##### Table of Contents



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, 2006oro

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)
     (Titles of Class)
   NONE
  o þ
  o þ
  Indicate by check mark whether the
    registrant: þ o
  Regulation S-K Form 10-K Form 10-K. o
    o þ o
  Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




---



TABLE OF CONTENTS  PART IItem 1. Business.Item 1A. Risk Factors.Item 1B. Unresolved Staff Comments.Item 2. Properties.Item 3. Legal Proceedings.Item 4. Submission Of Matters To A Vote Of Security Holders.PART IIItem 5. Market For The Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.Item 6. Selected Financial Data.Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operation.Item 7A. Quantitative and Qualitative Disclosures About Market Risks.Item 8. Financial Statements and Supplementary Data.Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.Item 9A. Controls And ProceduresItem 9B. Other Information.PART IIIItems 10, 11, 12, 13 and 14. Directors and Executive Officers of the Registrant; Executive Compensation; Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters; Certain Relationships and Related Transactions; and Principal Accounting Fees and Services.PART IVItem 15. Exhibits, Financial Statement Schedules.SIGNATURESEX-10.(17) CHANGE IN CONTROL AGREEMENTEX-21 SUBSIDIARIES OF SUPERIOR BANCORPEX-23 CONSENT OF CARR, RIGGS & INGRAM, LLC.EX-31 SECTION 302 CERTIFICATION OF THE CEO & CFOEX-32 SECTION 906 CERTIFICATION OF THE CEO & CFO    Table of Contents  
 PART I
 
  Item 1.
    Business.  General
  (205) 327-1400.
        Recently
    Announced Merger Agreement
    Strategy
  Operations.
  Products and Services.
 2




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##### Table of Contents



st
  Market Areas.
    Alabama

FloridaAlbertville

Andalusia

AlthaAthens

Birmingham

ApalachicolaBlountsville

Boaz

BlountstownChildersburg

Cleveland

BristolDecatur

Elkmont

CarrabelleFalkville

Frisco City

ClearwaterGadsden

Gardendale

Mexico BeachGuntersville

Gurley

New Port RicheyHaleyville

Hamilton

Palm HarborHartselle

Huntsville

Port RicheyJones Valley

Kinston

Port St. JoeMadison

Meridianville

Spring HillMonroeville

New Hope

Sun City CenterOneonta

Opp

TallahasseeRainbow City

Rogersville

TampaSamson

Snead

Wesley ChapelSylacauga

UniontownWarrior     Growth.
 3




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##### Table of Contents



Lending
    Activities
  General.
      follow-up
  Loan
    Portfolio
  Real Estate Loans. loan-to-value loan-to-value loan-to-value 30-year
   4




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##### Table of Contents



loan-to-value
  Commercial and Industrial Loans.
  Consumer Loans.
  Credit
    Review and Procedures
      Deposits
        Competition
   5




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##### Table of Contents



Employees
    Supervision
    and Regulation
  General.
  Holding Company Regulation.
   6




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##### Table of Contents



Change in Bank Control Act.
  Regulation of Business Activities. e.g.
  Capital Requirements.
      Prompt Corrective Regulatory Action.
 7




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##### Table of Contents



Insurance of Deposit Accounts.
      Loans to One Borrower.
  QTL Test. 12-month
    Limitations on Capital Distributions.
 8




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##### Table of Contents



Transactions with Related Parties. i.e.
    Standards for Safety and Soundness.
  Enforcement. and/or
  Federal Home Loan Bank System.
 9




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##### Table of Contents



Federal Reserve System.
  Community Reinvestment Act.
  Confidentiality of Customer
    Information.
  Bank Secrecy Act.
  USA Patriot Act. non-U.S. owned
 10




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##### Table of Contents



Consumer Laws and Regulations.
  Instability
    of Regulatory Structure
    Effect on
    Economic Environment
      Available
    Information
  www.superiorbank.com. Form 10-K, Form 10-Q, Form 8-K, www.superiorbank.com
  Code of
    Ethics
   
  Item 1A.  Risk
    Factors.
   11




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##### Table of Contents



Risks
    Relating To Our Business
  If the interest payments we make on our deposits increase
    relative to our interest income, we may be less
    profitable.
      An increase in loan prepayments may adversely affect our
    profitability.
  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.
 12




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We are subject to extensive regulation.
    We may require additional capital to fund our growth
    plans.
  We are dependent upon the services of our management
    team.
  Risks
    Related To an Investment in Our Common Stock
  Our stock price may be volatile due to limited trading
    volume.
  Our ability to pay dividends is limited.
  The market price of our common stock has risen significantly
    in a relatively short period of time.
  Use of our common stock for future acquisitions or to raise
    capital may be dilutive to existing
    stockholders.
 13




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##### Table of Contents



Item 1B.  Unresolved
    Staff Comments.
   
  Item 2.
    Properties.     
  Item 3.
    Legal
    Proceedings.   
  Item 4.
    Submission
    Of Matters To A Vote Of Security Holders.    FOR

AGAINST

ABSTAIN12,952,790

118,290

14,820  14




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##### Table of Contents



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

Low2005First Quarter

$
11.25


$
8.00Second Quarter


10.85



9.25Third Quarter


10.91



10.34Fourth Quarter


12.00



10.492006First Quarter

$
11.94


$
10.70Second Quarter


11.87



10.71Third Quarter


11.93



10.54Fourth Quarter


11.89



10.392007First Quarter (through
    March 13, 2006)

$
11.87


$
10.85     Dividends
      Equity
    Compensation Plan Information
  Regulation S-K
 15




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##### Table of Contents



Performance
    Graph
    
  Period EndingIndex

12/31/01

12/31/02

12/31/03

12/31/04

12/31/05

12/31/06Superior Bancorp


100.00



111.95



122.62



118.73



164.60



163.59NASDAQ Composite


100.00



68.76



103.67



113.16



115.57



127.58NASDAQ Financial


100.00



98.39



129.06



148.77



152.27



174.10  
  Item 6.
    Selected
    Financial Data.  Form 10-K.
  16




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##### Table of Contents



As of and For the Year Ended December 31,2006


2005


2004


2003


2002(Dollars in thousands, except per share data)Selected Statement of Financial
    Condition Data:Total assets

$
2,440,990


$
1,415,469


$
1,423,128


$
1,171,626


$
1,406,800Loans, net of unearned income


1,639,528



963,253



934,868



856,941



1,138,537Allowance for loan losses


18,892



12,011



12,543



25,174



27,766Investment securities


354,716



242,595



288,308



141,601



73,125Deposits


1,870,841



1,043,695



1,067,206



889,935



1,107,798Advances from FHLB and other
    borrowings


211,255



214,496



205,546



131,919



174,922Notes payable


5,545



3,755



3,965



1,925



Junior subordinated debentures owed
    to unconsolidated trusts


44,006



31,959



31,959



31,959



31,959Stockholders equity


276,087



105,065



100,539



100,122



76,541Selected Statement of Income
    Data:Interest income

$
108,777


$
77,280


$
66,160


$
76,213


$
88,548Interest expense


61,383



38,255



28,123



33,487



40,510Net interest income


47,394



39,025



38,037



42,726



48,038Provision for loan losses


2,500



3,500



975



20,975



51,852Noninterest income


11,811



9,583



10,527



14,592



15,123Gain on sale of branches










739



48,264



Insurance proceeds






5,114











Prepayment penalty  FHLB
    advances














2,532



Loss on sale of loans










2,293







Management separation costs


265



15,467











Noninterest expense


49,520



45,153



45,644



55,398



42,669Income (loss) before income
    taxes(benefit)


6,920



(10,398
)


391



26,677



(31,360
)Income tax expense (benefit)


1,923



(4,612
)


(796
)


9,178



(12,959
)Net income (loss)


4,997



(5,786
)


1,187



17,499



(18,401
)Preferred stock dividends






305



446



219



Effect of early conversion of
    preferred stock






2,006











Net income (loss) applicable to
    common stockholders

$
4,997


$
(8,097
)

$
741


$
17,280


$
(18,401
)Per Share Data:Net income (loss)  basic

$
0.21


$
(0.42
)

$
0.04


$
0.99


$
(1.09
) diluted(1)

$
0.21


$
(0.42
)

$
0.04


$
0.95


$
(1.09
)Weighted average shares
    outstanding  basic


23,409



19,154



17,583



17,492



16,829Weighted average shares
    outstanding  diluted(1)


24,034



19,154



17,815



18,137



16,829Book value at period end

$
7.97


$
5.21


$
5.31


$
5.31


$
4.35Tangible book value per share

$
4.31


$
4.61


$
4.62


$
4.59


$
3.59Preferred shares outstanding at
    period end










62



62



Common shares outstanding at period
    end


34,652



20,172



17,750



17,695



17,605Performance Ratios and Other
    Data:Return on average assets


0.30
%


(0.41
)%


0.09
%


1.29
%


(1.36
)%Return on average
    stockholders equity


3.55



(5.68
)


1.18



19.08



(19.89
)Net interest margin(2)(3)


3.17



3.14



3.31



3.50



3.93Net interest spread(3)(4)


2.93



3.00



3.20



3.35



3.70Noninterest income to average
    assets(5)


0.66



0.77



0.82



1.03



.99Noninterest expense to average
    assets(6)


2.87



3.14



3.52



4.07



3.15Efficiency ratio(7)


82.13



87.99



91.72



100.09



67.85Average loan to average deposit
    ratio


93.12



88.82



92.16



100.69



105.35Average interest-earning assets to
    average interest bearing liabilities


106.01



104.58



104.88



105.82



107.04Assets Quality Ratios:Allowance for loan losses to
    nonperforming loans


219.88
%


252.76
%


169.36
%


78.59
%


105.00
%Allowance for loan losses to loans,
    net of unearned income


1.15



1.25



1.34



2.94



2.44Nonperforming assets
    (NPAs) to loans plus NPAs, net of
    unearned income


0.63



0.68



1.32



4.41



2.53Nonaccrual loans to loans, net of
    unearned income


0.47



0.47



0.68



3.46



2.17Net loan charge-offs to average
    loans


0.20



0.43



1.52



2.21



3.35Net loan charge-offs as a
    percentage of:Provision for loan losses


92.64



115.20



1,395.49



111.87



72.69Allowance for loan losses


12.26



33.57



108.47



93.21



135.74Capital Ratios:Tier 1 risk-based capital ratio


9.39
%


10.15
%


10.05
%


12.60
%


6.51
%Total risk-based capital ratio


10.40



11.08



11.51



14.07



8.83Leverage ratio


7.43



8.30



7.98



9.72



3.70     (1)-
    Common stock equivalents of 775,000 and 1,002,000 shares
    were not included in computing diluted earnings per share for
    the years ended December 31, 2004 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-earning assets less rate on average
    interest-bearing liabilities.(5)-
    Noninterest income has been adjusted for certain nonrecurring
    items such as gain on sale of branches, insurance proceeds,
    change in fair value of derivatives and investment security
    gains (losses).(6)-
    Noninterest expense has been adjusted for certain nonrecurring
    items such as loss on sale of assets and management separation
    costs.(7)-
    Efficiency ratio is calculated by dividing noninterest expense,
    adjusted for management separation costs, losses on other real
    estate and the loss on sale of assets, by noninterest income,
    adjusted for gain on sale of branches, insurance proceeds,
    changes in fair values of derivatives and investment security
    gains (losses), plus net interest income on a fully taxable
    equivalent basis. 17




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation.  General
    Overview
  st
             18




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Critical
    Accounting Estimates
    Allowance
    for Loan Losses
    Income
    Taxes
      Accounting for Uncertainty in Income Taxes. Accounting for
    Income Taxes.
  Acquisitions
   19




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##### Table of Contents



Recent
    Developments
    Results
    of Operations
  Year
    Ended December 31, 2006, Compared with Year Ended
    December 31, 2005
         20




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##### Table of Contents



available-for-sale
 21




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##### Table of Contents



22




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##### Table of Contents



Year
    Ended December 31, 2005, Compared with Year Ended
    December 31, 2004
               23




---



##### Table of Contents



available-for-sale
          Net
    Interest Income
   24




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##### Table of Contents



Average Balances, Income, Expenses and
    Rates.
  Year Ended December 31,2006


2005


2004Interest


Average





Interest


Average





Interest


AverageAverage


Earned/


Yield/


Average


Earned/


Yield/


Average


Earned/


Yield/Balance


Paid


Rate


Balance


Paid


Rate


Balance


Paid


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

$
1,176,844


$
92,659



7.87
%

$
947,212


$
63,895



6.75
%

$
894,406


$
56,184



6.28
%Investment securities:Taxable


276,640



12,994



4.70



255,663



11,632



4.55



203,996



8,897



4.36Tax-exempt(2)


10,093



589



5.84



6,932



373



5.38



3,868



217



5.61Total investment securities


286,733



13,583



4.74



262,595



12,005



4.57



207,864



9,114



4.38Federal funds sold


11,102



570



5.13



14,757



460



3.12



15,454



202



1.31Other investments


24,618



2,165



8.79



22,266



1,047



4.70



32,637



734



2.25Total interest-earning assets


1,499,297



108,977



7.27



1,246,830



77,407



6.21



1,150,361



66,234



5.76Noninterest-earning assets:Cash and due from banks


32,730











28,227











26,238Premises and equipment


64,378











56,897











58,535Accrued interest and other assets


100,514











83,743











81,970Allowance for loan losses


(13,594
)










(12,504
)










(20,530
)Total assets

$
1,683,325










$
1,403,193










$
1,296,574LIABILITIES AND
    STOCKHOLDERS EQUITYInterest-bearing liabilities:Demand deposits

$
359,262


$
11,857



3.30
%

$
339,842


$
7,144



2.10
%

$
262,346


$
3,225



1.23
%Savings deposits


27,968



177



0.63



25,935



40



0.15



29,383



48



0.16Time deposits


764,787



34,477



4.51



607,141



20,731



3.41



590,070



15,915



2.70Other borrowings


228,631



11,603



5.07



187,297



7,493



4.00



183,052



6,356



3.47Subordinated debentures


33,642



3,269



9.72



31,959



2,847



8.91



31,959



2,579



8.07Total interest-bearing liabilities


1,414,290



61,383



4.34



1,192,174



38,255



3.21



1,096,810



28,123



2.56Noninterest-bearing liabilities:Demand deposits


111,757











93,564











88,695Accrued interest and other
    liabilities


16,451











15,651











10,154Total liabilities


1,542,498











1,301,389











1,195,659Stockholders equity


140,827











101,804











100,915Total liabilities and
    stockholders equity

$
1,683,325










$
1,403,193










$
1,296,574Net interest income/net interest
    spread






47,594



2.93
%






39,152



3.00
%






38,111



3.20
%Net yield on earning assets










3.17
%










3.14
%










3.31
%Taxable equivalent adjustment:Investment securities(2)






200











127











74Net interest income





$
47,394










$
39,025










$
38,037     (1)
    
    Nonaccrual loans are included in loans, net of unearned income.
    No adjustment has been made for these loans in the calculation
    of yields.(2)
    
    Interest income and yields are presented on a fully taxable
    equivalent basis using a tax rate of 34 percent. 25




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##### Table of Contents



Analysis of Changes in Net Interest
    Income.
  Year Ended December 31,(1)2006 vs. 2005


2005 vs. 2004Increase


Changes Due to


Increase


Changes Due to(Decrease)


Rate


Volume


(Decrease)


Rate


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

$
28,764


$
11,688


$
17,076


$
7,711


$
4,311


$
3,400Interest on securities:Taxable


1,362



390



972



2,735



401



2,334Tax-exempt


216



33



183



156



(10
)


166Interest on federal funds


110



244



(134
)


258



268



(10
)Interest on other investments


1,118



997



121



313



604



(291
)Total interest income


31,570



13,352



18,218



11,173



5,574



5,599Expense from interest-bearing
    liabilities:Interest on demand deposits


4,713



4,285



428



3,919



2,764



1,155Interest on savings deposits


137



134



3



(8
)


(3
)


(5
)Interest on time deposits


13,746



7,616



6,130



4,816



4,339



477Interest on other borrowings


4,110



2,252



1,858



1,137



987



150Interest on subordinated debentures


422



267



155



268



268



Total interest expense


23,128



14,554



8,574



10,132



8,355



1,777Net interest income

$
8,442


$
(1,202
)

$
9,644


$
1,041


$
(2,781
)

$
3,822     (1)
    
    The changes in net interest income due to both rate and volume
    have been allocated to rate and volume changes in proportion to
    the relationship of the absolute dollar amounts of the changes
    in each.  Market
    Risk  Interest Rate Sensitivity
       26




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##### Table of Contents



ChangeChange (in Basis Points) in Interest Rates

EVE


Amount


Percent(Dollars in thousands)+ 200 BP

$
404,377


$
14,626



3.8
%0 BP


389,751







 200 BP


355,976



(33,775
)


(8.7
)        27




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##### Table of Contents



Interest
    Rate Swaps
    Fair
    Value Hedges
    Interest
    Rate Floors
    Liquidity
    loan-to-deposit
 28




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##### Table of Contents



Payments Due by PeriodLess than


One to


Four to


After FiveTotal


One Year


Three Years


Five Years


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

$
187,840


$
42,000


$
82,500


$
5,000


$
58,340Operating leases(2)


6,357



1,971



2,255



1,352



779Capitalized leases(2)


8,590



367



734



734



6,755Notes payable(3)


5,545



4,460



420



420



245Repurchase agreements(4)


23,415



23,415











Junior subordinated debentures
    owed to unconsolidated trusts(5)


42,269















42,269Deferred compensation agreements(6)


14,201



361



1,142



818



11,880Employment separation agreements(7)


729



62



147



44



476Other employment related contract
    obligations incurred in business combinations(8)


3,509



2,098



1,305



106



Benefit Restoration Plan(9)


2,387



161



524



510



1,192Total Contractual Cash Obligations

$
294,842


$
74,895


$
89,027


$
8,984


$
121,936     (1)
    
    See Note 7 to the Consolidated Financial Statements.(2)
    
    See Note 6 to the Consolidated Financial Statements.(3)
    
    See Note 9 to the Consolidated Financial Statements.(4)
    
    See Note 8 to the Consolidated Financial Statements(5)
    
    See Note 10 to the Consolidated Financial Statements. 29




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##### Table of Contents



(6)
    
    See Note 12 to the Consolidated Financial Statements.(7)
    
    See Note 28 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)

$
361,525


$
239,411


$
88,976


$
4,068


$
29,070Standby letters of credit(1)


23,630



23,034



596







Total Commercial Commitments

$
385,155


$
262,445


$
89,572


$
4,068


$
29,070     (1)
    
    See Note 16 to the Consolidated Financial Statements.      30-day
  Financial
    Condition
    Kensington
    Acquisition
       30




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##### Table of Contents



Amount(Dollars in thousands)Cash and due from banks

$
4,454Federal funds sold


964Investment securities


180,151Loans, net


136,414Premises and equipment, net


5,397Goodwill


44,922Core deposit intangibles


3,544Other assets


5,042Deposits


(276,186
)Repurchase agreements


(30,050
)Other liabilities


(3,280
)Total consideration paid for
    Kensington

$
71,372   Community
    Acquisition
       31




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##### Table of Contents



Amount(Dollars in thousands)Cash and due from banks

$
23,167Federal funds sold


35,273Investment securities


117,424Loans, net


337,148Premises and equipment, net


24,225Goodwill


59,079Core deposit intangibles


10,142Other assets


19,328Deposits


(431,334
)FHLB advances


(68,801
)Junior subordinated debentures


(12,047
)Other liabilities


(16,404
)Total consideration paid for
    Community

$
97,200   Loans, net of unearned income.
    Distribution
    of Loans by Category
  December 31,2006


2005


2004


2003


2002(Dollars in thousands)Commercial and industrial

$
172,872


$
135,454


$
134,688


$
142,072


$
213,210Real estate 
    construction and land development


547,772



326,418



249,715



147,917



212,818Real estate  mortgagesSingle-family


456,341



243,183



250,758



231,064



272,899Commercial


362,542



210,611



242,884



250,032



340,998Other


46,895



27,503



25,764



31,645



14,581Consumer


54,462



21,122



32,009



46,201



79,398Other(1)


438



498



567



8,923



5,931Total loans


1,641,322



964,789



936,385



857,854



1,139,835Unearned income


(1,794
)


(1,536
)


(1,517
)


(913
)


(1,298
)Allowance for loan losses


(18,892
)


(12,011
)


(12,543
)


(25,174
)


(27,766
)Net loans

$
1,620,636


$
951,242


$
922,325


$
831,767


$
1,110,771     (1)
    
    Certain reclassifications were made to the 2004 amounts to
    conform to the 2005 presentation. This information was not
    available for periods prior to 2004. 32




---



##### Table of Contents



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








Maturing Over One YearOne Year


through Five


Over Five





Predetermined


Floating oror Less


Years


Years


Total


Interest Rate


Adjustable Rate(Dollars in thousands)Commercial and industrial

$
114,864


$
52,594


$
5,414


$
172,872


$
35,239


$
22,769Real estate 
    construction and land development


412,756



117,874



17,142



547,772



30,661



104,355Real estate  mortgagesSingle-family


30,092



75,789



350,460



456,341



138,216



288,033Commercial


66,341



139,983



156,218



362,542



106,816



189,385Other


11,716



14,553



20,626



46,895



13,539



21,640Consumer


15,000



37,442



2,021



54,463



37,974



1,489Other


346



92







438



92



Total loans

$
651,115


$
438,327


$
551,881


$
1,641,323


$
362,537


$
627,671Percent to total loans


39.7
%


26.7
%


33.6
%


100.0
%


22.1
%


38.2
%   Allowance for Loan Losses.
       33




---



##### Table of Contents



Allocation
    of the Allowance for Loan Losses
  December 31,2006


2005


2004


2003


2002Percent





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

$
3,719



10.5
%

$
3,805



14.0
%

$
3,736



14.1
%

$
10,110



16.6
%

$
10,056



18.7
%Real estate 
    construction and land development


3,425



33.4



1,275



33.8



1,009



26.6



1,099



17.2



1,317



18.7Real estate   
    mortgagesSingle-family


2,910



27.8



1,395



25.2



1,582



26.8



4,538



26.9



3,636



23.9Commercial


6,206



22.0



4,194



21.8



4,594



25.9



7,613



29.1



10,174



29.9Other


530



2.9



215



2.9



257



2.7



320



3.7



396



1.3Consumer


2,102



3.4



1,127



2.2



1,336



3.0



1,374



5.4



2,075



6.9Other














.1



29



.9



120



1.1



112



.6$
18,892



100.0
%

$
12,011



100.0
%

$
12,543



100.0
%

$
25,174



100.0
%

$
27,766



100.0
%      34




---



##### Table of Contents



Summary
    of Loan Loss Experience
  Year2006


2005


2004


2003


2002(Dollars in thousands)Allowance for loan losses at
    beginning of year

$
12,011


$
12,543


$
25,174


$
27,766


$
12,546Allowance of acquired bank
    (branches sold)


6,697











(102
)


1,059Charge-offs:Commercial and industrial


1,450



2,097



7,690



10,823



25,162Real estate 
    construction and land development


378



358



765



630



1,704Real estate  mortgagesSingle-family


625



795



1,012



1,505



2,608Commercial


416



1,432



5,820



6,696



6,140Other


15



85



86



1,187



141Consumer


860



630



1,881



3,092



2,343Other


2



345



87



517



Total charge-offs


3,746



5,742



17,341



24,450



38,098Recoveries:Commercial and industrial


465



413



1,468



554



93Real estate 
    construction and land development


126



37



4



23



14Real estate  mortgagesSingle-family


102



335



470



23



23Commercial


363



526



737



49



Other


73



118



97



48



38Consumer


301



280



549



282



239Other






1



410



6



Total recoveries


1,430



1,710



3,735



985



407Net charge-offs


2,316



4,032



13,606



23,465



37,691Provision for loan losses


2,500



3,500



975



20,975



51,852Allowance for loan losses at end
    of year

$
18,892


$
12,011


$
12,543


$
25,174


$
27,766Loans at end of period, net of
    unearned income

$
1,639,528


$
963,253


$
934,868


$
856,941


$
1,138,537Average loans, net of unearned
    income


1,176,844



947,212



894,406



1,063,451



1,124,977Ratio of ending allowance to
    ending loans


1.15
%


1.25
%


1.34
%


2.94
%


2.44
%Ratio of net charge-offs to
    average loans


0.20



0.43



1.52



2.21



3.35Net charge-offs as a percentage of:Provision for loan losses


92.64



115.20



1,395.49



111.87



72.69Allowance for loan losses


12.26



33.57



108.47



93.21



135.74Allowance for loan losses as a
    percentage of nonperforming loans


219.88



252.76



169.36



78.59



105.00   Nonperforming Assets.
 35




---



##### Table of Contents



Nonperforming
    Assets
  December 31,2006


2005


2004


2003


2002(Dollars in thousands)Nonaccrual

$
7,773


$
4,550


$
6,344


$
29,630


$
24,715Accruing loans 90 days or
    more delinquent


514



49



431



1,438



1,729Restructured


305



153



631



966



Total nonperforming loans


8,592



4,752



7,406



32,034



26,444Other real estate owned


1,684



1,842



4,906



5,806



2,360Repossessed assets


137







103



219



102Total nonperforming assets

$
10,413


$
6,594


$
12,415


$
38,059


$
28,906Nonperforming loans as a
    percentage of loans


.52
%


.49
%


.79
%


3.74
%


2.32
%Nonperforming assets as a
    percentage of loans plus nonperforming assets


.63
%


.68
%


1.32
%


4.41
%


2.53
%Nonperforming assets as a
    percentage of total assets


.43
%


.47
%


.87
%


3.25
%


2.05
%     December 31,2006


2005


2004


2003


2002(Dollars in thousands)Commercial and industrial

$
704


$
988


$
2,445


$
11,621


$
9,661Real estate 
    construction and land development


2,067



469



187



1,735



2,226Real estate  mortgagesSingle-family


2,805



2,448



2,060



5,472



3,672Commercial


1,765



675



2,273



12,378



8,434Other


688



11



183



162



888Consumer


559



161



250



465



1,548Other


4







8



201



15Total nonperforming loans

$
8,592


$
4,752


$
7,406


$
32,034


$
26,444     Impaired Loans.
 36




---



##### Table of Contents



December 31, 2006


December 31, 2005Outstanding


Specific


Outstanding


SpecificBalance


Allowance


Balance


Allowance(Dollars in thousands)Commercial and industrial

$
911


$
405


$
1,794


$
871Real estate 
    construction and land development


1,959



311



73



26Real estate  mortgagesSingle-family


616



92



169



25Commercial


2,381



656



1,437



498Other


1,019



343



10



5Total

$
6,886


$
1,807


$
3,483


$
1,425   Potential Problem Loans.
  Investment Securities.
    Investment
    Portfolio
  December 31,Available for Sale2006


2005


2004(Dollars in thousands)U.S. Treasury and agencies

$
113,259


$
99,365


$
180,717State and political subdivisions


12,977



8,729



7,195Mortgage-backed securities


185,814



93,689



61,241Corporate debt


38,883



38,064



34,176Other securities


6,675



7,028



6,802Total investment securities

$
357,608


$
246,875


$
290,131  37




---



##### Table of Contents



Maturity
    Distribution of Investment Securities
  MaturingAfter One But


After Five ButWithin One


Within Five


Within Ten


AfterYear


Years


Years


Ten Years


TotalAmount


Yield


Amount


Yield


Amount


Yield


Amount


Yield


Amount


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

$
3,077



5.54
%

$
50,863



4.25
%

$
49,439



5.88
%

$
9,880



6.93
%

$
113,259



5.23
%State and political subdivision


280



2.60



815



3.13



3,090



4.07



8,792



4.42



12,977



4.21Mortgage-backed securities


762



5.25



41,113



4.46



10,986



4.66



132,953



5.34



185,814



5.10Other securities










7,729



5.35











37,829



7.13



45,558



6.83Total

$
4,119



5.29
%

$
100,520



4.41
%

$
63,515



5.58
%

$
189,454



5.73
%

$
357,608



5.33
%   Tax lien certificates.
  Short-term liquid assets.
  Deposits.
     38




---



##### Table of Contents



Average
    Deposits
  Average for the Year2006


2005


2004Average





Average





AverageAmount


Average


Amount


Average


Amount


AverageOutstanding


Rate Paid


Outstanding


Rate Paid


Outstanding


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

$
111,757




%

$
93,564




%

$
88,695




%Interest-bearing demand deposits


359,262



3.30



339,842



2.10



262,346



1.23Savings deposits


27,968



.63



25,935



.15



29,383



.16Time deposits


764,787



4.51



607,141



3.41



590,070



2.70Total average deposits

$
1,263,774



3.68
%

$
1,066,482



2.62
%

$
970,494



1.98
%   loan-to-deposit
  Maturities
    of Time Deposits of $100,000 or More
  At December 31, 2006Under


3-6


6-12


Over3 Months


Months


Months


12 Months


Total(Dollars in thousands)$
151,883


$
153,214


$
151,537


$
77,066


$
533,700     Borrowed Funds. loan-to-deposit
 39




---



##### Table of Contents



2006


2005Weighted





WeightedYear

Average Rate


Balance


Average Rate


Balance(Dollars in thousands)2006



%

$




4.40
%

$
85,2502007


5.37



42,000







2008


5.38



55,500



5.74



5,5002009


5.39



27,000



2.32



27,0002010


6.41



5,000



6.41



5,0002015


5.39



26,340



4.45



26,3402020


4.28



32,000



4.28



32,000Total


5.22
%

$
187,840



4.17
%

$
181,090       30-day
      Junior subordinated debentures.
 40




---



##### Table of Contents



Consolidation of Variable Interest Entities
      December 31,2006


200510.6% junior subordinated
    debentures owed to TBC Capital Statutory Trust II due
    September 7, 2030

$
15,464,000


$
15,464,0006-month
    LIBOR plus 3.75% junior subordinated debentures owed to TBC
    Capital Statutory Trust III due July 25, 2031


16,495,000



16,495,00010.875% junior subordinated
    debentures owed to Community (AL) Capital Trust I due
    March 8, 2030


10,310,000



Purchase accounting
    adjustment  Community (AL) Capital Trust I


1,737,000



Total junior subordinated
    debentures owed to unconsolidated subsidiary trusts

$
44,006,000


$
31,959,000     Stockholders Equity.
    Share-Based Payment Accounting for
    Stock-Based Compensation
   41




---



##### Table of Contents



Superior Bancorp ESOP.
    Superior
    Bancorp
  December 31,2006Allocated shares


82,028Estimated shares committed to be
    released


26,700Unreleased shares


164,672Total ESOP shares


273,400Fair value of unreleased shares

$
3,100,000   Community Bancshares ESOP. No. 93-6 (SOP 93-6),
 42




---



##### Table of Contents



SOP 93-6
      December 31,2006Allocated shares


380,011Estimated shares committed to be
    released


14,066Unreleased shares


66,659Total ESOP shares


460,736Fair value of unreleased shares

$
5,224,746   Regulatory Capital.
     43




---



##### Table of Contents



To Be WellFor Capital

Capitalized UnderAdequacy

Prompt CorrectiveActual

Purposes

ActionAmount

Ratio

Amount

Ratio

Amount

RatioAs of December 31,
    2006Tier 1 Core Capital (to
    Adjusted Total Assets)Corporation

$
170,513



7.43
%

$
91,768



4.00
%

$
114,710



5.00
%Superior Bank


174,084



7.64



91,090



4.00



113,863



5.00Total Capital (to Risk Weighted
    Assets)Corporation


188,688



10.40



145,198



8.00



181,498



10.00Superior Bank


192,259



10.69



143,843



8.00



179,803



10.00Tier 1 Capital (to Risk
    Weighted Assets)Corporation


170,513



9.39



N/A



N/A



108,899



6.00Superior Bank


174,084



9.68



N/A



N/A



107,882



6.00Tangible Capital (to Adjusted
    Total Assets)Superior Bank


174,084



7.64



34,159



1.50



N/A



N/A   Impact of
    Inflation
    Forward-Looking
    Statements
  Form 10-K,
     44




---



##### 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.
 45




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
    CONSOLIDATED FINANCIAL STATEMENTS
    Years ended December 31, 2006, 2005 and 2004
    CONTENTS
  Report of Independent Registered
    Public Accounting Firm as of December 31, 2006 and 2005 and
    for each of the three years in the period ended
    December 31, 2006

47Consolidated Statements of
    Financial Condition

48Consolidated Statements of
    Operations

49Consolidated Statements of Changes
    in Stockholders Equity

50Consolidated Statements of Cash
    Flows

51Notes to Consolidated Financial
    Statements

52  46




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             Internal Control  Integrated Framework
      47




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF FINANCIAL CONDITION  December 31,2006


2005(In Thousands)ASSETSCash and due from banks

$
49,783


$
35,088Interest-bearing deposits in other
    banks


10,994



9,772Federal funds sold


25,185



Investment securities available for
    sale


354,716



242,306Tax lien certificates


16,313



289Mortgage loans held for sale


24,433



21,355Loans


1,641,322



964,789Unearned income


(1,794
)


(1,536
)Loans, net of unearned income


1,639,528



963,253Allowance for loan losses


(18,892
)


(12,011
)Net loans


1,620,636



951,242Premises and equipment, net


94,626



56,017Accrued interest receivable


14,387



7,081Stock in FHLB and Federal Reserve
    Bank


12,382



10,966Cash surrender value of life
    insurance


40,598



39,169Goodwill and intangible assets


129,520



12,090Other assets


47,417



30,094Total assets

$
2,440,990


$
1,415,469LIABILITIES AND
    STOCKHOLDERS EQUITYDeposits:Noninterest-bearing demand

$
191,323


$
92,342Interest-bearing demand


552,887



349,271Savings


42,717



21,705Time deposits $100,000 and over


533,700



344,736Other time deposits


550,214



235,642Total deposits


1,870,841



1,043,696Advances from FHLB


187,840



181,090Federal funds borrowed and security
    repurchase agreements


23,415



33,406Notes payable


5,545



3,755Junior subordinated debentures owed
    to unconsolidated subsidiary trusts


44,006



31,959Capital lease obligation


3,798



Accrued expenses and other
    liabilities


29,458



16,498Total liabilities


2,164,903



1,310,404Commitments and contingencies
    (Note 16)Stockholders equity:Convertible preferred stock, par
    value $.001 per share; shares authorized 5,000,000;
    0 shares issued and outstanding in 2006 and in 2005






Common stock, par value
    $.001 per share; shares authorized 50,000,000; shares
    issued 34,732,345 in 2006 and 20,221,456 in 2005; outstanding
    34,651,669 in 2006 and 19,980,261 in 2005


35



20Surplus  preferred






 common
    stock


253,815



87,979Retained earnings


26,491



21,494Accumulated other comprehensive loss


(1,452
)


(2,544
)Treasury stock, at cost 
    80,676 and 49,823 shares, respectively


(716
)


(341
)Unearned ESOP stock


(2,086
)


(1,543
)Total stockholders equity


276,087



105,065Total liabilities and
    stockholders equity

$
2,440,990


$
1,415,469    48




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF OPERATIONS  Year Ended December 31,2006


2005


2004(In Thousands, Except Per Share Data)Interest income:Interest and fees on loans

$
92,659


$
63,895


$
56,184Interest on taxable securities


12,994



11,632



8,897Interest on tax exempt securities


389



246



143Interest on federal funds sold


570



460



202Interest and dividends on other
    investments


2,165



1,047



734Total interest income


108,777



77,280



66,160Interest expense:Interest on deposits


46,511



27,915



19,188Interest expense on advances from
    FHLB and other borrowed funds


11,603



7,493



6,356Interest on subordinated debentures


3,269



2,847



2,579Total interest expense


61,383



38,255



28,123Net interest income


47,394



39,025



38,037Provision for loan losses


2,500



3,500



975Net interest income after
    provision for loan losses


44,894



35,525



37,062Noninterest income:Service charges and fees


4,915



4,687



5,204Mortgage banking income


2,997



2,558



1,664Investment securities losses






(948
)


(74
)Change in fair value of derivatives


374



(325
)


Gain on sale of branches










739Increase in cash surrender value
    of life insurance


1,580



1,544



1,643Insurance proceeds






5,114



Other


1,945



2,067



2,090Total noninterest income


11,811



14,697



11,266Noninterest expenses:Salaries and employee benefits


26,805



23,104



23,481Occupancy and equipment


7,754



7,680



8,047Management separation costs


265



15,467



Merger costs


635







Loss on sale of loans










2,293Subsidiary startup costs


135







Other


14,191



14,369



14,116Total noninterest expenses


49,785



60,620



47,937Income (loss) before income taxes


6,920



(10,398
)


391Income tax expense (benefit)


1,923



(4,612
)


(796
)Net income (loss)


4,997



(5,786
)


1,187Preferred stock dividends






305



446Preferred stock conversion






2,006



Net income (loss) applicable to
    common stockholders

$
4,997


$
(8,097
)

$
741Weighted average common shares
    outstanding


23,409



19,154



17,583Weighted average common shares
    outstanding, assuming dilution


24,034



19,154



17,815Basic net income (loss) per common
    share

$
0.21


$
(.42
)

$
0.04Diluted net income (loss) per
    common share


0.21



(.42
)


0.04    49




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY  AccumulatedOther





Unearned


Unearned


TotalCommon


Surplus


Retained


Comprehensive


Treasury


ESOP


Restricted


StockholdersStock


Common


Preferred


Earnings


Loss


Stock


Stock


Stock


Equity(In Thousands, Except Share Data)Balance at January 1, 2004

$
18


$
68,363


$
6,193


$
28,851


$
(180
)

$
(501
)

$
(1,974
)

$
(648
)

$
100,122Comprehensive income:Net income














1,187



















1,187Other comprehensive loss, net of
    tax benefit of $609, unrealized loss on securities available for
    sale, arising during the period, net of reclassification
    adjustment


















(914
)














(914
)Comprehensive income


































273Issuance of 20,821 shares of
    treasury stock






43















111











154Preferred dividends declared














(446
)


















(446
)Stock options exercised






49







(1
)


















48Amortization of unearned restricted
    stock






























199



199Release of 26,700 shares by
    ESOP






(27
)


















216







189Balance at December 31, 2004


18



68,428



6,193



29,591



(1,094
)


(390
)


(1,758
)


(449
)


100,539Comprehensive income:Net loss














(5,786
)


















(5,786
)Other comprehensive loss, net of
    tax benefit of $984, unrealized loss on securities available for
    sale, arising during the period, net of reclassification
    adjustment


















(1,473
)














(1,473
)Change in accumulated gain on cash
    flow hedging instrument, net of tax expense of $16


















23















23Comprehensive loss


































(7,236
)Issuance of 925,636 shares to
    new executive management and others in a private placement


1



7,328



























7,329Issuance of 8,191 shares of
    treasury stock






34















49











83Issuance of 49,375 shares of
    restricted stock






403























(122
)


281Preferred dividends declared














(305
)


















(305
)Preferred stock
    conversion  775,000 shares


1



8,198



(6,193
)


(2,006
)


















Stock options exercised 
    474,684 shares






3,727



























3,727Forfeiture of unearned restricted
    stock






(204
)






















204



Amortization of unearned restricted
    stock






























367



367Release of 26,700 shares by
    ESOP






65



















215







280Balance at December 31, 2005


20



87,979







21,494



(2,544
)


(341
)


(1,543
)






105,065Comprehensive income:Net income














4,997



















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


















831















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


















(23
)














(23
)Change in pension liability net of
    tax effect


















284















284Comprehensive income


































6,089Issuance of 4,873 shares of
    treasury stock






20















32











52Issuance of 6,226,722 shares
    for Kensington purchase


6



70,965



























70,971Issuance of 56,170 shares
    related to board compensation






569



























569Issuance of 8,072,179 shares
    for Community


8



93,045















(407
)


(759
)






91,887Stock options exercised 155,818


1



991



























992Compensation expense related to
    stock options






159



























159Release of 26,700 shares by
    ESOP






87



















216







303Balance at December 31, 2006

$
35


$
253,815


$



$
26,491


$
(1,452
)

$
(716
)

$
(2,086
)

$



$
276,087    50




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended December 31,2006


2005


2004(In Thousands)Operating activitiesNet income (loss)

$
4,997


$
(5,786
)

$
1,187Adjustments to reconcile net
    income(loss) to net cash provided by (used in) operations:Depreciation


3,245



3,275



3,374Net premium amortization on
    securities


298



531



653Loss on sale of investment
    securities






948



74Loss on foreclosed assets


181



818



969Loss on sale of loans










2,293Provision for loan losses


2,500



3,500



975Increase in accrued interest
    receivable


(750
)


(844
)


(1,199
)Deferred income tax expense
    (benefit)


1,923



(3,168
)


1,634Gain on sale of assets/branches


(254
)






(739
)Net increase in mortgage loans held
    for sale


(1,993
)


(13,260
)


(1,687
)Other operating activities, net


(3,781
)


4,202



(708
)Net cash provided by (used in)
    operating activities


6,366



(9,784
)


6,826Investing activitiesDecrease in interest bearing
    deposits in other banks


1,222



1,639



458Decrease (increase) in federal
    funds sold


11,052



11,000



(11,000
)Proceeds from sales of investment
    securities available for sale


215,717



57,372



84,485Proceeds from maturities of
    investment securities available for sale


39,233



40,642



65,560Purchase of investment securities
    available for sale


(72,319
)


(56,233
)


(306,400
)Proceeds from sale of loans










23,883Net increase in loans


(200,837
)


(34,225
)


(126,059
)Net cash received (paid) in
    business combinations


18,642







(6,626
)Purchase of tax lien certificates


(16,024
)


(273
)


Purchase of premises and equipment


(13,813
)


(2,665
)


(6,457
)Proceeds from sale of premises and
    equipment


1,835



3,343



497Proceeds from sale of foreclosed
    assets


1,722



4,155



7,689Purchase of life insurance










(5,000
)Other investing activities, net


2,087



1,247



(3,788
)Net cash (used in) provided by
    investing activities


(11,483
)


26,002



(282,758
)Financing activitiesNet increase in demand and savings
    deposits


59,375



50,236



59,338Net increase (decrease) in time
    deposits


60,766



(73,747
)


126,134(Decrease) increase in FHLB advances


(62,051
)


25,000



35,000Proceeds from note payable


2,000







2,250Principal payment on note payable


(210
)


(210
)


(210
)Net (decrease) increase in other
    borrowed funds


(41,060
)


(16,050
)


45,627Proceeds from issuance of common
    stock


992



10,457



49Cash dividends paid






(305
)


(446
)Net cash provided by (used in)
    financing activities


19,812



(4,619
)


267,742Increase (decrease) in cash and due
    from banks


14,695



11,599



(8,190
)Cash and due from banks at
    beginning of year


35,088



23,489



31,679Cash and due from banks at end of
    year

$
49,783


$
35,088


$
23,489Supplemental disclosures of cash
    flow informationCash paid (received) during the
    year for:Interest

$
56,831


$
37,790


$
27,322Income taxes


(1,706
)


(3,066
)


(2,708
)Transfer of foreclosed assets


935



1,804



7,637Assets acquired in business
    combinations


1,006,674







Liabilities assumed in business
    combinations


838,102







    51




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 December 31,
    2006
  1.
    Summary
    of Significant Accounting Policies    Basis of
    Presentation and Principles of Consolidation
      Use of
    Estimates
    Cash and
    Cash Equivalents
      Investment
    Securities
         52




---



##### 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
      Accounting for
    Creditors for Impairment of a Loan,
     53




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)       Acquired
    Loans
  03-3, Accounting for Certain Loans or Debt Securities Acquired in a
    Transfer (SOP 03-3).
    Mortgage
    Loans Held for Sale
    Premises
    and Equipment
       54




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)   Goodwill
    and Intangible Assets
  Goodwill and Other Intangible Assets
    December 31,2006


2005(In Thousands)Alabama Region

$
60,077


$
5,751Florida Region


54,445



4,585Total

$
114,522


$
10,336         2006


2005(In Thousands)Core deposit intangible

$
16,545


$
2,859Accumulated amortization


(1,547
)


(1,105
)Net core deposit intangible

$
14,998


$
1,754     Year

Annual Expense(In Thousands)2007

$
1,2182008


2,1912009


2,2482010


2,0022011


1,798Total

$
9,457   Other
    Real Estate
   55




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Security
    Repurchase Agreements
    Income
    Taxes
  Accounting for Income Taxes.
  Off-Balance
    Sheet Financial Instruments
    Per Share
    Amounts
      Stock-Based
    Compensation
  Share-Based Payment Accounting for Stock-Based
    Compensation,
 56




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)   Pension
    Plan
    Derivative
    Financial Instruments and Hedging Activities
  Accounting for Derivative Instruments
    and Hedging Activities
           57




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Recent
    Accounting Pronouncements
  Statement
    of Financial Accounting Standards No. 155
  Accounting for Certain Hybrid Financial Instruments Accounting for
    Transfers and Servicing of Financial Assets and Extinguishments
    of Liabilities  a replacement of FASB Statement
    No. 125,
  Statement
    of Financial Accounting Standards No. 156
  Accounting for Servicing of Financial Assets available-for-sale
  FASB
    Interpretation No. 48
  Accounting for Uncertainty in Income
    Taxes. Accounting for Income Taxes.
 58




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)   Emerging
    Issues Task Force Issue
    No. 06-05
  No. 06-05, Bulletin No. 85-4. Bulletin No. 85-4, No. 06-05 No. 06-05
  Staff
    Accounting Bulletin No. 108
  Quantifying Financial Misstatements,
  Statement
    of Financial Accounting Standards No. 158
  Employers Accounting for Defined Benefit Pension and
    Other Postretirement Plans  an amendment of FASB
    Statements No. 87, 88, 106 and 132(R)
 59




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   1.
    Summary
    of Significant Accounting
    Policies  (Continued)    Statement
    of Financial Accounting Standards No. 157
  Fair
    Value Measurements.
  Emerging
    Issues Task Force Issue
    No. 06-04
  No. 06-04, Employers Accounting for
    Postretirement Benefits Other Than Pensions. No. 06-04.
  Note 2 
    Business Combinations
  Kensington
    Acquisition
       60




---



##### Table of Contents



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

$
4,454Federal funds sold


964Investment securities


180,151Loans, net


136,414Premises and equipment, net


5,397Goodwill


44,922Core deposit intangibles


3,544Other assets


5,042Deposits


(276,186
)Repurchase agreements


(30,050
)Other liabilities


(3,280
)Total consideration paid for
    Kensington

$
71,372   Community
    Acquisition
       61




---



##### Table of Contents



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

$
23,167Federal funds sold


35,273Investment securities


117,424Loans, net


337,148Premises and equipment, net


24,225Goodwill


59,079Core deposit intangibles


10,142Other assets


19,328Deposits


(431,334
)FHLB advances


(68,801
)Junior subordinated debentures


(12,047
)Other liabilities


(16,404
)Total consideration paid for
    Community

$
97,200   Pro Forma
    Results of Operations
    2006


2005(Dollars in thousands,except per share data)Net interest income and
    noninterest income

$
84,483


$
88,109Net income


5,913



163Net income (loss) available to
    common shareholders


5,913



(2,148
)Earnings per common
    share  basic

$
0.17


$
(0.06
)Earnings per common
    share  diluted

$
0.17


$
(0.06
)   62




---



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

$
113,259


$
150


$
1,557


$
111,852State, county and municipal
    securities


12,977



54



89



12,942Mortgage-backed securities


185,814



361



1,722



184,453Corporate debt


38,883



103



334



38,652Other securities


6,675



223



81



6,817Total

$
357,608


$
891


$
3,783


$
354,716     Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


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

$
99,365


$



$
1,892


$
97,473State, county and municipal
    securities


8,729



28



111



8,646Mortgage-backed securities


93,689



10



1,937



91,762Corporate debt


38,064



75



411



37,728Other securities


6,739







42



6,697Total

$
246,586


$
113


$
4,393


$
242,306       December 31, 2006Less Than 12 Months


More than 12 Months


TotalUnrealized





Unrealized





UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In Thousands)U.S. agency securities

$



$



$
83,347


$
1,557


$
83,347


$
1,557State, county and municipal
    securities


1,727



17



3,825



72



5,552



89Mortgage-backed securities


16,223



76



78,000



1,646



94,223



1,722Corporate debt and other securities


3,920



80



8,572



335



12,492



415Total

$
21,870


$
173


$
173,744


$
3,610


$
195,614


$
3,783   other-than-temporary
 63




---



##### Table of Contents



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


EstimatedCost


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

$
3,357


$
3,358Due after one year through five
    years


59,407



58,009Due after five years through ten
    years


52,529



52,202Due after ten years


56,501



56,694Mortgage-backed securities


185,814



184,453$
357,608


$
354,716       Pre-Tax


Income Tax


Net ofAmount


Expense


Income Tax(In Thousands)2006Unrealized loss on derivatives

$
(39
)

$
(16
)

$
(23
)Unrealized gain on available for
    sale securities


1,387



556



831Less reclassification adjustment
    for losses realized in net income










Change in pension liability


451



167



284Net unrealized gain

$
1,799


$
707


$
1,0922005Unrealized gain on derivative

$
39


$
16


$
23Unrealized loss on available for
    sale securities


(3,405
)


(1,335
)


(2,070
)Less reclassification adjustment
    for losses realized in net income


(948
)


(351
)


(597
)Net unrealized loss

$
(2,418
)

$
(968
)

$
(1,450
)2004Unrealized loss on available for
    sale securities

$
(1,597
)

$
(636
)

$
(961
)Less reclassification adjustment
    for losses realized in net income


(74
)


(27
)


(47
)Net unrealized loss

$
(1,523
)

$
(609
)

$
(914
)   64




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  4.
    Loans    2006


2005(In Thousands)Commercial and industrial

$
172,872


$
135,454Real estate 
    construction and land development


547,772



326,418Real estate  mortgagesSingle family


456,341



243,183Commercial


362,542



210,611Other


46,895



27,503Consumer


54,462



21,122All other loans


438



498Total loans

$
1,641,322


$
964,789       SOP 03-3
  At


December 31,Acquisition


2006(In Thousands)Contractually required principal
    and interest

$
1,696


$
1,590Nonaccretable difference (expected
    losses and forgone interest)


(1,231
)


(1,156
)Cash flows expected to be collected


465



434Accretable yield


(190
)


(174
)Basis in acquired loans

$
275


$
260Accretable yield, at acquisition





$
190Accretion






(9
)Disposals






(7
)Accretable yield,
    December 31, 2006





$
174   SOP 03-3 SOP 03-3,
   65




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   4.
    Loans  (Continued)    5.
    Allowance
    for Loan Losses    2006


2005


2004(In Thousands)Balance at beginning of year

$
12,011


$
12,543


$
25,174Allowance of acquired banks


6,697







Provision for loan losses


2,500



3,500



975Loan charge-offs


(3,746
)


(5,742
)


(17,341
)Recoveries


1,430



1,710



3,735Balance at end of year

$
18,892


$
12,011


$
12,543    6.
    Premises
    and Equipment    2006


2005(In Thousands)Land

$
17,432


$
7,202Premises


74,836



53,003Furniture and equipment


17,737



12,818110,005



73,023Less accumulated depreciation and
    amortization


(20,311
)


(17,235
)Net book value of premises and
    equipment in service


89,694



55,788Construction in process (also
    includes land for branch expansion)


4,932



229Total

$
94,626


$
56,017           2006Buildings

$
2,450Accumulated depreciation


(21
)Total

$
2,429  66




---



##### Table of Contents



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

Operating


Capitalized(In Thousands)2007

$
1,971


$
3672008


1,236



3672009


1,019



3672010


751



3672011


601



3672012 and thereafter


779



6,755Total minimum lease payments

$
6,357


$
8,590Amount representing interest






(4,792
)Present value of net minimum lease
    payments





$
3,798     Year ending December 31,

Property


Equipment


Total(In Thousands)2007

$
1,716


$
255


$
1,9712008


1,097



139



1,2362009


946



73



1,0192010


741



10



7512011


601







6012012 and thereafter


779







779Total minimum lease payments

$
5,880


$
477


$
6,357         Years ending December 31,2007

$
2,692Amount representing interest


(144
)Present value of net minimum lease
    payments

$
2,548  67




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6.
    Deposits    Year Ended December 312006


2005


2004(In Thousands)Interest-bearing demand

$
11,857


$
7,144


$
3,225Savings


177



40



48Time deposits $100,000 and over


11,170



7,111



8,876Other time deposits


23,307



13,620



7,039Total

$
46,511


$
27,915


$
19,188     2007

$
954,1572008


43,7412009


27,3092010


16,9922011


11,6152012 and thereafter


30,100$
1,083,914    7.
    Advances
    from Federal Home Loan Bank    2006


2005Weighted





WeightedYear

Average Rate


Balance


Average Rate


Balance(Dollars in Thousands)2006



%

$




4.40
%

$
85,2502007


5.37



42,000







2008


5.38



55,500



5.74



5,5002009


5.39



27,000



2.32



27,0002010


6.41



5,000



6.41



5,0002015


5.39



26,340



4.45



26,3402020


4.28



32,000



4.28



32,000Total


5.22
%

$
187,840



4.17
%

$
181,090        68




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   8.
    Federal
    Funds Borrowed and Security Repurchase Agreements    2006


2005Balance at December 31:Federal funds borrowed

$



$
3,000Security repurchase agreements


23,415



30,406Maximum outstanding at any month
    end:Federal funds borrowed


9,000



11,000Security repurchase agreements


31,464



49,521Daily average amount outstanding:Federal funds borrowed


1,811



488Security repurchase agreements


30,629



35,064Weighted daily average interest
    rate:Federal funds borrowed


5.47
%


4.18
%Security repurchase agreements


4.51



3.02Weighted daily interest rate for
    amounts outstanding at December 31:Federal funds borrowed



%


4.40
%Security repurchase agreements


4.63



4.12     9.
    Notes Payable    2006


2005Balance at December 31:

Principal


Rate


Principal


RateNote payable to bank,
    borrowed under $10,000,000 line of credit, due June 7,
    2007, plus interest payable monthly at 30 day LIBOR plus
    2.50%, secured by real estate owned by the Corporation and 100%
    of Superior Bank stock

$
4,250



7.85
%

$
2,250



6.89
%ESOP Note Payable to bank,
    due February 1, 2013, plus interest payable monthly at the
    Wall Street Journal prime rate, secured by Corporation
    stock; see discussion in Note 11


1,295



8.25



1,505



7.25Total notes payable

$
5,545






$
3,755   30-day
 69




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  9.
    Notes Payable 
    (Continued)     2007

$
4,4602008


2102009


2102010


2102011


210Thereafter


245Total

$
5,545    10.
    Junior
    Subordinated Debentures Owed to Unconsolidated Subsidiary
    Trusts        December 31,2006


200510.6% junior subordinated
    debentures owed to TBC Capital Statutory Trust II due
    September 7, 2030

$
15,464,000


$
15,464,0006-month
    LIBOR plus 3.75% junior subordinated debentures owed to TBC
    Capital Statutory Trust III due July 25, 2031


16,495,000



16,495,00010.875% junior subordinated
    debentures owed to Community Capital Trust I due
    March 8, 2030


10,310,000



Purchase accounting
    adjustment  Community Capital Trust I


1,737,000



Total junior subordinated
    debentures owed to unconsolidated subsidiary trusts

$
44,006,000


$
31,959,000      70




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  10.
    Junior
    Subordinated Debentures Owed to Unconsolidated Subsidiary
    Trusts  (Continued)    11.
    Stock
    Incentive Plans  Share-Based Payment
        Risk-free interest rate


4.54
%Volatility factor


30.16
%Expected term (in years)


5.00Dividend yield


0.00
%  71




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Stock
    Incentive Plans  (Continued)    Weighted-Weighted-


AverageAverage


RemainingExercise


Contractual


AggregateNumber


Price


Term


Intrinsic ValueUnder option, beginning of period


3,031,946


$
7.81Granted


186,500



10.84Exercised


(155,818
)


6.37Forfeited


(20,031
)


7.06Under option, end of period


3,042,597


$
8.07



7.39


$
9,940,257Exercisable at end of period


2,861,097


$
7.90



6.82


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

$
3.79       December 31,2005


2004Weighted-





Weighted-Average





AverageExercise





ExerciseNumber


Price


Number


PriceUnder option, beginning of year


1,654,509


$
6.63



1,196,509


$
6.76Granted


1,914,437



8.53



506,000



6.28Exercised


(474,684
)


6.59



(13,600
)


6.44Forfeited


(62,316
)


7.73



(34,400
)


6.83Under option, end of year


3,031,946



7.81



1,654,509



6.63Exercisable at end of year


3,031,946







1,378,809Weighted-average fair value per
    option of options granted during the year

$
4.91






$
3.16    72




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Stock
    Incentive Plans  (Continued)      December 31,2005


2004Net (loss) income applicable to
    common stockholders:As reported

$
(8,097
)

$
741Pro forma


(14,217
)


(567
)Basic net (loss) income per common
    share:As reported

$
(.42
)

$
.04Pro forma


(.74
)


(.03
)Diluted net (loss) income per
    common share:As reported


(.42
)


.04Pro forma


(.74
)


(.03
)     2005


2004Risk free interest rate


4.34
%


4.56
%Volatility factory


43
%


32
%Weighted average life of options
    (in years)


7.00



7.00Dividend yield


0.00
%


0.00
%    73




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Stock
    Incentive Plans  (Continued)    Employee
    Stock Ownership Plans
    Wall Street Journal
  December 31,2006


2005


2004Allocated shares


82,028



55,328



28,628Estimated shares committed to be
    released


26,700



26,700



26,700Unreleased shares


164,672



191,372



218,072Total ESOP shares


273,400



273,400



273,400Fair value of unreleased shares

$
3,100,000


$
2,184,000


$
1,795,000   No. 93-6 (SOP 93-6),
 74




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Stock
    Incentive Plans  (Continued)  SOP 93-6
      December 31,2006Allocated shares


380,011Estimated shares committed to be
    released


14,066Unreleased shares


66,659Total ESOP shares


460,736Fair value of unreleased shares

$
5,224,746    12.
    Profit-Sharing
    Plan and Other Agreements      75




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  13.
    Income
    Taxes    2006


2005


2004Current:Federal

$



$
(1,439
)

$
(2,350
)State






(5
)


(80
)Total current expense (benefit)






(1,444
)


(2,430
)Deferred:Federal


1,555



(2,096
)


1,381State


368



(1,072
)


253Deferred income tax expense
    (benefit)


1,923



(3,168
)


1,634Total income tax expense (benefit)

$
1,923


$
(4,612
)

$
(796
)     2006


2005Deferred income tax assets:Rehabilitation tax credit

$
6,144


$
6,324Allowance for loan losses


6,978



4,444Deferred compensation


4,076



2,858Net operating loss carryforwards


13,147



972Alternative minimum tax credit
    carryover


1,034



646Purchase accounting basis
    differences


2,936



Unrealized loss on securities


1,157



1,696Other


2,085



1,711Total deferred income tax assets


37,557



18,651Less: valuation allowance on net
    operating loss carryforwards


(1,207
)


Deferred income tax liabilities:Difference in book and tax basis
    of premises and equipment


5,060



3,046Excess purchase price and
    intangibles


5,784



Other


107



766Total deferred income tax
    liabilities


10,951



3,812Net deferred income tax asset

$
25,399


$
14,839   Accounting for Income Taxes
   76




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   13.
    Income
    Taxes  (Continued)     2006


2005


2004Expected tax expense (benefit) at
    statutory rate of income (loss) before taxes

$
2,353


$
(3,535
)

$
133Add (deduct):Rehabilitation tax credit










(725
)State income taxes, net of federal
    tax benefit


243



(711
)


114Effect of interest income exempt
    from Federal income taxes


(251
)


(191
)


(178
)Basis reduction










247Increase in cash surrender value
    of life insurance


(537
)


(493
)


(559
)Amortization


97



97



97Travel and entertainment


34



28



85Other items  net


(16
)


193



(10
)Income tax expense (benefit)

$
1,923


$
(4,612
)

$
(796
)Federal statutory rate


34
%


34
%


34
%     Year of expiration:

Federal


Alabama


Florida2009

$



$
16,387


$
2010






12,806



2011






6,521



2023


6,690







2024


13,040







2,5382026


5,955







2027


6,175







$
31,860


$
35,714


$
2,538     Year of expiration:2018

$
1,7342019


7382020


1,2612021


5222022


3662023


9602024


564$
6,145      77




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   13.
    Income
    Taxes  (Continued)        14.
    Derivatives    Interest
    Rate Swaps
  Fair Value Hedges ).
  Fair
    Value Hedges
  Interest Rate Swaps
 78




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14.
    Derivatives  (Continued)   Interest
    Rate Floors
  3-year 3-month
  Commitments
    to Originate Mortgage Loans
  Amendment to Statement 133 on Derivatives Instruments
    and Hedging Activities
  15.
    Related
    Party Transactions    Balance











BalanceDecember 31,








Other


December 31,2005


Advances


Repayments


Changes


2006$
6,805


$
4,285


$
973


$
947


$
11,064         16.
    Commitments
    and Contingencies   79




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   16.
    Commitments
    and Contingencies  (Continued)    December 312006


2005Commitments to extend credit

$
361,523


$
215,951Standby letters of credit


23,630



23,591         17.
    Branch
    Sales    18.
    Regulatory
    Restrictions         80




---



##### Table of Contents



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


CapitalizedAdequacy


Under PromptActual


Purposes


Corrective ActionAmount


Ratio


Amount


Ratio


Amount


RatioAs of December 31,
    2006Tier 1 Core Capital (to
    Adjusted Total Assets) Corporation

$
170,513



7.43
%

$
91,768



4.00
%

$
114,710



5.00
%Superior Bank


174,084



7.64



91,090



4.00



113,863



5.00Total Capital (to Risk Weighted
    Assets) Corporation


188,688



10.40



145,198



8.00



181,498



10.00Superior Bank


192,259



10.69



143,843



8.00



179,803



10.00Tier 1 Capital (to Risk
    Weighted Assets) Corporation


170,513



9.39



N/A



N/A



108,899



6.00Superior Bank


174,084



9.68



N/A



N/A



107,882



6.00Tangible Capital (to Adjusted
    Total Assets) Superior Bank


174,084



7.64



34,159



1.50



N/A



N/AAs of December 31,
    2005Tier 1 Core Capital (to
    Adjusted Total Assets) Corporation

$
115,852



8.30
%

$
55,810



4.00
%

$
69,763



5.00
%Superior Bank


110,929



8.02



55,332



4.00



69,165



5.00Total Capital (to Risk Weighted
    Assets) Corporation


126,444



11.08



91,295



8.00



114,119



10.00Superior Bank


121,521



10.76



90,347



8.00



112,934



10.00Tier 1 Capital (to Risk
    Weighted Assets) Corporation


115,852



10.15



N/A



N/A



68,471



6.00Superior Bank


110,929



9.82



N/A



N/A



67,760



6.00Tangible Capital (to Adjusted
    Total Assets) Superior Bank


110,929



8.02



20,749



1.50



N/A



N/A    19.
    Fair
    Values of Financial Instruments    Cash and short-term instruments.
  Investment securities available for sale.
  Tax lien certificates.
 81




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    Fair
    Values of Financial
    Instruments  (Continued)  Mortgage loans held for sale.
  Net loans.
  Accrued interest receivable.
  Deposits.
  Advances from FHLB.
  Federal funds borrowed and security repurchase
    agreements.
  Notes payable.
  Subordinated debentures.
  Interest rate swaps.
  Limitations.
 82




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   19.
    Fair
    Values of Financial
    Instruments  (Continued)     December 31, 2006


December 31, 2005Carrying


Fair


CarryingAmount


Value


Amount


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

$
49,783


$
49,783


$
35,088


$
35,088Interest-bearing deposits in other
    banks


10,994



10,994



9,772



9,772Federal funds sold


25,185



25,185







Securities available for sale


354,716



354,716



242,306



242,306Tax lien certificates


16,313



16,313



289



289Mortgage loans held for sale


24,433



24,433



21,355



21,355Net loans


1,639,528



1,634,782



951,242



949,177Stock in FHLB and Federal Reserve
    Bank


12,382



12,382



10,966



10,966Accrued interest receivable


14,387



14,387



7,081



7,081Financial liabilities:Deposits


1,870,841



1,868,121



1,043,696



1,041,177Advances from FHLB


187,840



189,628



181,090



184,188Federal funds borrowed and
    security repurchase agreements


23,415



23,415



33,406



33,286Notes payable


5,545



5,545



3,755



3,755Junior subordinated debentures
    owed to unconsolidated subsidiary trusts


44,006



47,481



31,959



33,980Interest rate swaps


798



798



953



953    Note 20 
    Pension Plan
       83




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 20 
    Pension Plan  (Continued)
     Pension
    Plan:
  December 31, 2006(In thousands)Change in benefit
    obligationBenefit obligation as of
    November 7, 2006

$
10,540Interest cost


97Benefits paid (including expenses)


(73
)Actuarial (gain)/ loss


(263
)Benefit obligation at end of year

$
10,301Change in plan assetsFair value of plan assets as of
    November 7, 2006

$
9,915Actual return on plan assets


254Benefits paid (including expenses)


(73
)Fair value of plan assets at end
    of year

$
10,096Funded status at end of
    yearNet amount recognized in statement
    of financial condition (after SFAS 158)

$
(205
)Amounts Recognized in the
    Statement of Financial Condition consist of:Assets

$
Liabilities


(205
)Net amount recognized in statement
    of financial condition (after SFAS 158)

$
(205
)Amounts not yet reflected in
    net periodic benefit cost and included in accumulated other
    comprehensive income:Transition (obligation) cost

$
Prior service (cost) credit


Net (loss) gain


404Accumulated other comprehensive
    (loss) income (AOCI)


404Cumulative employer contributions
    in excess of net periodic benefit cost


(609
)Net amount recognized in statement
    of financial condition

$
(205
)Change in Accumulated other
    comprehensive income due to application
    of SFAS 158Additional minimum liability
    (before SFAS 158)

$
Intangible assets offset (before
    SFAS 158)


AOCI (before SFAS 158)


Net increase (decrease) in AOCI
    due to SFAS 158


404Additional year-end information
    for pension plans with accumulated
    benefit obligations in excess of plan assets:Projected benefit obligation

$
10,301Accumulated benefit obligation

$
10,301Fair value of plan assets

$
10,096 84




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 20 
    Pension Plan  (Continued)December 31, 2006(In thousands)Weighted-average assumptions
    used to determine net periodic
    benefit obligationsProjected benefit obligation


5.84
%Rate of compensation increase


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

$
Expected employer contribution for
    next fiscal year

$
Expected benefit
    paymentsYear ending December 31, 2007

$
490,616Year ending December 31, 2008


531,713Year ending December 31, 2009


536,653Year ending December 31, 2010


550,656Year ending December 31, 2011


574,716Next five years


3,264,616Components of Pension Plan net
    periodic benefit cost:Components of net periodic
    benefit cost
    (11/7/06 
    12/31/06)Interest cost


97Expected return on plan assets


(113
)Net periodic benefit cost

$
(16
)Weighted-average assumptions
    used to determine net periodic
    benefit costDiscount rate


5.65
%Expected long-term return on plan
    assets


7.00
%Rate of compensation increase

$
N/A       Percentage ofPension PlanAssets atDecember 31,


Long-term2006


target


RangeAsset Category:Cash and equivalents


3.0
%


5.0
%


1-15
%Equity securities


63.0



60.0



50-65Debt securities


34.0



35.0



30-50Total


100.0
%


100.0
%      85




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 20 
    Pension Plan  (Continued)
     Benefit
    Restoration Plan:
  December 31, 2006(In thousands)Change in benefit
    obligationBenefit obligation as of
    November 7, 2006

$
2,802Interest cost


26Benefits paid (including expenses)


(10
)Actuarial (gain)/ loss


(47
)Benefit obligation at end of year

$
2,771Change in plan assetsFair value of plan assets as of
    November 7, 2006

$
Actual return on plan assets


Employer contribution


10Benefits paid (including expenses)


(10
)Fair value of plan assets at end
    of year

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

$
(2,771
)Amounts Recognized in the
    Statement of Financial Condition consist of:Assets

$
Current liabilities


(161
)Noncurrent liabilities


(2,610
)Net amount recognized in statement
    of financial position (after SFAS 158)

$
(2,771
)Amounts not yet reflected in
    net periodic benefit cost and included in accumulated other
    comprehensive income:Transition (obligation) cost

$
Prior service (cost) credit


Net (loss) gain


47Accumulated other comprehensive
    income (loss) (AOCI)


47Cumulative employer contributions
    in excess of net periodic benefit cost


(2,818
)Net amount recognized in statement
    of financial condition

$
(2,771
)Change in Accumulated other
    comprehensive income due to application
    of SFAS 158Additional minimum liability
    (before SFAS 158)

$
Intangible assets offset (before
    SFAS 158)


AOCI (before SFAS 158)


Net increase (decrease) in AOCI
    due to SFAS 158


47 86




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 20 
    Pension Plan  (Continued)December 31, 2006(In thousands)Additional year-end information
    for pension plans with accumulated
    benefit obligations in excess of plan assets:Projected benefit obligation

$
2,771Accumulated benefit obligation

$
2,771Fair value of plan assets

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


5.84
%Rate of compensation increase


N/AComponents of Benefit Restoration
    Plan net periodic benefit cost:Components of net periodic
    benefit cost
    (11/7/06 
    12/31/06)Interest cost


26Net periodic benefit cost

$
26Weighted-average assumptions
    used to determine net periodic benefit costDiscount rate


5.65
%Expected long-term return on plan
    assets


N/ARate of compensation increase


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

$
Expected employer contribution for
    next fiscal year


161,443Expected benefit
    paymentsYear ending December 31, 2007

$
161,443Year ending December 31, 2008


263,641Year ending December 31, 2009


260,501Year ending December 31, 2010


256,974Year ending December 31, 2011


253,069Next five years


1,191,436    21.
    Other
    Noninterest Expense    Year Ended December 31,2006


2005


2004Professional fees

$
2,593


$
2,745


$
3,344Directors fees


345



380



191Insurance and assessments


1,898



2,344



2,410Postage, stationery and supplies


1,251



997



1,013Advertising


1,348



857



657Foreclosure losses


210



796



967Other operating expense


6,546



6,250



5,534Total

$
14,191


$
14,369


$
14,116   87




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  22.
    Concentrations
    of Credit Risk      23.
    Net
    Income (Loss) Per Common Share    2006


2005


2004Numerator:Net income (loss)

$
4,997


$
(5,786
)

$
1,187Less preferred dividends






(305
)


(446
)Less conversion of preferred stock






(2,006
)


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

$
4,997


$
(8,097
)

$
741Denominator:For basic, weighted average common
    shares outstanding


23,409



19,154



17,583Effect of dilutive stock options


625







232Average common shares outstanding,
    assuming dilution


24,034



19,154



17,815Basic net income (loss) per common
    share

$
0.21


$
(.42
)

$
.04Diluted net income (loss) per
    common share

$
0.21


$
(.42
)

$
.04      88




---



##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   24.
    Parent
    Company    December 31,2006


2005Statements of financial
    conditionAssets:Cash

$
1,318


$
2,070Investment in subsidiaries


308,061



127,361Intangibles, net


214



214Premises and equipment 
    net


6,713



7,763Other assets


19,220



8,964$
335,526


$
146,372Liabilities:Accrued expenses and other
    liabilities

$
9,888


$
5,593Notes payable


5,545



3,755Subordinated debentures


44,006



31,959Stockholders equity


276,087



105,065$
335,526


$
146,372   Year Ended December 31,2006


2005


2004Statements of
    operationsIncome:Dividends from subsidiaries

$
1,750


$
2,585


$
2,576Interest


100



15



13Other income


431



852



3,3972,281



3,452



5,986Expense:Directors fees


276



270



74Salaries and benefits


708



10,831



3,219Occupancy expense


512



897



615Interest expense


3,566



3,142



2,653Other


886



2,257



9375,948



17,397



7,498Loss before income taxes and
    equity in undistributed earnings of subsidiaries


(3,667
)


(13,945
)


(1,512
)Income tax benefit


1,409



6,445



1,822(Loss) income before equity in
    undistributed earnings of subsidiaries


(2,258
)


(7,500
)


310Equity in undistributed earnings
    of subsidiaries


7,255



1,714



877Net income (loss)

$
4,997


$
(5,786
)

$
1,187 89




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  24.  Parent
    Company  (Continued)Year Ended December 31,2006


2005


2004Statements of cash
    flowsOperating activitiesNet income (loss)

$
4,997


$
(5,786
)

$
1,187Adjustments to reconcile net
    income (loss) to net cash used by operating activities:Amortization and depreciation
    expense


245



257



213Equity in undistributed earnings
    of subsidiaries


(7,255
)


(1,714
)


(877
)Other increase (decrease)


1,392



(868
)


(2,276
)Net cash used by operating
    activities


(621
)


(8,111
)


(1,753
)Investing activitiesProceeds from sale of premises and
    equipment


947



19



Purchases of premises and equipment


(5
)






(2,117
)Net cash paid in business
    combinations


(3,855
)






Net cash used in investing
    activities


(2,913
)


19



(2,117
)Financing activitiesProceeds from issuance of common
    stock


992



10,542



203Proceeds from note payable


2,000







2,250Principal payment on note payable


(210
)


(210
)


(210
)Cash dividends paid






(305
)


(447
)Net cash provided by financing
    activities


2,782



10,027



1,796Net (decrease) increase in cash


(752
)


1,935



(2,074
)Cash at beginning of year


2,070



135



2,209Cash at end of year

$
1,318


$
2,070


$
135   90




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##### 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


Quarter2006Total interest income

$
21,649


$
23,608


$
27,458


$
36,062Total interest expense


11,645



13,195



16,543



20,000Net interest income


10,004



10,413



10,915



16,062Provision for loan losses


600



700



550



650Securities (losses) gains














Changes in fair value of
    derivatives


70



(33
)


6



331Income before income taxes


1,100



1,880



979



2,961Net income


850



1,274



813



2,060Basic net income per common share


0.04



0.06



0.04



0.07Diluted net income per common share


0.04



0.06



0.04



0.062005Total interest income

$
18,186


$
18,957


$
19,479


$
20,658Total interest expense


8,579



9,108



10,005



10,563Net interest income


9,607



9,849



9,474



10,095Provision for loan losses


750



1,500



500



750Securities (losses) gains


(909
)


(68
)






29Changes in fair value of
    derivatives


(230
)


933



(863
)


(165
)(Loss) income before income taxes


(13,218
)


1,560



(127
)


1,387Net (loss) income


(8,161
)


1,148



137



1,090Basic net (loss) income per common
    share


(.44
)


(.06
)


.01



.06Diluted net (loss) income per
    common share


(.44
)


(.06
)


.01



.05   26.
    Segment
    Reporting     91




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##### Table of Contents



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


FloridaRegion


Region


Combined(In Thousands)2006Net interest income

$
31,736


$
15,658


$
47,394Provision for loan losses


280



2,220



2,500Noninterest income


10,723



1,088



11,811Noninterest expense(2)


43,000



6,785



49,785Income tax (benefit) expense


(1,307
)


3,230



1,923Net (loss) income


(1,734
)


6,731



4,997Total assets


1,897,611



543,379



2,440,9902005Net interest income

$
27,272


$
11,753


$
39,025Provision for loan losses


3,455



45



3,500Noninterest income(1)


13,426



1,271



14,697Noninterest expense(2)(3)


56,462



4,158



60,620Income tax (benefit) expense


(7,144
)


2,532



(4,612
)Net (loss) income


(12,075
)


6,289



(5,786
)Total assets


1,112,700



302,769



1,415,4692004Net interest income

$
27,362


$
10,675


$
38,037Provision for loan losses


3,223



(2,248
)


975Noninterest income


9,922



1,344



11,266Noninterest expense(2)


40,876



7,061



47,937Income tax expense (benefit)


(3,739
)


2,943



(796
)Net income (loss)


(3,076
)


4,263



1,187Total assets


1,160,747



262,381



1,423,128     (1)
    
    Alabama Region includes proceeds from insurance settlement of
    $5,114,000.(2)
    
    Noninterest expense for the Alabama Region includes all expenses
    for the holding company and other administrative expenses, which
    have not been prorated to the Florida region.(3)
    
    Alabama Region includes management separation costs of
    $15,467,000.  27.
    Preferred
    Stock    28.
    Management
    Separation Costs and Insurance Settlement   92




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##### Table of Contents



SUPERIOR
    BANCORP AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   28.
    Management
    Separation Costs and Insurance Settlement 
    (Continued)              29.
    Subsequent
    Event   93




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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
    13a-l5(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f)
      Report of
    Independent Registered Public Accounting Firm
      94




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##### Table of Contents



Internal Control  Integrated Framework
          Internal Control  Integrated Framework Internal Control  Integrated Framework
    
    95




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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
    and Executive Officers of the Registrant; Executive
    Compensation; Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters; Certain
    Relationships and Related Transactions; and Principal Accounting
    Fees and Services.   
  PART IV
 
  Item 15.
    Exhibits,
    Financial Statement Schedules.  Financial Statements and Financial Schedules.
  (l)
    The consolidated financial statements of Superior Bancorp and
    its subsidiaries filed as a part of this Annual Report on Form
    10-K are
    listed in Item 8 of this Annual Report on Form
    10-K, which
    is hereby incorporated by reference herein.  (2)
    All schedules to the consolidated financial statements of
    Superior Bancorp and its subsidiaries have been omitted because
    they are not required under the related instructions or are
    inapplicable, or because the required information has been
    provided in the consolidated financial statements or the notes
    thereto.  Exhibits.
  Regulation S-K Form 10-K
  (3)-l

Restated Certificate of
    Incorporation of Superior Bancorp, filed as Exhibit 3 to
    Superior Bancorps Current Report on
    Form 8-K
    dated May 18, 2006, 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 1, 2006, is hereby incorporated herein by
    reference.(4)-1

Amended and Restated Declaration
    of Trust, dated as of September 7, 2000, by and among State
    Street Bank and Trust Company of Connecticut, National
    Association, as Institutional Trustee, The Banc Corporation, as
    Sponsor, David R. Carter and James A. Taylor, Jr., as
    Administrators, filed as Exhibit(4)-l to The Banc
    Corporations Annual Report on Form
    10-K for the
    year ended December 3l, 2000, is hereby incorporated herein
    by reference. 96




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##### Table of Contents



(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.(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, 2004, 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 by and
    between The Banc Corporation and James A. Taylor, filed as
    Exhibit (10)-1 to The Banc Corporations Quarterly
    Report on
    Form 10-Q
    for quarter ended March 31, 2002 is hereby incorporated
    herein by reference.(10)-4

Deferred Compensation Agreement by
    and between The Banc Corporation and James A. Taylor, filed as
    Exhibit (10)-2 to The Banc Corporations Registration
    Statement on
    Form S-l
    (Registration
    No. 333-67011),
    is hereby incorporated herein by reference. 97




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##### Table of Contents



(10)-5

Form of Deferred Compensation
    Agreement by and between The Banc Corporation and the
    individuals listed on Schedule A attached thereto filed as
    Exhibit (10)-11 to The Banc Corporations Annual
    Report on Form
    10-K for the
    year ended December 31, 1999, is hereby incorporated herein
    by reference.(10)-6

Form of Deferred Compensation
    Agreement by and between Superior Bank and the individuals
    listed on Schedule A attached thereto filed as Exhibit
    (10)-11 to The Banc Corporations Annual Report on
    Form 10-K
    for the year ended December 31, 1999, is hereby
    incorporated herein by reference.(10)-7

Agreement dated as of
    June 30, 2005, by and between The Banc Corporation and
    David R. Carter, filed as
    Exhibit 10-3
    to The Banc Corporations Current Report on
    Form 10-K
    dated July 21, 2005, is hereby incorporated herein by
    reference.(10)-8

Agreement, dated as of
    June 30, 2005, by and between The Banc Corporation and F.
    Hampton McFadden, Jr., filed as
    Exhibit 10-4
    to The Banc Corporations Current Report on
    Form 8-K
    dated July 21, 2005, is hereby incorporated herein by
    reference.(10)-9

Agreement, dated January 24,
    2005, between The Banc Corporation and James A.
    Taylor, Sr., filed as
    Exhibit 10-3
    to The Banc Corporations Current Report on
    Form 8-K
    dated January 24, 2005, is hereby incorporated herein by
    reference.(10)-10

Agreement, dated January 24,
    2005, between The Banc Corporation and James A.
    Taylor, Jr., filed as
    Exhibit 10-4
    to The Banc Corporations Current Report on
    Form 8-K
    dated January 24, 2005, is hereby incorporated herein by
    reference.(10)-11

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)-12

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)-13

Employment Agreement, dated
    January 24, 2005, by and between The Banc Corporation, The
    Bank and Rick D. Gardner, filed as
    Exhibit 10-7
    to The Banc Corporations Current Report on
    Form 8-K
    dated January 24, 2005, is hereby incorporated herein by
    reference.(10)-14

Agreement and Plan of Merger
    between Kensington Bankshares, Inc. and The Banc Corporation,
    dated March 6, 2006, filed as Exhibit 10 to The Banc
    Corporations Current Report on
    Form 8-K
    dated March 6, 2006, is hereby incorporated herein by
    reference.(10)-15

Agreement and Plan of Merger
    between Community Bancshares, Inc. and The Banc Corporation,
    dated April 29, 2006, filed as Exhibit 2.01 to The
    Banc Corporations Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2006, is hereby
    incorporated herein by reference.(10)-16

Agreement and Plan of Merger
    between Peoples Community Bancshares, Inc. and Superior
    Bancorp, dated January 18, 2007, filed as Exhibit 10
    to Superior Bancorps Current Report on
    Form 8-K
    dated January 18, 2007, is hereby incorporated herein by
    reference.(10)-17

Change in Control Agreement
    between The Banc Corporation and James C. Gossett dated
    April 1, 2002.(10)-28

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.(21)

Subsidiaries of Superior Bancorp.(23)

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

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

Certifications of Chief Executive
    Officer and Principal Financial Officer pursuant to
    18 U.S.C. Section 1350.   Financial Statement Schedules.
  Form 10-K Form 10-K,
 98




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##### Table of Contents



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

Title

Date/s/  C.
    Stanley
    BaileyC.
    Stanley Bailey

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

March 16, 2007/s/  James
    C.
    GossettJames
    C. Gossett

Chief Accounting Officer
    (Principal Financial and Accounting Officer)

March 16, 2007/s/  Roger
    BarkerRoger
    Barker

Director

March 16, 2007/s/  Glynn
    C.
    DebterGlynn
    C. Debter

Director

March 16, 2007/s/  K.
    Earl
    DurdenK.
    Earl Durden

Director

March 16, 2007/s/  Rick
    D.
    GardnerRick
    D. Gardner

Director

March 16, 2007/s/  Roy
    B.
    JacksonRoy
    B. Jackson

Director

March 16, 2007/s/  Thomas
    E.
    Jernigan, Jr.Thomas
    E. Jernigan, Jr.

Director

March 16, 2007/s/  James
    Mailon
    Kent, Jr.James
    Mailon Kent, Jr.

Director

March 16, 2007 99




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##### Table of Contents



Signature

Title

Date/s/  James
    M.
    LinkJames
    M. Link

Director

March 16, 2007/s/  D.
    Dewey
    MitchellD.
    Dewey Mitchell

Director

March 16, 2007/s/  Barry
    MortonBarry
    Morton

Director

March 16, 2007/s/  Robert
    R.
    Parrish, Jr.Robert
    R. Parrish, Jr.

Director

March 16, 2007/s/  C.
    Marvin
    ScottC.
    Marvin Scott

Director

March 16, 2007/s/  Michael
    E.
    StephensMichael
    E. Stephens

Director

March 16, 2007/s/  James
    C.
    White, Sr.James
    C. White, Sr.

Director

March 16, 2007  100