
    issue. An analysis of the company, including discussion with its
    management, indicates there is adequate capital and liquidity to
    service the debt. The discount margin of 2342 basis points
    was derived from implied credit spreads from certain publicly
    traded trust preferred securities within the issuers peer group.(3)
    
    Excess subordination represents the additional defaults in
    excess of both the current and projected defaults the issue can
    absorb before the security experiences any credit impairment.
    Excess subordination is calculated by 109




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    Securities  (Continued)  determining what level of defaults an issue can experience
    before the security has any credit impairment and then
    subtracting both the current and projected future defaults.        For theYear EndedDecember 31, 2009(Dollars in thousands)Balance at beginning of period

$
Amounts related to credit losses for which an OTTI was not
    previously recognized


4,637Reductions for securities sold during the period


Increases in credit loss for which an OTTI was previously
    recognized when the investor does not intend to sell the
    security and it is not more likely than not that the entity will
    be required to sell the security before recovery of its
    amortized cost


4,232Reductions for securities where there is an intent to sale or
    requirement to sale


Reductions for increases in cash flows expected to be collected


Balance at end of period

$
8,869     Stock in
    the Federal Home Loan Bank of Atlanta (FHLB
    Atlanta)
  942-325-35-3.
   110




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    Securities  (Continued)    
    The significance of the decline in net assets of FHLB Atlanta as
    compared to the capital stock amount for FHLB Atlanta and the
    length of time this decline has persisted;
    Commitments by FHLB Atlanta to make payments required by law or
    regulation and the level of such payments in relation to the
    operating performance of FHLB Atlanta;
    The impact of legislative and regulatory changes on financial
    institutions and, accordingly, on the customer base of FHLB
    Atlanta; and
    The liquidity position of FHLB Atlanta.    4.
    Loans    December 31,2009


2008(Dollars in thousands)Commercial and industrial

$
213,329


$
207,372Real estate  construction and land development


680,445



637,587Real estate  mortgagesSingle-family


691,364



655,216Commercial


801,813



726,704Other


28,885



31,187Consumer


58,785



57,877Other


969



972Total loans

$
2,475,590


$
2,316,915     111




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   4.
    Loans  (Continued)    December 31,2009


2008(Dollars in thousands)Impaired loans with specific valuation allowance

$
129,298


$
32,299Valuation allowance related to impaired loans


(14,527
)


(5,106
)Impaired loans without specific valuation allowance


151,050



20,581Impaired loans, net

$
265,821


$
47,774     December 31,2009


2008(Dollars in thousands)Nonaccrual loans

$
155,631



54,712Accruing loans 90 days or more delinquent


3,920



8,033     December 31,2009


2008(Dollars in thousands)Restructured and performing under restructured terms

$
110,277


$
2,643Restructured and not performing under restructured terms


5,527



     December 31,2009


2008


2007(Dollars in thousands)Average investment in impaired loans for the period

$
136,567


$
37,385


$
11,767Interest recognized during the period for impaired loans


4,661



1,714



873Interest recognized on a cash basis during the period for
    impaired loans


274







    112




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    Allowance
    for Loan Losses    2009


2008


2007(Dollars in thousands)Balance at beginning of year

$
28,850


$
22,868


$
18,892Allowance of acquired banks










3,717Provision for loan losses


28,550



13,112



4,541Total charge-offs


(16,661
)


(8,444
)


(5,722
)Total recoveries


1,145



1,314



1,440Balance at end of year

$
41,884


$
28,850


$
22,868   6.
    Premises
    and Equipment    2009


2008(Dollars in thousands)Land

$
22,867


$
21,575Premises


85,891



83,986Furniture and equipment


31,360



27,646140,118



133,207Less accumulated depreciation and amortization


(37,926
)


(31,253
)Net book value of premises and equipment in service


102,192



101,954Construction in process (also includes land for branch expansion)


1,830



2,131Total

$
104,022


$
104,085         2009


2008(Dollars in thousands)Buildings

$
2,450


$
2,450Accumulated depreciation


(261
)


(180
)Total

$
2,189


$
2,270  113




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6.
    Premises
    and Equipment  (Continued)    OperatingYears Ending December 31,

Property


Equipment


Total


Capitalized(Dollars in thousands)2010

$
3,536


$
235


$
3,771


$
2752011


3,275



129



3,404



2692012


2,724



69



2,793



2632013


2,153



8



2,161



2582014


1,952







1,952



2522015 and thereafter


14,821







14,821



3,208Total minimum lease payments

$
28,461


$
441


$
28,902



4,525Amount representing interest














(1,141
)Present value of net minimum lease payments













$
3,384       Property
    Classified as
    Held-for-Sale
      Sale-Leaseback
    Transactions
   114




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6.
    Premises
    and Equipment  (Continued)        7.
    Deposits    December 31,2009


2008


2007(Dollars in thousands)Interest-bearing demand

$
8,543


$
14,705


$
20,791Savings


3,651



2,731



819Time deposits $100,000 and over


15,975



19,356



21,122Other time deposits


26,191



31,613



36,935Total

$
54,360


$
68,405


$
79,667     2010

$
1,144,2802011


207,5202012


27,7212013


8,6032014 and thereafter


35,598Total

$
1,423,722   115




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   8.
    Advances
    from Federal Home Loan Bank (FHLB)    2009


2008Weighted





WeightedYear:

Average Rate


Balance


Average Rate


Balance(Dollars in thousands)2009



%

$




1.03
%

$
142,9842010


3.36



29,982



6.41



5,0002011


2.66



50,000



2.69



75,0002012


4.44



5,000



4.44



5,0002013


3.46



35,000



3.46



35,0002015


4.58



66,340



4.58



66,3402020


4.28



32,000



4.28



32,000Total


3.74
%

$
218,322



2.67
%

$
361,324         WeightedAverageCurrent


RateWeighted


BeforeMatures

Average Rate


Refinancing


Balance(Dollars in thousands)2011


2.77
%


4.60
%

$
25,0002013


3.46



4.21



35,0002015


4.05



4.57



40,000Total


3.52
%


4.45
%

$
100,000     116




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   9.
    Federal
    Funds Borrowed and Security Repurchase Agreements    As of December 31,2009


2008(Dollars in thousands)Balance at December 31:Federal funds borrowed

$



$
Security repurchase agreements


841



3,563Maximum outstanding at any month end:Federal funds borrowed






3,135Security repurchase agreements


4,026



7,817Daily average amount outstanding:Federal funds borrowed


17



1,145Security repurchase agreements


1,935



6,367Weighted daily average interest rate:Federal funds borrowed


1.01
%


2.93
%Security repurchase agreements


0.85



2.14Weighted daily interest rate for amounts outstanding at December
    31:Federal funds borrowed



%



%Security repurchase agreements


1.82



0.29     10.
    Notes
    Payable    As of December 31,2009


2008Principal


Rate


Principal


Rate(Dollars in thousands)Note payable to bank, borrowed under $7,000,000 line of credit,
    due September 3, 2010; interest is based on Wall Street
    prime plus 1.25 but not less than 4.5%, 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 September 3, 2009; interest is based on the
    lenders base rate, secured by 100% of the outstanding
    Superior Bank stock










7,000



4.50
%Senior note guaranteed under the TLGP, due March 30, 2012,
    2.625% fixed rate due semi-annually


40,000



2.625
%






Less: Discount, FDIC guarantee premium and other issuance costs


(1,083
)










Total notes payable

$
45,917






$
7,000     (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, 2009, the Corporation was in compliance with
    all covenants. 117




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   10.
    Notes
    Payable  (Continued)      11.
    Subordinated
    Debentures  Subordinated
    Debt and Related Warrant
      Junior
    Subordinated Debentures
     118




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    Subordinated
    Debentures  (Continued)                 119




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    Subordinated
    Debentures  (Continued)      December 31,2009


2008(Dollars in thousands)Junior Subordinated Debentures5.00% perpetual junior subordinated debentures owed to Superior
    Capital Trust II(3)(4)

$
69,100


$
10.6% 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



4,124Add (subtract):Purchase accounting adjustment


471



819Discount related to 5.00% perpetual junior subordinated
    debentures owed to Superior Capital Trust II(4)


(45,598
)


Total junior subordinated debentures owed to unconsolidated
    subsidiary trusts


76,552



53,398Other Subordinated Debt9.5% subordinated debentures owed to Durden Enterprises,
    LLC due September 15, 2013


10,000



10,000Add (subtract):Discount related to 9.5% subordinated debentures owed to
    Durden Enterprises, LLC


(2,382
)


(2,514
)Total other subordinated debt


7,618



7,486Total subordinated debentures

$
84,170


$
60,884     (1)
    
    Interest rate is equal to 1.58% at December 31, 2009. 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.(3)
    
    Converts to 9.00% on February 15, 2014 (see Note 29).(4)
    
    Effective yield is equal to 20.22% (see Note 29).  12.
    Stock
    Incentive Plans   120




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   12.
    Stock
    Incentive Plans  (Continued)  1-for-4
  1-for-4
      2009


2008


2007Risk-free interest rate


2.57
%


3.65
%


4.49
%Volatility factor


55.38
%


35.19
%


29.11
%Expected term (in years)


5.00



5.00



5.00Dividend yield


0.00
%


0.00
%


0.00
%  121




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##### Table of Contents



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


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicFor the Year Ended December 31, 2009

Number


Price


Term


ValueUnder option, beginning of period


848,922


$
29.94Granted


104,100



2.97Exercised






Forfeited


(27,375
)


(31.77
)Under option, end of period


925,647


$
26.85



5.65


$
39Exercisable at end of period


625,903


$
31.76



2.90


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

$
1.47For the Year Ended
    December 31, 2008Under 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

$
3.95For the Year Ended
    December 31, 2007Under 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   30-months
 122




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   12.
    Stock
    Incentive Plans  (Continued)  24-month
  Employee
    Stock Ownership Plans
  Superior
    Bancorp ESOP
    Wall
    Street Journal
  Community
    Bancshares ESOP
   123




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   12.
    Stock
    Incentive Plans  (Continued)  718-40, Employee Stock Ownership Plans 718-40) 718-40
      December 31,2009


2008Allocated shares


69,695



65,787Estimated shares committed to be released


3,938



3,908Unreleased shares


12,335



16,273Total ESOP shares


85,968



85,968Fair value of unreleased shares

$
40,582


$
51,585   13.
    Profit-Sharing
    Plan and Other Agreements       124




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##### 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    2009


2008


2007(Dollars in thousands)Current:Federal

$
533


$
73


$
88State


201



75



25Total current expense


734



148



113Deferred:Federal


(12,062
)


(4,243
)


3,529State


(1,677
)


(493
)


492Deferred income tax (benefit) expense


(13,739
)


(4,736
)


4,021Total income tax (benefit) expense

$
(13,005
)

$
(4,588
)

$
4,134  125




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14.
    Income
    Taxes  (Continued)    2009


2008(Dollars in thousands)Deferred income tax assets:Rehabilitation tax credit

$
5,981


$
5,981Allowance for loan losses


15,455



10,601Nonaccrual interest


2,993



998Deferred compensation


1,194



1,423Net operating loss carryforwards


11,635



12,562Alternative minimum tax credit carryover


1,418



1,243Purchase accounting basis differences


542



1,234Other-than-temporary
    impairment loss on securities


9,587



3,761Unrealized loss on securities


3,678



3,439Other


4,094



2,991Total deferred income tax assets


56,577



44,233Less: 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


4,418



4,389Difference in book and tax basis on exchange of preferred stockfor trust preferred securities


16,521



Excess purchase price and intangibles


4,660



5,848Other


233



466Total deferred income tax liabilities


25,832



10,703Net deferred income tax asset

$
29,538


$
32,323      126




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14.
    Income
    Taxes  (Continued)    three-year-cumulative
  
    Management forecasts sufficient taxable income in the next five
    years, even under stressed economic scenarios, to realize the
    Corporations DTA in the carryforward periods allowed under
    the respective federal and state revenue codes (see discussion
    below).
    Management has a history of extremely accurate forecasting of
    asset/liability growth and corresponding interest margin, as
    well as reasonably accurate forecasting of controllable income
    and expense.
    The Corporations net interest margin remains strong and
    has steadily improved even in this weak economy.
    The Corporations liquidity is strong due to a mature
    branch network which provides a reliable and low cost funding
    source to support the interest margin.
    The Corporation has stable levels of core operating noninterest
    income and noninterest expenses.
    The Corporations executive team is experienced in managing
    through difficult credit cycles.
    A recent economic forecast indicates a strengthening real estate
    economy in Florida, where approximately 46% of the
    Corporations total loans and 71% of total classified loans
    are located.
    The Corporations general tax credit and federal net
    operating loss carryforwards do not begin expiring until the
    years 2018 and 2023, respectively. The AMT credit carryforwards
    have no expiration. In addition, the Corporation has no history
    of operating or tax credit carryforwards expiring unused.  available-for-sale
   127




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14.
    Income
    Taxes  (Continued)    2009


2008


2007(Dollars in thousands)Expected tax (benefit) expense at statutory rate of income
    (loss) before taxes

$
(11,184
)

$
(57,031
)

$
3,996Add (deduct):State income tax (benefit) expense, net of federal tax


(974
)


(276
)


341Effect of interest income exempt from Federal income taxes


(633
)


(665
)


(468
)Increase in cash surrender value of life insurance


(747
)


(654
)


(644
)Effect of nondeductible goodwill impairment charge






53,656



Taxable exchange of cash surrender value of life insurance










256Other items  net


533



382



653Income tax (benefit) expense

$
(13,005
)

$
(4,588
)

$
4,134Federal statutory rate


34
%


34
%


34
%     Year of expiration:

Federal


Alabama(Dollars in thousands)2011

$



$
12,2332012






14,7692013






22,0162014






6,7512015






3,4532016






2,5272017






82018 through 2022






1,0402023


2,788



562024


13,043



2025


5,813



2026


5,788



2027


143



$
27,575


$
62,853  128




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14.
    Income
    Taxes  (Continued)    Year of expiration:2018

$
1,7342019


7382020


1,2612021


5222022


3662023


9602024


400$
5,981         740-10, Recognition of Income Taxes 740-10)
  2009


2008Balance at January 1

$
336,000


$
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


(336,000
)


Balance at December 31

$



$
336,000      129




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14.
    Income
    Taxes  (Continued)      15.
    Derivatives      Interest
    Rate Swaps
      Fair
    Value Hedges
    Cash Flow
    Hedges
  3-month
 130




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   15.
    Derivatives  (Continued)  Interest
    Rate Lock Commitments
    Assets and Liabilities
    Recorded at Fair Value on a Recurring Basis
  December 31,2009


2008Estimated





EstimatedNotional


Fair


Notional


FairAmount


Value


Amount


Value(Dollars in thousands)Interest rate derivatives designated as hedges of fair value:Interest rate swap on brokered certificates of deposit

$
2,777


$
228


$
5,334


$
799Interest rate derivatives designated as hedges of cash flows:Interest rate swaps on subordinated debenture


22,000



(766
)


22,000



(954
)Non-hedging interest rate derivatives:Brokered certificates of deposit interest rate swap


723



59



1,166



164Mortgage loan held for sale interest rate lock commitment


41,038



(370
)


92,721



(117
)Commercial loan interest rate swap


3,766



323



3,861



462Commercial loan interest rate swap


3,766



(323
)


3,861



(462
)     Weighted-AverageInterest

InterestRate

RatePaid

ReceivedInterest rate swaps:Fair value hedge on brokered certificates of deposit interest
    rate swap


0.52
%


4.70
%Cash flow hedge interest rate swaps on subordinated debentures


4.42



1.58Non-hedging interest rate swap on commercial loan


6.73



6.73   Gains,
    Losses and Derivative Cash Flows
   131




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   15.
    Derivatives  (Continued)      December 31,2009


2008


2007(Dollars in thousands)Interest rate swap on brokered certificates of deposit:Amount of gain (loss) included in interest expense on deposits

$
109


$
65


$
(61
)Amount of (loss) gain included in other noninterest income


(506
)


342



73     December 31,2009


2008


2007(Dollars in thousands)Interest rate swap on subordinated debenture:Net (loss) gain included in interest expense on subordinated debt

$
(474
)

$
(50
)

$
Amount of gain (loss) recognized in other comprehensive income


119



(601
)


         December 31,2009

2008

2007(Dollars in thousands)Non-hedging interest rate derivatives:Brokered certificates of deposit interest rate swap

$
(67
)

$
426


$
742Mortgage loan held for sale interest rate lock commitment


(253
)


(239
)


122Interest rate floors






678



374Commercial loan interest rate swap






34



  132




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   15.
    Derivatives  (Continued)  Counterparty
    Credit Risk
        16.
    Related
    Party Transactions    Balance at December 31, 2008

$
48,414Loans originated


Advances


27,114Repayments


(16,697
)Other changes and reclassifications


(4,326
)Balance at December 31, 2009

$
54,505           17.
    Commitments
    and Contingencies   133




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   17.
    Commitments
    and Contingencies  (Continued)    December 31,2009

2008(Dollars in thousands)Commitments to extend credit

$
266,550


$
355,243Standby letters of credit


21,845



35,636         18.
    Regulatory
    Restrictions           134




---



##### Table of Contents



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


CapitalizedActual


Purposes


Under Prompt Corrective ActionAmount


Ratio


Amount


Ratio


Amount


Ratio(Dollars in thousands)December 31, 2009Tier 1 Core Capital (to Adjusted Total Assets)

$
249,253



7.79
%

$
127,957



4.00
%

$
159,947



5.00
%Total Capital (to Risk Weighted Assets)


286,748



10.69



214,517



8.00



268,146



10.00Tier 1 Capital (to Risk Weighted Assets)


249,253



9.30



NA



NA



160,888



6.00Tangible Capital (to Adjusted Total Assets)


249,253



7.79



47,984



1.50



NA



NADecember 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



NA



150,571



6.00Tangible Capital (to Adjusted Total Assets)


271,146



9.00



45,191



1.50



NA



NA   19.
    Fair
    Values of Financial Instruments   135




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    Fair
    Values of Financial
    Instruments  (Continued)  Assets
    and Liabilities Recorded at Fair Value on a Recurring
    Basis
    Quoted Prices in





SignificantActive Markets for


Significant Other


UnobservableFair


Identical Assets


Observable Inputs


InputsValue


(Level 1)


(Level 2)


(Level 3)December 31, 2009Available for sale securities

$
286,310


$
314


$
272,667


$
13,329Derivative assets


610







610



Total recurring basis measured assets

$
286,920


$
314


$
273,277


$
13,329Derivative liabilities

$
1,459


$



$
1,459


$
Total recurring basis measured liabilities

$
1,459


$



$
1,459


$
December 31, 2008Available 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. Trust Preferred Securities Mortgage-backed Securities
  Derivative financial instruments.
 136




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    Fair
    Values of Financial
    Instruments  (Continued)  Changes
    in Level 3 fair value measurements
    Level 3
    Assets Measured at Fair Value on a Recurring Basis
  Available forSale Securities2009


2008(Dollars in thousands)Balance at January 1

$
18,497


$
Transfer into level 3 category during the year


13,978



25,956Total gains (losses) (realized and unrealized)Included in earnings  investment security loss


(15,746
)


(7,459
)Included in other comprehensive loss


(1,610
)


Other changes due to principal payments


(1,790
)


Balance at December 31

$
13,329


$
18,497Total amount of loss for the period
    year-to-date
    included in earnings attributable to the change in unrealized
    gains (losses) related to assets held at December 31

$
(15,746
)

$
   Assets
    Recorded at Fair Value on a Nonrecurring Basis
    Quoted PricesinActive Markets for


Significant Other


SignificantIdentical


Observable


UnobservableFair


Assets


Inputs


InputsValue


(Level 1)


(Level 2)


(Level 3)December 31, 2009Mortgage loans held for sale

$
71,879


$



$
71,879


$
Impaired loans, net of specific allowance


155,545











155,545Other foreclosed real estate


41,618











41,618Other real estate held for sale


3,349











3,349Total nonrecurring basis measured assets

$
272,391


$



$
71,879


$
200,512December 31, 2008Mortgage 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  137




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    Fair
    Values of Financial
    Instruments  (Continued)  Valuation
    Techniques  Nonrecurring Basis
  Mortgage Loans Held for Sale.
  Impaired Loans. and/or and/or
  Other Foreclosed Real Estate. and/or
  Other Real Estate Held for Sale.
    Tax lien certificates.
  Net loans.
  Deposits.
 138




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    Fair
    Values of Financial
    Instruments  (Continued)  Advances from FHLB.
  Federal funds borrowed and security repurchase
    agreements.
  Notes payable.
  Subordinated debentures.
  Limitations.
    December 31, 2009


December 31, 2008Carrying


Fair


Carrying


FairAmount


Value


Amount


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

$
74,020


$
74,020


$
74,237


$
74,237Interest-bearing deposits in other banks


23,714



23,714



10,042



10,042Federal funds sold


2,036



2,036



5,169



5,169Securities available for sale


286,310



286,310



347,142



347,142Tax lien certificates


19,292



19,292



23,786



23,786Mortgage loans held for sale


71,879



71,879



22,040



22,040Net loans


2,430,813



2,440,026



2,286,071



2,374,637Stock in FHLB


18,212



18,212



21,410



21,410Accrued interest receivable


50,142



50,142



14,794



14,794Derivative assets


610



610



1,427



1,427Financial liabilities:Deposits


2,656,573



2,671,504



2,342,988



2,363,270Advances from FHLB


218,322



233,028



361,324



382,547Security repurchase agreements


841



841



3,563



3,563Note payable


45,917



45,917



7,000



7,000Subordinated debentures


84,170



51,609



60,884



46,839Derivative liabilities


1,459



1,459



1,534



1,534   20.
    Pension
    Plan   139




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   20.
    Pension
    Plan  (Continued)       140




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   20.
    Pension
    Plan  (Continued)    Pension
    Plan:
  December 31,2009


2008(Dollars in thousands)Change in benefit obligationBenefit obligation as of December 31, 2009 and 2008,
    respectively

$
10,634


$
10,070Interest cost


601



602Benefits paid (including expenses)


(631
)


(602
)Actuarial (gain)/loss


413



564Benefit obligation at end of year

$
11,017


$
10,634Change in plan assetsFair value of plan assets as of December 31, 2009 and 2008,
    respectively

$
7,909


$
10,537Actual return on plan assets


1,439



(2,026
)Benefits paid (including expenses)


(631
)


(602
)Fair value of plan assets at end of year

$
8,717


$
7,909Funded status at end of yearNet amount recognized in statement of financial condition (after
    ASC 715)

$
(2,300
)

$
(2,725
)Amounts Recognized in the Statement of Financial Condition
    consist of:Assets

$



$
Liabilities


(2,300
)


(2,725
)Net amount recognized in statement of financial condition (after
    ASC 715)

$
(2,300
)

$
(2,725
)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


(1,691
)


(2,327
)Accumulated other comprehensive (loss) income (AOCI)


(1,691
)


(2,327
)Cumulative employer contributions in excess of net periodic
    benefit cost


(609
)


(398
)Net amount recognized in statement of financial condition

$
(2,300
)

$
(2,725
)Additional year-end information for pension plans with
    accumulated benefit obligations in excess of plan assets:Projected benefit obligation

$
11,017


$
10,634Accumulated benefit obligation

$
11,017


$
10,634Fair value of plan assets

$
8,717


$
7,909Weighted-average assumptions used to determine net periodic
    benefit obligationsProjected benefit obligation


5.84
%


5.76
%Rate of compensation increase


NA



NA 141




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   20.
    Pension
    Plan  (Continued)  December 31,2009


2008(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, 2010

$
648Year ending December 31, 2011


635Year ending December 31, 2012


636Year ending December 31, 2013


620Year ending December 31, 2014


640Next five years


3,498Components of net periodic benefit costInterest cost

$
601


$
602Expected return on plan assets


(531
)


(716
)Amortization of net (gain) loss


141



Net periodic benefit cost

$
211


$
(114
)Weighted-average assumptions used to determine net periodic
    benefit costDiscount rate


5.76
%


6.11
%Expected long-term return on plan assets


7.00
%


7.00
%Rate of compensation increase


N/A



N/A          142




---



##### Table of Contents



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


Long-term2009


2008


target


RangeAsset Category:Cash and cash equivalents


3.4
%


6.0
%


3.0
%


0-10
%Equity securities


56.2



50.5



62.0



40-65
%Debt securities


40.4



43.5



35.0



30-55
%Total


100.0
%


100.0
%


100.0
%     Quoted Prices in





SignificantFair Value at


Active Markets for


Significant Other


UnobservableDecember 31,


Identical Assets


Observable Inputs


Inputs2009


(Level 1)


(Level 2)


(Level 3)(Dollars in thousands)Cash

$
293


$
293


$



$
Equity securities:U.S. Companies


4,046



4,046







International Companies


852



852







U.S. Treasury securities


3,526



3,526







Total

$
8,717


$
8,717


$



$
     Quoted Prices in





SignificantFair Value at


Active Markets for


Significant Other


UnobservableDecember 31,


Identical Assets


Observable Inputs


Inputs2008


(Level 1)


(Level 2)


(Level 3)(Dollars in thousands)Cash

$
477


$
477


$



$
Equity securities:U.S. Companies


3,327



3,327







International Companies


665



665







U.S. Treasury securities


3,440



3,440







Total

$
7,909


$
7,909


$



$
  143




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   20.
    Pension
    Plan  (Continued)  Benefit
    Restoration Plan:
  December 31,2009


2008(Dollars in thousands)Change in benefit obligationBenefit obligation as of December 31, 2009 and 2008,
    respectively

$
610


$
2,829Interest cost


34



90Benefits paid (including expenses)


(58
)


(57
)Forfeiture of benefits






(2,224
)Actuarial (gain)/loss


18



(28
)Benefit obligation at end of year

$
604


$
610Change in plan assetsFair value of plan assets as of December 31, 2009 and 2008,
    respectively

$



$
Actual return on plan assets






Employer contribution


58



57Benefits paid (including expenses)


(58
)


(57
)Fair value of plan assets at end of year

$



$
Funded status at end of yearNet amount recognized in statement of financial condition (ASC
    715)

$
604


$
610Amounts Recognized in the Statement of Financial Condition
    consist of:Assets

$



$
Current liabilities


(57
)


(56
)Noncurrent liabilities


(547
)


(554
)Net amount recognized in statement of financial condition (after
    ASC 715)

$
(604
)

$
(610
)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


(22
)


(4
)Accumulated other comprehensive (loss) income (AOCI)


(22
)


(4
)Cumulative employer contributions in excess of net periodic
    benefit cost


(582
)


(606
)Net amount recognized in statement of financial condition

$
(604
)

$
(610
)   144




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   20.
    Pension
    Plan  (Continued)  December 31,2009


2008(Dollars in thousands)Additional year-end information for pension plans with
    accumulated benefit obligations in excess of plan assets:Projected benefit obligation

$
604


$
610Accumulated benefit obligation

$
604


$
610Fair value of plan assets

$



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


5.84
%


5.76
%Rate of compensation increase


NA



NAComponents of net periodic benefit costInterest cost

$
34


$
90Net periodic benefit cost

$
34


$
90Weighted-average assumptions used to determine net periodic
    benefit costDiscount rate


5.76
%


6.11
%Expected long-term return on plan assets


NA



NARate of compensation increase


NA



NAExpected Cash FlowsExpected return of assets to employer in next year

$



$
Expected employer contribution for next fiscal year

$
57


$
56Expected benefit paymentsYear ending December 31, 2010

$
57Year ending December 31, 2011


56Year ending December 31, 2012


55Year ending December 31, 2013


54Year ending December 31, 2014


52Next five years


235   21.
    Other
    Noninterest Expense    December 31,2009


2008


2007(Dollars in thousands)Professional fees

$
4,202


$
2,637


$
2,269Directors fees


377



438



397Insurance


2,555



2,381



1,907Postage, stationery and supplies


3,002



2,964



2,252Communications


3,054



2,941



2,007Advertising


2,530



3,522



2,397Other operating expense


7,755



7,022



7,618Total

$
23,475


$
21,905


$
18,847  145




---



##### 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    December 31,2009


2008


2007(Dollars in thousands, except per share amounts)Numerator:Net (loss) income

$
(19,889
)

$
(163,150
)

$
7,621Less: preferred stock dividends and amortization


4,193



311



Add: gain on exchange of Series A preferred stock totrust preferred securities (See Note 29)


23,097







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

$
(985
)

$
(163,461
)

$
7,621Denominator:For basic, weighted average common shares outstanding


10,687



10,021



9,243Effect of dilutive stock options










90Average common shares outstanding, assuming dilution


10,687



10,021



9,333Basic net income (loss) per common share

$
(0.09
)

$
(16.31
)

$
0.82Diluted net income (loss) per common share

$
(0.09
)

$
(16.31
)

$
0.82      146




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   24.
    Parent
    Company    December 31,2009


2008(Dollars in thousands)Statements of financial conditionAssets:Cash

$
2,093


$
1,414Investment in subsidiaries


273,074



294,377Premises and equipment  net


762



787Other assets


3,947



18,115$
279,876


$
314,693Liabilities:Accrued expenses and other liabilities

$
4,620


$
3,057Note payable


7,000



7,000Subordinated debentures


76,552



53,397Stockholders equity


191,704



251,239$
279,876


$
314,693   Year Ended December 31,2009


2008


2007(Dollars in thousands)Statements of operationsIncome:Dividends from subsidiaries

$
6,000


$
4,000


$
7,000Interest


127



156



156Other income


145



3,160



404$
6,272


$
7,316


$
7,560Expense:Directors fees


301



293



269Salaries and benefits


827



1,147



1,384Occupancy expense


180



265



362Interest expense


4,270



4,231



4,569Other


1,020



766



2,3736,598



6,702



8,957Income (loss) before income taxes and equity in undistributed
    earnings of subsidiaries


(326
)


614



(1,397
)Income tax benefit


1,734



1,948



3,513Income before equity in undistributed (loss) earnings of
    subsidiaries


1,408



2,562



2,116Equity in undistributed (loss) earnings of subsidiaries


(21,297
)


(165,712
)


5,505Net (loss) income

$
(19,889
)

$
(163,150
)

$
7,621  147




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   24.
    Parent
    Company  (Continued)  Year Ended December 31,2009


2008


2007(Dollars in thousands)Statements of cash flowsOperating activitiesNet (loss) income

$
(19,889
)

$
(163,150
)

$
7,621Adjustments to reconcile net (loss) income to net cash provided
    by operating activities:Amortization and depreciation expense


25



60



184Equity in undistributed loss (earnings) of subsidiaries


21,297



165,712



(5,505
)Other decreases


(545
)


(2,079
)


(1,120
)Net cash provided by operating activities


888



543



1,180Investing activitiesInvestment in subsidiary






(66,550
)


Proceeds from sale of premises and equipment






316



339Purchases of premises and equipment






(57
)


Net cash paid in business combinations










(2,527
)Net cash used by investing activities






(66,291
)


(2,188
)Financing activitiesProceeds from issuance of common stock


3,299







640Proceeds from issuance of preferred stock






69,000



Proceeds from note payable






10,000



10,000Principal payment on note payable






(12,500
)


(6,045
)Proceeds from issuance of junior subordinated debentures










22,680Principal payment on junior subordinated debentures










(16,495
)Purchase of treasury stock










(10,428
)Cash dividends paid


(3,508
)






Net cash (used) provided by financing activities


(209
)


66,500



352Net increase (decrease) in cash


679



752



(656
)Cash at beginning of year


1,414



662



1,318Cash at end of year

$
2,093


$
1,414


$
662   148




---



##### Table of Contents



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


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(Dollars in thousands, except per share data)2009Total interest income

$
39,756


$
40,629


$
41,049


$
40,648Total interest expense


18,428



17,912



17,136



16,044Net interest income


21,328



22,717



23,913



24,604Provision for loan losses


3,452



5,982



5,169



13,947Securities loss


(5,845
)


(5,781
)


2,121



(597
)Changes in fair value of derivatives


(199
)


(67
)


435



(995
)(Loss) income before income taxes


(6,422
)


(10,233
)


1,581



(17,820
)Net (loss) income


(3,574
)


(5,694
)


880



(11,501
)Net (loss) income applicable to common shareholders


(4,717
)


(6,861
)


(287
)


10,880Basic net (loss) income per common share


(0.47
)


(0.68
)


(0.03
)


0.94Diluted net (loss) income per common share


(0.47
)


(0.68
)


(0.03
)


0.922008Total 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 loss


695



841



(6,508
)


(158,178
)Net income (loss) applicable to common shareholders


695



841



(6,508
)


(158,489
)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
)   year-to-date
  26.
    Segment
    Reporting   149




---



##### 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


Combined(Dollars in thousands)2009Net interest income

$
37,554


$
38,785


$
76,339


$
16,223


$
92,562Provision for loan losses


6,496



10,150



16,646



11,904



28,550Noninterest income


8,662



2,101



10,763



2,816



13,579Noninterest expense


35,480



25,637



61,117



49,368



110,485Operating profit (loss)

$
4,240


$
5,099


$
9,339


$
(42,233
)


(32,894
)Income tax benefit


















(13,005
)Net loss

















$
(19,889
)Total assets

$
1,060,530


$
1,259,223


$
2,319,753


$
902,116


$
3,221,8692008Net 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


$
3,052,7012007Net 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


$
2,885,425   (
 150




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   27.
    Stockholders
    Equity  Common
    Stock
        1-for-4
    Reverse Stock Split
  1-for-4 1-for-4
  Stock
    Repurchase Plan
      Issuance
    of Preferred Stock and Related Warrant
   151




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   27.
    Stockholders
    Equity  (Continued)    pari passu
  and/or
     152




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   27.
    Stockholders
    Equity  (Continued)    Exchange
    of Preferred Stock
    Exchange
    of non-pooled trust preferred securities for newly issued common
    stock
    28.
    Other
    Comprehensive (Loss) Income    Pre-Tax


Income Tax


Net ofAmount


Expense


Income Tax(Dollars in thousands)2009Unrealized loss on available for sale securities

$
(10,748
)

$
3,977


$
(6,771
)Reclassification adjustment for losses realized in net loss


10,102



(3,738
)


6,364Unrealized gain on derivatives


189



(71
)


118Defined benefit pension plan  net gain arising during
    the period


617



(228
)


389Net unrealized gain

$
160


$
(60
)

$
1002008Unrealized loss on available for sale securities

$
(16,885
)

$
6,203


$
(10,682
)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
)

$
1,426Reclassification 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  153




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   29.
    Exchange
    Offer  Exchange
    of preferred stock held by the Treasury Department for trust
    preferred securities
      pari passu
         154




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   29.
    Exchange
    Offer  (Continued)    30-year
      AssetsOther assets  investment in common stock of trust

$
100 deferred income taxes (see Note 14)


(16,544
)Total assets

$
(16,444
)LiabilitiesSubordinated debentures, net (see Note 11):Issuance

$
69,100Discount


(44,714
)Total liabilities


24,386Stockholders equity (see Note 27)Preferred stock, par value $.001 per share

$
Surplus  preferred ($69,000 less discount of $5,073)


(63,927
)Accumulated deficit (net of $16,544 deferred taxes)


23,097Total stockholders equity


(40,830
)Total liabilities and stockholders equity

$
(16,444
)   30.
    Subsequent
    Events  Exchange
    of non-pooled trust preferred securities for newly issued common
    stock
   155




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   30.
    Subsequent
    Events  (Continued)         156




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##### Table of Contents



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,
 157




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
     Internal Control  Integrated Fram
        Internal Control  Integrated Framework
    
    158




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##### 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)-1

Restated Certificate of Incorporation of Superior Bancorp, filed
    as Exhibit 3 to Superior Bancorps Current Report on Form
    8-K dated November 19, 2009, 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 October 22,
    2009, 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. 159




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##### 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)-1
    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)-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. 160




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##### 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),
    and is hereby incorporated herein by reference.(4)-23

Amended and Restated Declaration of Trust and Trust Agreement,
    dated as of December 11, 2009, by and among Superior Bancorp,
    The Bank of New York Mellon Trust Company, N.A., BNY Mellon
    Trust of Delaware, James A. White, and William H. Caughran.(4)-24

Indentures, dated as of December 11, 2009, by Superior Bancorp
    and The Bank of New York Mellon Trust Company, N.A.(4)-25

First Supplemental Indenture, dated as of December 11, 2009,
    between Superior Bancorp and The Bank of New York Mellon Trust
    Company, N.A.(4)-26

Guarantee Agreement, dated as of December 11, 2009, between
    Superior Bancorp and The Bank of New York Mellon Trust
    Company, N.A.(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. 161




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##### Table of Contents



(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.(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. 162




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##### Table of Contents



(10)-23*

Amended and Restated Employment Agreement, dated
    December 29, 2008, between Superior Bancorp and C. Stanley
    Bailey, filed as Exhibit 10.23 to Superior Bancorps
    Annual Report on
    Form 10-K
    for the year ended December 31, 2008, is hereby
    incorporated herein by reference.(10)-24*

Amended and Restated Employment Agreement, dated
    December 29, 2008, between Superior Bancorp and C. Marvin
    Scott, filed as Exhibit 10.24 to Superior Bancorps
    Annual Report on
    Form 10-K
    for the year ended December 31, 2008, is hereby
    incorporated herein by reference.(10)-25*

Amended and Restated Employment Agreement, dated
    December 29, 2008, between Superior Bancorp and Rick D.
    Gardner, filed as Exhibit 10.25 to Superior Bancorps
    Annual Report on
    Form 10-K
    for the year ended December 31, 2008, is hereby
    incorporated herein by reference.(10)-26*

Amendment to Third Amended and Restated 1998 Stock Incentive
    Plan of The Banc Corporation, filed as Exhibit 10.26 to
    Superior Bancorps Annual Report on
    Form 10-K
    for the year ended December 31, 2008, is hereby
    incorporated herein by reference.(10)-27*

Agreement, dated as of January 1, 2006, between The Banc
    Corporation and James Mailon Kent, Jr., field as
    Exhibit 10.27 to Superior Bancorps Annual Report on
    Form 10-K
    for the year ended December 31, 2008, is hereby
    incorporated herein by reference.(10)-28*

Amendment to Agreement, dated as of November 3, 2008,
    between Superior Bancorp and James Mailon Kent, Jr., filed as
    Exhibit 10.28 to Superior Bancorps Annual Report on
    Form 10-K
    for the year ended December 31, 2008, is hereby
    incorporated herein by reference.(10)-29

Exchange Agreement, dated as of December 11, 2009, by and among
    Superior Bancorp, Superior Capital Trust II and The United
    States Department of the Treasury.(10)-30

Exchange Agreement and Plan of Reorganization, dated as of
    January 15, 2010, by and among Superior Bancorp, Superior
    Holdings, LLC, and Cambridge Savings bank.(10)-31

Exchange Agreement and Plan of Reorganization, dated as of
    January 15, 2010, by and among Superior Bancorp, Superior
    Holdings, LLC, and KBW, Inc.(21)

Subsidiaries of Superior Bancorp.(23)

Consent of Grant Thornton, LLP.(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.(99)

Certifications of Chief Executive Officer and Principal
    Financial Officer pursuant to 12 U.S.C. Section 5221     *
    
    Compensatory plan or arrangement(c)
    
    Financial Statement Schedules.  Form 10-K Form 10-K,
 163




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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 11, 2010/s/  James
    A.
    WhiteJames
    A. White

Chief Financial Officer (Principal
    Financial Officer)

March 11, 2010/s/  James
    C. GossettJames
    C. Gossett

Chief Accounting Officer (Principal
    Accounting Officer)

March 11, 2010/s/  Roger
    BarkerRoger
    Barker

Director

March 11, 2010/s/  Thomas
    E. Dobbs, Jr.Thomas
    E. Dobbs, Jr.

Director

March 11, 2010/s/  K.
    Earl DurdenK.
    Earl Durden

Director

March 11, 2010/s/  Rick
    D. GardnerRick
    D. Gardner

Director and Vice Chairman

March 11, 2010/s/  Thomas
    E. Jernigan, Jr.Thomas
    E. Jernigan, Jr.

Director

March 11, 2010/s/  James
    Mailon Kent, Jr.James
    Mailon Kent, Jr.

Director

March 11, 2010 164




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##### Table of Contents



Signature

Title

Date/s/  Mark
    A. LeeMark
    A. Lee

Director

March 11, 2010/s/  Peter
    L. LowePeter
    L. Lowe

Director

March 11, 2010/s/  John
    C. MetzJohn
    C. Metz

Director

March 11, 2010/s/  D.
    Dewey MitchellD.
    Dewey Mitchell

Director

March 11, 2010/s/  Robert
    R. Parrish, Jr.Robert
    R. Parrish, Jr.

Director

March 11, 2010/s/  Charles
    W. Roberts, IIICharles
    W. Roberts, III

Director

March 11, 2010/s/  C.
    Marvin ScottC.
    Marvin Scott

Director and Vice Chairman

March 11, 2010/s/  James
    C. White, Sr.James
    C. White, Sr.

Director

March 11, 2010  165