Federal Reserve Orders Alabama's SouthPoint Bancshares to Submit Capital Plan
The Federal Reserve and Alabama banking regulators took action against SouthPoint Bancshares, requiring it to submit a capital plan and cash flow projections within 60 days to strengthen the financial position of its subsidiary, SouthPoint Bank. The bank was previously subject to an FDIC consent order due to credit risk management issues.
SouthPoint Bancshares, headquartered in Birmingham, Alabama, must submit a capital plan and cash flow forecast to the Federal Reserve and state regulators within 60 days, and the relevant documents have been made public.
SouthPoint Bancshares is the holding company of SouthPoint Bank, a bank with $1.7 billion in assets, which has been subject to a consent order from the Federal Deposit Insurance Corporation (FDIC) since November 2025 due to issues such as credit risk management and asset quality.
The Federal Reserve and the Alabama State Banking Department jointly require the bank holding company to "take appropriate measures to fully utilize SouthPoint's financial and managerial resources as a source of financial and managerial support for the bank." Regulators stated that this may include raising additional capital for the bank or taking other measures to improve its financial condition if the bank faces financial difficulties.
The capital plan must be submitted within 60 days from August 14, and its contents must include: an assessment of current and expected capital uses and sources; a capital adequacy analysis; an action plan for raising additional capital; and a more comprehensive capital contingency plan covering both the short-term and long-term capital needs of SouthPoint and its subsidiary bank.
Regulators also require SouthPoint to submit a statement detailing its sources and planned uses of cash for debt repayment, operating expenses, and other purposes in 2026.
From now on, SouthPoint may not declare or pay dividends, repurchase shares, or make any other capital distributions without regulatory approval; it must also obtain regulatory approval before incurring, increasing, or guaranteeing any debt.
Earlier this month, SouthPoint was listed as the largest creditor in the bankruptcy case of Nick Pihakis. Pihakis operates a restaurant group in the Birmingham area and has filed for bankruptcy protection. According to the Birmingham Business Journal, Pihakis listed liabilities of approximately $44 million and assets of $10.6 million, of which approximately $23.6 million in liabilities are loans provided to him by SouthPoint.
A spokesperson for SouthPoint did not immediately respond to a request for comment.