Attached files
| file | filename |
|---|---|
| 8-K - SUPERIOR BANCORP | v205564_8k.htm |
[Letterhead
of C. Stanley Bailey]
EXHIBIT
99
December
15, 2010
Dear
Preferred Stockholder:
In the second quarter, Superior Bancorp
issued Series B Cumulative Convertible Preferred Stock (“Series B Preferred
Stock”) with a liquidation value of $11.1 million as well as five-year warrants
to purchase 792,859 shares of the Corporation’s common stock at an exercise
price of $3.50 per share. In addition, during the second quarter, the
Corporation issued Series C Cumulative Convertible Preferred Stock (the “Series
C Preferred Stock”, and, together with the Series B Preferred Stock, the
“Preferred Stock”) with a liquidation value of $0.3 million along with five-year
warrants to purchase 21,429 shares of common stock at an exercise price of $3.50
(these warrants, together with the warrants described above, the
“Warrants”). The Preferred Stock was scheduled to mandatorily convert
into common stock of Superior Bancorp on December 15, 2010 subject to certain
conditions, including without limitation the receipt of stockholder approval if
required under NASDAQ listing rules. The conversion rate of the
Preferred Stock is 83% of the 10-day volume-weighted trailing average of closing
prices of the Corporation’s common stock. Stockholder approval of the
conversion has not been obtained. As a result, the Preferred Stock
has not converted into common stock.
Under the terms of agreements entered
into with you and the other holders of the Preferred Stock, Superior is required
to file two registration statements, one by December 15, 2010 covering the shares of
common stock into which the Preferred Stock are convertible and another by
October 31, 2010 covering shares of common stock for which the Warrants are
exercisable. These registration statements have not been filed. In
addition, to the extent stockholder approval of the conversion has not been
obtained, we are required to seek this approval. As we have disclosed
in our public filings, we are engaged in negotiations with potential investors in
order to raise additional capital for the bank. Soliciting
stockholder approval and filing registration statements at this time would in
our opinion be counterproductive to those negotiations. We are
working hard to be in a position to make a public announcement about the capital
raise in the near future and we will provide you with additional information
about the preferred stock at that time. However,
no specific transaction has been agreed upon and we can give no assurance that
any transaction will be agreed upon, or that any such transaction will not be
substantially dilutive to or eliminate present equity
interests.
We thank you for your continuing
support and are available to respond to your questions.
Sincerely,
Forward
Looking Statements
This letter contains forward-looking
statements that are not historical facts and that are intended to be covered by
the safe harbor for “forward-looking statements” provided by the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements may include, but are not limited to, statements about Superior
Bancorp’s plans, objectives, expectations and intentions and other statements
contained in this letter that are not historical facts and pertain to Superior
Bancorp’s financial restructuring plans. When used in this letter,
the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates” and similar expressions are generally intended to identify
forward-looking statements. Actual results may differ materially from
the results discussed in these forward-looking statements because such
statements are inherently subject to significant assumptions, risks and
uncertainties, many of which are difficult to predict and are generally beyond
Superior Bancorp’s control. These include but are not limited to:
Superior Bancorp’s ability to complete future contemplated capital raises and
other aspects of its financial restructuring plans; Superior Bancorp’s ability
to maintain adequate liquidity and its viability as a going concern; the
possibility of continued adverse economic developments that may, among other
things, increase default and delinquency risks in Superior Bancorp’s loan
portfolios; shifts in interest rates that may result in lower interest rate
margins; shifts in the demand for Superior Bancorp’s loan and other products;
changes in accounting policies; changes in the monetary and fiscal policies of
the federal government; changes in laws, regulations and the competitive
environment; and Superior Bancorp’s ability to comply with regulatory
actions. Other factors that could cause actual conditions, events or
results to differ significantly from those described in the forward-looking
statements may be found under the headings “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” in
Superior Bancorp’s Annual Report on Form 10-K, as updated periodically in
Superior Bancorp’s filings with the Securities and Exchange Commission. Unless
legally required, Superior Bancorp disclaims any obligation to update any
forward-looking statements.