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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-K/A

Amendment No. 1



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

| | For the fiscal year ended December 31, 2006
| | -------------------------------------------

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

| | For the transition period from                     to
| | -----------------------------------------------------

Commission file number: 000-51273



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NEXITY FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 63-0523669                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|3500 Blue Lake Drive Suite 330 Birmingham, AL                  |  | 35243                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

(205) 298- 6391

(Registrants telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



|                                        |  |                                          
|--------------------------------------- |  | -----------------------------------------
|Title of each class                     |  | Name of each exchange on which registered
|Common Stock, $0.01 par value per share |  | The NASDAQ Stock Market LLC              

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ̈No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ̈No x

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes x No ̈

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to Form 10-K. ̈

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.



|                         |  |                     |  |                        
|------------------------ |  | ------------------- |  | -----------------------
|Large accelerated filer ̈ |  | Accelerated filer x |  | Non- accelerated filer ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act. Yes ̈No x

As of June 30, 2006, the aggregate market value of the registrants common stock held by non-affiliates of the registrant was approximately
$96.7 million based on the closing sale price as reported on the National Association of Securities Dealers Automated Quotation System National Market System National Market.

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



|                                        |  |                              
|--------------------------------------- |  | -----------------------------
|Class                                   |  | Outstanding at March 16, 2007
|Common Stock, $0.01 par value per share |  | 8,740,680 shares             

DOCUMENTS INCORPORATED BY REFERENCE



|                                                                                 |  |                              
|-------------------------------------------------------------------------------- |  | -----------------------------
|Document                                                                         |  | Parts Into Which Incorporated
|Proxy Statement for the Annual Meeting of Stockholders to be held April 19, 2007 |  | Part III                     



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EXPLANATORY NOTE

This Amendment No. 1 to the Annual Report on Form 10-K of Nexity Financial Corporation (the Corporation) is being filed solely to include the Report of Independent Registered Public Accounting Firm
from Ernst & Young LLP, which was inadvertently omitted from the Corporations Form 10-K filed on March 14, 2007.

Except as described above, no other changes have been made to the original Form 10-K, and this Form 10-K/A does not amend, update, or change the financial statements or any other items or disclosures in the original Form 10-K. This Form
10-K/A does not reflect events occurring after the filing of the Form 10-K or modify or update those disclosures, including any exhibits to the Form 10-K affected by subsequent events. Information not affected by the changes described above is
unchanged and reflects the disclosures made at the time of the original filing of the Form 10-K on March 14, 2007. Accordingly, this Form 10-K/A should be read in conjunction with our filings made with the Securities and Exchange commission
subsequent to the filing of the original Form 10-K, including any amendments to those filings.



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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of

Nexity Financial Corporation:

We have audited the accompanying consolidated balance sheet of Nexity Financial Corporation and subsidiaries as of December 31, 2005, and the related
consolidated statements of income, stockholders equity, and cash flows for each of the two years in the period ended December 31, 2005. These financial statements are the responsibility of the Companys management. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit
of the Companys internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of
Nexity Financial Corporation and subsidiaries at December 31, 2005, and the consolidated results of their operations and their cash flows for each of the two years in the period ended December 31, 2005, in conformity with U.S. generally
accepted accounting principles.

/s/ Ernst & Young LLP

Birmingham, Alabama

March 16, 2006





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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this annual
report on Form 10-K/A:

(3) Listing of Exhibits



|            |  |                                                                                                                                                                                                                                    
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                        
|3.1         |  | Certificate of Incorporation, restated, included as Exhibit 3.1 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and incorporated herein by
reference.                                                           
|            | 
|3.2         |  | Bylaws, included as Exhibit 3.2 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and incorporated herein by reference.                                                                                           
|            | 
|3.3         |  | Certificate of Amendment to the Restated Certificate of Incorporation, included as Exhibit 3.3 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and incorporated
herein by reference.                            
|            | 
|10.1        |  | Incentive Stock Compensation Plan, included as Exhibit 10.1 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and incorporated herein by
reference.+                                                              
|            | 
|10.1.1      |  | Amendment to Incentive Stock Compensation Plan, included as Exhibit 10.1.1 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and incorporated herein by
reference.+                                               
|            | 
|10.2        |  | Form of Employee Stock Option Agreement, included as Exhibit 10.2 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and incorporated herein by
reference.+                                                        
|            | 
|10.3        |  | Noncompetition, Severance, and Employment Agreement with Greg L. Lee, dated December 13, 2000, included as Exhibit 10.3 to the Registrants Amendment No. 1 on Form 10 filed
July 8, 2005, and incorporated herein by reference.+  
|            | 
|10.4        |  | Noncompetition, Severance, and Employment Agreement with David E. Long, dated December 13, 2000, included as Exhibit 10.4 to the Registrants Amendment No. 1 on Form 10 filed
July 8, 2005, and incorporated herein by reference.+
|            | 
|10.5        |  | Noncompetition, Severance, and Employment Agreement with John J. Moran, Dated December 13, 2000, included as Exhibit 10.5 to the Registrants Amendment No. 1 on Form 10 filed
July 8, 2005, and incorporated herein by reference.+
|            | 
|10.6        |  | Employment Agreement with Kenneth T. Vassey, dated November 15, 2001, included as Exhibit 10.6 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and
incorporated herein by reference.+                           
|            | 
|10.7        |  | Salary Continuation Agreement with Greg L. Lee, dated July 20, 2004, included as Exhibit 10.7 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and
incorporated herein by reference.+                            
|            | 
|10.8        |  | Salary Continuation Agreement with David E. Long, dated July 20, 2004, included as Exhibit 10.8 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and
incorporated herein by reference.+                          
|            | 
|10.9        |  | Salary Continuation Agreement with John J. Moran, dated July 20, 2004, included as Exhibit 10.9 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and
incorporated herein by reference.+                          
|            | 
|10.10       |  | Loan and Stock Pledge Agreement with Flag Bank, included as Exhibit 10.10 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and incorporated herein by
reference.                                                 
|            | 
|10.11       |  | Trust Preferred Indenture, included as Exhibit 10.11 to the Registrants Amendment No. 1 on Form 10 filed July 8, 2005, and incorporated herein by reference.                                                                      
|            | 
|14          |  | Code of Ethics, included as Exhibit 14 to the Registrants Form 10-K filed March 14, 2007, and incorporated herein by reference.                                                                                                   
|            | 
|21.1        |  | Subsidiaries of the Registrant                                                                                                                                                                                                     
|            |  | (1) Nexity Bank, a state-chartered bank in Alabama                                                                                                                                                                                 





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|     |  |                                                                                                                                                          
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  | (2) Nexity Capital Trust II, a Delaware statutory trust                                                                                                  
|     | 
|21.2 |  | Subsidiary of Nexity Bank                                                                                                                                
|     |  | (1) Nexity Financial Services, Inc., an Alabama corporation                                                                                              
|     |  | (2) Nexity Financial Services of Florida, Inc.                                                                                                           
|     |  | (3) Nexity Financial Services of New York, Inc.                                                                                                          
|     | 
|23.1 |  | Consent of Mauldin & Jenkins, LLC*                                                                                                                       
|     | 
|23.2 |  | Consent of Ernst & Young LLP*                                                                                                                            
|     | 
|31.1 |  | Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|     | 
|31.2 |  | Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|     | 
|32.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                 
|     | 
|32.2 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*                                 

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|* | Indicates filed herewith.
|- | -------------------------

|+ | Indicates management contract or compensatory plan.
|- | ---------------------------------------------------

(b)
Exhibits. The exhibits required by this Item are listed under Item 15(a)(3).

Copies of exhibits are available upon written request to
John J. Moran, Executive Vice President and Chief Financial Officer of Nexity Financial Corporation and online at the SECs website, www.sec.gov.



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this to be signed on its behalf by the undersigned, thereunto duly authorized.



|                     |  |  |  |                                           |  |     |  |                                                                   
|-------------------- |  |  |  | ----------------------------------------- |  | --- |  | ------------------------------------------------------------------
|                     |  |  |  | NEXITY FINANCIAL CORPORATION (Registrant)
|                     |  |  | 
|Dated March 16, 2007 |  |  |  |                                           |  |    
|                     |  |  |  |                                          
|                     |  |  |  |                                           |  | By: |  | /s/ John J. Moran                                                 
|                     |  |  |  |                                           |  |     |  | John J. Moran Executive Vice President and
Chief Financial Officer





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Exhibit Index



|            |  |                                                                                                                                                        
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                            
|            | 
|23.1        |  | Consent of Mauldin & Jenkins, LLC                                                                                                                      
|            | 
|23.2        |  | Consent of Ernst & Young                                                                                                                               
|            | 
|31.1        |  | Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|            | 
|31.2        |  | Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|            | 
|32.1        |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                 
|            | 
|32.2        |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                 

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