BIRMINGHAM, Ala. — Federal and state regulators have ordered Birmingham-based SouthPoint Bancshares to shore up its capital planning and show it can financially support its bank subsidiary, adding a new layer of scrutiny to a company already operating under a separate consent order.
The Federal Reserve Bank of Atlanta and Alabama State Banking Department entered a written agreement with SouthPoint Bancshares on Aug. 14. The agreement, made public Wednesday, followed an offsite review that identified deficiencies at the bank holding company.
SouthPoint Bancshares owns SouthPoint Bank, a state-chartered bank regulated by the Federal Deposit Insurance Corp. and the Alabama State Banking Department.
The agreement requires SouthPoint Bancshares to submit a plan within 60 days for maintaining adequate consolidated capital and for providing financial help to SouthPoint Bank if needed. The plan must assess the company’s capital sources and needs, analyze the bank’s capital in light of its problem loans and reserves for credit losses, and outline possible steps to raise capital or improve the bank’s financial condition.
The company also must prepare cash-flow projections for the remainder of 2026 and future years.
Effective immediately, SouthPoint Bancshares may not pay dividends, repurchase shares, make other capital distributions or take on, increase, prepay or guarantee debt without advance written approval from the Federal Reserve, the state banking department and the Federal Reserve Board’s supervision chief.
The company must submit progress reports within 45 days after each quarter ends, including a parent-company balance sheet and income statement.
The agreement does not accuse SouthPoint Bancshares of a crime or announce a penalty. It says the company, the Federal Reserve Bank of Atlanta and the Alabama State Banking Department agreed that SouthPoint should operate safely and soundly and comply with applicable laws and regulations.
The parent-company action follows a November 2025 consent order involving SouthPoint Bank itself. That order, issued by the FDIC and Alabama State Banking Department, was intended to improve the bank’s operations and financial condition, according to the new Federal Reserve agreement.
SouthPoint’s latest regulatory problems arrive after years of rapid growth. In its 2023 audited financial statements, SouthPoint Bancshares reported about $1.66 billion in assets, $1.38 billion in deposits and $103.2 million in shareholders’ equity at the end of that year. Its loan portfolio, net of reserves, totaled about $1.46 billion.
The bank’s own history is closely tied to Birmingham banking lore. SouthPoint opened in October 2005 after former SouthTrust executives, led by current Chairman, President and CEO J. Stephen Smith, formed a locally owned bank in the wake of SouthTrust’s acquisition by Wachovia. Nine of its original 14 employees came from SouthTrust, according to SouthPoint’s website.
SouthPoint now operates from its Grandview Parkway headquarters near U.S. 280 and has expanded beyond Birmingham through its 2022 purchase of Merchants Bank of Alabama in Cullman. The bank says its headquarters is powered by a 111.25-kilowatt solar installation — a distinctive feature for a lender now facing a far less routine regulatory spotlight.
The written agreement remains in effect unless regulators modify, suspend or terminate it in writing.