Superior Bancorp in Birmingham, Ala., has taken another step in its efforts to improve its capital position.

The $3.2 billion-asset company said late Thursday it exchanged $7.5 million of privately held trust-preferred securities for common stock. The company expects to report an after-tax gain of $1.8 million from the transaction.

Jim White, Superior's chief financial officer, said in a press release: "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."

In December, Superior exchanged $69 million of preferred shares it had issued to the Treasury Department under the Troubled Asset Relief Program for the same amount of trust-preferred securities with similar terms. That deal resulted in a $22.5 million gain.

Superior was the first small bank company to make such a deal with the Treasury. The $35 billion-asset Popular Inc. in San Juan, Puerto Rico, made a similar exchange in August.

At the end of September, Superior reported a total risk-based capital ratio of 11.27% and a leverage ratio of 8.32%.

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