SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Period Ended September 30, 1997 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 Identification No.)
15 South 20th Street
Birmingham, Alabama 35233
----------------------------------------
(Address of principal executive offices)
(205) 933-3000
-------------------------------
(Registrant's telephone number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $2 par value
--------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date.
Class Outstanding at October 31, 1997
-------------------------- -------------------------------
Common Stock, $2 Par Value 65,929,416
The number of pages of this report is 21.
<PAGE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION Page
- ------------------------------------------------------------------------ ----
Item 1 Financial Statements
Consolidated Balance Sheets as of September 30, 1997
and December 31, 1996 3
Consolidated Statements of Income for the Three and Nine Months
Ended September 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of Results of Operations and
Financial Condition 10
PART II. OTHER INFORMATION
- ------------------------------------------------------------------------
Item 1 Legal Proceedings 17
Item 6 Exhibits and Reports on Form 8-K 17
<PAGE>
<TABLE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
<CAPTION>
September 30 December 31
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 543,209 $ 735,813
Federal funds sold and securities purchased
under agreements to resell 114,906 82,479
Interest bearing deposits with other banks 397 492
Investment securities (market value of
$1,089,843 and $1,128,804 for 1997 and
1996, respectively) 1,072,457 1,121,644
Investment securities available for sale 1,936,929 2,120,674
Trading account securities 129,395 91,453
Loans, net of unearned income 8,513,861 7,876,672
Allowance for loan losses (122,011) (122,115)
------------ ------------
Net loans 8,391,850 7,754,557
Premises and equipment, net 294,078 263,858
Other assets 429,328 261,231
------------ ------------
Total assets $12,912,549 $12,432,201
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest bearing $ 1,860,177 $ 1,907,204
Interest bearing 7,744,924 7,876,517
------------ ------------
Total deposits 9,605,101 9,783,721
Federal funds purchased and securities
sold under agreements to repurchase 929,094 811,467
Other short-term borrowings 259,999 201,901
Accrued expenses and other liabilities 74,659 83,253
FHLB and other borrowings 1,009,154 702,770
Guaranteed preferred beneficial interests
in Company's junior subordinated
deferrable interest debentures (Note 5) 100,000 -
------------ ------------
Total liabilities 11,978,007 11,583,112
Shareholders' equity:
Common stock of $2 par value:
Authorized--100,000,000 shares;
Issued--65,925,404 shares in 1997 and
43,719,987 shares in 1996 131,851 87,440
Surplus 84,925 71,408
Loans to finance stock purchases (4,649) (6,026)
Unearned restricted stock (3,066) (1,080)
Net unrealized holding gain/(loss) on
available-for-sale securities 1,989 (2,890)
Retained earnings 723,492 700,237
------------ ------------
Total shareholders' equity 934,542 849,089
------------ ------------
Total liabilities and shareholders'
equity $12,912,549 $12,432,201
============ ============
</TABLE>
<PAGE>
<TABLE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In Thousands Except Per Share Data)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
---------------------- ----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $184,974 $163,181 $537,133 $473,895
Interest and dividends on
investment securities 19,090 16,307 60,413 42,251
Interest on investment
securities available
for sale 33,956 36,598 99,588 110,805
Interest on trading account
securities 1,585 1,356 4,779 4,966
Interest on federal funds
sold and securities
purchased under agreements
to resell 1,447 2,129 3,914 5,815
Interest on interest bearing
deposits with other banks 7 18 30 77
---------- ---------- ---------- ----------
Total interest income 241,059 219,589 705,857 637,809
INTEREST EXPENSE:
Interest on deposits 89,674 90,073 262,332 256,347
Interest on federal funds
purchased and securities
sold under agreements to
repurchase 11,925 7,827 34,171 26,771
Interest on other short
-term borrowings 3,843 2,612 8,980 6,738
Interest on FHLB and other
borrowings 15,101 9,941 39,367 30,621
Interest on guaranteed prefer-
red beneficial interests in
Company's junior subordinated
deferrable interest
debentures 2,057 - 5,738 -
---------- ---------- ---------- ----------
Total interest expense 122,600 110,453 350,588 320,477
---------- ---------- ---------- ----------
Net interest income 118,459 109,136 355,269 317,332
Provision for loan losses 6,690 4,950 16,853 14,070
---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses 111,769 104,186 338,416 303,262
NONINTEREST INCOME:
Service charges on deposit
accounts 17,153 16,170 52,218 46,769
Trust fees 3,917 4,234 11,888 12,926
Trading account profits and
commissions 3,422 2,820 10,816 9,825
Investment securities
gains, net 4,299 1,472 4,136 8,159
Retail investment sales 4,294 3,421 12,590 9,953
Gain on sale of branches - 215 - 2,515
Other 13,489 10,758 39,018 30,076
---------- ---------- ---------- ----------
Total noninterest income 46,574 39,090 130,666 120,223
NONINTEREST EXPENSE:
Salaries and benefits 52,441 49,205 156,402 139,913
Net occupancy expense 7,882 6,941 22,771 20,128
Equipment expense 7,549 6,132 21,341 17,927
FDIC insurance premium 341 9,042 1,135 10,776
Other 30,403 29,553 90,874 80,661
---------- ---------- ---------- ----------
Total noninterest expense 98,616 100,873 292,523 269,405
---------- ---------- ---------- ----------
Net income before income
tax expense 59,727 42,403 176,559 154,080
Income tax expense 20,299 15,479 62,742 55,480
---------- ---------- ---------- ----------
NET INCOME $ 39,428 $ 26,924 $113,817 $ 98,600
========== ========== ========== ==========
NET INCOME PER COMMON SHARE $0.59 $0.42 $1.71 $1.51
Primary weighted average
shares outstanding 66,759 64,535 66,512 65,108
Dividends per common share $0.2367 $0.2133 $0.71 $0.64
</TABLE>
<PAGE>
<TABLE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30
------------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 113,817 $ 98,600
Adjustments to reconcile net income to
cash provided (used) by operations:
Depreciation and amortization 31,732 26,796
Accretion of discount and loan fees (10,134) (10,039)
Provision for loan losses 16,853 14,070
Net change in trading account securities (37,942) 21,085
Net change in mortgage loans available
for sale 2,019 5,117
Gain on sale of investment securities (4,136) (8,159)
Gain on sale of premises and equipment (10) (156)
Gain on sale of other real estate owned (258) (45)
Provision for losses on other real estate
owned 191 196
Gain on sale of branches - (2,515)
(Increase) decrease in interest receivable (12,211) 7,885
Increase in other assets (162,561) (82,988)
Increase (decrease) in interest payable 2,912 (3,026)
Increase (decrease) in taxes payable 3,000 (6,409)
Increase (decrease) in other payables (17,565) 145,157
------------ ------------
Net cash provided (used) by operating
activities (74,293) 205,569
INVESTING ACTIVITIES:
Proceeds from maturities/calls of investment
securities 271,424 167,028
Purchases of investment securities (102,614) (340,563)
Proceeds from sales of securities
available for sale 452,166 636,302
Proceeds from maturities/calls of
securities available for sale 421,619 404,308
Purchases of securities available for sale (797,573) (1,060,972)
Net (increase) decrease in federal funds
sold and securities purchased
under agreements to resell (32,427) 232,773
Net increase in loan portfolio (653,535) (303,312)
Purchase (divestiture) of branches 22,216 (47,273)
Acquisitions, net of cash acquired - (83,329)
Purchases of premises and equipment (48,503) (23,387)
Net decrease in interest
bearing deposits with other banks 95 1,718
Proceeds from sales of other
real estate owned 6,003 6,717
------------ ------------
Net cash used by investing activities (461,129) (409,990)
</TABLE>
<PAGE>
<TABLE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30
------------------------------
1997 1996
------------ ------------
<S> <C> <C>
FINANCING ACTIVITIES:
Net increase (decrease) in demand deposits,
NOW accounts and savings accounts $ (76,358) $ 377,605
Net increase (decrease) in time deposits (127,727) 90,341
Net increase (decrease) in federal funds
purchased 70,416 (334,320)
Net increase (decrease) in securities sold
under agreements to repurchase 47,211 (80,254)
Net increase in short-term
borrowings 58,098 101,357
Issuance of FHLB advances and
other borrowings 412,500 14,395
Repayment of long-term debt (106,186) (1,347)
Issuance of guaranteed preferred beneficial
interests in Company's junior subordinated
deferrable interest debentures 100,000 -
Purchase of treasury shares (988) (45,590)
Common dividends paid (45,940) (37,488)
Exercise of stock options of acquired
entities prior to acquisition 6,473 -
Repayment of loans to finance stock
purchases 2,499 2,404
Proceeds from exercise of stock options 2,820 1,716
------------ ------------
Net cash provided by financing activities 342,818 88,819
------------ ------------
Net decrease in cash and due from banks (192,604) (115,602)
Cash and due from banks at beginning of period 735,813 637,921
------------ ------------
Cash and due from banks at end of period $ 543,209 $ 522,319
============ ============
SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Transfers of loans to other real estate owned $ 5,754 $ 3,697
Loans to facilitate the sale of
other real estate owned 667 1,565
Loans to finance stock purchases 1,122 1,782
Tax benefit realized upon exercise
of stock options 1,778 56
Issuance of restricted stock 2,706 1,296
Converstion of debentures - 790
Repurchase liability associated with treasury
stock transaction - 1,427
Change in unrealized gain/loss on available
for sale securities 7,292 (32,164)
Transfer of securities available for
sale to held-to-maturity securities 118,947 193,129
Issuance of treasury stock upon exercise
of stock options 988 248
Acquisition (divestiture) of branches:
Liabilities assumed (sold) $ 25,661 $ (79,378)
Assets acquired (sold) 3,445 (29,590)
------------ ------------
Net liabilities assumed (sold) $ 22,216 $ (49,788)
============ ============
Acquisitions:
Assets acquired $ 797,193
Liabilities assumed 667,095
------------
Net assets acquired 130,098
Treasury stock issued 46,769
------------
Cash paid $ 83,329
============
</TABLE>
<PAGE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
NOTE 1 - GENERAL
The consolidated financial statements in this report have not been audited.
In the opinion of management, all adjustments necessary to present fairly the
financial position and the results of operations for the interim periods have
been made. All such adjustments are of a normal recurring nature. The results
of operations are not necessarily indicative of the results of operations for
the full year or any other interim periods. For further information, refer to
the consolidated financial statements and notes included in the Company's
annual report on Form 10-K for the year ended December 31, 1996.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Derivative Financial Instruments
As a part of its overall interest rate risk management, the Company uses
interest rate futures, swaps, caps and floors. Interest rate futures contracts
are accounted for as hedges provided the criteria in Financial Accounting
Statement No. 80 ("FAS80"), Accounting for Futures Contracts, are met. For
interest rate swaps, caps and floors that are designated as synthetic
alterations of existing assets or liabilities, unrealized gains or losses on
such interest rate contracts are deferred. Interest rate futures contracts that
do not meet the hedge criteria of FAS80 and interest rate swaps, caps and
floors that are not designated as synthetic alterations, are accounted for as
trading contracts and marked to market through earnings. Refer to the
Securities accounting policy under the Summary of Significant Accounting
Policies in the Company's December 31, 1996 annual report on Form 10-K for
additional accounting policies related to derivative financial instruments.
NOTE 3 - BUSINESS COMBINATIONS
Completed Acquisitions
Summarized below are acquisitions completed by the Company during the first
nine months of 1997. All of the acquisitions completed during the period were
accounted for under the pooling-of-interests method of accounting and
accordingly all prior period information has been restated.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Common
dollars in millions Location Date Assets Equity Shares Issued
- ----------------------------------- ---------------------- ------- ------ ------ -------------
<S> <C> <C> <C> <C> <C>
Enterprise National Bank Jacksonville, Florida 1/15/97 $171 $18 1,620,782
Horizon Bancorp, Inc. Austin, Texas 3/12/97 154 11 1,333,220
Greater Brazos Valley Bancorp, Inc. College Station, Texas 4/17/97 58 3 323,918
Central Texas Bancorp, Inc. Waco, Texas 7/15/97 207 19 1,537,444
- --------------------------------------------------------------------------------------------------
</TABLE>
Pending Acquisitions
The Company signed a definitive agreement on August 6, 1997, to acquire
G.S.B. Investments, Inc. ("GSB"), and its subsidiary, Gainesville State Bank,
of Gainesville, Florida. At September 30, 1997, GSB had assets of $213 million
and equity of $22 million. It is anticipated that the transaction will close in
the first quarter of 1998 and will be accounted for under the pooling-of-
interests method of accounting.
<PAGE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements - Continued
NOTE 3 - BUSINESS COMBINATIONS (continued)
On September 25, 1997, the Company signed a definitive agreement to acquire
First University Corporation ("First University"), and its subsidiary, West
University Bank, N.A., of Houston, Texas. At September 30, 1997, First
University had assets of $66 million and equity of $5 million. It is
anticipated that the transaction will close in the first quarter of 1998 and
will be accounted for under the pooling-of-interests method of accounting.
The Company signed a definitive agreement on October 16, 1997, to acquire
Fidelity Resources Company ("Fidelity"), and it subsidiary, Fidelity Bank,
N.A., of Dallas, Texas. At September 30, 1997, Fidelity had assets of $318
million and equity of $23 million. It is anticipated that the transaction will
close in the first quarter of 1998 and will be accounted for under the pooling-
of-interests method of accounting.
NOTE 4 - IMPAIRED LOANS
At September 30, 1997, the recorded investment in loans that are considered
impaired under generally accepted accounting principles was $23.6 million, of
which $8.8 million were on nonaccrual status. Included in this amount is $23.4
million of impaired loans for which the related allowance for loan losses was
$3.9 million and $213,000 of loans which are carried at estimated fair value
without a specifically allocated allowance for loan losses. At December 31,
1996, impaired loans totaled $25.7 million.
NOTE 5 - CAPITAL SECURITIES
In January, 1997, the Company formed a wholly owned Delaware statutory
business trust, Compass Trust I, which issued $100 million of guaranteed
preferred beneficial interests in the Company's junior subordinated deferrable
interest debentures ("Capital Securities") that qualify as Tier I capital under
Federal Reserve Board guidelines. All of the common securities of Compass
Trust I are owned by the Company. The proceeds from the issuance of the
Capital Securities ($100 million) and common securities ($3.1 million) were
used by Compass Trust I to purchase $103.1 million of junior subordinated
deferrable interests debentures of the Company which carries an interest rate
of 8.23 percent. The debentures represent the sole asset of Compass Trust I.
The debentures and related income statement effects are eliminated in the
Company's financial statements.
The Capital Securities accrue and pay distributions semiannually at a rate
of 8.23 percent per annum of the stated liquidation value of $1,000 per capital
security. The Company has entered into contractual arrangements which, taken
collectively, fully and unconditionally guarantee payment of: (i) accrued and
unpaid distributions required to be paid on the Capital Securities; (ii) the
redemption price with respect to any capital securities called for redemption
by Compass Trust I; and (iii) payments due upon a voluntary or involuntary
liquidation, winding-up or termination of Compass Trust I.
The Capital Securities are mandatorily redeemable upon the maturity of the
debentures on January 15, 2027, or upon earlier redemption as provided in the
indenture. The Company has the right to redeem the debentures purchased by
Compass Trust I: (i) in whole or in part, on or after January 15, 2007, and
(ii) in whole (but not in part) at any time within 90 days following the
occurrence and during the continuation of a tax event or capital treatment
event (as defined in the offering circular). As specified in the indenture, if
the debentures are redeemed prior to maturity, the redemption price will be the
principal amount, any accrued but unpaid interest, plus a premium ranging from
4.12 percent in 2007 to 0.41 percent in 2016.
<PAGE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements - Continued
NOTE 6 - RECENTLY ISSUED ACCOUNTING STANDARDS
In February, 1997, the Financial Accounting Standards Board ("FASB") issued
Financial Accounting Statement No. 128, Earnings Per Share, ("FAS128"). FAS128
specifies the computation, presentation and disclosure requirements for
earnings per share, replacing the current presentation of primary earnings per
share with the presentation of basic earnings per share. FAS128 is effective
for both interim and annual financial statements issued for periods ending
after December 15, 1997, with earlier adoption prohibited. Upon adoption by the
Company on January 1, 1998, all prior period earnings per share data will be
required to be restated. The Company does not expect the impact of the adoption
of FAS128 on prior period data to be material.
In June, 1997, the FASB issued Financial Accounting Statement No. 130,
Reporting Comprehensive Income, ("FAS130") and Financial Accounting Statement
No. 131, Disclosures about Segments of an Enterprise and Related Information,
("FAS131"). FAS130 establishes reporting and presentation standards for
comprehensive income and its components in a full set of general-purpose
financial statements. Comprehensive income is defined as the change in equity
of a business enterprise during a period from transactions and other events and
circumstances arising from nonowner sources. FAS130 is effective for both
interim and annual financial statements issued for periods beginning after
December 15, 1997, and also applies to financial statements presented for prior
periods. FAS131 requires that financial and descriptive information be
disclosed for each reportable operating segment based on the management
approach. The management approach focuses on financial information that an
enterprise's decision makers use to assess performance and make decisions about
resource allocation. The statement also prescribes the enterprise-wide
disclosures to be made about products, services, geographic areas and major
customers. FAS131 is effective for annual financial statements issued for
periods beginning after December 15, 1997, and for interim financial statements
in the second year of application. The Company expects to adopt FAS130 and
FAS131 as of January 1, 1998.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
OVERVIEW
This report may contain forward-looking statements which are subject to
numerous assumptions, risks and uncertainties. Statements pertaining to future
periods are subject to uncertainty because of the possibility of changes in
underlying factors and assumptions. Actual results could differ materially
from those contained in or implied by such forward-looking statements for a
variety of factors including: sharp and/or rapid changes in interest rates;
significant changes in the economic scenario from the current anticipated
scenario which could materially change anticipated credit quality trends and
the ability to generate loans; significant delay in or inability to execute
strategic initiatives designed to grow revenues and/or control expenses; and
significant changes in accounting, tax, or regulatory practices or
requirements.
Net income for the quarter ended September 30, 1997, increased 46 percent to
$39.4 million while net income per common share increased 40 percent to $0.59
from the third quarter of 1996. Excluding securities gains and losses in the
third quarter of 1997 and 1996 and a SAIF special assessment in the third
quarter of 1996, net income increased $6.2 million to $36.7 million, an
increase of 20 percent, while net income per share increased from $0.47 in 1996
to $0.55 in 1997, a 17 percent increase. Net interest income increased 9
percent to $118.5 million from the third quarter of 1996 while the provision
for loan losses increased 35 percent to $6.7 million. Noninterest income
increased 19 percent to $46.6 million during the third quarter while
noninterest expense decreased 2 percent to $98.6 million.
For the nine months ended September 30, 1997, net income increased to $113.8
million, a 15 percent increase, while net income per share increased to $1.71,
a 13 percent increase, over the prior year period. Excluding securities gains
and losses in 1997 and 1996, the gain on the sale of the Company's corporate
trust division and litigation reserves in 1997, and the gain on the sale of
nonstrategic bank offices and a special SAIF assessment in 1996, net income
increased 15 percent to $110.6 million and net income per share increased 12
percent to $1.66. For the nine month period, net interest income increased
$37.9 million, or 12 percent, while both noninterest income and noninterest
expense increased 9 percent. The provision for loan losses increased 20 percent
to $16.9 million. All per share information has been restated to reflect the
Company's three-for-two stock split effected in the form of a 50 percent stock
dividend on April 2, 1997.
All acquisitions completed in 1997 were accounted for under the pooling-of-
interests method of accounting and, accordingly, the financial statements have
been restated for all periods to reflect the acquisitions. Acquisitions
completed in 1997 and pending acquisitions are detailed in Note 3 - Business
Combinations in the Notes to the Consolidated Financial Statements and
acquisitions completed prior to 1997 are included in "Acquisitions" under Item
1 - Business in the Company's 1996 Form 10-K.
NET INTEREST INCOME
Net interest income for the quarter ended September 30, 1997, increased $9.3
million over the third quarter of 1996 to $118.5 million. On a tax-equivalent
basis, net interest income increased $9.2 million, or 8 percent, as a result of
a $21.4 million, or 10 percent, increase in interest income on a tax-equivalent
basis offset, in part, by a $12.2 million, or 11 percent, increase in interest
expense. The increase in interest income was primarily due to an increase in
average earning assets of $967 million, or 9 percent, combined with a 3 basis
point increase in the average yield on earning assets from 8.13 percent to 8.16
percent. The largest portion of the increase in average earning assets occurred
in the average balance of loans, which increased 14 percent, or $1.0 billion,
with funding provided primarily by increases in the average balance of savings
deposits and FHLB and other borrowings.
For the nine months ended September 30, 1997, net interest income increased
12 percent to $355.3 million over the first nine months of 1996. On a tax-
equivalent basis, net interest income increased $37.7 million, or 12 percent,
due to a $67.8 million, or 11 percent, increase in interest income on a tax-
equivalent basis offset by a $30.1 million, or 9 percent, increase in interest
expense. A $1.1 billion, or 10 percent, increase in average earning assets, due
primarily to a 14 percent increase in loans, and a 2 basis point increase in
the average yield on earning assets to 8.20 percent from 8.18 percent were
responsible for the increase in interest income.
Interest expense for the quarter ended September 30, 1997, increased by
$12.2 million, or 11 percent, from the third quarter of 1996, due principally
to a 9 percent increase in total interest bearing liabilities coupled with a 6
basis point increase in the rate paid on liabilities. The increase in interest
bearing liabilities was due to a $498 million increase in FHLB and other
borrowings. This was due in part to the issuance by the Company of $100 million
of Capital Securities in January, 1997. The increase in the rate paid on
interest bearing liabilities was primarily a function of a 41 basis point
increase in the rate paid on federal funds purchased and securities sold under
agreements to repurchase.
For the nine months ended September 30, 1997, interest expense increased 9
percent, or $30.1 million, due to a 10 percent increase in average interest
bearing liabilities partially offset by a 4 basis point decrease in the rate
paid on liabilities. The increase in interest bearing liabilities was due to a
$385 million increase in average interest bearing deposits and a $339 million
increase in average FHLB and other borrowings during the first nine months of
1997 over the prior year period. The decrease in the rate paid on interest
bearing liabilities resulted from a 13 basis point decrease in the rate paid on
interest bearing deposits and a 38 basis point decrease in the rate paid on
FHLB and other borrowings.
NET INTEREST MARGIN
Net interest margin, stated as a percentage, is the yield on average earning
assets obtained by dividing the difference between the overall interest income
on earning assets and the interest expense paid on all funding sources by
average earning assets. For the third quarter of 1997, the net interest
margin, on a tax-equivalent basis, was 4.03 percent compared to 4.06 percent
for the same period in 1996, while increasing from 4.09 percent to 4.15 percent
in the first nine months of 1997. These changes resulted from the changes in
rates and volumes of earning assets and the corresponding funding sources noted
previously. While the yield on interest earning assets for the third quarter
increased 3 basis points, including a 6 basis point increase in the yield on
investment securities available for sale, the yield on interest bearing
liabilities increased 6 basis points. The impact of the increase in the yield
on interest bearing liabilities on net interest margin was partially offset by
an 8 percent increase in the average balance of noninterest bearing demand
deposits during the third quarter of 1997. For the nine months ended September
30, 1997, the increase in net interest margin was due to a 2 basis point
increase in the yield on interest earning assets and a 4 basis point decrease
in the rate paid on interest bearing liabilities.
During the third quarter of 1997, the Company's net interest margin was
positively impacted by the Company's use of interest rate contracts, increasing
taxable equivalent net interest margin by four basis points as compared to a
one basis point impact for the same period in 1996. The Company's use of
interest rate contracts positively impacted the taxable equivalent net interest
margin for the nine months ended September 30, 1997, increasing the net
interest margin by three basis points as compared to no impact in the first
nine months of 1996.
The following tables detail the components of the changes in net interest
income (on a tax-equivalent basis) by major category of interest earning assets
and interest bearing liabilities for the three month and nine month periods
ended September 30, 1997, as compared to the comparable periods of 1996 (in
thousands):
<TABLE>
<CAPTION>
Nine Months Ended
September 30
---------------------------------------------
Change
1997 Attributed to
to ---------------------------------
1996 Volume Rate Mix
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Interest income:
Loans $63,181 $67,145 $(3,473) $ (491)
Investment securities 18,005 18,979 (683) (291)
Investment securities available
for sale (11,223) (11,347) 138 (14)
Trading account securities (165) 240 (386) (19)
Fed funds and resale agreements (1,901) (1,967) 99 (33)
Time deposits in other banks (47) (50) 8 (5)
--------- --------- --------- ---------
Increase in interest income $67,850 $73,000 $(4,297) $ (853)
========= ========= ========= =========
Interest expense:
Deposits $ 5,985 $17,780 $(9,258) $(2,537)
Fed funds purchased and repos 7,400 5,461 1,611 328
Other short-term borrowings 2,242 1,846 311 85
FHLB and other borrowings* 14,484 17,191 (1,734) (973)
--------- --------- --------- ---------
Increase in interest expense $30,111 $42,278 $(9,070) $(3,097)
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
September 30
---------------------------------------------
Change
1997 Attributed to
to ---------------------------------
1996 Volume Rate Mix
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Interest income:
Loans $21,778 $22,772 $ (873) $ (121)
Investment securities 2,673 2,885 (182) (30)
Investment securities available
for sale (2,630) (3,029) 435 (36)
Trading account securities 233 241 (6) (2)
Fed funds and resale agreements (682) (668) (21) 7
Time deposits in other banks (11) (8) (5) 2
--------- --------- --------- ---------
Increase in interest income $21,361 $22,193 $ (652) $ (180)
========= ========= ========= =========
Interest expense:
Deposits $ (401) $ 2,222 $(2,082) $ (541)
Fed funds purchased and repos 4,098 3,159 669 270
Other short-term borrowings 1,232 1,066 118 48
FHLB and other borrowings* 7,218 8,544 (713) (613)
--------- --------- --------- ---------
Increase in interest expense $12,147 $14,991 $(2,008) $ (836)
========= ========= ========= =========
<FN>
* Includes Capital Securities.
</FN>
</TABLE>
NONINTEREST INCOME AND NONINTEREST EXPENSE
During the third quarter of 1997, noninterest income increased $7.5 million,
or 19 percent, to $46.6 million, due to a $2.7 million increase in other income
and a $2.8 million increase in investment securities gains. Similarly,
noninterest income for the first nine months of 1997 increased 9 percent due to
a 12 percent increase in service charges on deposit accounts, a 26 percent
increase in retail investment sales income, and a 30 percent increase in other
income. Increases in service charges on deposit accounts were due to the
increase in deposits while increases in retail investment sales income were due
to the Company's continued emphasis on increasing revenue in this area. The
increase in noninterest income for the first nine months of 1997 was negatively
impacted by the decline in securities gains of $4.0 million and the absence of
gains on the sale of branches of $2.5 million during the first nine months of
1996. Excluding the aforementioned nonrecurring items, noninterest income
increased 12 percent in the third quarter of 1997 and 13 percent in the first
nine months of the year. Trading account profits and commissions increased 21
percent to $3.4 million in the third quarter of 1997 and 10 percent to $10.8
million for the first nine months of 1997. Trading account profits for the
first nine months of 1997 related specifically to derivative securities were
approximately $923,000, consisting of $611,000 of profits related to
collateralized mortgage obligations ("CMOs") held in the trading account and
$312,000 of profits on non-CMO derivative securities, specifically options,
futures, and interest rate swaps, caps, and floors.
The components of trading account assets at September 30, 1997, and December
31, 1996, are presented in the following table (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------ ------------
<S> <C> <C>
U.S. Treasury and Government agency $ 54,443 $ 44,798
State and political subdivisions 8,614 9,738
Mortgage-backed pass through securities 56,574 24,371
Other securities 97 727
Derivative securities:
Collateralized mortgage obligations 9,193 10,972
Interest rate floors and caps 278 787
Other options 196 60
----------- -----------
$ 129,395 $ 91,453
=========== ===========
</TABLE>
Noninterest expense decreased $2.3 million, or 2 percent, during the third
quarter of 1997 while increasing $23.1 million, or 9 percent, during the first
nine months of 1997 over the same periods in 1996. The decrease in the third
quarter of 1997 was primarily due to the absence of a special one-time SAIF
assessment of $7.2 million that was recorded in the third quarter of 1996.
Salaries increased $3.4 million, or 8 percent, for the third quarter while
employee benefits decreased $211,000, or 3 percent. For the first nine months
of 1997, salaries increased $13.6 million, or 12 percent, and employee benefits
increased $2.9 million, or 12 percent. The increase in salaries over 1996
levels was the result of purchase business combinations completed during the
second and third quarters of 1996 and normal business growth as well as regular
merit increases and increased incentive expense. The decrease in employee
benefits for the third quarter of 1997 was due to decreased pension and ESOP
expense while the increase for the first nine months of 1997 was due to
increased employee relocation expense and increased payroll taxes associated
with the increase in employees. Net occupancy expense increased 14 percent in
the third quarter of 1997 and 13 percent during the first nine months of the
year due to increased rental expense and other expenses associated with
branches acquired in business combinations completed during the second and
third quarters of 1996 and normal business growth. Other noninterest expense
increased $10.2 million, or 13 percent, during the first nine months of 1997
primarily due to increased amortization expense resulting from increased
intangibles related to acquisitions and litigation reserves of $1.7 million.
INCOME TAXES
Income tax expense increased by $7.3 million, or 13 percent, during the
first nine months of 1997 compared to the same period in 1996 due to the 15
percent increase in pretax income. The effective tax rate for the first nine
months of 1997 was 35.5 percent, down slightly from the 36.0 percent effective
tax rate for the same period in 1996. The decrease in the effective tax rate
was primarily attributable to continued investment in tax-advantaged assets.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
The provision for loan losses for the nine months ended September 30, 1997,
increased $2.8 million, or 20 percent, from the same period in 1996 due to a 23
percent increase in net loan charge-offs during the period. Net loan charge-
offs expressed as an annualized percentage of average loans for the first nine
months of 1997 was 0.28 percent, up from 0.26 percent for the first nine months
of 1996. Management considers changes in the size and character of the loan
portfolio, changes in nonperforming and past due loans, historical loan loss
experience, the existing risk of individual loans, concentrations of loans to
specific borrowers or industries and existing and prospective economic
conditions when determining the adequacy of the loan loss allowance. The
allowance for loan losses at September 30, 1997, was $122 million, unchanged
from December 31, 1996. The ratio of the allowance for loan losses to loans
outstanding was 1.43 percent at September 30, 1997, down from 1.55 percent at
December 31, 1996.
NONPERFORMING ASSETS AND PAST DUE LOANS
Nonperforming assets, comprised of nonaccrual loans, renegotiated loans and
other real estate owned, totaled $30.6 million at September 30, 1997,
increasing 1 percent from $30.4 million at December 31, 1996, as nonaccrual
loans increased $1.4 million and renegotiated loans and other real estate
declined. At September 30, 1997, the allowance for loan losses as a percentage
of nonperforming loans was 520 percent as compared to 542 percent at December
31, 1996. The allowance for loan losses as a percentage of nonperforming loans
and accruing loans ninety days or more past due decreased from 386 percent at
December 31, 1996, to 383 percent at September 30, 1997.
Nonperforming assets as a percentage of total loans and other real estate
owned decreased to 0.36 percent at September 30, 1997, from 0.39 percent at
December 31, 1996. The amount recorded in other repossessed assets at
September 30, 1997, was $675,000, down from $955,000 at December 31, 1996.
Loans past due ninety days or more but still accruing interest decreased 8
percent from $9.1 million at December 31, 1996, to $8.4 million at September
30, 1997, representing 0.10 percent of total loans and other real estate owned.
The Company regularly monitors selected accruing loans for which general
economic conditions or changes within a particular industry could cause the
borrowers financial difficulties. This continuous monitoring of the loan
portfolio and the related identification of loans with a high degree of credit
risk are essential parts of the Company's credit management. Management
continues to emphasize maintaining a low level of nonperforming assets and
returning current nonperforming assets to an earning status.
FINANCIAL CONDITION
OVERVIEW
Total assets at September 30, 1997, were $12.9 billion, up 4 percent from
December 31, 1996, as an increase in earning assets more than offset a decrease
in cash and due from banks. Retained earnings remained the primary source of
growth for the Company's capital base.
ASSETS AND FUNDING
At September 30, 1997, earning assets totaled $11.8 billion, up from $11.3
billion at December 31, 1996, an increase of 4 percent. The mix of earning
assets shifted moderately toward loans in the first nine months of 1997 with
loans comprising 72 percent of total earning assets at September 30, 1997, up
from 70 percent at December 31, 1996, while the percentage of earning assets
represented by total investment securities decreased to 26 percent from 29
percent.
A $179 million decrease in total deposits during the first nine months of
1997 was more than offset by a $306 million increase in FHLB and other
borrowings, a $118 million increase in federal funds purchased and securities
sold under agreements to repurchase and the issuance of $100 million of Capital
Securities in January, 1997. At September 30, 1997, deposits accounted for 74
percent of the Company's funding, down from 79 percent at year end.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used by operating activities totaled $74 million for the nine
months ended September 30, 1997. Net cash used by investing activities of $461
million consisted of proceeds from maturities/calls of investment securities of
$271 million, proceeds from maturities/calls of securities available for sale
of $422 million, proceeds from sales of securities available for sale of $452
million and $22 million received in the purchase of a branch. Cash outflows
consisted of $798 million in purchases of investment securities available for
sale, $103 million in purchases of investment securities, a $654 million
increase in loans outstanding, and purchases of premises and equipment of $49
million. Net cash provided by financing activities of $343 million consisted of
the issuance of Capital Securities, a $306 million net increase in FHLB and
other borrowings, and increases in other short-term borrowings, federal funds
purchased, and securities sold under agreements to repurchase of $58 million,
$70 million, and $47 million, respectively, reduced by a decrease in total
deposits of $204 million and the payment of $46 million in common stock
dividends.
Total shareholders' equity at September 30, 1997, was 7.24 percent of total
assets compared to 6.83 percent at December 31, 1996, due to earnings retained
after the payment of dividends on common stock. During the first quarter of
1997 and 1996, the Company issued restricted stock to certain executive
officers that vests ratably over the next five years. Due to the fact that the
restricted stock is considered issued and outstanding and is reflected in
common stock and surplus, shareholders' equity has been reduced by the unvested
portion of the stock granted, as required by generally accepted accounting
principles.
The leverage ratio, defined as period-end common equity and the Capital
Securities adjusted for goodwill divided by average quarterly assets adjusted
for goodwill, was 7.35 percent at September 30, 1997 and 6.19 percent at
December 31, 1996. Similarly, the Company's tangible leverage ratio, defined
as period-end common equity and the Capital Securities adjusted for all
intangibles divided by average quarterly assets adjusted for all intangibles,
increased from 6.05 percent at December 31, 1996 to 7.23 percent at September
30, 1997.
Tier I capital and total qualifying capital (Tier I capital plus Tier II
capital), as defined by regulatory agencies, as of September 30, 1997, exceeded
the target ratios of 6.00 percent and 10.00 percent, respectively, under
current regulations. The Tier I and total qualifying capital ratios at
September 30, 1997, were 9.86 percent and 12.42 percent, respectively, compared
to 8.70 percent and 11.41 percent at December 31, 1996, with the increase due
to the issuance of the Capital Securities in the first quarter of 1997. Tier II
capital includes supplemental capital components such as qualifying allowances
for loan losses, certain qualifying classes of preferred stock and qualifying
subordinated debt. Increased regulatory activity in the financial industry as a
whole will continue to impact the industry; however, management does not
anticipate any negative impact on the capital resources or operations of the
Company.
<PAGE>
<TABLE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Allowance for Loan Losses/Nonperforming Assets
(In Thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30
--------------------------
1997 1996
---------- -----------
<S> <C> <C>
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period $ 122,115 $ 113,805
Add: Provision charged to earnings 16,853 14,070
Balance due to acquisition - 6,973
Deduct: Loans charged off 21,660 18,113
Loan recoveries (4,703) (4,372)
---------- ----------
Net charge-offs 16,957 13,741
---------- ----------
Balance at end of period $ 122,011 $ 121,107
========== ==========
Net charge-offs as a percentage of
average loans (annualized) 0.28% 0.26%
Recoveries as a percentage of charge-offs 21.71% 24.14%
</TABLE>
<TABLE>
<CAPTION>
September 30 December 31
1997 1996
------------ -----------
<S> <C> <C>
NONPERFORMING ASSETS
Nonaccrual loans $ 21,343 $ 19,955
Renegotiated loans 2,102 2,591
---------- ----------
Total nonperforming loans 23,445 22,546
Other real estate 7,152 7,883
---------- ----------
Total nonperforming assets $ 30,597 $ 30,429
========== ==========
Accruing loans ninety days or more past due $ 8,372 $ 9,091
Other repossessed assets $ 675 $ 955
Allowance for loan losses $ 122,011 $ 122,115
Allowance as a percentage of loans 1.43% 1.55%
Total nonperforming loans as a percentage
of loans and ORE 0.28% 0.29%
Total nonperforming assets as a percentage
of loans and ORE 0.36% 0.39%
Accruing loans ninety days or more past due
as a percentage of loans and ORE 0.10% 0.12%
Allowance for loan losses as a percentage of
nonperforming loans 520.41% 541.63%
Allowance for loan losses as a percentage of
nonperforming assets 398.77% 401.31%
</TABLE>
<PAGE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION Page
- ----------------------------------------------------------------------- ----
Item 1 Legal Proceedings
During the ordinary course of business, the Company is subject to
legal proceedings which involve claims for substantial monetary relief.
However, based upon the advice of legal counsel, management is of the
opinion that any legal proceedings, individually or in the aggregate,
will not have a material adverse effect on the Company's financial
condition or results of operation.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
(10)(a) Compass Bancshares, Inc. 1982 Long Term Incentive Plan
(incorporated by reference to Exhibit 1 to the Company's
Registration Statement on Form S-8 filed June 15, 1983, with
the Securities and Exchange Commission)
(10)(b) Compass Bancshares, Inc. 1989 Long Term Incentive Plan
(incorporated by reference to Exhibit 28 to the Company's
Registration Statement on Form S-8 filed February 21, 1991,
with the Securities and Exchange Commission)
(10)(c) Compass Bancshares, Inc. 1996 Long Term Incentive Plan
(incorporated by reference to Exhibit 4(g) to the Company's
Registration Statement on Form S-8, Registration No. 333-
15117, filed October 30, 1996, with the Securities and
Exchange Commission)
(10)(d) Employment Agreement, dated December 14, 1994, between Compass
Bancshares, Inc. and D. Paul Jones, Jr. (incorporated by
reference to Exhibit 10(d) to the Company's Form 10-K for the
year ended December 31, 1994, filed February 27, 1995, with
the Securities and Exchange Commission)
(10)(e) Employment Agreement, dated December 14, 1994, between Compass
Bancshares, Inc. and Jerry W. Powell (incorporated by
reference to Exhibit 10(e) to the Company's Form 10-K for the
year ended December 31, 1994, filed February 27, 1995, with
the Securities and Exchange Commission)
(10)(f) Employment Agreement, dated December 14, 1994, between Compass
Bancshares, Inc. and Garrett R. Hegel (incorporated by
reference to Exhibit 10(f) to the Company's Form 10-K for the
year ended December 31, 1994, filed February 27, 1995, with
the Securities and Exchange Commission)
(10)(g) Employment Agreement, dated December 14, 1994, between Compass
Bancshares, Inc. and Byrd Williams (incorporated by reference
to Exhibit 10(g) to the Company's Form 10-K for the year ended
December 31, 1994, filed February 27, 1995, with the
Securities and Exchange Commission)
(10)(h) Employment Agreement, dated December 14, 1994, between Compass
Bancshares, Inc. and Charles E. McMahen (incorporated by
reference to Exhibit 10(h) to the Company's Form 10-K for the
year ended December 31, 1994, filed February 27, 1995, with
the Securities and Exchange Commission)
(10)(i) Employment Agreement, dated December 14, 1994, between Compass
Bancshares, Inc. and G. Ray Stone (incorporated by reference
to Exhibit 10(i) to the Company's Registration Statement on
Form S-4, Registration No. 333-15373, filed November 1, 1996,
with the Securities and Exchange Commission)
<PAGE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION Page
- ----------------------------------------------------------------------- ----
Item 6 Exhibits and Reports on Form 8-K (continued)
(11) Computation of Per Share Earnings 20
(12) Ratio of Earnings to Fixed Charges 21
(27) Financial Data Schedule (Filed electronically only)
(b) Reports on Form 8-K
None
<PAGE>
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
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 thereunto duly authorized.
November 13, 1997 /s/ GARRETT R. HEGEL
- ----------------- ---------------------------
Date By Garrett R. Hegel, as its
Chief Financial Officer
<TABLE>
Exhibit (11)
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Computation of Earnings Per Share
(In Thousands Except Per Share Data)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
---------------------- ----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
PRIMARY:
Weighted average shares
outstanding 65,881 64,070 65,781 64,676
Net effect of the assumed exer-
cise of stock options - based on
the treasury stock method using
average market price 878 465 731 432
---------- ---------- ---------- ----------
Total weighted average shares
and common stock equivalents
outstanding 66,759 64,535 66,512 65,108
========== ========== ========== ==========
Net income $ 39,428 $26,924 $113,817 $ 98,600
========== ========== ========== ==========
Net income per common share $ 0.59 $ 0.42 $ 1.71 $ 1.51
========== ========== ========== ==========
FULLY DILUTED:
Weighted average shares
outstanding 65,881 64,070 65,781 64,676
Net effect of the assumed exer-
cise of stock options - based on
the treasury stock method using
average market price or period-
end market price, whichever is
higher 958 507 958 480
---------- ---------- ---------- ----------
Total weighted average shares
and common stock equivalents
outstanding 66,839 64,577 66,739 65,156
========== ========== ========== ==========
Net income $ 39,428 $26,924 $113,817 $ 98,600
========== ========== ========== ==========
Net income per common share $ 0.59 $ 0.42 $ 1.71 $ 1.51
========== ========== ========== ==========
</TABLE>
<TABLE>
Exhibit (12)
COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Computation of Earnings Per Share
(In Thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30
---------------------------
1997 1996
----------- -----------
<S> <C> <C>
Pretax income $ 176,559 $ 154,080
Add fixed charges:
Interest on deposits 262,332 256,347
Interest on borrowings 88,256 64,130
Portion of rental expense
representing interest expense 3,519 3,037
----------- -----------
Total fixed charges 354,107 323,514
----------- -----------
Income before fixed charges $ 530,666 $ 477,594
=========== ===========
Pretax income $ 176,559 $ 154,080
Add fixed charges (excluding
interest on deposits):
Interest on borrowings 88,256 64,130
Portion of rental expense
representing interest expense 3,519 3,037
----------- -----------
Total fixed charges 91,775 67,167
----------- -----------
Income before fixed charges
(excluding interest on deposits) $ 268,334 $ 221,247
=========== ===========
RATIO OF EARNINGS TO FIXED CHARGES:
Including interest on deposits 1.50x 1.48x
Excluding interest on deposits 2.92x 3.29x
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF INCOME AND RELATED SUPPLEMENTAL
SCHEDULES OF COMPASS BANCSHARES, INC. AS OF AND FOR THE PERIOD ENDED SEPT. 30,
1997 AND IF QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
AND RELATED SUPPLEMENTAL SCHEDULES.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 543,209
<INT-BEARING-DEPOSITS> 397
<FED-FUNDS-SOLD> 114,906
<TRADING-ASSETS> 129,395
<INVESTMENTS-HELD-FOR-SALE> 1,936,929
<INVESTMENTS-CARRYING> 1,072,457
<INVESTMENTS-MARKET> 1,089,843
<LOANS> 8,513,861
<ALLOWANCE> 122,011
<TOTAL-ASSETS> 12,912,549
<DEPOSITS> 9,605,101
<SHORT-TERM> 1,189,093
<LIABILITIES-OTHER> 74,659
<LONG-TERM> 1,109,154
0
0
<COMMON> 131,851
<OTHER-SE> 802,691
<TOTAL-LIABILITIES-AND-EQUITY> 12,912,549
<INTEREST-LOAN> 537,133
<INTEREST-INVEST> 160,001
<INTEREST-OTHER> 8,723
<INTEREST-TOTAL> 705,857
<INTEREST-DEPOSIT> 262,332
<INTEREST-EXPENSE> 350,588
<INTEREST-INCOME-NET> 355,269
<LOAN-LOSSES> 16,853
<SECURITIES-GAINS> 4,136
<EXPENSE-OTHER> 292,523
<INCOME-PRETAX> 176,559
<INCOME-PRE-EXTRAORDINARY> 113,817
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 113,817
<EPS-PRIMARY> 1.71
<EPS-DILUTED> 1.71
<YIELD-ACTUAL> 4.15
<LOANS-NON> 21,343
<LOANS-PAST> 8,372
<LOANS-TROUBLED> 2,102
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 122,115
<CHARGE-OFFS> 21,660
<RECOVERIES> 4,703
<ALLOWANCE-CLOSE> 122,011
<ALLOWANCE-DOMESTIC> 122,011
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
