SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
As of October 1, 1994 Commission File No. 0-6032
COMPASS BANCSHARES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 63-0593897
- ------------------------ -------------------------------------
(State of Incorporation) (I.R.S. Employer Indentification No.)
15 South 20th Street
Birmingham, Alabama 35233
----------------------------------------
(Address of principal executive offices)
(205) 933-3000
-------------------------------
(Registrant's telephone number)
<PAGE>
Item 2. Acquisition or Disposition of Assets
(a) On October 1, 1994, Compass Bancshares, Inc. ("the Company") acquired
selected deposits and assets of First Heights Bank, fsb, of Houston, Texas
("First Heights"), a wholly owned subsidiary of Pulte Diversified Companies,
Inc., in a cash transaction. In the transaction, the Company assumed deposits
of approximately $874 million, acquired assets, composed primarily of loans
and fixed assets, of $68 million and received a cash payment of $806 million.
(b) In connection with the acquisition, the Company acquired 22 of 30 branches
of First Heights which the Company reopened on October 3, 1994, as branches
of Compass Bank - Houston.
Item 7. Financial Statements and Exhibits Page
----
(a) Financial statements of businesses acquired *
(b) Pro forma financial information 3
(c) Exhibits
(2) Purchase and Assumption Agreement, dated as of April 1, 1994,
among Compass Bancshares, Inc., Compass Bank - Houston, First Heights
Bank, fsb, and Pulte Diversified Companies, Inc. (incorporated by
reference to Exhibit 10(d) to the Company's Form 10-Q for the
period ended June 30, 1994, filed August 15, 1994, with the Securities
and Exchange Commission)
* Not applicable.
- 2 -
<PAGE>
<TABLE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Pro Forma Balance Sheet
As of June 30, 1994
(In Thousands)
(Unaudited)
<CAPTION>
Acquired Assets
Compass and Liabilities Pro
Bancshares of First Heights Forma
------------ ---------------- ------------
<S> <C> <C> <C>
Assets
Cash and due from banks $ 343,638 $ 855,864 (b)(c) $ 1,199,502
Federal funds sold and securities
purchased under agreements to
resell 91,579 - 91,579
Interest bearing deposits with
other banks 10,099 - 10,099
Investment securities 930,721 - 930,721
Investment securities available
for sale 781,799 - 781,799
Trading account securities 64,547 - 64,547
Loans, net of unearned income 5,311,865 48,179 5,360,044
Allowance for loan losses (110,523) (447) (110,970)
------------ ---------- ------------
Net loans 5,201,342 47,732 5,249,074
Premises and equipment, net 193,262 5,471 (a) 198,733
Other assets 152,650 14,770 167,420
------------ ---------- ------------
Total assets $ 7,769,637 $ 923,837 $ 8,693,474
============ ========== ============
Liabilities and
Shareholders' Equity
Liabilities:
Deposits:
Noninterest bearing $ 1,195,289 $ 32,580 (a) $ 1,227,869
Interest bearing 4,840,716 837,105 (a) 5,677,821
------------ ---------- ------------
Total deposits 6,036,005 869,685 6,905,690
Federal funds purchased and
securities sold under
agreements to repurchase 440,116 - 440,116
Other short-term borrowings 372,030 - 372,030
Accrued expenses and other
liabilities 26,852 4,152 31,004
FHLB and other borrowings 325,370 50,000 375,370
------------ ---------- ------------
Total liabilities 7,200,373 923,837 8,124,210
Shareholders' equity:
Common stock of $2 par value:
Authorized -- 100,000,000 shares;
Issued -- 36,947,883 shares in
1994 and 36,927,277 shares in
1993 73,896 - 73,896
Surplus 37,342 - 37,342
Loans to finance stock purchases (6,034) - (6,034)
Net unrealized holding loss on
available-for-sale securities (8,074) - (8,074)
Retained earnings 472,134 - 472,134
------------ ---------- ------------
Total shareholders' equity 569,264 - 569,264
------------ ---------- ------------
Total liabilities and
shareholders' equity $ 7,769,637 $ 923,837 $ 8,693,474
============ ========== ============
</TABLE>
(a) Represents the acquisition of 22 former branches of First Heights Bank in
Houston, Texas.
(b) The difference between assets acquired of $68 million and liabilities
assumed of $874 million was received in cash. These funds were immediately
invested in investment securities of various maturities and yields. The
Company anticipates returning the loan-to-deposit ratio of its Houston
subsidiary bank to levels maintained prior to the First Heights transaction
over a reasonable period of time while maintaining the Company's standards
of acceptable credit risk.
(c) Includes proceeds received from the issuance of $50 million of 8 3/8%
subordinated debentures by the Company in September, 1994, in connection
with the acquisition of First Heights. The debentures mature in 2004 and
qualify as Tier II capital for regulatory capital computations.
- 3 -
<PAGE>
<TABLE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Pro Forma Statement of Income
For the Year Ended December 31, 1993
(In Thousands Except Per Share Data)
(Unaudited)
<CAPTION>
As Pro
Reported** Adjustments Forma
---------- --------------- ----------
<S> <C> <C> <C>
Interest income:
Interest and fees on loans $ 414,219 $ 4,163 (a) $ 418,382
Interest and dividends on
investment securities 67,374 23,282 (b) 90,656
Interest on investment securities
available for sale 32,942 8,794 (b) 41,736
Interest on trading account
securities 9,777 - 9,777
Interest on federal funds sold
and securities purchased under
agreements to resell 2,712 18,709 (b) 21,421
Interest on interest bearing
deposits with other banks 889 - 889
---------- ------------ ----------
Total interest income 527,913 54,948 582,861
Interest expense:
Interest on deposits 161,437 37,285 (c) 198,722
Interest on federal funds purchased
and securities sold under
agreements to repurchase 19,205 - 19,205
Interest on other short-term
borrowings 6,908 - 6,908
Interest on FHLB and other
borrowings 11,350 4,220 (d) 15,570
---------- ------------ ----------
Total interest expense 198,900 41,505 240,405
---------- ------------ ----------
Net interest income 329,013 13,443 342,456
Provision for loan losses 36,306 - 36,306
---------- ------------ ----------
Net interest income after
provision for loan losses 292,707 13,443 306,150
Noninterest income:
Service charges on deposit accounts 39,020 1,844 (e) 40,864
Trust fees 16,648 - 16,648
Trading account profits and
commissions 11,351 - 11,351
Investment securities gains, net 1,036 - 1,036
Other 35,131 - 35,131
---------- ------------ ----------
Total noninterest income 103,186 1,844 105,030
Noninterest expense:
Salaries and benefits 131,085 3,361 (f) 134,446
Net occupancy expense 19,367 1,831 (f) 21,198
Equipment expense 18,219 - (f) 18,219
FDIC insurance premium 12,151 2,088 (f) 14,239
Other 76,881 1,329 (f) 78,210
---------- ------------ ----------
Total noninterest expense 257,703 8,609 266,312
---------- ------------ ----------
Net income before income tax
expense 138,190 6,678 144,868
Income tax expense 48,472 2,342 (g) 50,814
---------- ------------ ----------
Net income $ 89,718 $ 4,336 $ 94,054
========== ============ ==========
Net income per common share $ 2.37 $ 2.49
Weighted average shares outstanding 37,187 37,187
</TABLE>
** Income statement amounts for the year ended December 31, 1993, have been
restated to reflect the acquisition of Security National Bank on May 5,
1994, under the pooling-of-interests method of accounting.
(a) Weighted average yield on loans acquired of 8.64%.
(b) Yield on investment securities and investment securities available for
sale represents the actual yield on securities purchased of $462 million
of 7.41% on investment securities held to maturity and 5.93% on
investment securities available for sale. The remainder of cash received
is reflected as invested in federal funds sold.
(c) Interest expense on deposits represents historical amounts for the branches
acquired.
(d) Interest expense of 8.44% on subordinated debentures of $50 million
issued in September, 1994.
(e) Service charge income represents historical amounts earned.
(f) Actual noninterest expenses for branches acquired exclusive of corporate
allocations.
(g) Based on the Company's historical effective tax rate.
- 4 -
<PAGE>
<TABLE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Pro Forma Statement of Income
For the Six Months Ended June 30, 1994
(In Thousands Except Per Share Data)
(Unaudited)
<CAPTION>
As Pro
Reported Adjustments Forma
---------- --------------- ----------
<S> <C> <C> <C>
Interest income:
Interest and fees on loans $ 211,220 $ 2,064 (a) $ 213,284
Interest and dividends on
investment securities 26,206 11,545 (b) 37,751
Interest on investment securities
available for sale 22,717 4,361 (b) 27,078
Interest on trading account
securities 7,630 - 7,630
Interest on federal funds sold
and securities purchased under
agreements to resell 2,586 9,277 (b) 11,863
Interest on interest bearing
deposits with other banks 431 - 431
---------- ------------- ----------
Total interest income 270,790 27,247 298,037
Interest expense:
Interest on deposits 85,473 19,152 (c) 104,625
Interest on federal funds
purchased and securities sold
under agreements to repurchase 11,130 - 11,130
Interest on other short-term
borrowings 3,789 - 3,789
Interest on FHLB and other
borrowings 7,130 2,093 (d) 9,223
---------- ------------- ----------
Total interest expense 107,522 21,245 128,767
---------- ------------- ----------
Net interest income 163,268 6,002 169,270
Provision for loan losses 2,305 - 2,305
---------- ------------- ----------
Net interest income after
provision for loan losses 160,963 6,002 166,965
Noninterest income:
Service charges on deposit
accounts 21,110 1,059 (e) 22,169
Trust fees 8,822 - 8,822
Trading account profits and
commissions (6,265) - (6,265)
Investment securities gains, net (5,063) - (5,063)
Other 16,141 - 16,141
---------- ------------- ----------
Total noninterest income 34,745 1,059 35,804
Noninterest expense:
Salaries and benefits 63,031 1,960 (f) 64,991
Net occupancy expense 10,947 953 (f) 11,900
Equipment expense 9,665 - (f) 9,665
FDIC insurance premium 6,656 997 (f) 7,653
Other 33,022 705 (f) 33,727
---------- ------------- ----------
Total noninterest expense 123,321 4,615 127,936
---------- ------------- ----------
Net income before income
tax expense 72,387 2,446 74,833
Income tax expense 24,053 813 (g) 24,866
---------- ------------- ----------
Net income $ 48,334 $ 1,633 $ 49,967
========== ============= ==========
Net income per common share $ 1.30 $ 1.34
Weighted average shares outstanding 37,210 37,210
</TABLE>
(a) Weighted average yield on loans acquired of 8.64%.
(b) Yield on investment securities and investment securities available for
sale represents the actual yield on securities purchased of $462 million
of 7.41% on investment securities held to maturity and 5.93%
on investment securities available for sale. The remainder of
cash received is reflected as invested in federal funds sold.
(c) Interest expense on deposits represents historical amounts for the
branches acquired.
(d) Interest expense of 8.44% on subordinated debentures of $50 million issued
in September, 1994.
(e) Service charge income represents historical amounts earned.
(f) Actual noninterest expenses for branches acquired exclusive of
corporate allocations.
(g) Based on the Company's historical effective tax rate.
- 5 -
<PAGE>
COMPASS BANCSHARES, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
October 14, 1994 /s/ Garrett R. Hegel
- ---------------- ---------------------------
Date By Garrett R. Hegel, as its
Chief Financial Officer
- 6 -
