SouthPoint Ordered to Strengthen Subsidiary Bank Amid Credit Concerns

SouthPoint Bancshares, the holding company of SouthPoint Bank, has been ordered by the Federal Reserve and Alabama State Banking Department to take steps to strengthen its subsidiary bank. The regulators have asked the company to submit a capital plan and cash-flow projections within 60 days. This move comes after SouthPoint Bank was placed under a consent order by the Federal Deposit Insurance Corp. in November 2025 due to issues with credit risk management and asset quality.

The Fed, along with state officials, has ordered SouthPoint Bancshares to utilize its financial resources to support SouthPoint Bank. This could include raising additional capital for the bank or taking other steps to improve its financial condition in case of financial distress. Regulators have also asked the company to submit a statement detailing its planned sources and uses of cash for 2026.

SouthPoint was named as the largest creditor in the bankruptcy of Nick Pihakis, who owns a restaurant group in Birmingham and filed for bankruptcy protection earlier this month. Pihakis listed $44 million in liabilities against $10.6 million in assets, with about $23.6 million of those liabilities being loans made to him by SouthPoint.