Superior Bancorp Agrees To The Exchange Of $7.5 Million Trust Preferred Securities For Common Stock

BIRMINGHAM, Ala., Jan. 21 /PRNewswire-FirstCall/ -- Superior Bancorp (Nasdaq: SUPR) today announced that it had secured agreements from the holders of $7.5 million of its currently outstanding non-pooled trust preferred securities to exchange those securities for newly issued common stock.

Jim White, CFO of Superior Bancorp, said, "While Superior has always been 'well capitalized,' we believe that the uncertain economic environment in which we find ourselves warrants taking advantage of every opportunity to strengthen our common equity.  These current transactions are the third step in a logical series of steps to further improve our equity capital base.  Our goal in this process is to build a capital base at Superior that is unassailable, and puts us in the position of being able to be a leader in the recovery of the economy in both of our key markets – Florida and Alabama."

Superior expects to record a net after-tax gain of $1.8 million ( $0.15/share) upon exchange of the trust preferred securities.  The ultimate effect of the transactions will be to increase tangible common equity of the Company by approximately $6.5 million, consisting of both the increase in equity upon recording the gain, and the value of the newly issued shares.

These transactions follow a similar securities exchange completed in December 2009 in which Superior exchanged newly issued trust preferred securities for its preferred stock then held by the U.S. Treasury, and realized a $22.4 million net gain in a unique conversion that resulted in an increase in tangible book value of approximately $1.90/share.  

Also, Superior earlier received shareholder approval for an increase in authorized shares from 20 million to 200 million at a special shareholders' meeting held on November 19, 2009.  

All of these activities have been undertaken by Superior in a multi-phased program to increase its equity capital base.  At September 30, 2009, Superior Bank had capital ratios well in excess of those necessary to maintain "well capitalized" status, with a Total Risk Based Capital Ratio of 11.27%, and a Core Capital Ratio of 8.32%.