SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES ACT OF 1934
For the period ended December 31, 1997 Commission File No. 0-6032
COMPASS BANCSHARES, INC. EMPLOYEE STOCK OWNERSHIP PLAN
------------------------------------------------------
(Full title of the Plan)
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)
<PAGE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
FINANCIAL INFORMATION
- ---------------------
Item 1 Audited statements of financial condition as of December 31, 1997
and 1996
Item 2 Audited statements of income and changes in plan equity for the three
years ended December 31, 1997
<PAGE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Financial Statements and Schedules
December 31, 1997, 1996, and 1995
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
Compass Bancshares, Inc.:
We have audited the accompanying statements of net assets available for
plan benefits as of December 31, 1997 and 1996 of Compass Bancshares, Inc.
Employee Stock Ownership Plan (Plan) and the related statements of changes
in net assets available for plan benefits for each of the years in the
three-year period ended December 31, 1997. These financial statements are
the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the
Plan as of December 31, 1997 and 1996, and the changes in net assets
available for benefits for each of the years in the three-year period
ended December 31, 1997, in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information
included in Schedules I and II is presented for purposes of additional
analysis and is not a required part of the basic financial statements but
is supplementary information required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. These supplemental schedules are the
responsibility of management. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects
in relation to the basic financial statements taken as a whole.
/s/ KPMG Peat Marwick LLP
Birmingham, Alabama
July 9, 1998
<PAGE>
<TABLE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Net Assets Available for Plan Benefits
December 31, 1997 and 1996
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
Investments, at fair value:
Compass Bancshares, Inc.
common stock - (cost of $42,287,514
and $41,752,828 for 1997 and 1996, respectively) $179,395,672 109,780,556
Compass Bank, Inc. common trust funds (cost of
$-0- and $9,501,975 for 1997 and 1996, respectively) - 12,667,303
Federated Capital Preservation Fund (at contract
value) 3,581,465 3,905,870
Expedition Equity Fund (cost of $11,460,165 and
$-0- for 1997 and 1996, respectively) 14,337,261 -
Expedition Bond Fund (cost of $499,312 and $-0-
for 1997 and 1996, respectively) 526,832 -
AIM Constellation Fund (cost of $1,149,890 and $-0-
for 1997 and 1996, respectively) 1,012,996 -
Evergreen Foundation Balanced Fund (cost of $486,520
and $-0- for 1997 and 1996, respectively) 525,920 -
Vanguard International Growth Fund (cost of $801,483
and $-0- for 1997 and 1996, respectively) 728,428 -
Expedition Money Market Fund (at cost which
equals fair value) 3,348,308 1,993,977
------------- -------------
203,456,882 128,347,706
Dividends and interest income receivable 1,008,594 908,562
Cash 229,291 149,810
Employee contributions receivable 435,524 162,164
Employer contributions receivable 3,725,619 1,741,430
------------- -------------
Net assets available for plan benefits $208,855,910 131,309,672
============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available for Plan Benefits
December 31, 1997, 1996, and 1995
<CAPTION>
1997 1996 1995
-------------- ------------ ------------
<S> <C> <C> <C>
Investment income:
Dividends $ 6,133,399 3,512,058 3,105,538
Interest 182,077 329,851 358,413
-------------- ------------ ------------
Net investment income 6,315,476 3,841,909 3,463,951
Net realized gain on sale of investments 5,781,685 3,539,120 2,496,095
Unrealized appreciation of investments 62,880,898 16,735,603 28,229,260
-------------- ------------ ------------
74,978,059 24,116,632 34,189,306
Contributions:
Employee 10,533,159 3,784,030 3,049,865
Employer 3,738,790 4,774,512 1,115,422
-------------- ------------ ------------
14,271,949 8,558,542 4,165,287
Distributions to participants (13,263,735) (11,081,988) (7,244,825)
Rollovers and transfers 1,559,965 3,951,687 553,250
-------------- ------------ ------------
Net increase 77,546,238 25,544,873 31,663,018
Net assets available for plan benefits:
Beginning of year 131,309,672 105,764,799 74,101,781
-------------- ------------ ------------
End of year $ 208,855,910 131,309,672 105,764,799
============== ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1997, 1996 and 1995
(1) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements of Compass Bancshares, Inc.
Employee Stock Ownership Plan (the Plan) have been prepared on an
accrual basis in accordance with generally accepted accounting
principles.
(b) Investments in Securities
Corporate securities are valued based on quotations obtained from
national securities exchanges. Mutual funds are valued at their current
unit value. The GIC - Capital Preservation Fund is valued at contract
value which aproximates fair value adn the money market is valued at
cost which equals fair value. Purchases and sales of securities are
recorded on a trade-date basis. Realized gains and losses are
calculated using the average cost method.
(c) Plan Expenses
The trust department of Compass Bank (the Trustee) is trustee for the
Plan. Compass Bank is a wholly-owned banking subsidiary of Compass
Bancshares, Inc. (the Company or Employer). In 1997, administrative fees
were paid by the Company. In previous years, administrative fees were
paid by the Plan to the Trustee and were reimbursed directly by the
Company. Trustee administration fees were $694,069, $449,271, and
$377,048 for the years ended December 31, 1997, 1996 and 1995,
respectively.
(d) Federal Income Taxes
A determination letter has been received from the Internal Revenue
Service stating that the Plan qualifies under Section 401 of the
Internal Revenue Code and that the Plan is exempt from federal income
tax. Amounts contributed by the employer and Plan earnings and
appreciation in the value of investments will not be taxed to the
employee until a distribution is received from the Plan, except for
appreciation in the value of Compass Bancshares, Inc. common stock which
will not be taxed until the participant disposes of that stock.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrators to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of the
components of changes in net assets during the reporting period. Actual
results could differ from those estimates.
(2) Organization
The Plan was adopted on November 19, 1976, effective January 1, 1976. The
Plan was amended, effective April 1, 1986, to include a salary reduction
feature which permits employees who participate (Participants) in the Plan
to defer and save part of their compensation, as provided for under Section
401(k) of the Internal Revenue Code. The Plan is subject to the applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended (ERISA).
(3) Description of Plan
(a) Participant Contributions
Employees automatically become Participants on the first day of January
or July following completion of one year of service. Participants may
elect to have up to 10 percent of their compensation deferred and
contributed to the Plan. There were 4,290, 4,070, and 3,792
participants as of December 31, 1997, 1996, and 1995, respectively.
Participants may allocate their contributions, in multiples of 1
percent, to the following funds:
1) Employee Company Stock Fund: Invested entirely in common stock of
Compass Bancshares, Inc.
2) Expedition Equity Fund - In 1997, all balances previously held in
the Growth Stock Fund, the Value Stock Fund, or the Contrarian Stock
Fund were converted to shares of the Expedition Equity Fund. The
Fund invests primarily (at least 80 percent of its total assets) in
common stocks issued by mid and large capitalization companies. The
Fund invests in stocks of private companies that are subject to wide
market value (price) fluctuations based on market and economic
conditions and perceptions, and, therefore involves a high level of
investment risk.
3) Federated Capital Preservation Fund - Employee Guaranteed Income
Contract Fund: Invested solely in one or more guaranteed income
contracts entered into with insurance companies with the objective
of providing high current income and stability of principal.
4) Expedition Money Market Fund (previously invested Starburst Money
Market Fund) - Invests in high quality money market instruments that
are either rated in the highest short-term rating category by one or
more nationally recognized statistical rating organizations or of
comparable quality to such securities having such ratings.
5) Expedition Bond Fund - Invests in a diversified portfolio consisting
primarily of bonds (normally at least 65 percent in bonds), as well
as other fixed income securities. The Fund may also invest in
certain securities, including mortgage-related securities, foreign
securities and financial futures and options on financial fixtures,
which may present special risks not associated with bonds and fixed-
income securities generally.
6) Vanguard International Growth Portfolio - Invests in stocks of non-
U.S. companies. About two-thirds of the Funds assets are invested in
small and medium size companies, and the remaining assets are
invested in large companies.
7) AIM Constellation Fund - Invests primarily in U.S. companies. The
Fund's investment advisor will emphasize medium-sized and small-
sized emerging growth companies. The Fund is also invested in
companies that are likely to benefit from new or innovative
products, services, or processes.
8) Evergreen Foundation Fund - Invests in a combination of common
stocks, preferred stocks, securities convertible into or
exchangeable for common stocks, corporate and U.S. Government debt
obligations and short-term debt obligations. Under normal
circumstances, the Fund anticipates that at least 25 percent of its
net assets will consist of fixed-income securities. The balance is
invested in equity securities or securities convertible into equity
securities.
Compass Bank is the investment advisor for the Expedition Equity Fund,
the Expedition Money Market Fund, and the Expedition Bond Fund.
(b) Employer Contributions
The Employer, in its sole discretion, may make matching contributions in
an amount determined by the board of directors of the Company. These
matching contributions may not exceed the lesser of a Participant's
elective contribution or 2 percent of such Participant's base
compensation.
If the Employer's earnings reach a targeted amount, the Employer may
contribute an additional 1 percent matching amount. Such contributions
are allocated to employee amounts based on relative compensation. For
the years ended December 31, 1997 and 1996, the employer's earnings
reached the targeted amount. The matching contribution for these two
years was the lesser of the Participant's elective contribution or 3
percent of the Participant's base compensation. The employer's earnings
did not reach the target in 1995.
(c) Vesting
Participants have a fully-vested and nonforfeitable interest in the
portion of their accounts attributable to their contributions and the
Employer's matching contributions, including earnings thereon. A
Participant acquires a vested interest in accounts attributable to the
additional 1 percent contribution based on length of employment, as
follows:
Years of Service Vesting Percentage
---------------- ------------------
Less than 5 0
5 or more 100
(d) Forfeitures
If a Participant incurs a "break in service," as defined in the Plan,
for any reason other than permanent disability, death or normal
retirement, and is not 100 percent vested in the employer discretionary
contributions, the nonvested portion is forfeited. Forfeited amounts
attributable to employer discretionary contributions are allocated among
eligible Participants in the same manner as employer discretionary
contributions.
(e) Withdrawal Provisions
Participants may request that all or part of their accounts attributable
to elective contributions, adjusted for gain or loss thereon, be paid to
them to meet an immediate and heavy financial hardship for which funds
are not reasonably available to them from other sources. The amount
paid to a Participant in this fashion will be taxable and may not be
repaid to the Plan.
(f) Priorities Upon Termination
Upon termination of the Plan, all Participants' funds shall become fully
vested. The trust will continue until the Plan benefits of each
Participant has been distributed.
(g) Rollovers
During 1997, 1996 and 1995, assets were rolled into the Plan from the
plans that were associated with banks acquired by the Company.
(4) Investments
The investments of the Plan as of December 31, 1997 and 1996 are
summarized as follows:
<TABLE>
<CAPTION>
Fair
value
per
Number of share Fair
December 31, 1997 shares/units Cost or unit value
----------------- ------------ ------------ ------- -----------
<S> <C> <C> <C> <C>
Common stock -
Compass Bancshares, Inc. 4,100,473 $ 48,199,858 43.75 179,395,672
Mutual funds-
Expedition Equity Fund 1,518,778 11,316,000 9.44 14,337,261
Expedition Bond Fund 53,431 499,312 9.86 526,832
Vanguard International Growth Fund 44,633 801,483 16.39 728,428
AIM Constellation Fund 38,400 1,149,890 26.38 1,012,996
Evergreen Foundation Fund 27,278 486,520 19.28 525,920
Federated Capital Preservation Fund 358,146 3,581,465 10.00 3,581,465
Compass Bank, Inc. Expedition
Money Market Fund 3,348,308 3,348,308 1.00 3,348,308
------------ -----------
$ 69,382,835 203,456,882
============ ===========
</TABLE>
<TABLE>
<CAPTION>
Fair
value
per
Number of share Fair
December 31, 1996 shares/units Cost or unit value
----------------- ------------ ------------ ------- -----------
<S> <C> <C> <C> <C>
Common stock -
Compass Bancshares, Inc. 2,761,775 $ 41,752,828 39.75 109,780,556
------------ -----------
Compass Bank, Inc. common trust funds-
Employee Benefit Growth Stock
Collective Investment Fund 42,756 2,871,197 86.86 3,713,654
Employee Benefit Value Stock
Collective Investment Fund 154,914 3,171,090 28.62 4,433,044
Employee Benefit Short-Term,
High Quality Bond Collective
Investment Fund 36,915 555,433 15.72 580,260
Employee Benefit Contrarian
Stock Collective Investment Fund 86,242 2,904,255 45.69 3,940,345
------------ -----------
9,501,975 12,667,303
------------ -----------
Federated Capital Preservation Fund 390,587 3,905,776 10.00 3,905,870
Compass Bank, Inc. Starburst
Money Market Fund 1,993,977 1,993,977 1.00 1,993,977
------------ -----------
$ 57,154,556 128,347,706
============ ===========
</TABLE>
The net unrealized appreciation (depreciation) of investments included
in plan equity is as follows:
<TABLE>
<CAPTION>
Employee Employee Employee Employee
Benefit Benefit Benefit Benefit
Common Growth Stock Value Contrarian Stock Short-term,
Stock Collective Stock Collective Expedition High Quality
Compass Investment Collective Investment Equity Bond Collective
Bancshares, Inc. Fund Investment Fund Fund Investment Fund
---------------- ------------ ---------- ---------------- ------------ ---------------
<S> <C> <c. <C> <C> <C> <C>
Balance at December 31, 1994 $ 25,347,891 203,778 287,633 388,977 - 8
1995 appreciation 27,122,436 232,299 384,420 481,445 - 8,660
------------- -------- --------- --------- ----------- -------
Balance at December 31, 1995 52,470,327 436,077 672,053 870,422 - 8,668
1996 appreciation 15,557,401 406,380 589,901 165,668 - 16,159
------------- -------- --------- --------- ----------- -------
Balance at December 31, 1996 68,027,728 842,457 1,261,954 1,036,090 3,140,501 * 24,827
1997 appreciation
(depreciation) 63,168,086 * * * (119,240)* **
------------- -------- --------- --------- ----------- -------
Balance at December 31, 1997 $ 131,195,814 3,021,261
============= ======== ========= ========= =========== =======
</TABLE>
* The Growth Stock Fund, Value Stock Fund and Contrarian Stock Fund were
combined into the Expedition Equity Fund in 1997.
** The High Quality Bond Fund became the Expedition Bond Fund in 1997.
<TABLE>
<CAPTION>
Federated Evergreen Vanguard
Expedition Capital AIM Foundation International
Bond Preservation Constellation Balanced Growth Combined
Fund Fund Fund Fund Fund funds
---------- ------------ ------------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $ - - - - - 26,228,287
1995 appreciation - - - - - 28,229,260
-------- ------ --------- ------- -------- -----------
Balance at December 31, 1995 - - - - - 54,457,547
1996 appreciation - 94 - - - 16,735,603
-------- ------ --------- ------- -------- -----------
Balance at December 31, 1996 24,827** 94 - - - 71,193,150
1997 appreciation
(depreciation) 2,693 (94) (136,893) 39,401 (73,055) 62,880,898
-------- ------ --------- ------- -------- -----------
Balance at December 31, 1997 $ 27,520 - (136,893) 39,401 (73,055) 134,074,048
======== ====== ========= ======= ======== ===========
</TABLE>
(5) Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, Disclosures About Fair
Value of Financial Instruments, requires disclosure of fair value
information about financial instruments, whether or not recognized on the
face of the balance sheet, for which it is practical to estimate that
value. The assumptions used in the estimation of the fair value of the
Company's financial instruments are explained in note 1(b) and below. Fair
value estimates should not be considered representative of the liquidation
value of the Plan's financial instruments, but rather a good-faith estimate
of the fair value of financial instruments held by the Plan.
For cash, receivables and payables, the carrying amounts approximate fair
value because of the short-term nature of these instruments.
<PAGE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1997, 1996, and 1995
(6) Investment Funds
The financial information on each investment fund option is presented
below:
<TABLE>
<CAPTION>
Federated
Employee/ Capital Exped- ESOP - Expedition AIM Evergreen
Employer Preserv- Expedition ition Employer Money Constel- Foundation
Company ation Equity Bond Company Market lation Balanced Vanguard Combined
Stock Fund Fund Fund Fund Stock Fund Fund Fund Fund Fund Funds
----------- --------- ---------- ------- ----------- ---------- --------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31,
1997
Investments
at fair
value:
Compass
Bancshares,
Inc.
common
stock $61,993,553 - - - 117,402,119 - - - - 179,395,672
Federated
Capital
Preservation
Fund - 3,581,465 - - - - - - - 3,581,465
Expedition
Equity
Fund - - 14,337,261 - - - - - - 14,337,261
Expedition
Bond
Fund - - - 526,832 - - - - - 526,832
AIM
Constellation
Fund - - - - - - 1,012,996 - - 1,012,996
Evergreen
Foundation
Balanced
Fund - - - - - - - 525,920 - 525,920
Vanguard
Fund - - - - - - - - 728,428 728,428
Expedition
Money
Market
Fund - - - - 646,257 2,702,051 - - - 3,348,308
----------- --------- ---------- ------- ----------- ---------- --------- ------- ------- -----------
Net
investment
income 61,993,553 3,581,465 14,337,261 526,832 118,048,376 2,702,051 1,012,996 525,920 728,428 203,456,882
Dividends
and
interest
income
receivable 335,465 17,426 - 147 640,776 14,780 - - - 1,008,594
Cash 143,093 - - - 13,066 73,132 - - - 229,291
Employee
contributions
receivable 282,588 15,865 69,168 6,907 - 12,001 22,332 10,863 15,800 435,524
Employer
contributions
receivable 673,733 - - - 3,051,886 - - - - 3,725,619
----------- --------- ---------- ------- ----------- ---------- --------- ------- ------- -----------
Net assets
available
for plan
benefits $63,428,432 3,614,756 14,406,429 533,886 121,754,104 2,801,964 1,035,328 536,783 744,228 208,855,910
=========== ========= ========== ======= =========== ========== ========= ======= ======= ===========
</TABLE>
<PAGE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1997, 1996, and 1995
<TABLE>
<CAPTION>
ESOP -
Employee/ Employee Federated Employee Employee Employee Employee Employer
December 31, 1996 Employer Growth Capital Starburst Value Contrarian Short-Term, Company
- ----------------- Company Equity Preservation Money Equity Equity High Quality Stock Unallocated
Assets Stock Fund Fund Fund Market Fund Fund Fund Bond Fund Fund Funds
------ ----------- --------- --------- --------- --------- --------- ------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments at fair value:
Compass Bancshares, Inc
common stock $35,718,833 - - - - - - 74,061,723 -
Compass Bank, Inc. common
trust funds - 3,713,654 - - 4,433,044 3,940,345 580,260 - -
Capital Preservation
Fund - - 3,905,870 - - - - - -
Money market fund 109,501 - - 1,882,554 1,922 -
----------- --------- --------- --------- --------- --------- ------- ----------- -------
35,828,334 3,713,654 3,905,870 1,882,554 4,433,044 3,940,345 580,260 74,063,645 -
Dividends and interest
income receivable 285,775 - 18,276 8,291 - - - 596,220 -
Cash 149,479 - - - 324 305 - - (298)
Employee contributions
receivable 64,351 22,978 17,977 6,111 21,784 26,246 2,717 - -
Employer contributions
receivable 615,572 - - - - - - 1,125,858 -
----------- --------- --------- --------- --------- --------- ------- ----------- -------
Net assets available
for plan benefits $36,943,511 3,736,632 3,942,123 1,896,956 4,455,152 3,966,896 582,977 75,785,723 (298)
=========== ========= ========= ========= ========= ========= ======= ========== =======
</TABLE>
<PAGE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1997, 1996, and 1995
<TABLE>
<CAPTION>
Employee/ Federated Employee Employee Employee
For the Employer Capital Growth Value Contrarian Short-Term Expedition Expedition
Year Ended Company Preservation Equity Equity Equity High-Quality Equity Bond
December 31, 1997 Stock Fund Fund Fund Fund Fund Bond Fund Fund Fund
------------ ---------- ----------- ----------- ----------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
income:
Dividends -
Compass
Bancshares,
Inc. $ 1,330,529 210,077 - - - - 1,997,688 -
Interest 11,874 - - - - - - 14,858
------------ ---------- ----------- ----------- ----------- --------- ----------- ---------
Net
investment
income 1,342,403 210,077 - - - - 1,997,688 14,858
Net realized
gain on
sale of
investments 2,299,480 - 43,061 65,245 53,984 32,536 683,749 14,853
Unrealized
appreciation
(depreciation)
of investments 20,931,703 (94) - - - - (119,240) 2,694
------------ ---------- ----------- ----------- ----------- --------- ----------- ---------
24,573,586 209,983 43,061 65,245 53,984 32,536 2,562,197 32,405
Contributions:
Employee 3,736,597 847,000 305,825 383,832 335,519 234,109 1,532,546 134,080
Employer 686,904 - - - - - - -
------------ ---------- ----------- ----------- ----------- --------- ----------- ---------
4,423,501 847,000 305,825 383,832 335,519 234,109 1,532,546 134,080
Distributions
paid to
participants (2,845,034) (976,144) (313,514) (281,494) (285,597) (140,437) (2,743,606) (294,005)
Rollovers and
transfers 332,868 (408,206) (3,772,004) (4,622,735) (4,070,802) (709,185) 13,055,292 661,406
------------ ---------- ----------- ----------- ----------- --------- ----------- ---------
Net increase
(decrease) 26,484,921 (327,367) (3,736,632) (4,455,152) (3,966,896) (582,977) 14,406,429 533,886
Net assets
available for
Plan benefits:
Beginning of
year 36,943,511 3,942,123 3,736,632 4,455,152 3,966,896 582,977 - -
------------ ---------- ----------- ----------- ----------- --------- ----------- ---------
End of year $63,428,432 3,614,756 - - - - 14,406,429 533,886
============ ========== =========== =========== =========== ========= =========== =========
</TABLE>
<TABLE>
<CAPTION>
ESOP Expedition AIM Evergreen
Employer Money Constel- Foundation
Company Market lation Balanced Vanguard Unallocated Combined
Stock Fund Fund Fund Fund Fund Fund Funds
------------- ---------- ---------- ---------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
December 31, 1997
Investment income:
Dividends - Compass
Bancshares, Inc. $ 2,591,361 - - 3,744 - - 6,133,399
Interest 20,694 134,651 - - - - 182,077
------------- ---------- ---------- ---------- ---------- --------- -------------
Net investment
income 2,612,055 134,651 - 3,744 - - 6,315,476
Net realized gain on
sale of investments 2,580,913 - 728 6,443 693 - 5,781,685
Unrealized
appreciation of
(depreciation)
investments 42,236,382 - (136,893) 39,401 (73,055) - 62,880,898
------------- ---------- ---------- ---------- ---------- --------- -------------
47,429,350 134,651 (136,165) 49,588 (72,362) - 74,978,059
Contributions:
Employee - 510,832 1,225,385 487,978 799,456 - 10,533,159
Employer 3,051,886 - - - - - 3,738,790
------------- ---------- ---------- ---------- ---------- --------- -------------
3,051,886 510,832 1,225,385 487,978 799,456 - 14,271,949
Distributions paid
to participants (4,512,855) (548,578) (53,892) (120,729) (147,850) - (13,263,735)
Rollovers and
transfers - 808,104 - 119,946 164,983 298 1,559,965
------------- ---------- ---------- ---------- ---------- --------- -------------
Net increase
(decrease) 45,968,381 905,009 1,035,328 536,783 744,227 298 77,546,238
Net assets
available for
Plan benefits:
Beginning of year 75,785,723 1,896,956 - - - (298) 131,309,672
------------- ---------- ---------- ---------- ---------- --------- -------------
End of year $121,754,104 2,801,965 1,035,328 536,783 744,227 - 208,855,910
============= ========== ========== ========== ========== ========= =============
<PAGE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1997, 1996, and 1995
</TABLE>
<TABLE>
<CAPTION>
ESOP -
Employee/ Federated Employee Employee Employee Employee Employee Employer
For the Employer Growth Capital Starburst Value Contrarian Short-Term, Company
Year Ended Company Equity Preservation Money Equity Equity High Quality Stock Unallocated
December 31, 1996 Stock Fund Fund Fund Market Fund Fund Fund Bond Fund Fund Funds
----------- --------- --------- --------- --------- --------- -------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends - Compass
Bancshares, Inc.
common stock $ 1,109,479 - - - - - - 2,402,579 -
Interest 4,955 - 225,427 93,168 - - - 6,301 -
----------- --------- --------- --------- --------- --------- -------- ----------- -------
Net investment income 1,114,434 - 225,427 93,168 - - - 2,408,880 -
Net realized gain on sale
of investments 832,227 128,174 (64) - 154,473 280,347 6,184 2,137,779 -
Unrealized appreciation
of investments 5,302,016 406,381 94 - 589,899 165,668 16,158 10,255,387 -
----------- --------- --------- --------- --------- --------- -------- ----------- -------
7,248,677 534,555 225,457 93,168 744,372 446,015 22,342 14,802,046 -
----------- --------- --------- --------- --------- --------- -------- ----------- -------
Contributions:
Employee 1,487,008 526,064 481,363 140,138 498,963 591,567 58,927 - -
Employer 1,845,693 - - - - - - 2,928,819 -
----------- --------- --------- --------- --------- --------- -------- ----------- -------
3,332,701 526,064 481,363 140,138 498,963 591,567 58,927 2,928,819 -
----------- --------- --------- --------- --------- --------- -------- ----------- -------
Distributions paid to
participants (2,776,922) (267,654) (679,933) (497,939) (253,256) (314,921) (49,264) (6,237,340) (4,759)
Rollovers and transfers 1,310,651 690,521 (503,838) 501,988 919,476 625,502 407,387 - -
----------- --------- --------- --------- --------- --------- -------- ----------- -------
Net increase (decrease) 9,115,107 1,483,486 (476,951) 237,355 1,909,555 1,348,163 439,392 11,493,525 (4,759)
Net assets available for
Plan benefits:
Beginning of year 27,828,404 2,253,146 4,419,074 1,659,601 2,545,597 2,618,733 143,585 64,292,198 4,461
----------- --------- --------- --------- --------- --------- -------- ----------- -------
End of year $36,943,511 3,736,632 3,942,123 1,896,956 4,455,152 3,966,896 582,977 75,785,723 (298)
=========== ========= ========= ========= ========= ========= ======== ========== =======
</TABLE>
<PAGE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1997, 1996, and 1995
<TABLE>
<CAPTION>
Employee/ Federated Employee Employee Employee Employee Employee Employer
For the Employer Growth Capital Starburst Value Contrarian Short-Term, Company
Year Ended Company Equity Preservation Money Equity Equity High Quality Stock Unallocated
December 31, 1995 Stock Fund Fund Fund Market Fund Fund Fund Bond Fund Fund Funds
----------- --------- --------- --------- --------- --------- -------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends - Compass
Bancshares, Inc.
common stock $ 902,658 - - - - - - 2,202,353 527
Interest 7,307 - 252,581 91,424 - - - 5,599 1,502
----------- --------- --------- --------- --------- --------- ------- ----------- ------
Net investment income 909,965 - 252,581 91,424 - - - 2,207,952 2,029
Net realized gain on sale
of investments 599,112 70,352 - - 96,957 97,692 2,996 1,628,986 -
Unrealized appreciation
(depreciation) of
investments 7,914,698 231,155 - - 384,420 481,445 8,660 19,207,738 1,144
----------- --------- --------- --------- --------- --------- ------- ----------- ------
9,423,775 301,507 252,581 91,424 481,377 579,137 11,656 23,044,676 3,173
Contributions:
Employee 1,304,618 349,378 506,055 123,812 354,110 395,198 16,594 - 100
Employer 1,115,422 - - - - - - -
----------- --------- --------- --------- --------- --------- ------- ----------- ------
2,420,040 349,378 506,055 123,812 354,110 395,198 16,594 - 100
----------- --------- --------- --------- --------- --------- ------- ----------- ------
Distributions paid to
participants (1,714,210) (238,822) (772,737) (389,789) (242,178) (247,217) (1,162) (3,630,480) (8,230)
Rollovers and transfers 120,818 99,080 (100,925) 103,503 173,804 107,703 77,448 (6,159) (22,022)
----------- --------- --------- --------- --------- --------- ------- ----------- ------
Net increase (decrease) 10,250,423 511,143 (115,026) (71,050) 767,113 834,821 104,536 19,408,037 (26,979)
Net assets available for
Plan benefits:
Beginning of year 17,577,981 1,742,002 4,534,101 1,730,651 1,778,484 1,783,912 39,050 44,884,161 31,439
----------- --------- --------- --------- --------- --------- ------- ----------- ------
End of year $27,828,404 2,253,146 4,419,074 1,659,601 2,545,597 2,618,733 143,585 64,292,198 4,461
=========== ========= ========= ========= ========= ========= ======= ========== ======
</TABLE>
<PAGE>
<PAGE>
Schedule I
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
As of December 31, 1997
<TABLE>
<CAPTION>
Number of Fair value per Fair
December 31, 1997 shares/units Cost share or unit value
------------ ------------ -------------- -----------
<S> <C> <C> <C> <C>
Compass Bancshares, Inc. 4,100,473 $ 48,199,858 43.75 179,395,672
Mutual funds :
Expedition Equity Fund 1,518,778 11,316,000 9.44 14,337,261
Expedition Bond Fund 53,431 499,312 9.86 526,832
AIM Constellation Fund 38,400 1,149,890 26.38 1,012,996
Evergreen Foundation Balanced Fund 27,278 486,519 19.28 525,920
Vanguard International Growth Fund 44,633 801,483 16.39 728,428
Federated Capital Preservation Fund 358,146 3,581,465 10.00 3,581,465
Compass Bancshares, Inc. Expedition
Money Market Fund 3,348,308 3,348,308 1.00 3,348,308
------------ -----------
$ 69,382,835 203,456,882
============ ===========
</TABLE>
* Compass Bancshares, Inc., the issuer of the common stock and investment
manager of the Expedition Funds is a party-in-interest to the plan.
<PAGE>
<PAGE>
Schedule II
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1997
<TABLE>
<CAPTION>
Description Current
of asset value of
in asset on
number Purchase Selling Cost of transaction Net gain
Identity of party involved of shares price price asset date (loss)
------------- ------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Purchase of investments:
Compass Bancshares, Inc.*
common stock $ 278,488 8,671,132 - 8,671,132 8,671,132 -
Expedition Money Market* 19,312,898 19,312,898 - 19,312,898 19,312,898 -
Sale of investments:
Compass Bancshares, Inc.*
common stock 186,060 - 7,104,495 2,224,102 7,104,495 4,880,393
Expedition Money Market* 17,958,567 - 17,958,567 17,958,567 - -
</TABLE>
* Compass Bancshares, Inc., the issuer of the common stock and investment
manager of the Expedition Funds is a party-in-interest to the plan.
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
COMPASS BANCSHARES, INC. EMPLOYEE STOCK OPTION PLAN
---------------------------------------------------
(Name of the Plan)
July 14, 1998 /s/ Garrett R. Hegel
- ------------- -----------------------
DATE GARRETT R. HEGEL
CHIEF FINANCIAL OFFICER
<PAGE>
EXHIBITS
Exhibit (23) - Consents of experts and counsel
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Administrative Committee
Compass Bancshares, Inc. Employee Stock Ownership Plan:
We consent to incorporation by reference in the registration statement on
Form S-8 of Compass Bancshares, Inc. Employee Stock Ownership Plan of our
report dated July 9, 1998, relating to the statements of net assets
available for plan benefits of Compass Bancshares, Inc. Employee Stock
Ownership Plan as of December 31, 1997 and 1996, and the related statements
of changes in net assets available for plan benefits and related schedules
for each of the years in the three-year period ended December 31, 1997, which
report appears in the December 31, 1997 Annual Report on Form 11-K of Compass
Bancshares, Inc. Employee Stock Ownership Plan.
/s/ KPMG Peat Marwick LLP
Birmingham, Alabama
July 14, 1998
