##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2005
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File No. 1-31272
 (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
 
  (205) 297-3000
 
  þ o
 þ o
 o þ
  Class
    
    Outstanding at October 31, 2005Common Stock, $2 Par Value
    
    124,541,209




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PagePART I. FINANCIAL INFORMATIONItem 1
    
    Financial Statements (Unaudited)Consolidated Balance Sheets as of September 30, 2005 and December 31, 2004
    
    
    3Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2005 and 2004
    
    
    4Consolidated Statements of Changes In Shareholders Equity for the Nine Months Ended September 30, 2005 and 2004
    
    
    5Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2005 and 2004
    
    
    6Notes to Consolidated Financial Statements (Unaudited)
    
    
    8Item 2
    
    Managements Discussion and Analysis of Results of Operations and Financial Condition
    
    
    24Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4
    
    Controls and Procedures
    
    
    33PART II. OTHER INFORMATIONItem 1
    
    Legal Proceedings
    
    
    34Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 6
    
    Exhibits
    
    
    34EX-31.(A) SECTION 302 CERTIFICATION OF THE CEOEX-31.(B) SECTION 302 CERTIFICATION OF THE CFOEX-32.(A) SECTION 906 CERTIFICATION OF THE CEOEX-32.(B) SECTION 906 CERTIFICATION OF THE CFO
  -2-




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##### Table of Contents



PART
I. FINANCIAL INFORMATION
 
 Item 1
 Financial Statements
 COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 Consolidated Balance Sheets
   September 30, 2005
    
    
    December 31, 2004AssetsCash and due from banks
    
    $
    774,812
    
    
    $
    585,679Federal funds sold and securities purchased
under agreements to resell
    
    
    36,225
    
    
    
    46,948Trading account assets
    
    
    66,321
    
    
    
    60,156Investment securities available for sale
    
    
    4,514,493
    
    
    
    4,398,184Investment securities held to maturity (fair value of
$2,341,796 and $2,768,334 for 2005 and 2004, respectively)
    
    
    2,359,824
    
    
    
    2,767,099Loans
    
    
    20,841,790
    
    
    
    18,856,922Allowance for loan losses
    
    
    (260,512
    )
    
    
    (258,339
    )Net loans
    
    
    20,581,278
    
    
    
    18,598,583Premises and equipment, net
    
    
    542,613
    
    
    
    537,466Bank owned life insurance
    
    
    436,611
    
    
    
    423,942Goodwill
    
    
    316,240
    
    
    
    302,619Other assets
    
    
    502,863
    
    
    
    463,952Total assets
    
    $
    30,131,280
    
    
    $
    28,184,628Liabilities and Shareholders EquityDeposits:Noninterest bearing
    
    $
    6,085,377
    
    
    $
    5,476,140Interest bearing
    
    
    12,743,779
    
    
    
    11,563,011Total deposits
    
    
    18,829,156
    
    
    
    17,039,151Federal funds purchased and securities sold under
agreements to repurchase
    
    
    4,405,198
    
    
    
    4,532,004Other short-term borrowings
    
    
    195,076
    
    
    
    175,771FHLB and other borrowings
    
    
    4,132,080
    
    
    
    4,140,972Accrued expenses and other liabilities
    
    
    339,719
    
    
    
    251,477Total liabilities
    
    
    27,901,229
    
    
    
    26,139,375Shareholders equity:Preferred stock (25,000,000 shares authorized; issued  none)
    
    
    
    
    
    
    Common stock of $2 par value:Authorized  300,000,000 shares;Issued  133,783,248 shares in 2005 and
132,903,225 shares in 2004
    
    
    267,566
    
    
    
    265,806Treasury stock, at cost (9,273,328 shares in 2005 and
9,639,194 shares in 2004)
    
    
    (320,698
    )
    
    
    (333,351
    )Surplus
    
    
    290,934
    
    
    
    264,400Loans to finance stock purchases
    
    
    (1,249
    )
    
    
    (1,056
    )Unearned restricted stock
    
    
    (12,327
    )
    
    
    (10,624
    )Accumulated other comprehensive loss
    
    
    (52,445
    )
    
    
    (23,376
    )Retained earnings
    
    
    2,058,270
    
    
    
    1,883,454Total shareholders equity
    
    
    2,230,051
    
    
    
    2,045,253Total liabilities and shareholders equity
    
    $
    30,131,280
    
    
    $
    28,184,628
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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Income
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Interest income:Interest and fees on loans
    
    $
    321,087
    
    
    $
    238,392
    
    
    $
    884,110
    
    
    $
    693,530Interest on investment securities available for sale
    
    
    48,049
    
    
    
    42,914
    
    
    
    139,911
    
    
    
    137,820Interest on investment securities held to maturity
    
    
    29,550
    
    
    
    34,709
    
    
    
    91,805
    
    
    
    107,780Interest on federal funds sold and securities
purchased under agreements to resell
    
    
    391
    
    
    
    283
    
    
    
    1,020
    
    
    
    599Interest on trading account assets
    
    
    222
    
    
    
    111
    
    
    
    577
    
    
    
    367Total interest income
    
    
    399,299
    
    
    
    316,409
    
    
    
    1,117,423
    
    
    
    940,096Interest expense:Interest on deposits
    
    
    68,848
    
    
    
    37,861
    
    
    
    176,309
    
    
    
    109,821Interest on federal funds purchased and securities
sold under agreements to repurchase
    
    
    37,194
    
    
    
    15,438
    
    
    
    92,886
    
    
    
    35,458Interest on other short-term borrowings
    
    
    1,418
    
    
    
    395
    
    
    
    2,922
    
    
    
    788Interest on FHLB and other borrowings
    
    
    41,899
    
    
    
    36,184
    
    
    
    118,904
    
    
    
    117,898Total interest expense
    
    
    149,359
    
    
    
    89,878
    
    
    
    391,021
    
    
    
    263,965Net interest income
    
    
    249,940
    
    
    
    226,531
    
    
    
    726,402
    
    
    
    676,131Provision for loan losses
    
    
    34,195
    
    
    
    25,617
    
    
    
    82,268
    
    
    
    78,140Net interest income after provision for loan
losses
    
    
    215,745
    
    
    
    200,914
    
    
    
    644,134
    
    
    
    597,991Noninterest income:Service charges on deposit accounts
    
    
    78,448
    
    
    
    73,401
    
    
    
    220,024
    
    
    
    210,723Card and merchant processing fees
    
    
    24,496
    
    
    
    19,554
    
    
    
    70,100
    
    
    
    55,139Insurance commissions
    
    
    13,888
    
    
    
    11,787
    
    
    
    45,182
    
    
    
    39,180Retail investment sales
    
    
    8,748
    
    
    
    8,501
    
    
    
    25,977
    
    
    
    24,151Asset management fees
    
    
    7,386
    
    
    
    5,479
    
    
    
    21,093
    
    
    
    16,898Corporate and correspondent investment sales
    
    
    7,037
    
    
    
    4,347
    
    
    
    16,391
    
    
    
    15,220Bank owned life insurance
    
    
    4,396
    
    
    
    4,224
    
    
    
    12,852
    
    
    
    12,427Investment securities gains, net
    
    
    
    
    
    
    25,129
    
    
    
    79
    
    
    
    27,336Gain on sale of business
    
    
    
    
    
    
    
    
    
    
    4,791
    
    
    
    Other
    
    
    26,246
    
    
    
    19,892
    
    
    
    74,734
    
    
    
    63,170Total noninterest income
    
    
    170,645
    
    
    
    172,314
    
    
    
    491,223
    
    
    
    464,244Noninterest expense:Salaries, benefits and commissions
    
    
    122,979
    
    
    
    111,061
    
    
    
    363,085
    
    
    
    340,528Equipment
    
    
    21,048
    
    
    
    19,301
    
    
    
    61,277
    
    
    
    56,602Net occupancy
    
    
    17,036
    
    
    
    16,377
    
    
    
    50,521
    
    
    
    49,623Professional services
    
    
    15,154
    
    
    
    13,407
    
    
    
    44,388
    
    
    
    40,154Marketing
    
    
    10,505
    
    
    
    9,749
    
    
    
    33,866
    
    
    
    28,885Communications
    
    
    5,400
    
    
    
    5,246
    
    
    
    16,323
    
    
    
    16,607Amortization of intangibles
    
    
    1,541
    
    
    
    1,621
    
    
    
    4,656
    
    
    
    4,871Merger and integration
    
    
    454
    
    
    
    233
    
    
    
    923
    
    
    
    778Loss on prepayment of FHLB advances
    
    
    
    
    
    
    25,136
    
    
    
    
    
    
    
    25,136Other
    
    
    33,279
    
    
    
    30,370
    
    
    
    96,824
    
    
    
    90,645Total noninterest expense
    
    
    227,396
    
    
    
    232,501
    
    
    
    671,863
    
    
    
    653,829Net income before income tax expense
    
    
    158,994
    
    
    
    140,727
    
    
    
    463,494
    
    
    
    408,406Income tax expense
    
    
    53,943
    
    
    
    47,125
    
    
    
    157,236
    
    
    
    136,812Net income
    
    $
    105,051
    
    
    $
    93,602
    
    
    $
    306,258
    
    
    $
    271,594Basic earnings per share
    
    $
    0.85
    
    
    $
    0.76
    
    
    $
    2.48
    
    
    $
    2.22Basic weighted average shares outstanding
    
    
    123,947
    
    
    
    122,320
    
    
    
    123,619
    
    
    
    122,153Diluted earnings per share
    
    $
    0.83
    
    
    $
    0.75
    
    
    $
    2.42
    
    
    $
    2.17Diluted weighted average shares outstanding
    
    
    126,877
    
    
    
    125,557
    
    
    
    126,487
    
    
    
    125,218Dividends per share
    
    $
    0.3500
    
    
    $
    0.3125
    
    
    $
    1.0500
    
    
    $
    0.9375
  -4-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Changes In Shareholders Equity
    AccumulatedOther
    
    
    
    
    
    
    TotalCommon
    
    
    Treasury
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    
    
    
    
    Shareholders
    
    
    ComprehensiveStock
    
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Other
    
    
    Equity
    
    
    IncomeBalance, December 31, 2003
    
    $
    263,138
    
    
    $
    (317,669
    )
    
    $
    227,404
    
    
    $
    1,668,998
    
    
    $
    37,306
    
    
    $
    (7,294
    )
    
    $
    1,871,883Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    271,594
    
    
    
    
    
    
    
    
    
    
    
    271,594
    
    
    $
    271,594Change in unrealized net losses on securities
available for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37,056
    )
    
    
    
    
    
    
    (37,056
    )
    
    
    (37,056
    )Change in accumulated net gains / losses on cash-
flow hedging instruments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,281
    )
    
    
    
    
    
    
    (4,281
    )
    
    
    (4,281
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    230,257Common dividends declared ($0.9375 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (115,528
    )
    
    
    
    
    
    
    
    
    
    
    (115,528
    )Exercise of stock options and other issuances
    
    
    2,060
    
    
    
    
    
    
    
    21,968
    
    
    
    (1,312
    )
    
    
    
    
    
    
    
    
    
    
    22,716Issuance of restricted stock, net of cancellations
    
    
    262
    
    
    
    
    
    
    
    6,720
    
    
    
    
    
    
    
    
    
    
    
    (7,651
    )
    
    
    (669
    )Advances on loans to finance stock purchases,
net of repayments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (250
    )
    
    
    (250
    )Issuance of treasury stock for acquisitions, stock
options and employee benefit plans
    
    
    
    
    
    
    7,100
    
    
    
    913
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,013Amortization of restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,059
    
    
    
    3,059Purchase of treasury stock
    
    
    
    
    
    
    (33,743
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,743
    )Balance, September 30, 2004
    
    $
    265,460
    
    
    $
    (344,312
    )
    
    $
    257,005
    
    
    $
    1,823,752
    
    
    $
    (4,031
    )
    
    $
    (12,136
    )
    
    $
    1,985,738Balance, December 31, 2004
    
    $
    265,806
    
    
    $
    (333,351
    )
    
    $
    264,400
    
    
    $
    1,883,454
    
    
    $
    (23,376
    )
    
    $
    (11,680
    )
    
    $
    2,045,253Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    306,258
    
    
    
    
    
    
    
    
    
    
    
    306,258
    
    
    $
    306,258Change in unrealized net losses on securities
available for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,429
    )
    
    
    
    
    
    
    (31,429
    )
    
    
    (31,429
    )Change in accumulated net losses on cash-
flow hedging instruments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,360
    
    
    
    
    
    
    
    2,360
    
    
    
    2,360Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    277,189Common dividends declared ($1.0500 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (130,330
    )
    
    
    
    
    
    
    
    
    
    
    (130,330
    )Exercise of stock options and other issuances
    
    
    1,510
    
    
    
    
    
    
    
    17,957
    
    
    
    (1,112
    )
    
    
    
    
    
    
    
    
    
    
    18,355Issuances of restricted stock, net of cancellations
    
    
    250
    
    
    
    
    
    
    
    4,932
    
    
    
    
    
    
    
    
    
    
    
    (5,182
    )
    
    
    Advances on loans to finance stock purchases,
net of repayments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (193
    )
    
    
    (193
    )Issuance of treasury stock for acquisitions, stock
options and employee benefit plans
    
    
    
    
    
    
    14,557
    
    
    
    3,645
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,202Amortization of restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,479
    
    
    
    3,479Purchase of treasury stock
    
    
    
    
    
    
    (1,904
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,904
    )Balance, September 30, 2005
    
    $
    267,566
    
    
    $
    (320,698
    )
    
    $
    290,934
    
    
    $
    2,058,270
    
    
    $
    (52,445
    )
    
    $
    (13,576
    )
    
    $
    2,230,051
  -5-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Cash Flows
   Nine Months EndedSeptember 30,2005
    
    
    2004Operating Activities:Net income
    
    $
    306,258
    
    
    $
    271,594Adjustments to reconcile net income to cash provided by operations:Depreciation and amortization
    
    
    77,601
    
    
    
    79,440Accretion of discount and loan fees
    
    
    (5,068
    )
    
    
    (13,827
    )Provision for loan losses
    
    
    82,268
    
    
    
    78,140Net change in trading account assets
    
    
    (5,183
    )
    
    
    4,059Net gain on sale of investment securities available for sale
    
    
    (79
    )
    
    
    (27,336
    )Net loss on prepayment of FHLB advances
    
    
    
    
    
    
    25,136Net gain on sale of business
    
    
    (4,791
    )
    
    
    Increase in other assets
    
    
    (59,702
    )
    
    
    (75,162
    )Increase in other liabilities
    
    
    113,151
    
    
    
    58,750Net cash provided by operating activities
    
    
    504,455
    
    
    
    400,794Investing Activities:Proceeds from prepayments, maturities and calls of investment
securities held to maturity
    
    
    413,086
    
    
    
    585,879Purchases of investment securities held to maturity
    
    
    (5,000
    )
    
    
    Proceeds from sales of investment securities available for sale
    
    
    50,870
    
    
    
    812,248Proceeds from prepayments, maturities and calls of investment
securities available for sale
    
    
    520,399
    
    
    
    684,966Purchases of investment securities available for sale
    
    
    (744,377
    )
    
    
    (1,392,921
    )Net decrease in federal funds sold and securities purchased under
agreements to resell
    
    
    10,723
    
    
    
    35,662Net increase in loan portfolio
    
    
    (2,066,949
    )
    
    
    (1,724,255
    )Net cash paid in acquisitions
    
    
    (202
    )
    
    
    Net cash received in sale of business
    
    
    4,726
    
    
    
    Purchases of premises and equipment, net
    
    
    (49,777
    )
    
    
    (46,910
    )Proceeds from sales of other real estate owned
    
    
    15,841
    
    
    
    23,958Net cash used by investing activities
    
    
    (1,850,660
    )
    
    
    (1,021,373
    )
  -6-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows  Continued
 Nine Months EndedSeptember 30,2005
    
    
    2004Financing Activities:Net increase in demand deposits, NOW accounts
and savings accounts
    
    
    633,014
    
    
    
    579,824Net increase in time deposits
    
    
    1,158,250
    
    
    
    225,700Net increase (decrease) in federal funds purchased and securities
sold under agreements to repurchase
    
    
    (126,806
    )
    
    
    598,237Net increase (decrease) in other short-term borrowings
    
    
    19,305
    
    
    
    (58,650
    )Proceeds from FHLB advances and other borrowings
    
    
    396,902
    
    
    
    1,125,101Repayment of FHLB advances and other borrowings
    
    
    (400,376
    )
    
    
    (1,793,004
    )Redemption of guaranteed preferred beneficial interests in
Companys junior subordinated deferrable interest debentures
    
    
    
    
    
    
    (23,000
    )Common dividends paid
    
    
    (165,702
    )
    
    
    (115,914
    )Purchase of treasury stock
    
    
    (1,904
    )
    
    
    (33,743
    )Issuance of treasury stock for benefit plans and stock options
    
    
    4,493
    
    
    
    3,272Repayment of loans to finance stock purchases
    
    
    491
    
    
    
    357Proceeds from exercise of stock options
    
    
    17,671
    
    
    
    21,440Net cash provided by financing activities
    
    
    1,535,338
    
    
    
    529,620Net increase (decrease) in cash and due from banks
    
    
    189,133
    
    
    
    (90,959
    )Cash and due from banks at beginning of period
    
    
    585,679
    
    
    
    726,492Cash and due from banks at end of period
    
    $
    774,812
    
    
    $
    635,533Schedule of noncash investing and financing activities:Transfers of loans to other real estate owned
    
    $
    8,428
    
    
    $
    20,093Loans to facilitate the sale of other real estate owned
    
    
    780
    
    
    
    1,006Assets retained in loan securitizations
    
    
    
    
    
    
    589,912Loans to finance stock purchases
    
    
    684
    
    
    
    607Change in unrealized gain (loss) on investment securities
available for sale
    
    
    (47,593
    )
    
    
    (50,175
    )Issuance of restricted stock, net of cancellations
    
    
    5,182
    
    
    
    7,651Treasury stock exchanged for acquisition earnouts
    
    
    5,840
    
    
    
    4,741Allowance transferred to other liabilities
    
    
    12,189
    
    
    
    Business combinations and divestitures:Common stock issued from treasury stock
    
    
    7,869
    
    
    
    Assets acquired
    
    
    8,092
    
    
    
    Liabilities assumed
    
    
    21
    
    
    
    Assets sold
    
    
    13
    
    
    
    Liabilities sold
    
    
    78
    
    
    
    
  -7-




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COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 Notes to Consolidated Financial Statements (Unaudited)
 NOTE 1  General
     Critical Accounting Policies
  Allowance for Loan Losses
 Derivative Instruments
 Consolidation
 -8-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilities
 Income Taxes
 Goodwill Impairment
 Stock-Based Compensation
 Accounting for Stock Issued to Employees, Share-Based Payments
    -9-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income:As reported
    
    $
    105,051
    
    
    $
    93,602
    
    
    $
    306,258
    
    
    $
    271,594Deduct: Total share-based employee
compensation
expense determined under fair value based
method for all awards, net of tax
    
    
    1,485
    
    
    
    2,234
    
    
    
    5,527
    
    
    
    7,163Pro forma net income
    
    $
    103,566
    
    
    $
    91,368
    
    
    $
    300,731
    
    
    $
    264,431Basic earnings per share:As reported
    
    $
    0.85
    
    
    $
    0.76
    
    
    $
    2.48
    
    
    $
    2.22Pro forma
    
    
    0.83
    
    
    
    0.74
    
    
    
    2.43
    
    
    
    2.16Diluted earnings per share:As reported
    
    $
    0.83
    
    
    $
    0.75
    
    
    $
    2.42
    
    
    $
    2.17Pro forma
    
    
    0.82
    
    
    
    0.73
    
    
    
    2.38
    
    
    
    2.11
 Website Availability of Reports Filed with the SEC
  NOTE 2  Business Combinations and Divestitures
 Business Combinations
      -10-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 Divestitures
  NOTE 3  Capital Securities and Preferred Stock
 Capital Securities
  Consolidation of Variable Interest Entities,an interpretation of ARB No. 51
   Class B Preferred Stock
   -11-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  Maturity
    
    
    September 30,
    
    
    December 31,Dates
    
    
    2005
    
    
    2004(in Thousands)Capital Securities:8.23% debentures payable to Compass Trust I
    
    
    2027
    
    
    $
    103,093
    
    
    $
    103,0937.35% debentures payable to Compass Trust III
    
    
    2032
    
    
    
    309,279
    
    
    
    309,279Fair value adjustment of hedged Capital Securities
    
    
    2027, 2032
    
    
    
    9,749
    
    
    
    17,657Class B Preferred Stock
    
    
    
    
    
    
    18,055
    
    
    
    18,012Total Capital Securities and Preferred Stock
    
    
    
    
    
    $
    440,176
    
    
    $
    448,041
 NOTE 4  Earnings Per Share
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(In Thousands Except Per Share Data)BASIC EARNINGS PER SHARE:Net income
    
    $
    105,051
    
    
    $
    93,602
    
    
    $
    306,258
    
    
    $
    271,594Weighted average shares outstanding
    
    
    123,947
    
    
    
    122,320
    
    
    
    123,619
    
    
    
    122,153Basic earnings per share
    
    $
    0.85
    
    
    $
    0.76
    
    
    $
    2.48
    
    
    $
    2.22DILUTED EARNINGS PER SHARE:Net income
    
    $
    105,051
    
    
    $
    93,602
    
    
    $
    306,258
    
    
    $
    271,594Weighted average shares outstanding
    
    
    123,947
    
    
    
    122,320
    
    
    
    123,619
    
    
    
    122,153Net effect of nonvested restricted stock and
the assumed exercise of stock options  based
on the treasury stock method using the
average
market price for the period
    
    
    2,930
    
    
    
    3,237
    
    
    
    2,868
    
    
    
    3,065Weighted average diluted shares outstanding
    
    
    126,877
    
    
    
    125,557
    
    
    
    126,487
    
    
    
    125,218Diluted earnings per share
    
    $
    0.83
    
    
    $
    0.75
    
    
    $
    2.42
    
    
    $
    2.17
 NOTE 5  Segment Information
    -12-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
      -13-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  For the Three Months Ended September 30, 2005
(in Thousands)
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    98,152
    
    
    $
    110,261
    
    
    $
    13,946
    
    
    $
    11,056
    
    
    $
    16,525
    
    
    $
    249,940Noninterest income
    
    
    36,153
    
    
    
    120,732
    
    
    
    9,350
    
    
    
    7,584
    
    
    
    (3,174
    )
    
    
    170,645Noninterest expense
    
    
    51,835
    
    
    
    108,402
    
    
    
    11,518
    
    
    
    5,458
    
    
    
    50,183
    
    
    
    227,396Segment income (loss)
    
    $
    82,470
    
    
    $
    122,591
    
    
    $
    11,778
    
    
    $
    13,182
    
    
    $
    (36,832
    )
    
    
    193,189Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,195Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    158,994Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53,943Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    105,051Balance SheetAverage assets
    
    $
    10,814,230
    
    
    $
    8,953,521
    
    
    $
    1,372,234
    
    
    $
    7,582,324
    
    
    $
    1,045,981
    
    
    $
    29,768,290Average loans
    
    
    10,646,541
    
    
    
    8,663,137
    
    
    
    1,361,449
    
    
    
    
    
    
    
    (251,254
    )
    
    
    20,419,873Average deposits
    
    
    4,781,285
    
    
    
    10,336,080
    
    
    
    1,193,899
    
    
    
    2,380,581
    
    
    
    (61,771
    )
    
    
    18,630,074Period-end assets
    
    $
    11,056,344
    
    
    $
    9,082,146
    
    
    $
    1,432,297
    
    
    $
    7,490,445
    
    
    $
    1,070,048
    
    
    $
    30,131,280Period-end loans
    
    
    10,881,742
    
    
    
    8,788,175
    
    
    
    1,421,202
    
    
    
    
    
    
    
    (249,329
    )
    
    
    20,841,790Period-end deposits
    
    
    4,950,555
    
    
    
    10,743,534
    
    
    
    1,191,743
    
    
    
    2,012,745
    
    
    
    (69,421
    )
    
    
    18,829,156
 
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    92,619
    
    
    $
    99,736
    
    
    $
    13,486
    
    
    $
    12,918
    
    
    $
    7,772
    
    
    $
    226,531Noninterest income
    
    
    31,446
    
    
    
    103,616
    
    
    
    7,152
    
    
    
    31,987
    
    
    
    (1,887
    )
    
    
    172,314Noninterest expense
    
    
    47,998
    
    
    
    99,592
    
    
    
    9,205
    
    
    
    29,303
    
    
    
    46,403
    
    
    
    232,501Segment income (loss)
    
    $
    76,067
    
    
    $
    103,760
    
    
    $
    11,433
    
    
    $
    15,602
    
    
    $
    (40,518
    )
    
    
    166,344Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,617Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    140,727Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,125Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    93,602Balance SheetAverage assets
    
    $
    9,951,597
    
    
    $
    7,655,062
    
    
    $
    1,235,378
    
    
    $
    7,674,014
    
    
    $
    1,209,995
    
    
    $
    27,726,046Average loans
    
    
    9,816,429
    
    
    
    7,397,193
    
    
    
    1,226,719
    
    
    
    
    
    
    
    (366,652
    )
    
    
    18,073,689Average deposits
    
    
    4,697,478
    
    
    
    9,333,440
    
    
    
    1,226,800
    
    
    
    1,274,815
    
    
    
    (43,074
    )
    
    
    16,489,459Period-end assets
    
    $
    10,122,896
    
    
    $
    7,799,878
    
    
    $
    1,271,932
    
    
    $
    7,597,252
    
    
    $
    989,200
    
    
    $
    27,781,158Period-end loans
    
    
    9,986,753
    
    
    
    7,528,562
    
    
    
    1,263,744
    
    
    
    
    
    
    
    (359,073
    )
    
    
    18,419,986Period-end deposits
    
    
    4,811,143
    
    
    
    9,396,096
    
    
    
    1,216,904
    
    
    
    1,111,115
    
    
    
    (43,111
    )
    
    
    16,492,147
 -14-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 For the Nine Months Ended September 30, 2005
(in Thousands)
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    286,209
    
    
    $
    325,943
    
    
    $
    41,138
    
    
    $
    32,996
    
    
    $
    40,116
    
    
    $
    726,402Noninterest income
    
    
    114,964
    
    
    
    338,413
    
    
    
    28,106
    
    
    
    22,004
    
    
    
    (12,264
    )
    
    
    491,223Noninterest expense
    
    
    150,850
    
    
    
    320,755
    
    
    
    34,540
    
    
    
    15,038
    
    
    
    150,680
    
    
    
    671,863Segment income (loss)
    
    $
    250,323
    
    
    $
    343,601
    
    
    $
    34,704
    
    
    $
    39,962
    
    
    $
    (122,828
    )
    
    
    545,762Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,268Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    463,494Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    157,236Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    306,258Balance SheetAverage assets
    
    $
    10,552,080
    
    
    $
    8,508,236
    
    
    $
    1,330,435
    
    
    $
    7,656,324
    
    
    $
    1,091,377
    
    
    $
    29,138,452Average loans
    
    
    10,402,759
    
    
    
    8,234,085
    
    
    
    1,320,354
    
    
    
    
    
    
    
    (276,785
    )
    
    
    19,680,413Average deposits
    
    
    4,754,642
    
    
    
    10,027,621
    
    
    
    1,199,714
    
    
    
    2,229,500
    
    
    
    (59,154
    )
    
    
    18,152,323Period-end assets
    
    $
    11,056,344
    
    
    $
    9,082,146
    
    
    $
    1,432,297
    
    
    $
    7,490,445
    
    
    $
    1,070,048
    
    
    $
    30,131,280Period-end loans
    
    
    10,881,742
    
    
    
    8,788,175
    
    
    
    1,421,202
    
    
    
    
    
    
    
    (249,329
    )
    
    
    20,841,790Period-end deposits
    
    
    4,950,555
    
    
    
    10,743,534
    
    
    
    1,191,743
    
    
    
    2,012,745
    
    
    
    (69,421
    )
    
    
    18,829,156
 
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    277,374
    
    
    $
    295,074
    
    
    $
    40,065
    
    
    $
    55,873
    
    
    $
    7,745
    
    
    $
    676,131Noninterest income
    
    
    102,913
    
    
    
    296,288
    
    
    
    21,931
    
    
    
    48,264
    
    
    
    (5,152
    )
    
    
    464,244Noninterest expense
    
    
    146,950
    
    
    
    294,998
    
    
    
    28,963
    
    
    
    37,944
    
    
    
    144,974
    
    
    
    653,829Segment income (loss)
    
    $
    233,337
    
    
    $
    296,364
    
    
    $
    33,033
    
    
    $
    66,193
    
    
    $
    (142,381
    )
    
    
    486,546Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78,140Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    408,406Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    136,812Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    271,594Balance SheetAverage assets
    
    $
    9,823,790
    
    
    $
    7,573,620
    
    
    $
    1,189,143
    
    
    $
    7,650,185
    
    
    $
    1,254,058
    
    
    $
    27,490,796Average loans
    
    
    9,680,204
    
    
    
    7,318,660
    
    
    
    1,180,513
    
    
    
    
    
    
    
    (416,297
    )
    
    
    17,763,080Average deposits
    
    
    4,558,991
    
    
    
    9,246,406
    
    
    
    1,244,210
    
    
    
    1,180,149
    
    
    
    (39,530
    )
    
    
    16,190,226Period-end assets
    
    $
    10,122,896
    
    
    $
    7,799,878
    
    
    $
    1,271,932
    
    
    $
    7,597,252
    
    
    $
    989,200
    
    
    $
    27,781,158Period-end loans
    
    
    9,986,753
    
    
    
    7,528,562
    
    
    
    1,263,744
    
    
    
    
    
    
    
    (359,073
    )
    
    
    18,419,986Period-end deposits
    
    
    4,811,143
    
    
    
    9,396,096
    
    
    
    1,216,904
    
    
    
    1,111,115
    
    
    
    (43,111
    )
    
    
    16,492,147
 -15-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 NOTE 6  Loans and Allowance for Loan Losses
  September 30,
    
    
    December 31,2005
    
    
    2004(in Thousands)Commercial loans:Commercial, financial and agricultural
    
    $
    3,809,480
    
    
    $
    3,750,063Real estate  construction
    
    
    3,830,403
    
    
    
    3,027,228Commercial real estate  mortgage
    
    
    3,997,237
    
    
    
    3,943,163Total commercial loans
    
    
    11,637,120
    
    
    
    10,720,454Consumer loans:Residential real estate  mortgage
    
    
    1,858,865
    
    
    
    1,566,370Equity lines of credit
    
    
    1,570,209
    
    
    
    1,401,604Equity loans
    
    
    1,132,021
    
    
    
    1,069,614Credit card
    
    
    505,248
    
    
    
    505,090Consumer installment  direct
    
    
    443,689
    
    
    
    484,657Consumer installment  indirect
    
    
    3,694,638
    
    
    
    3,109,133Total consumer loans
    
    
    9,204,670
    
    
    
    8,136,468Total
    
    $
    20,841,790
    
    
    $
    18,856,922
 ,
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(in Thousands)Balance at beginning of period
    
    $
    254,708
    
    
    $
    250,573
    
    
    $
    258,339
    
    
    $
    244,882Add: Provision charged to income
    
    
    34,195
    
    
    
    25,617
    
    
    
    82,268
    
    
    
    78,140Deduct: Allowance for loans securitized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    591Allowance transferred to other liabilities
    
    
    
    
    
    
    
    
    
    
    12,189
    
    
    
    Net charge-offs:Commercial, financial and agricultural
    
    
    4,982
    
    
    
    612
    
    
    
    8,230
    
    
    
    6,588Real estate  construction
    
    
    98
    
    
    
    3
    
    
    
    353
    
    
    
    115Commercial real estate  mortgage
    
    
    541
    
    
    
    328
    
    
    
    1,221
    
    
    
    2,969Residential real estate  mortgage
    
    
    331
    
    
    
    489
    
    
    
    1,106
    
    
    
    1,004Equity lines of credit
    
    
    564
    
    
    
    812
    
    
    
    1,224
    
    
    
    1,889Equity loans
    
    
    736
    
    
    
    142
    
    
    
    1,556
    
    
    
    1,604Credit card
    
    
    8,331
    
    
    
    7,266
    
    
    
    25,433
    
    
    
    25,710Consumer installment  direct
    
    
    4,739
    
    
    
    2,992
    
    
    
    8,796
    
    
    
    6,115Consumer installment  indirect
    
    
    8,069
    
    
    
    7,508
    
    
    
    19,987
    
    
    
    20,399Total net charge-offs
    
    
    28,391
    
    
    
    20,152
    
    
    
    67,906
    
    
    
    66,393Balance at end of period
    
    $
    260,512
    
    
    $
    256,038
    
    
    $
    260,512
    
    
    $
    256,038
 -16-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  September 30,
    
    
    December 31,2005
    
    
    2004(in Thousands)Nonaccrual loans
    
    $
    50,261
    
    
    $
    49,947Renegotiated loans
    
    
    707
    
    
    
    734Total nonperforming loans
    
    
    50,968
    
    
    
    50,681Other real estate
    
    
    12,796
    
    
    
    19,998Total nonperforming assets
    
    $
    63,764
    
    
    $
    70,679
 NOTE 7  Securitized Assets
   NOTE 8  Investments
  Securities in a loss position
    
    
    Securities in a loss positionfor less than 12 months
    
    
    for 12 months or longer
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses(in Thousands)Investment securities available for sale:Debt securities:U.S. Treasury and other U.S. Government
agencies and corporations
    
    $
    45,022
    
    
    $
    142
    
    
    $
    58
    
    
    $
    1
    
    
    $
    45,080
    
    
    $
    143Mortgage-backed pass-through securities
    
    
    245,057
    
    
    
    3,931
    
    
    
    184,084
    
    
    
    5,588
    
    
    
    429,141
    
    
    
    9,519Collateralized mortgage obligations
    
    
    1,928,454
    
    
    
    27,753
    
    
    
    1,553,705
    
    
    
    33,017
    
    
    
    3,482,159
    
    
    
    60,770Asset-backed securities and corporate bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    States and political subdivisions
    
    
    35,621
    
    
    
    567
    
    
    
    
    
    
    
    
    
    
    
    35,621
    
    
    
    567Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    2,254,154
    
    
    $
    32,393
    
    
    $
    1,737,847
    
    
    $
    38,606
    
    
    $
    3,992,001
    
    
    $
    70,999
   -17-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 NOTE 9  Off-Balance Sheet Activities, Derivatives and Hedging
 Accounting for Derivative Instruments and Hedging Activities
  September 30,
    
    
    December 31,2005
    
    
    2004Other
    
    
    
    
    
    
    OtherThan
    
    
    
    
    
    
    ThanTrading
    
    
    Trading
    
    
    Trading
    
    
    Trading(in Thousands)Forward and futures contracts
    
    $
    259,708
    
    
    $
    39,455
    
    
    $
    271,863
    
    
    $
    18,708Interest rate swap agreements:Pay fixed versus receive float
    
    
    1,642,488
    
    
    
    200,000
    
    
    
    1,384,586
    
    
    
    Receive fixed versus pay float
    
    
    1,639,528
    
    
    
    1,261,108
    
    
    
    1,402,189
    
    
    
    1,503,836Written options
    
    
    239,319
    
    
    
    44,397
    (1)
    
    
    63,229
    
    
    
    19,812
    (1)Purchased options
    
    
    286,584
    
    
    
    
    
    
    
    97,358
    
    
    
    
 
 (1)
    
    Written options classified as other than trading represent interest rate loan commitments related to the Companys
mortgage banking activities   September 30, 2005
    
    
    December 31, 2004Notional
    
    
    Carrying
    
    
    Notional
    
    
    CarryingValue
    
    
    Value
    
    
    Value
    
    
    Value(in Thousands)Cash Flow Hedges:Interest rate swap agreements
    
    $
    400,000
    
    
    $
    (2,370
    )
    
    $
    700,000
    
    
    $
    (3,654
    )Fair Value Hedges:Interest rate swap agreements
    
    
    1,061,108
    
    
    
    37,878
    
    
    
    803,836
    
    
    
    47,291Forward contracts (1)
    
    
    39,455
    
    
    
    (184
    )
    
    
    18,708
    
    
    
    9
 
 (1)
    
    Derivatives related to the Companys mortgage banking activities Interest-Rate Risk
  Fair-Value Hedges
  -18-




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COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  Cash-Flow Hedges
  Off-Balance Sheet Activities
    -19-




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COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  NOTE 10  Shareholders Equity
    NOTE 11  Goodwill and Other Acquired Intangible Assets
    As of September 30, 2005Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    
    Value(in Thousands)Nonamortizing goodwill
    
    $
    369,973
    
    
    $
    (53,733
    )
    
    $
    316,240Amortizing intangible assets:Core deposit intangibles
    
    $
    58,043
    
    
    $
    (50,064
    )
    
    $
    7,979Other customer intangibles
    
    
    43,334
    
    
    
    (12,684
    )
    
    
    30,650Total amortizing intangible assets
    
    $
    101,377
    
    
    $
    (62,748
    )
    
    $
    38,629
  NOTE 12  Commitments and Contingencies
  -20-




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##### Table of Contents



COMPASS
BANCSHARES, INC. AND SUBSIDIARIESNotes to Consolidated Financial
Statements (Unaudited)
   September 30,
    
    December 31,2005
    
    2004(in Thousands)Commitments to extend credit
    
    $
    10,839,234
    
    
    $
    11,265,440Standby and commercial letters of credit
    
    
    823,009
    
    
    
    716,195
        -21-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 NOTE 13  Defined Benefit Pension Plan
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(In Thousands)Service cost
    
    $
    1,902
    
    
    $
    1,770
    
    
    $
    5,706
    
    
    $
    5,185Interest cost
    
    
    2,381
    
    
    
    2,191
    
    
    
    7,145
    
    
    
    6,415Expected return on plan assets
    
    
    (3,189
    )
    
    
    (3,016
    )
    
    
    (9,267
    )
    
    
    (8,329
    )Amortization of prior service cost
    
    
    9
    
    
    
    9
    
    
    
    26
    
    
    
    26Amortization of net loss
    
    
    797
    
    
    
    424
    
    
    
    2,392
    
    
    
    1,241Net periodic benefit cost
    
    $
    1,900
    
    
    $
    1,378
    
    
    $
    6,002
    
    
    $
    4,538
  NOTE 14  Recently Issued Accounting Standards
 Consolidation of Variable Interest Entities
 Consolidation of Variable Interest Entities Consolidation of Variable
Interest Entities, an interpretation of ARB No. 51,
  Accounting for Certain Loans or Debt Securities Acquired in a Transfer
 Accounting for Certain Loans or Debt Securities Acquired in a Transfer.
 -22-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  Share-Based Payments
 Share-Based Payments.
 Exchanges of Nonmonetary Assets
 Exchanges of Nonmonetary Assets, an Amendment of
APB Opinion No. 29
 Accounting Changes and Error Corrections
 Accounting Changes and Error Corrections, a Replacement
of APB Opinion 20 and FASB Statement No. 3.
 -23-




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##### Table of Contents



Item 2  Managements Discussion and Analysis of Results of Operations and Financial Condition
 Results of Operations
 Forward-Looking Information
    Overview
    Net Interest Income
   -24-




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##### Table of Contents



For the Quarter EndingMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,2004
    
    2004
    
    2004
    
    2004Actual
    
    Actual
    
    Actual
    
    Actual
    
    Total(in Thousands)Hedging derivatives positive
impact to net interest margin
    
    $
    17,668
    
    
    $
    13,931
    
    
    $
    12,012
    
    
    $
    9,121
    
    
    $
    52,732
 For the Quarter EndingMarch 31,
    
    June 30,
    
    September 30,
    
    December 31,2005
    
    2005
    
    2005
    
    2005
    
    TotalActual
    
    Actual
    
    Actual
    
    Projected*
    
    Projected*(in Thousands)Hedging derivatives positive
impact to net interest margin
    
    $
    6,329
    
    
    $
    5,634
    
    
    $
    4,118
    
    
    $
    3,141
    
    
    $
    19,222
 
 *
    
    Projected impact based on interest rates remaining at September 30, 2005 levels. -25-




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##### Table of Contents



October 1, 2005throughDecember 31,
    
    For the Year Ended December 31,2005
    
    2006
    
    2007
    
    Thereafter($ in Thousands)Non-trading interest rate contractsCash Flow HedgesNotional maturity
    
    $
    
    
    
    $
    400,000
    
    
    $
    
    
    
    $
    Weighted average coupon received
on maturities
    
    
    
    %
    
    
    2.93
    %
    
    
    
    %
    
    
    
    %Weighted
average time to maturity (months)
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    Fair Value HedgesNotional maturity
    
    $
    40,000
    
    
    $
    45,000
    
    
    $
    323,500
    
    
    $
    652,608Weighted average coupon received
on maturities
    
    
    4.66
    %
    
    
    4.58
    %
    
    
    7.55
    %
    
    
    5.93
    %Weighted
average time to maturity (months)
    
    
    2
    
    
    
    5
    
    
    
    17
    
    
    
    106
  -26-




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##### Table of Contents



Three Months EndedSeptember 30, 2005Change2004To
    
    
    Attributed to2005
    
    
    Volume
    
    
    Rate
    
    
    MixInterest income:Federal funds sold and securities
purchased
under agreements to resell
    
    $
    108
    
    
    $
    (110
    )
    
    $
    358
    
    
    $
    (140
    )Trading account assets
    
    
    110
    
    
    
    112
    
    
    
    (1
    )
    
    
    (1
    )Investment securities available for sale
    
    
    5,384
    
    
    
    1,795
    
    
    
    3,445
    
    
    
    144Investment securities held to maturity
    
    
    (5,183
    )
    
    
    (6,769
    )
    
    
    1,962
    
    
    
    (376
    )Loans
    
    
    82,801
    
    
    
    30,974
    
    
    
    45,872
    
    
    
    5,955Increase in interest income
    
    $
    83,220
    
    
    $
    26,002
    
    
    $
    51,636
    
    
    $
    5,582Interest expense:Deposits
    
    $
    30,987
    
    
    $
    11,264
    
    
    $
    16,301
    
    
    $
    3,422Federal funds purchased and securities
sold under agreements to repurchase
    
    
    21,756
    
    
    
    (206
    )
    
    
    22,259
    
    
    
    (297
    )Other short-term borrowings
    
    
    1,023
    
    
    
    200
    
    
    
    547
    
    
    
    276FHLB and other borrowings
    
    
    5,715
    
    
    
    (3,391
    )
    
    
    10,048
    
    
    
    (942
    )Increase in interest expense
    
    $
    59,481
    
    
    $
    7,867
    
    
    $
    49,155
    
    
    $
    2,459
 Nine Months EndedSeptember 30, 2005Change2004To
    
    
    Attributed to2005
    
    
    Volume
    
    
    Rate
    
    
    MixInterest income:Federal funds sold and securities
purchased
under agreements to resell
    
    $
    421
    
    
    $
    (137
    )
    
    $
    723
    
    
    $
    (165
    )Trading account assets
    
    
    213
    
    
    
    204
    
    
    
    6
    
    
    
    3Investment securities available for sale
    
    
    2,312
    
    
    
    4,092
    
    
    
    (1,729
    )
    
    
    (51
    )Investment securities held to maturity
    
    
    (16,212
    )
    
    
    (16,835
    )
    
    
    736
    
    
    
    (113
    )Loans
    
    
    190,946
    
    
    
    74,917
    
    
    
    104,725
    
    
    
    11,304Increase in interest income
    
    $
    177,680
    
    
    $
    62,241
    
    
    $
    104,461
    
    
    $
    10,978Interest expense:Deposits
    
    $
    66,488
    
    
    $
    23,408
    
    
    $
    31,560
    
    
    $
    11,520Federal funds purchased and securities
sold under agreements to repurchase
    
    
    57,428
    
    
    
    240
    
    
    
    56,804
    
    
    
    384Other short-term borrowings
    
    
    2,134
    
    
    
    366
    
    
    
    1,207
    
    
    
    561FHLB and other borrowings
    
    
    1,006
    
    
    
    (15,622
    )
    
    
    19,168
    
    
    
    (2,540
    )Increase in interest expense
    
    $
    127,056
    
    
    $
    8,392
    
    
    $
    108,739
    
    
    $
    9,925
 Noninterest Income and Noninterest Expense
  -27-




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##### Table of Contents



Income Taxes
  Provision and Allowance for Loan Losses
  Nonperforming Assets and Past Due Loans
   -28-




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##### Table of Contents



,
  Allowance for Loan Losses/Nonperforming Assets
 Nine Months EndedSeptember 30,2005
    
    
    2004Allowance for Loan LossesBalance at beginning of period
    
    $
    258,339
    
    
    $
    244,882Add: Provision charged to income
    
    
    82,268
    
    
    
    78,140Deduct: Allowance for loans securitized
    
    
    
    
    
    
    591Allowance transferred to other liabilities
    
    
    12,189
    
    
    
    Loans charged off
    
    
    89,956
    
    
    
    86,161Loan recoveries
    
    
    (22,050
    )
    
    
    (19,768
    )Net charge-offs
    
    
    67,906
    
    
    
    66,393Balance at end of period
    
    $
    260,512
    
    
    $
    256,038Net charge-offs as a percentage of
average loans (annualized)
    
    
    0.46
    %
    
    
    0.50
    %September 30, 2005
    
    
    December 31, 2004Nonperforming AssetsNonaccrual loans
    
    $
    50,261
    
    
    $
    49,947Renegotiated loans
    
    
    707
    
    
    
    734Total nonperforming loans
    
    
    50,968
    
    
    
    50,681Other real estate
    
    
    12,796
    
    
    
    19,998Total nonperforming assets
    
    $
    63,764
    
    
    $
    70,679Accruing loans ninety days or more past due
    
    $
    14,510
    
    
    $
    15,509Other repossessed assets
    
    
    685
    
    
    
    656Allowance as a percentage of loans
    
    
    1.25
    %
    
    
    1.37
    %Total nonperforming loans as a percentage
of loans
    
    
    0.24
    
    
    
    0.27Total nonperforming assets as a percentage
of loans and ORE
    
    
    0.31
    
    
    
    0.37Accruing loans ninety days or more past due as a
percentage of loans
    
    
    0.07
    
    
    
    0.08Allowance for loan losses as a percentage of
nonperforming loans
    
    
    511.13
    
    
    
    509.74Allowance for loan losses as a percentage of
nonperforming assets
    
    
    408.56
    
    
    
    365.51
 -29-




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Financial Condition
 Overview
  Assets and Funding
   Liquidity and Capital Resources
        -30-




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##### Table of Contents



-31-




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##### Table of Contents



Item 3  Quantitative and Qualitative Disclosures About Market Risk
  Principal
    
    
    PercentageAmount of Earning
    
    
    Increase/(Decrease)Assets, Interest
    
    
    in Interest Income/ExpenseBearing Liabilities
    
    
    Down 100
    
    
    Up 100and Swaps
    
    
    Basis Points
    
    
    Basis Points(in Thousands)(Unaudited)September 30, 2005:Assets which reprice in: *One year or less
    
    $
    13,723,584
    
    
    
    (7.98
    )%
    
    
    8.09
    %Over one year
    
    
    14,053,035
    
    
    
    (2.42
    )
    
    
    1.70$
    27,776,619
    
    
    
    (5.45
    )
    
    
    5.17Liabilities which reprice in:One year or less
    
    $
    16,987,839
    
    
    
    (15.04
    )%
    
    
    15.69
    %Over one year
    
    
    4,488,294
    
    
    
    (1.22
    )
    
    
    1.26$
    21,476,133
    
    
    
    (10.61
    )
    
    
    11.07Total net interest income sensitivity
    
    
    
    
    
    
    (1.99
    )%
    
    
    1.24
    %December 31, 2004:Assets which reprice in: *One year or less
    
    $
    12,480,418
    
    
    
    (8.94
    )%
    
    
    9.23
    %Over one year
    
    
    13,610,460
    
    
    
    (2.81
    )
    
    
    2.40$
    26,090,878
    
    
    
    (5.83
    )
    
    
    5.77Liabilities which reprice in:One year or less
    
    $
    16,491,092
    
    
    
    (24.19
    )%
    
    
    27.69
    %Over one year
    
    
    3,920,666
    
    
    
    (1.15
    )
    
    
    1.33$
    20,411,758
    
    
    
    (15.16
    )
    
    
    17.36Total net interest income sensitivity
    
    
    
    
    
    
    (1.26
    )%
    
    
    0.10
    %
 
 *
    
    Excludes noninterest earning trading account assets  -32-




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Item 4  Controls and Procedures
   -33-




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 PART II. OTHER INFORMATION
 
 Item 1  Legal Proceedings
  
 Item 2  Unregistered Sales of Equity Securities and Use of Proceeds
  Total Number of
    
    
    Maximum Number ofShares Purchased as
    
    
    Shares that May YetTotal Number of
    
    
    Average Price
    
    
    Part of Publicly
    
    
    Be PurchasedShares Purchased (1)
    
    
    Paid Per Share
    
    
    Announced Program (2)
    
    
    Under the Program (2)July 1 
July 31, 2005
    
    
    2,120
    
    
    $
    47.31
    
    
    
    
    
    
    
    4,338,600August 1, 2005 
August 31, 2005
    
    
    396
    
    
    $
    46.72
    
    
    
    
    
    
    
    4,338,600September 1, 2005 
September 30, 2005
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    4,338,600Total
    
    
    2,516
    
    
    $
    47.22
    
    
    
    
 
 (1)
    
    This column includes (a) purchases of equity instruments under the Companys publicly announced share repurchase programs
described in (2) below and (b) the surrender to the Company by plan participants of shares of common stock to satisfy the
exercise price related to the exercise of employee stock options during the period indicated.(2)
    
    On January 16, 2003, the Company announced that its Board of Directors had authorized management to purchase 6.3 million shares
of the Companys outstanding common stock from time to time through open market transactions either directly or through brokers
or agents, and has no expiration date. Additionally, on August 16, 2003, the Company announced that its Board of Directors had
authorized management to purchase an additional 4.1 million shares of the Companys outstanding common stock from time to time
through open market transactions either directly or through brokers or agents, and has no expiration date. 
 Item 6  Exhibits
 (3)
    
    Articles of Incorporation and By-Laws of Compass Bancshares, Inc.
 (a)
    
    Restated Certificate of Incorporation of Compass Bancshares, Inc., as amended,
dated May 17, 1982 (incorporated by reference to Exhibit 3(a) to Compass Bancshares,
Inc.s December 31, 1997 Form 10-K, file number 000-06032, filed March 23, 1998 with
the Commission)(b)
    
    Certificate of Amendment, dated May 20, 1986, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.2 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
33-46086, filed with the Commission)(c)
    
    Certificate of Amendment, dated May 15, 1987, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.1.2
to Compass Bancshares, Inc.s Post-Effective Amendment No. 1 to Registration Statement
on Form S-4, Registration No. 33-10797, filed with the Commission)
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(d)
    
    Certificate of Amendment, dated September 16, 1994, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.5(1)
to Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
33-55899, filed with the Commission)(e)
    
    Certificate of Amendment, dated November 3, 1993, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3(d) to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
33-51919, filed with the Commission)(f)
    
    Certificate of Amendment, dated May 15, 1998, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (filed as exhibit 4.6 to Compass Bancshares,
Inc.s Registration Statement on Form S-3, Registration Statement No. 333-60725, filed
with the Commission)(g)
    
    Certificate of Amendment, dated May 1, 2002, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 4.7 to
Compass Bancshares, Inc.s Registration Statement on Form S-8, Registration No.
333-90806, filed June 19, 2002 with the Commission)(h)
    
    Bylaws of Compass Bancshares, Inc. (Amended and Restated as of March 15, 1982)
(incorporated by reference to Exhibit 3(f) to Compass Bancshares, Inc.s December 31,
1997 Form 10-K, file number 000-06032, filed March 23, 1998 with the Commission)
 (4)
    
    Instruments Defining the Rights of Security Holders, Including Indentures
 (a)
    
    Form of Indenture between Compass Bancshares, Inc. (formerly Central Bancshares
of the South, Inc.) and JPMorgan Chase Bank (formerly Chemical Bank), as Senior Trustee
(incorporated by reference to Exhibit 4(g) to Compass Bancshares, Inc.s Registration
Statement on Form S-3, Registration No. 33-61018, filed with the Commission)(b)
    
    Form of Indenture between Compass Bancshares, Inc. (formerly Central Bancshares
of the South, Inc.) and JPMorgan Chase Bank (formerly Chemical Bank), as Subordinated
Trustee (incorporated by reference to Exhibit 4(f) to Compass Bancshares, Inc.s
Registration Statement on Form S-3, Registration No. 33-61018, filed with the
Commission)
 (10)
    
    Material Contracts
 (a)
    
    Compass Bancshares, Inc., 1996 Long Term Incentive Plan (incorporated by
reference to Exhibit 4(g) to Compass Bancshares, Inc.s Registration Statement on Form
S-8, Registration No. 333-15117, filed October 30, 1996 with the Commission) *(b)
    
    Compass Bancshares, Inc., 1999 Omnibus Incentive Compensation Plan
(incorporated by reference to Exhibit 10(a) to Compass Bancshares, Inc.s Registration
Statement on Form S-8, Registration No. 333-86455, filed September 2, 1999 with the
Commission) *(c)
    
    Employment Agreement, dated December 14, 1994, between Compass Bancshares, Inc.
and D. Paul Jones, Jr. (incorporated by reference to Exhibit 10(e) to Compass
Bancshares, Inc.s March 31, 2000 Form 10-Q, file number 000-06032, filed May 15, 2000
with the Commission) *(d)
    
    Employment Agreement, dated December 14, 1994, between Compass Bancshares, Inc.
and Garrett R. Hegel (incorporated by reference to Exhibit 10(g) to Compass Bancshares,
Inc.s March 31, 2000 Form 10-Q, file number 000-06032, filed May 15, 2000 with the
Commission) *(e)
    
    Employment Agreement, dated November 24, 1997, between Compass Bancshares, Inc.
and James D. Barri (incorporated by reference to Exhibit 10(j) to Compass Bancshares,
Inc.s March 31, 2000 Form 10-Q, file number 000-06032, filed May 15, 2000 with the
Commission) *(f)
    
    Employment Agreement, dated December 14, 1994, between Compass Bancshares, Inc.
and G. Ray Stone (incorporated by reference to Exhibit 10(i) to Compass Bancshares,
Inc. Registration Statement on Form S-4, Registration No. 333-15373, filed November 1,
1996 with the Commission) *(g)
    
    Employment Agreement, dated March 1, 1998, between Compass Bancshares, Inc. and
Clayton D. Pledger (incorporated by reference to Exhibit 10(g) to Compass Bancshares,
Inc. December 31, 2001 Form 10-K, file number 000-06032, filed March 11, 2002 with the
Commission) *
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(h)
    
    First Amendment to Employment Agreement, dated March 31, 1997, between Compass
Bancshares, Inc. and D. Paul Jones, Jr. (incorporated by reference to Exhibit 10(h) to
Compass Bancshares, Inc.s December 31, 2004 Form 10-K, file number 001-31272, filed
February 28, 2005 with the Commission) *(i)
    
    First Amendment to Employment Agreement, dated April 14, 1997, between Compass
Bancshares, Inc. and Garrett R. Hegel (incorporated by reference to Exhibit 10(i) to
Compass Bancshares, Inc.s December 31, 2004 Form 10-K, file number 001-31272, filed
February 28, 2005 with the Commission) *(j)
    
    First Amendment to Employment Agreement, dated April 18, 1997, between Compass
Bancshares, Inc. and G. Ray Stone (incorporated by reference to Exhibit 10(j) to
Compass Bancshares, Inc.s December 31, 2004 Form 10-K, file number 001-31272, filed
February 28, 2005 with the Commission) *(k)
    
    Amendment to Employment Agreement, dated October 12, 2001, between Compass
Bancshares, Inc. and D. Paul Jones, Jr. (incorporated by reference to Exhibit 10(i) to
Compass Bancshares, Inc.s December 31, 2001 Form 10-K, file number 000-06032, filed
March 11, 2002 with the Commission) *(l)
    
    Amendment to Employment Agreement, dated October 12, 2001, between Compass
Bancshares, Inc. and Garrett R. Hegel (incorporated by reference to Exhibit 10(j) to
Compass Bancshares, Inc.s December 31, 2001 Form 10-K, file number 000-06032, filed
March 11, 2002 with the Commission) *(m)
    
    Amendment to Employment Agreement, dated October 12, 2001, between Compass
Bancshares, Inc. and James D. Barri (incorporated by reference to Exhibit 10(l) to
Compass Bancshares, Inc.s December 31, 2001 Form 10-K, file number 000-06032, filed
March 11, 2002 with the Commission) *(n)
    
    Amendment to Employment Agreement, dated October 12, 2001, between Compass
Bancshares, Inc. and Clayton D. Pledger (incorporated by reference to Exhibit 10(h) to
Compass Bancshares, Inc.s December 31, 2001 Form 10-K, file number 000-06032, filed
March 11, 2002 with the Commission) *(o)
    
    Amendment to Employment Agreement, dated October 12, 2001, between Compass
Bancshares, Inc. and G. Ray Stone (incorporated by reference to Exhibit 10(o) to
Compass Bancshares, Inc.s December 31, 2004 Form 10-K, file number 001-31272, filed
February 28, 2005 with the Commission) *(p)
    
    Compass Bancshares, Inc., Employee Stock Ownership Benefit Restoration Plan,
dated as of May 1, 1997 (incorporated by reference to Exhibit 10(j) to Compass
Bancshares, Inc.s December 31, 1999 Form 10-K, file number 000-06032, filed March 23,
2000 with the Commission) *(q)
    
    Compass Bancshares, Inc., Supplemental Retirement Plan, dated as of May 1, 1997
(incorporated by reference to Exhibit 10(k) to Compass Bancshares, Inc.s December 31,
1999 Form 10-K, file number 000-06032, filed March 23, 2000 with the Commission) *(r)
    
    Deferred Compensation Plan for Compass Bancshares, Inc., dated as of February
1, 1996. (Amended and Restated as of May 1, 1998) (incorporated by reference to Exhibit
10(l) to Compass Bancshares, Inc.s December 31, 1999 Form 10-K, file number 000-06032,
filed March 23, 2000 with the Commission) *(s)
    
    Compass Bancshares, Inc. Special Supplemental Retirement Plan, dated as of May
1, 1997. (Amended and Restated as of February 27, 2000) (incorporated by reference to
Exhibit 10(n) to Compass Bancshares, Inc.s March 31, 2000 Form 10-Q, file number
000-06032, filed May 15, 2000 with the Commission) *(t)
    
    Amendment Number One to the Compass Bancshares, Inc., Special Supplemental
Retirement Plan, dated April 26, 2000 (incorporated by reference to Exhibit 10(q) to
Compass Bancshares, Inc.s December 31, 2001 Form 10-K, file 000-06032, filed March 11,
2002 with the Commission) *(u)
    
    Amendment Number Two to the Compass Bancshares, Inc., Special Supplemental
Retirement Plan, dated as of February 9, 2001(incorporated by reference to Exhibit
10(r) to Compass Bancshares, Inc.s December 31, 2001 Form 10-K, file number 000-06032,
filed March 11, 2002 with the Commission) *
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(v)
    
    Compass Bancshares, Inc., Director & Executive Stock Purchase Plan (formerly
known as Monthly Investment Plan), as Amended and Restated, effective as of September
1, 2001 (incorporated by reference to Exhibit 4.8 to Compass Bancshares, Inc.s
Registration Statement on Form S-8, Registration No. 333-26884, filed July 31, 2001
with the Commission) *(w)
    
    Compass Bancshares, Inc. 2002 Incentive Compensation Plan (incorporated by
reference to Exhibit 4.9 to Compass Bancshares, Inc.s Registration Statement on Form
S-8, Registration No. 333-90806, filed June 19, 2002 with the Commission) *(x)
    
    Form of Performance Contingent Restricted Stock Agreement (incorporated by
reference to Exhibit 10.1 to Compass Bancshares, Inc.s Form 8-K, file number
001-31272, filed February 22, 2005 with the Commission) *(y)
    
    Form of Amendment Number One to the Performance Contingent
Restricted Stock Award Agreement (incorporated by reference to Compass
Bancshares, Inc.s Form 8-K, file number 001-31272, filed October 21,
2005 with the Commission)(z)
    
    Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit
10.2 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed February 22,
2005 with the Commission) *(aa)
    
    Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit
10.3 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed February 22,
2005 with the Commission) *(ab)
    
    Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit
10.4 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed February 22,
2005 with the Commission) *(ac)
    
    Executive Officer Compensation Arrangements (incorporated by reference to
Exhibit 10(y) to Compass Bancshares, Inc.s March 31, 2005 Form 10-Q, file number
001-31272, filed May 6, 2005 with the Commission) *(ad)
    
    Form of Stock Option Agreement for Non-Employee Directors (incorporated by
reference to Exhibit 10(cc) to Compass Bancshares, Inc.s March 31, 2005 Form 10-Q,
file number 001-31272, filed May 6, 2005 with the Commission) *(31)(a)
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by D. Paul
Jones, Jr., Chief Executive Officer(31)(b)
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Garrett. R.
Hegel, Chief Financial Officer(32)(a)
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 by D. Paul Jones, Jr., Chief Executive Officer(32)(b)
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 by Garrett R. Hegel, Chief Financial OfficerCertain financial statement
schedules and exhibits have been omitted because they are either not required or the information is otherwise included in the Notes to Consolidated Financial Statements. 
 *
    
    Management contract or compensatory plan or arrangement
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COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 SIGNATURES
  November 4, 2005
    
    By:
    /s/  Garrett R. HegelDate
    
    
    Garrett R. HegelChief Financial Officer -38-