##### 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 June 30, 2007
 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
 (C B LOGO)
    
    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
 
  (205) 297-3000
 
  þ o
  þ o o
 o þ
  Class
    
    Outstanding at July 31, 2007Common Stock, $2 Par Value
    
    133,595,336




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##### 



PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (Unaudited)Consolidated Balance Sheets as of June 30, 2007 and December 31, 2006
    
    
    3Consolidated Statements of Income for the Three and Six Months Ended June 30, 2007 and 2006
    
    
    4Consolidated Statements of Changes In Shareholders Equity for the Six Months Ended June 30, 2007 and 2006
    
    
    5Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2006
    
    
    6Notes to Consolidated Financial Statements (Unaudited)
    
    
    8Item 2
    
    Managements Discussion and Analysis of Results of Operations and Financial Condition
    
    
    25Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 4
    
    Controls and Procedures
    
    
    34PART II. OTHER INFORMATIONItem 1
    
    Legal Proceedings
    
    
    35Item 1A
    
    Risk Factors
    
    
    35Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    35Item 6
    
    Exhibits
    
    
    35EX-10.(E) AMENDMENT NO. 1 TO SUPPLEMENTAL RETIREMENT PLANEX-10.(H) AMENDMENT NO. 1 TO EMPLOYEE STOCK OWNERSHIP BENEFIT RESTORATION PLANEX-10.(J) AMENDMENT NO. 1 TO SMARTINVESTOR RETIREMENT BENEFIT RESTORATION PLANEX-10.(L) AMENDMENT NO.1 TO DEFERRED COMPENSATION PLANEX-31.(A) SECTION 302 CERTIFICATION OF THE CEOEX-31.(B) SECTION 302 CERTIFICATION OF THE CFOEX-32.(A) SECTION 906 CERTIFICATION OF THE CFOEX-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
  June 30, 2007
    
    
    December 31, 2006(Unaudited)AssetsCash and due from banks
    
    $
    709,741
    
    
    $
    738,168Federal funds sold and securities purchased
under agreements to resell
    
    
    52,370
    
    
    
    24,423Trading account assets
    
    
    78,738
    
    
    
    86,706Investment securities available for sale
    
    
    4,706,624
    
    
    
    4,687,782Investment securities held to maturity (fair value of
$1,747,497 and $1,914,863 for 2007 and 2006, respectively)
    
    
    1,799,309
    
    
    
    1,953,166Loans
    
    
    25,480,626
    
    
    
    24,665,273Allowance for loan losses
    
    
    (304,143
    )
    
    
    (291,050
    )Net loans
    
    
    25,176,483
    
    
    
    24,374,223Premises and equipment, net
    
    
    586,388
    
    
    
    589,264Bank owned life insurance
    
    
    476,650
    
    
    
    474,664Goodwill
    
    
    688,897
    
    
    
    677,314Other assets
    
    
    607,257
    
    
    
    594,045Total assets
    
    $
    34,882,457
    
    
    $
    34,199,755Liabilities and Shareholders EquityDeposits:Noninterest bearing
    
    $
    6,102,496
    
    
    $
    6,459,669Interest bearing
    
    
    17,556,474
    
    
    
    16,585,860Total deposits
    
    
    23,658,970
    
    
    
    23,045,529Federal funds purchased and securities sold under
agreements to repurchase
    
    
    4,025,936
    
    
    
    3,179,351Other short-term borrowings
    
    
    424,014
    
    
    
    1,242,963FHLB and other borrowings
    
    
    3,365,795
    
    
    
    3,511,601Accrued expenses and other liabilities
    
    
    417,139
    
    
    
    396,177Total liabilities
    
    
    31,891,854
    
    
    
    31,375,621Shareholders equity:Preferred stock (25,000,000 shares authorized)
    
    
    
    
    
    
    Common stock of $2 par value:Authorized  300,000,000 shares in 2007 and 2006Issued  138,506,128 shares in 2007 and
135,603,484 shares in 2006
    
    
    277,012
    
    
    
    271,207Treasury stock, at cost (5,499,845 shares in 2007 and
5,520,533 shares in 2006)
    
    
    (203,710
    )
    
    
    (201,950
    )Surplus
    
    
    517,246
    
    
    
    430,826Loans to finance stock purchases
    
    
    (5,153
    )
    
    
    (2,177
    )Accumulated other comprehensive loss
    
    
    (81,062
    )
    
    
    (53,932
    )Retained earnings
    
    
    2,486,270
    
    
    
    2,380,160Total shareholders equity
    
    
    2,990,603
    
    
    
    2,824,134Total liabilities and shareholders equity
    
    $
    34,882,457
    
    
    $
    34,199,755
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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Income
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest income:Interest and fees on loans
    
    $
    471,194
    
    
    $
    433,252
    
    
    $
    937,471
    
    
    $
    805,632Interest on investment securities available for sale
    
    
    57,129
    
    
    
    51,199
    
    
    
    111,593
    
    
    
    102,364Interest on investment securities held to maturity
    
    
    21,566
    
    
    
    25,973
    
    
    
    43,582
    
    
    
    51,854Interest on federal funds sold and securities
purchased under agreements to resell
    
    
    500
    
    
    
    744
    
    
    
    1,050
    
    
    
    1,273Interest on trading account assets
    
    
    444
    
    
    
    295
    
    
    
    793
    
    
    
    538Total interest income
    
    
    550,833
    
    
    
    511,463
    
    
    
    1,094,489
    
    
    
    961,661Interest expense:Interest on deposits
    
    
    166,805
    
    
    
    126,418
    
    
    
    326,228
    
    
    
    225,719Interest on federal funds purchased and securities
sold under agreements to repurchase
    
    
    46,466
    
    
    
    35,588
    
    
    
    91,432
    
    
    
    72,865Interest on other short-term borrowings
    
    
    8,714
    
    
    
    10,757
    
    
    
    18,861
    
    
    
    15,258Interest on FHLB and other borrowings
    
    
    50,744
    
    
    
    51,018
    
    
    
    101,463
    
    
    
    99,876Total interest expense
    
    
    272,729
    
    
    
    223,781
    
    
    
    537,984
    
    
    
    413,718Net interest income
    
    
    278,104
    
    
    
    287,682
    
    
    
    556,505
    
    
    
    547,943Provision for loan losses
    
    
    38,288
    
    
    
    27,322
    
    
    
    58,333
    
    
    
    44,434Net interest income after provision for loan
losses
    
    
    239,816
    
    
    
    260,360
    
    
    
    498,172
    
    
    
    503,509Noninterest income:Service charges on deposit accounts
    
    
    76,762
    
    
    
    82,317
    
    
    
    152,692
    
    
    
    154,485Card and merchant processing fees
    
    
    30,484
    
    
    
    28,673
    
    
    
    58,672
    
    
    
    54,380Insurance commissions
    
    
    14,555
    
    
    
    15,477
    
    
    
    31,134
    
    
    
    33,081Retail investment sales
    
    
    12,936
    
    
    
    10,904
    
    
    
    24,781
    
    
    
    20,324Asset management fees
    
    
    9,558
    
    
    
    8,408
    
    
    
    19,082
    
    
    
    16,156Corporate and correspondent investment sales
    
    
    5,555
    
    
    
    5,607
    
    
    
    12,601
    
    
    
    10,836Bank owned life insurance
    
    
    5,476
    
    
    
    5,191
    
    
    
    10,809
    
    
    
    10,094Gain on prepayment of FHLB advances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,893Investment securities losses, net
    
    
    
    
    
    
    (51
    )
    
    
    
    
    
    
    (14,889
    )Other
    
    
    32,898
    
    
    
    24,840
    
    
    
    57,257
    
    
    
    47,350Total noninterest income
    
    
    188,224
    
    
    
    181,366
    
    
    
    367,028
    
    
    
    346,710Noninterest expense:Salaries, benefits and commissions
    
    
    144,716
    
    
    
    144,309
    
    
    
    297,443
    
    
    
    280,319Equipment
    
    
    23,392
    
    
    
    22,586
    
    
    
    46,429
    
    
    
    44,133Net occupancy
    
    
    19,856
    
    
    
    18,616
    
    
    
    39,133
    
    
    
    35,833Professional services
    
    
    16,492
    
    
    
    15,896
    
    
    
    31,107
    
    
    
    30,800Marketing
    
    
    12,567
    
    
    
    14,235
    
    
    
    24,662
    
    
    
    26,499Communications
    
    
    5,238
    
    
    
    6,151
    
    
    
    10,343
    
    
    
    11,773Amortization of intangibles
    
    
    2,798
    
    
    
    3,548
    
    
    
    5,595
    
    
    
    5,038Merger and integration
    
    
    1,029
    
    
    
    5,223
    
    
    
    3,064
    
    
    
    7,849Other
    
    
    37,314
    
    
    
    35,286
    
    
    
    71,061
    
    
    
    67,976Total noninterest expense
    
    
    263,402
    
    
    
    265,850
    
    
    
    528,837
    
    
    
    510,220Net income before income tax expense
    
    
    164,638
    
    
    
    175,876
    
    
    
    336,363
    
    
    
    339,999Income tax expense
    
    
    55,331
    
    
    
    60,505
    
    
    
    113,920
    
    
    
    116,719Net income
    
    $
    109,307
    
    
    $
    115,371
    
    
    $
    222,443
    
    
    $
    223,280Basic earnings per share
    
    $
    0.83
    
    
    $
    0.90
    
    
    $
    1.70
    
    
    $
    1.77Basic weighted average shares outstanding
    
    
    131,897
    
    
    
    128,690
    
    
    
    131,135
    
    
    
    126,201Diluted earnings per share
    
    $
    0.82
    
    
    $
    0.88
    
    
    $
    1.67
    
    
    $
    1.73Diluted weighted average shares outstanding
    
    
    133,827
    
    
    
    131,395
    
    
    
    133,313
    
    
    
    128,923Dividends declared per share
    
    $
    0.43
    
    
    $
    0.39
    
    
    $
    0.86
    
    
    $
    0.78
  - 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
    
    
    Loss
    
    
    Other
    
    
    Equity
    
    
    IncomeBalance, January 1, 2006
    
    $
    267,900
    
    
    $
    (377,327
    )
    
    $
    300,375
    
    
    $
    2,121,310
    
    
    $
    (63,156
    )
    
    $
    (13,073
    )
    
    $
    2,236,029Adoption of SFAS No. 123R
    
    
    
    
    
    
    
    
    
    
    (11,811
    )
    
    
    
    
    
    
    
    
    
    
    11,811
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    223,280
    
    
    
    
    
    
    
    
    
    
    
    223,280
    
    
    $
    223,280Net change in unrealized losses on securities
available for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,177
    )
    
    
    
    
    
    
    (28,177
    )
    
    
    (28,177
    )Net change in accumulated losses on cash-
flow hedging instruments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,444
    )
    
    
    
    
    
    
    (2,444
    )
    
    
    (2,444
    )Net change in additional minimum pension
liability, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52
    )
    
    
    
    
    
    
    (52
    )
    
    
    (52
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    192,607Common dividends declared ($0.78 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (98,660
    )
    
    
    
    
    
    
    
    
    
    
    (98,660
    )Exercise of stock options and other issuances
    
    
    1,448
    
    
    
    
    
    
    
    18,065
    
    
    
    (1,089
    )
    
    
    
    
    
    
    
    
    
    
    18,424Issuances of restricted stock, net of cancellations
    
    
    351
    
    
    
    
    
    
    
    (351
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Advances on loans to finance stock purchases,
net of repayments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (625
    )
    
    
    (625
    )Issuance of treasury stock for acquisitions and
stock options
    
    
    
    
    
    
    184,461
    
    
    
    77,306
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    261,767Amortization of restricted stock and stock
option grants
    
    
    
    
    
    
    
    
    
    
    5,526
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,526Purchase of treasury stock
    
    
    
    
    
    
    (9,556
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,556
    )Balance, June 30, 2006
    
    $
    269,699
    
    
    $
    (202,422
    )
    
    $
    389,110
    
    
    $
    2,244,841
    
    
    $
    (93,829
    )
    
    $
    (1,887
    )
    
    $
    2,605,512Balance, January 1, 2007
    
    $
    271,207
    
    
    $
    (201,950
    )
    
    $
    430,826
    
    
    $
    2,380,160
    
    
    $
    (53,932
    )
    
    $
    (2,177
    )
    
    $
    2,824,134Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    222,443
    
    
    
    
    
    
    
    
    
    
    
    222,443
    
    
    $
    222,443Net change in unrealized losses on
securities available for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,962
    )
    
    
    
    
    
    
    (16,962
    )
    
    
    (16,962
    )Net change in accumulated gains (losses) on cash-
flow hedging instruments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,029
    )
    
    
    
    
    
    
    (9,029
    )
    
    
    (9,029
    )Net change in additional minimum pension
liability, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    40
    
    
    
    40Net change in funded pension asset, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,179
    )
    
    
    
    
    
    
    (1,179
    )
    
    
    (1,179
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    195,313Common dividends declared ($0.86 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (113,562
    )
    
    
    
    
    
    
    
    
    
    
    (113,562
    )Adoption of FIN No. 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,621
    )
    
    
    
    
    
    
    
    
    
    
    (1,621
    )Exercise of stock options and other issuances
    
    
    5,455
    
    
    
    
    
    
    
    72,964
    
    
    
    (1,150
    )
    
    
    
    
    
    
    
    
    
    
    77,269Issuances of restricted stock, net of cancellations
    
    
    350
    
    
    
    624
    
    
    
    (974
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Advances on loans to finance stock purchases,
net of repayments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,976
    )
    
    
    (2,976
    )Issuance of treasury stock for acquisitions and
stock options
    
    
    
    
    
    
    7,471
    
    
    
    4,697
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,168Amortization of restricted stock and stock
option grants
    
    
    
    
    
    
    
    
    
    
    9,733
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,733Purchase of treasury stock
    
    
    
    
    
    
    (9,855
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,855
    )Balance, June 30, 2007
    
    $
    277,012
    
    
    $
    (203,710
    )
    
    $
    517,246
    
    
    $
    2,486,270
    
    
    $
    (81,062
    )
    
    $
    (5,153
    )
    
    $
    2,990,603
  - 5 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Cash Flows
   Six Months EndedJune 30,2007
    
    
    2006Operating Activities:Net income
    
    $
    222,443
    
    
    $
    223,280Adjustments to reconcile net income to cash provided by operations:Depreciation and amortization
    
    
    52,416
    
    
    
    49,693Amortization of stock-based compensation
    
    
    9,733
    
    
    
    5,526Accretion and amortization of discount and loan fees
    
    
    (14,056
    )
    
    
    (6,280
    )Provision for loan losses
    
    
    58,333
    
    
    
    44,434Net change in trading account assets
    
    
    7,963
    
    
    
    (26,885
    )Net loss on sale of investment securities available for sale
    
    
    
    
    
    
    14,889Gain on prepayment of FHLB advances
    
    
    
    
    
    
    (14,893
    )Increase in other assets
    
    
    (41,654
    )
    
    
    (27,706
    )(Decrease) increase in accrued expenses and other liabilities
    
    
    (9,378
    )
    
    
    30,048Net cash provided by operating activities
    
    
    285,800
    
    
    
    292,106Investing Activities:Proceeds from prepayments, maturities and calls of
investment securities held to maturity
    
    
    155,010
    
    
    
    188,828Purchases of investment securities held to maturity
    
    
    
    
    
    
    (10,193
    )Proceeds from sales of investment securities available for sale
    
    
    138,309
    
    
    
    782,334Proceeds from prepayments, maturities and calls of
investment securities available for sale
    
    
    507,655
    
    
    
    460,684Purchases of investment securities available for sale
    
    
    (692,953
    )
    
    
    (800,787
    )Net increase in federal funds sold and securities
purchased under agreements to resell
    
    
    (27,947
    )
    
    
    (26,459
    )Net increase in loan portfolio
    
    
    (860,086
    )
    
    
    (1,503,992
    )Net cash paid in acquisitions
    
    
    
    
    
    
    (190,071
    )Purchases of premises and equipment, net
    
    
    (37,526
    )
    
    
    (39,486
    )Proceeds from sales of other real estate owned
    
    
    14,151
    
    
    
    6,210Net cash used by investing activities
    
    
    (803,387
    )
    
    
    (1,132,932
    )
  - 6 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows  Continued
 Six Months EndedJune 30,2007
    
    
    2006Financing Activities:Net increase in demand deposits, NOW accounts
and savings accounts
    
    
    271,359
    
    
    
    711,685Net increase in time deposits
    
    
    342,906
    
    
    
    268,805Net increase (decrease) in federal funds purchased and
securities sold
under agreements to repurchase
    
    
    846,585
    
    
    
    (449,100
    )Net (decrease) increase in other short-term borrowings
    
    
    (818,949
    )
    
    
    775,366Proceeds from FHLB and other borrowings
    
    
    
    
    
    
    1,071,441Repayment of FHLB and other borrowings
    
    
    (106,055
    )
    
    
    (1,504,082
    )Common dividends paid
    
    
    (113,202
    )
    
    
    (98,958
    )Purchase of treasury stock
    
    
    (9,760
    )
    
    
    (1,720
    )Issuance of treasury stock for stock options
    
    
    1,983
    
    
    
    1,613Repayment of loans to finance stock purchases
    
    
    1,426
    
    
    
    370Proceeds from exercise of stock options
    
    
    72,867
    
    
    
    17,429Net cash provided by financing activities
    
    
    489,160
    
    
    
    792,849Net decrease in cash and due from banks
    
    
    (28,427
    )
    
    
    (47,977
    )Cash and due from banks at beginning of period
    
    
    738,168
    
    
    
    805,556Cash and due from banks at end of period
    
    $
    709,741
    
    
    $
    757,579Schedule of noncash investing and financing activities:Transfers of loans to other real estate owned
    
    $
    10,749
    
    
    $
    6,780Loans to facilitate the sale of other real estate owned
    
    
    
    
    
    
    375Loans to finance stock purchases
    
    
    4,402
    
    
    
    995Change in unrealized loss on available for sale investment
securities
    
    
    (26,838
    )
    
    
    (39,530
    )Issuance of restricted stock, net of cancellations
    
    
    13,104
    
    
    
    11,681Treasury stock exchanged for acquisition earnouts
    
    
    9,874
    
    
    
    6,269Treasury stock purchase (exchange) for deferred compensation
plan, net
    
    
    (216
    )
    
    
    7,943Adoption of FIN 48
    
    
    1,621
    
    
    
    Business combinations and divestitures:Common stock issued from treasury stock
    
    
    
    
    
    
    253,992Assets acquired
    
    
    
    
    
    
    2,012,632Liabilities assumed
    
    
    
    
    
    
    1,568,569
  - 7 -




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##### Table of Contents



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 Calculation and Impairment
 Website Availability of Reports Filed with the SEC
 www.compassbank.com
 NOTE 2  Business Combinations
 BBVA Transaction
     - 9 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 Other Business Combinations
   NOTE 3  Capital Securities and Preferred Stock
 Capital Securities
  Consolidation of Variable Interest Entities, an interpretation
of ARB No. 51
   Class B Preferred Stock
   - 10 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
   Maturity
    
    
    June 30,
    
    
    December 31,Dates
    
    
    2007
    
    
    2006(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
    
    
    
    309,279LIBOR plus 2.60% floating rate debentures
payable to TexasBanc Capital Trust I *
    
    
    2034
    
    
    
    25,774
    
    
    
    25,774Fair value of and unamortized fees on hedged
capital securities
    
    
    
    
    
    
    (4,195
    )
    
    
    1,030Class B Preferred Stock
    
    
    
    
    
    
    18,188
    
    
    
    18,149Total Capital Securities and Preferred Stock
    
    
    
    
    
    $
    452,139
    
    
    $
    457,325
 
 *
    
    Majority of amounts qualify for Tier I Capital NOTE 4  Earnings Per Share
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In Thousands Except Per Share Data)(Unaudited)BASIC EARNINGS PER SHARE:Net income
    
    $
    109,307
    
    
    $
    115,371
    
    
    $
    222,443
    
    
    $
    223,280Weighted average shares outstanding
    
    
    131,897
    
    
    
    128,690
    
    
    
    131,135
    
    
    
    126,201Basic earnings per share
    
    $
    0.83
    
    
    $
    0.90
    
    
    $
    1.70
    
    
    $
    1.77DILUTED EARNINGS PER SHARE:Net income
    
    $
    109,307
    
    
    $
    115,371
    
    
    $
    222,443
    
    
    $
    223,280Weighted average shares outstanding
    
    
    131,897
    
    
    
    128,690
    
    
    
    131,135
    
    
    
    126,201Net 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
    
    
    1,930
    
    
    
    2,705
    
    
    
    2,178
    
    
    
    2,722Weighted average diluted shares outstanding
    
    
    133,827
    
    
    
    131,395
    
    
    
    133,313
    
    
    
    128,923Diluted earnings per share
    
    $
    0.82
    
    
    $
    0.88
    
    
    $
    1.67
    
    
    $
    1.73
 NOTE 5  Segment Information
   - 11 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
         For the Three Months Ended June 30, 2007
(in Thousands)
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    118,371
    
    
    $
    121,536
    
    
    $
    15,147
    
    
    $
    9,494
    
    
    $
    13,556
    
    
    $
    278,104Noninterest income
    
    
    37,725
    
    
    
    131,430
    
    
    
    12,033
    
    
    
    6,876
    
    
    
    160
    
    
    
    188,224Noninterest expense
    
    
    61,691
    
    
    
    125,940
    
    
    
    13,761
    
    
    
    4,355
    
    
    
    57,655
    
    
    
    263,402Segment income (loss)
    
    $
    94,405
    
    
    $
    127,026
    
    
    $
    13,419
    
    
    $
    12,015
    
    
    $
    (43,939
    )
    
    
    202,926Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,288Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164,638Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,331Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    109,307Balance SheetAverage assets
    
    $
    14,429,287
    
    
    $
    9,538,973
    
    
    $
    1,674,062
    
    
    $
    7,172,915
    
    
    $
    1,745,319
    
    
    $
    34,560,556Average loans
    
    
    14,407,874
    
    
    
    9,342,603
    
    
    
    1,671,141
    
    
    
    
    
    
    
    (137,674
    )
    
    
    25,283,944Average deposits
    
    
    6,033,604
    
    
    
    13,780,881
    
    
    
    1,385,679
    
    
    
    2,358,612
    
    
    
    (109,401
    )
    
    
    23,449,375Period-end assets
    
    $
    14,642,911
    
    
    $
    9,790,454
    
    
    $
    1,717,028
    
    
    $
    7,157,454
    
    
    $
    1,574,610
    
    
    $
    34,882,457Period-end loans
    
    
    14,409,414
    
    
    
    9,502,738
    
    
    
    1,703,384
    
    
    
    
    
    
    
    (134,910
    )
    
    
    25,480,626Period-end deposits
    
    
    6,075,341
    
    
    
    13,866,264
    
    
    
    1,355,779
    
    
    
    2,449,126
    
    
    
    (87,540
    )
    
    
    23,658,970
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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    120,958
    
    
    $
    122,902
    
    
    $
    15,747
    
    
    $
    10,827
    
    
    $
    17,248
    
    
    $
    287,682Noninterest income
    
    
    36,924
    
    
    
    127,645
    
    
    
    10,983
    
    
    
    7,480
    
    
    
    (1,666
    )
    
    
    181,366Noninterest expense
    
    
    59,506
    
    
    
    128,913
    
    
    
    13,132
    
    
    
    5,264
    
    
    
    59,035
    
    
    
    265,850Segment income (loss)
    
    $
    98,376
    
    
    $
    121,634
    
    
    $
    13,598
    
    
    $
    13,043
    
    
    $
    (43,453
    )
    
    
    203,198Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,322Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    175,876Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,505Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    115,371Balance SheetAverage assets
    
    $
    13,560,112
    
    
    $
    9,039,499
    
    
    $
    1,566,593
    
    
    $
    7,085,334
    
    
    $
    1,910,428
    
    
    $
    33,161,966Average loans
    
    
    13,509,614
    
    
    
    8,855,551
    
    
    
    1,566,584
    
    
    
    
    
    
    
    (106,032
    )
    
    
    23,825,717Average deposits
    
    
    5,854,384
    
    
    
    12,513,458
    
    
    
    1,298,065
    
    
    
    2,860,321
    
    
    
    (7,655
    )
    
    
    22,518,573Period-end assets
    
    $
    14,079,410
    
    
    $
    9,211,338
    
    
    $
    1,606,743
    
    
    $
    7,097,747
    
    
    $
    1,618,254
    
    
    $
    33,613,492Period-end loans
    
    
    13,816,644
    
    
    
    8,948,701
    
    
    
    1,593,945
    
    
    
    
    
    
    
    (127,175
    )
    
    
    24,232,115Period-end deposits
    
    
    6,328,988
    
    
    
    12,845,358
    
    
    
    1,289,905
    
    
    
    2,472,186
    
    
    
    (99,178
    )
    
    
    22,837,259
 For the Six Months Ended June 30, 2007
(in Thousands)
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    238,799
    
    
    $
    242,647
    
    
    $
    30,298
    
    
    $
    18,150
    
    
    $
    26,611
    
    
    $
    556,505Noninterest income
    
    
    78,267
    
    
    
    249,554
    
    
    
    23,762
    
    
    
    14,108
    
    
    
    1,337
    
    
    
    367,028Noninterest expense
    
    
    124,931
    
    
    
    249,659
    
    
    
    28,113
    
    
    
    9,024
    
    
    
    117,110
    
    
    
    528,837Segment income (loss)
    
    $
    192,135
    
    
    $
    242,542
    
    
    $
    25,947
    
    
    $
    23,234
    
    
    $
    (89,162
    )
    
    
    394,696Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,333Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    336,363Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113,920Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    222,443Balance SheetAverage assets
    
    $
    14,395,259
    
    
    $
    9,450,759
    
    
    $
    1,658,355
    
    
    $
    7,167,690
    
    
    $
    1,750,136
    
    
    $
    34,422,199Average loans
    
    
    14,376,869
    
    
    
    9,256,898
    
    
    
    1,655,318
    
    
    
    
    
    
    
    (143,660
    )
    
    
    25,145,425Average deposits
    
    
    5,963,320
    
    
    
    13,693,904
    
    
    
    1,366,286
    
    
    
    2,425,194
    
    
    
    (113,419
    )
    
    
    23,335,285Period-end assets
    
    $
    14,642,911
    
    
    $
    9,790,454
    
    
    $
    1,717,028
    
    
    $
    7,157,454
    
    
    $
    1,574,610
    
    
    $
    34,882,457Period-end loans
    
    
    14,409,414
    
    
    
    9,502,738
    
    
    
    1,703,384
    
    
    
    
    
    
    
    (134,910
    )
    
    
    25,480,626Period-end deposits
    
    
    6,075,341
    
    
    
    13,866,264
    
    
    
    1,355,779
    
    
    
    2,449,126
    
    
    
    (87,540
    )
    
    
    23,658,970
 - 13 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    225,457
    
    
    $
    239,317
    
    
    $
    30,640
    
    
    $
    22,393
    
    
    $
    30,136
    
    
    $
    547,943Noninterest income
    
    
    73,898
    
    
    
    237,507
    
    
    
    21,289
    
    
    
    15,135
    
    
    
    (1,119
    )
    
    
    346,710Noninterest expense
    
    
    116,334
    
    
    
    247,231
    
    
    
    27,156
    
    
    
    10,780
    
    
    
    108,719
    
    
    
    510,220Segment income (loss)
    
    $
    183,021
    
    
    $
    229,593
    
    
    $
    24,773
    
    
    $
    26,748
    
    
    $
    (79,702
    )
    
    
    384,433Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,434Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    339,999Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116,719Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    223,280Balance SheetAverage assets
    
    $
    12,636,666
    
    
    $
    8,955,393
    
    
    $
    1,527,436
    
    
    $
    7,223,664
    
    
    $
    1,702,034
    
    
    $
    32,045,193Average loans
    
    
    12,590,271
    
    
    
    8,772,309
    
    
    
    1,527,363
    
    
    
    
    
    
    
    (95,802
    )
    
    
    22,794,141Average deposits
    
    
    5,374,843
    
    
    
    11,942,984
    
    
    
    1,272,307
    
    
    
    2,849,627
    
    
    
    14,079
    
    
    
    21,453,840Period-end assets
    
    $
    14,079,410
    
    
    $
    9,211,338
    
    
    $
    1,606,743
    
    
    $
    7,097,747
    
    
    $
    1,618,254
    
    
    $
    33,613,492Period-end loans
    
    
    13,816,644
    
    
    
    8,948,701
    
    
    
    1,593,945
    
    
    
    
    
    
    
    (127,175
    )
    
    
    24,232,115Period-end deposits
    
    
    6,328,988
    
    
    
    12,845,358
    
    
    
    1,289,905
    
    
    
    2,472,186
    
    
    
    (99,178
    )
    
    
    22,837,259
 NOTE 6  Loans and Allowance for Loan Losses
  June 30,
    
    
    December 31,2007
    
    
    2006(in Thousands)Commercial loans:Commercial, financial and agricultural
    
    $
    4,594,807
    
    
    $
    4,376,572Real estate  construction
    
    
    6,657,969
    
    
    
    6,365,283Commercial real estate  mortgage
    
    
    4,156,012
    
    
    
    4,266,776Total commercial loans
    
    
    15,408,788
    
    
    
    15,008,631Consumer loans:Residential real estate  mortgage
    
    
    2,729,937
    
    
    
    2,454,565Equity lines of credit
    
    
    1,893,555
    
    
    
    1,786,211Equity loans
    
    
    1,375,030
    
    
    
    1,382,779Credit card
    
    
    462,254
    
    
    
    505,216Consumer  direct
    
    
    375,426
    
    
    
    409,277Consumer  indirect
    
    
    3,235,636
    
    
    
    3,118,594Total consumer loans
    
    
    10,071,838
    
    
    
    9,656,642Total
    
    $
    25,480,626
    
    
    $
    24,665,273
 - 14 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in Thousands)Balance at beginning of period
    
    $
    292,282
    
    
    $
    282,457
    
    
    $
    291,050
    
    
    $
    267,173Add: Provision charged to income
    
    
    38,288
    
    
    
    27,322
    
    
    
    58,333
    
    
    
    44,434Allowance acquired (transferred)
    
    
    (1,633
    )
    
    
    (4,079
    )
    
    
    (1,633
    )
    
    
    11,179Deduct: Net charge-offs (recoveries):Commercial, financial and
agricultural
    
    
    5,682
    
    
    
    3,628
    
    
    
    9,826
    
    
    
    5,256Commercial real estate  mortgage
    
    
    (56
    )
    
    
    346
    
    
    
    (17
    )
    
    
    1,445Real estate  construction
    
    
    5,565
    
    
    
    179
    
    
    
    5,654
    
    
    
    268Residential real estate  mortgage
    
    
    223
    
    
    
    322
    
    
    
    427
    
    
    
    502Equity lines of credit
    
    
    696
    
    
    
    273
    
    
    
    990
    
    
    
    734Equity loans
    
    
    53
    
    
    
    (29
    )
    
    
    205
    
    
    
    219Credit card
    
    
    5,763
    
    
    
    5,316
    
    
    
    12,097
    
    
    
    10,143Consumer  direct
    
    
    2,074
    
    
    
    2,228
    
    
    
    4,210
    
    
    
    3,106Consumer- indirect
    
    
    4,794
    
    
    
    4,294
    
    
    
    10,215
    
    
    
    11,970Total net charge-offs
    
    
    24,794
    
    
    
    16,557
    
    
    
    43,607
    
    
    
    33,643Balance at end of period
    
    $
    304,143
    
    
    $
    289,143
    
    
    $
    304,143
    
    
    $
    289,143
   June 30,
    
    
    December 31,2007
    
    
    2006(in Thousands)Nonaccrual loans
    
    $
    130,939
    
    
    $
    53,014Renegotiated loans
    
    
    3,985
    
    
    
    3,258Total nonperforming loans
    
    
    134,924
    
    
    
    56,272Other real estate
    
    
    14,165
    
    
    
    17,105Total nonperforming assets
    
    $
    149,089
    
    
    $
    73,377
 NOTE 7  Securitized Assets
   - 15 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 NOTE 8  Investments
  June 30, 2007Securities 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
    
    $
    
    
    
    $
    
    
    
    $
    10,024
    
    
    $
    17
    
    
    $
    10,024
    
    
    $
    17Mortgage-backed pass-through securities
    
    
    717,699
    
    
    
    4,385
    
    
    
    323,780
    
    
    
    12,347
    
    
    
    1,041,479
    
    
    
    16,732Collateralized mortgage obligations
    
    
    556,685
    
    
    
    9,350
    
    
    
    2,093,635
    
    
    
    60,726
    
    
    
    2,650,320
    
    
    
    70,076States and political subdivisions
    
    
    201,936
    
    
    
    2,669
    
    
    
    26,963
    
    
    
    1,008
    
    
    
    228,899
    
    
    
    3,677Equity securities
    
    
    1,052
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    1,052
    
    
    
    14Total
    
    $
    1,477,372
    
    
    $
    16,418
    
    
    $
    2,454,402
    
    
    $
    74,098
    
    
    $
    3,931,774
    
    
    $
    90,516
 December 31, 2006Securities 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
    
    $
    10,006
    
    
    $
    2
    
    
    $
    9,910
    
    
    $
    89
    
    
    $
    19,916
    
    
    $
    91Mortgage-backed pass-through securities
    
    
    203,198
    
    
    
    908
    
    
    
    364,104
    
    
    
    10,622
    
    
    
    567,302
    
    
    
    11,530Collateralized mortgage obligations
    
    
    352,743
    
    
    
    1,581
    
    
    
    2,385,800
    
    
    
    55,641
    
    
    
    2,738,543
    
    
    
    57,222States and political subdivisions
    
    
    12,214
    
    
    
    75
    
    
    
    28,892
    
    
    
    527
    
    
    
    41,106
    
    
    
    602Total
    
    $
    578,161
    
    
    $
    2,566
    
    
    $
    2,788,706
    
    
    $
    66,879
    
    
    $
    3,366,867
    
    
    $
    69,445
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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 NOTE 9  Derivatives, Hedging and Off-Balance Sheet Activities
 Accounting for Derivative Instruments and Hedging Activities
  June 30, 2007
    
    December 31, 2006Other
    
    
    
    
    
    OtherThan
    
    
    
    
    
    ThanTrading
    
    Trading
    
    Trading
    
    Trading(in Thousands)Forward and futures contracts
    
    $
    397,560
    
    
    $
    35,389
    
    
    $
    354,064
    
    
    $
    19,538Interest rate swap agreements:Pay fixed versus receive float
    
    
    1,870,722
    
    
    
    
    
    
    
    1,892,968
    
    
    
    Receive fixed versus pay float
    
    
    1,880,549
    
    
    
    2,075,516
    
    
    
    1,892,968
    
    
    
    2,160,382Pay float versus receive float
    
    
    22,000
    
    
    
    
    
    
    
    22,000
    
    
    
    Written options
    
    
    689,202
    
    
    
    39,440
    (1)
    
    
    601,314
    
    
    
    23,274
    (1)Purchased options
    
    
    596,203
    
    
    
    1,500,000
    
    
    
    581,314
    
    
    
    1,500,000
 
 (1)
    
    Written options classified as other than trading represent interest rate loan commitments
related to the Companys mortgage banking activities.   June 30, 2007
    
    December 31, 2006National
    
    Carrying
    
    National
    
    Carryingvalue
    
    value
    
    value
    
    value(in Thousands)Cash Flow Hedges:Interest rate swap agreements
    
    $
    850,000
    
    
    $
    (2,096
    )
    
    $
    850,000
    
    
    $
    (348
    )Purchased options
    
    
    1,500,000
    
    
    
    12,382
    
    
    
    1,500,000
    
    
    
    29,213Fair Value Hedges:Interest rate swap agreements
    
    
    1,225,516
    
    
    
    (35,725
    )
    
    
    1,310,382
    
    
    
    9,777Forward contracts (1)
    
    
    35,389
    
    
    
    (434
    )
    
    
    19,538
    
    
    
    37
 
 (1)
    
    Derivatives related to the Companys mortgage banking activities Interest-Rate Risk
  Fair-Value Hedges
  - 17 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
   Cash-Flow Hedges
  Off-Balance Sheet Activities
    - 18 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  NOTE 10  Shareholders Equity
    NOTE 11  Goodwill and Other Acquired Intangible Assets
    June 30, 2007Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    
    ValueAmortizing intangible assets:Core deposit intangibles
    
    $
    67,832
    
    
    $
    (44,319
    )
    
    $
    23,513Other customer intangibles
    
    
    44,827
    
    
    
    (18,784
    )
    
    
    26,043Total amortizing intangible assets
    
    $
    112,659
    
    
    $
    (63,103
    )
    
    $
    49,556
 December 31, 2006Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    
    ValueAmortizing intangible assets:Core deposit intangibles
    
    $
    67,832
    
    
    $
    (40,502
    )
    
    $
    27,330Other customer intangibles
    
    
    44,827
    
    
    
    (17,007
    )
    
    
    27,820Total amortizing intangible assets
    
    $
    112,659
    
    
    $
    (57,509
    )
    
    $
    55,150
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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 NOTE 12  Commitments, Contingencies and Guarantees
    June 30,
    
    December 31,2007
    
    2006(in Thousands)Commitments to extend credit
    
    $
    12,311,846
    
    
    $
    12,661,226Standby and commercial letters of credit
    
    
    1,075,534
    
    
    
    1,136,411
       NOTE 13  Stock-Based Compensation
  - 20 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  Share-Based Payment
  Six Months
    
    Six MonthsEnded
    
    EndedJune 30, 2007
    
    June 30, 2006Dividend yield
    
    
    3.29
    %
    
    
    3.55
    %Expected volatility
    
    
    0.1970
    
    
    
    .02169Risk free interest rate
    
    
    4.76
    %
    
    
    4.98
    %Expected life
    
    5.0 years
    
    
    5.0 yearsForfeiture rate
    
    
    2.58
    %
    
    
    3.08
    %
   Weighted
    
    
    
    
    
    AggregateShares
    
    Average
    
    Contractual
    
    IntrinsicUnderlying
    
    Exercise
    
    Term
    
    ValueOptions
    
    Price
    
    (Years)
    
    (In Thousands)Outstanding, beginning of the period
    
    
    7,012,176
    
    
    $
    34.21Granted
    
    
    597,349
    
    
    
    60.11Exercised
    
    
    (2,749,629
    )
    
    
    28.71Cancelled
    
    
    (20,795
    )
    
    
    50.60Outstanding, end of the period
    
    
    4,839,101
    
    
    
    40.41
    
    
    
    6.67
    
    
    $
    138,262Exercisable, end of the period
    
    
    3,680,892
    
    
    
    35.50
    
    
    
    5.92
    
    
    $
    123,241
   - 21 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
   Restricted
    
    Grant DateStock
    
    Fair ValueNonvested, beginning of the period
    
    
    502,825
    
    
    $
    55.35Granted
    
    
    193,331
    
    
    
    60.32Vested
    
    
    (48,269
    )
    
    
    43.32Forfeited
    
    
    (8,123
    )
    
    
    53.95Nonvested, end of the period
    
    
    639,764
    
    
    
    57.77
  NOTE 14  Defined Benefit Pension Plan
 Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans  an amendment of FASB Statements 87, 88, 106 and 132(R)
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    1,803
    
    
    $
    1,738
    
    
    $
    3,509
    
    
    $
    3,698Interest cost
    
    
    2,824
    
    
    
    2,480
    
    
    
    5,539
    
    
    
    5,049Expected return on plan assets
    
    
    (3,849
    )
    
    
    (3,248
    )
    
    
    (7,687
    )
    
    
    (6,636
    )Amortization of prior service cost
    
    
    8
    
    
    
    9
    
    
    
    17
    
    
    
    17Amortization of net loss
    
    
    365
    
    
    
    697
    
    
    
    557
    
    
    
    1,527Net periodic benefit cost
    
    $
    1,151
    
    
    $
    1,676
    
    
    $
    1,935
    
    
    $
    3,655
  NOTE 15  Income Taxes
   - 22 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  NOTE 16  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 Hybrid Financial Instruments
 Accounting for Certain Hybrid Financial
Instruments  an amendment of FASB Statements 133 and 140 Accounting
for Derivative Instruments and Hedging Activities Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities
 Accounting for Uncertainty in Income Taxes
 Accounting for Uncertainty in Income Taxes  an
interpretation of FASB Statement 109 Accounting for Income Taxes
 - 23 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 Fair Value Measurements
 Fair Value Measurements
 Accounting for Defined Pension and Other Postretirement Plans
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans  an amendment of FASB Statements 87, 88, 106 and 132(R)
 Considering the Effects of Misstatements
 Financial Statements
- Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current
Year Financial Statements
 Fair Value Option
 The Fair Value Option for Financial Assets and
Financial Liabilities, Including an amendment of FASB Statement No. 115
 - 24 -




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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
    Pending Acquisition
  - 25 -




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##### Table of Contents



Net Interest Income
    - 26 -




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##### Table of Contents



July 1, 2007throughDecember 31,
    
    For the Year Ended December 31,2007
    
    2008
    
    2009
    
    Thereafter($ in Thousands)Non-trading interest rate contractsCash Flow HedgesNotional maturity
    
    $
    
    
    
    $
    500,000
    
    
    $
    350,000
    
    
    $
    1,500,000Weighted average coupon received
on maturities
    
    
    
    %
    
    
    4.88
    %
    
    
    5.32
    %
    
    
    5.12
    %Weighted average time to maturity (months)
    
    
    
    
    
    
    7
    
    
    
    26
    
    
    
    41Fair Value HedgesNotional maturity
    
    $
    314,000
    
    
    $
    18,000
    
    
    $
    318,516
    
    
    $
    575,000Weighted average coupon received
on maturities
    
    
    6.83
    %
    
    
    4.06
    %
    
    
    6.66
    %
    
    
    5.69
    %Weighted average time to maturity (months)
    
    
    1
    
    
    
    7
    
    
    
    25
    
    
    
    190
  - 27 -




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##### Table of Contents



Three Months EndedJune 30, 2007Change2006to
    
    
    Attributed to2007
    
    
    Volume
    
    
    Rate
    
    
    MixInterest income:Federal funds sold and securities
purchased
under agreements to resell
    
    $
    (244
    )
    
    $
    (277
    )
    
    $
    53
    
    
    $
    (20
    )Trading account assets
    
    
    151
    
    
    
    127
    
    
    
    17
    
    
    
    7Investment securities available for sale
    
    
    7,017
    
    
    
    3,673
    
    
    
    3,122
    
    
    
    222Investment securities held to maturity
    
    
    (4,381
    )
    
    
    (4,139
    )
    
    
    (287
    )
    
    
    45Loans
    
    
    38,723
    
    
    
    26,538
    
    
    
    11,482
    
    
    
    703Increase in interest income
    
    $
    41,266
    
    
    $
    25,922
    
    
    $
    14,387
    
    
    $
    957Interest expense:Deposits
    
    $
    40,387
    
    
    $
    9,871
    
    
    $
    28,004
    
    
    $
    2,512Federal funds purchased and securities
sold under agreements to repurchase
    
    
    10,878
    
    
    
    7,852
    
    
    
    2,479
    
    
    
    547Other short-term borrowings
    
    
    (2,043
    )
    
    
    (2,667
    )
    
    
    830
    
    
    
    (206
    )FHLB and other borrowings*
    
    
    (274
    )
    
    
    (5,146
    )
    
    
    5,419
    
    
    
    (547
    )Increase (decrease) in interest expense
    
    $
    48,948
    
    
    $
    9,910
    
    
    $
    36,732
    
    
    $
    2,306
 Six Months EndedJune 30, 2007Change2006to
    
    
    Attributed to2007
    
    
    Volume
    
    
    Rate
    
    
    MixInterest income:Federal funds sold and securities
purchased
under agreements to resell
    
    $
    (223
    )
    
    $
    (340
    )
    
    $
    159
    
    
    $
    (42
    )Trading account assets
    
    
    258
    
    
    
    204
    
    
    
    39
    
    
    
    15Investment securities available for sale
    
    
    11,601
    
    
    
    3,299
    
    
    
    8,044
    
    
    
    258Investment securities held to maturity
    
    
    (8,106
    )
    
    
    (7,614
    )
    
    
    (575
    )
    
    
    83Loans
    
    
    133,222
    
    
    
    83,179
    
    
    
    45,364
    
    
    
    4,679Increase in interest income
    
    $
    136,752
    
    
    $
    78,728
    
    
    $
    53,031
    
    
    $
    4,993Interest expense:Deposits
    
    $
    100,509
    
    
    $
    30,933
    
    
    $
    61,347
    
    
    $
    8,229Federal funds purchased and securities
sold under agreements to repurchase
    
    
    18,567
    
    
    
    8,312
    
    
    
    9,205
    
    
    
    1,050Other short-term borrowings
    
    
    3,603
    
    
    
    1,476
    
    
    
    1,940
    
    
    
    187FHLB and other borrowings*
    
    
    1,587
    
    
    
    (11,748
    )
    
    
    15,113
    
    
    
    (1,778
    )Increase (decrease) in interest expense
    
    $
    124,266
    
    
    $
    28,973
    
    
    $
    87,605
    
    
    $
    7,688
 
 *
    
    Includes Capital Securities and Preferred Stock Noninterest Income and Noninterest Expense
  - 28 -




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##### Table of Contents



Income Taxes
  Provision and Allowance for Loan Losses
  Credit  Nonperforming Assets and Past Due Loans
    - 29 -




---



##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Allowance for Loan Losses/Nonperforming Assets
 Six Months EndedJune 30,2007
    
    
    2006Allowance for Loan LossesBalance at beginning of period
    
    $
    291,050
    
    
    $
    267,173Add: Provision charged to income
    
    
    58,333
    
    
    
    44,434Allowance for loans acquired (transferred)
    
    
    (1,633
    )
    
    
    11,179Deduct: Loans charged off
    
    
    57,781
    
    
    
    48,381Loan recoveries
    
    
    14,174
    
    
    
    14,738Net charge-offs
    
    
    43,607
    
    
    
    33,643Balance at end of period
    
    $
    304,143
    
    
    
    289,143Net charge-offs as a percentage of
average loans (annualized)
    
    
    0.35
    %
    
    
    0.30
    %
 June 30, 2007
    
    
    December 31, 2006Nonperforming AssetsNonaccrual loans
    
    $
    130,939
    
    
    $
    53,014Renegotiated loans
    
    
    3,985
    
    
    
    3,258Total nonperforming loans
    
    
    134,924
    
    
    
    56,272Other real estate, net
    
    
    14,165
    
    
    
    17,105Total nonperforming assets
    
    $
    149,089
    
    
    $
    73,377Accruing loans ninety days or more past due
    
    $
    21,318
    
    
    $
    18,023Other repossessed assets
    
    
    659
    
    
    
    856Allowance as a percentage of loans
    
    
    1.19
    %
    
    
    1.18
    %Total nonperforming loans as a percentage
of loans
    
    
    0.53
    
    
    
    0.23Total nonperforming assets as a percentage
of loans and ORE
    
    
    0.58
    
    
    
    0.30Accruing loans ninety days or more past due as a
percentage of loans
    
    
    0.08
    
    
    
    0.07Allowance for loan losses as a percentage of
nonperforming loans
    
    
    225.42
    
    
    
    517.22Allowance for loan losses as a percentage of
nonperforming assets
    
    
    204.00
    
    
    
    396.65
 - 30 -




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##### Table of Contents



Financial Condition
 Overview
  Assets and Funding
  Liquidity and Capital Resources
        - 31 -




---



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- 32 -




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##### Table of Contents



Item 3  Quantitative and Qualitative Disclosures About Market Risk
   PercentageIncrease/(Decrease)in Interest Income/ExpenseDown 100
    
    Up 100Basis Points
    
    Basis PointsJune 30, 2007:
Total net interest income sensitivity
    
    
    0.41
    %
    
    
    (0.03
    )%December 31, 2006:
Total net interest income sensitivity
    
    
    (0.23
    )%
    
    
    (0.18
    )%
  - 33 -




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##### Table of Contents



Item 4  Controls and Procedures
   - 34 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 PART II. OTHER INFORMATION
 
 Item 1  Legal Proceedings
  
 Item 1A  Risk Factors
  
 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)April 1, 2007 
April 30, 2007
    
    
    9,450
    
    
    $
    69.40
    
    
    
    
    
    
    
    2,798,407May 1, 2007 
May 31, 2007
    
    
    1,723
    
    
    
    68.73
    
    
    
    
    
    
    
    2,798,407June 1, 2007 
June 30, 2007
    
    
    7,181
    
    
    
    68.91
    
    
    
    
    
    
    
    2,798,407Total
    
    
    18,354
    
    
    $
    69.14
    
    
    
    
 
 (1)
    
    This column includes the surrender to the Company by plan participants of shares of common stock to satisfy the exercise price
and tax withholdings related to the exercise of employee stock options and restricted stock during the period indicated.(2)
    
    In 2003, the Company announced that its Board of Directors authorized management to purchase approximately 4.1 million shares
of the Companys outstanding common stock. 
 Item 6  Exhibits
 (2)
    
    Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
 (a)
    
    Transaction Agreement, dated as of February 16, 2007, between Compass
Bancshares, Inc. and Banco Bilbao Vizcaya Argentaria, S.A. (incorporated by reference
to Exhibit 2.1 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed
February 22, 2007 with the Commission)
 (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 3.1 to Compass Bancshares,
Inc.s Registration Statement on Form S-4, Registration No. 333-129940, filed November
23, 2005 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.
333-129940, filed November 23, 2005 with the Commission)
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##### Table of Contents



Exhibits  continued
 (c)
    
    Certificate of Amendment, dated May 15, 1987, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.3 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
333-129940, filed November 23, 2005 with the Commission)(d)
    
    Certificate of Amendment, dated November 3, 1993, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.4 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
333-129940, filed November 23, 2005 with the Commission)(e)
    
    Certificate of Amendment, dated September 16, 1994, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.5 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
333-129940, filed November 23, 2005 with the Commission)(f)
    
    Certificate of Amendment, dated May 15, 1998, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.6 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
333-129940, filed November 23, 2005 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 3.7 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
333-129940, filed November 23, 2005 with the Commission)(h)
    
    Bylaws of Compass Bancshares, Inc. as amended and restated as of March 15, 1982
and amended on February 17, 1986 and February 15, 1988 (incorporated by reference to
Exhibit 3(h) to Compass Bancshares, Inc.s June 30, 2006 Form 10-Q, file number
001-31272, filed August 8, 2006 with the Commission)
 (4)
    
    Instruments Defining the Rights of Security Holders, Including Indentures
 Instruments defining the rights of the holders of long-term debt of Compass Bancshares,
Inc. and its subsidiaries are not filed herewith pursuant to Item 601(b)(4)(iii) of
Regulation S-K. Compass Bancshares, Inc. hereby agrees to furnish copies of such
instruments to the Commission upon request.
 (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)
    
    Form of Amended and Restated Employment Agreement, effective as of January 23,
2007, between Compass Bancshares, Inc. and each executive officer of Compass
Bancshares, Inc. (incorporated by reference to Exhibit 10.8 to Compass Bancshares,
Inc.s Form 8-K, file number 001-31272, filed January 29, 2007 with the Commission) *(d)
    
    Compass Bancshares, Inc. Supplemental Retirement Plan, as amended and restated
as of January 1, 2005 (incorporated by reference to Exhibit 10(d) to Compass
Bancshares, Inc.s December 31, 2006 Form 10-K, file number 001-31272, filed February
27, 2007 with the Commission)*(e)
    
    Amendment Number One, dated June 18, 2007, to the Compass Bancshares, Inc.
Supplemental Retirement Plan, as amended and restated as of January 1, 2005*(f)
    
    Compass Bancshares, Inc. Special Supplemental Retirement Plan, as amended and
restated as of January 1, 2005 (incorporated by reference to Exhibit 10(e) to Compass
Bancshares, Inc.s December 31, 2006 Form 10-K, file number 001-31272, filed February
27, 2007 with the Commission)*(g)
    
    Compass Bancshares, Inc. Employee Stock Ownership Benefit Restoration Plan, as
amended and restated as of January 1, 2005 (incorporated by reference to Exhibit 10(f)
to Compass Bancshares, Inc.s December 31, 2006 Form 10-K, file number 001-31272, filed
February 27, 2007 with the Commission)*
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##### Table of Contents



Exhibits  continued
 (h)
    
    Amendment Number One, dated June 18, 2007, to the Compass Bancshares, Inc.
Employee Stock Ownership Benefit Restoration Plan, as amended and restated as of
January 1, 2005*(i)
    
    Compass Bancshares, Inc. Smartinvestor Retirement Benefit Restoration Plan, as
amended and restated as of January 1, 2005 (incorporated by reference to Exhibit 10(g)
to Compass Bancshares, Inc.s December 31, 2006 Form 10-K, file number 001-31272, filed
February 27, 2007 with the Commission)*(j)
    
    Amendment Number One, dated June 18, 2007, to the Compass Bancshares, Inc.
Smartinvestor Retirement Benefit Restoration Plan, as amended and restated as of
January 1, 2005*(k)
    
    Deferred Compensation Plan for Compass Bancshares, Inc., as amended and
restated as of January 1, 2005 (incorporated by reference to Exhibit 10(r) to Compass
Bancshares, Inc.s June 30, 2006 Form 10-Q, file number 001-31272, filed August 8, 2006
with the Commission) *(l)
    
    Amendment Number One, dated June 18, 2007, to the Deferred Compensation Plan
for Compass Bancshares, Inc., as amended and restated as of January 1, 2005*(m)
    
    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) *(n)
    
    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) *(o)
    
    2005 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) *(p)
    
    Form of Amendment Number One to the 2005 Performance Contingent Restricted
Stock Award Agreement (incorporated by reference Exhibit 10.1 to Compass Bancshares,
Inc.s Form 8-K, file number 001-31272, filed October 21, 2005 with the Commission) *(q)
    
    2005 Form of Incentive Stock Option Agreement (D. Paul Jones, Jr.)
(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) *(r)
    
    2005 Form of Incentive Stock Option Agreement (Garrett R. Hegel, James D.
Barri, George M. Boltwood and William C. Helms) (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) *(s)
    
    Compass Bancshares, Inc. 2006 Incentive Compensation Plan (incorporated by
reference to Exhibit 4.9 to Compass Bancshares, Inc.s Registration Statement on Form
S-8, Registration No. 333-135154, filed June 20, 2006 with the Commission) *(t)
    
    2006 Form of Performance Contingent Restricted Stock Agreement (D. Paul Jones,
Jr.) (incorporated by reference to Exhibit 10.1 to Compass Bancshares, Inc.s Form 8-K,
file number 001-31272, filed May 31, 2006 with the Commission) *(u)
    
    2006 Form of Performance Contingent Restricted Stock Agreement (Garrett R.
Hegel, James D. Barri, George M. Boltwood and William C. Helms) (incorporated by
reference to Exhibit 10.3 to Compass Bancshares, Inc.s Form 8-K, file number
001-31272, filed May 31, 2006 with the Commission) *(v)
    
    2006 Form of Incentive Stock Option Agreement (D. Paul Jones, Jr.)
(incorporated by reference to Exhibit 10.4 to Compass Bancshares, Inc.s Form 8-K, file
number 001-31272, filed May 31, 2006 with the Commission) *
 
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##### Table of Contents



Exhibits  continued
 (w)
    
    2006 Form of Incentive Stock Option Agreement (Garrett R. Hegel, James D.
Barri, George M. Boltwood and William C. Helms) (incorporated by reference to Exhibit
10.6 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed May 31, 2006
with the Commission) *(x)
    
    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) *(y)
    
    Form of Restricted Stock Award Agreement for Non-Employee Directors
(incorporated by reference to Exhibit 10(u) to Compass Bancshares, Inc.s December 31,
2006 Form 10-K, file number 001-31272, filed February 27, 2007 with the Commission)*(z)
    
    Form of Performance Unit Award Agreement (incorporated by reference to Exhibit
10.1 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed January 29,
2007 with the Commission) *(aa)
    
    Form of Performance Contingent Restricted Stock Award Agreement (Jones)
(incorporated by reference Exhibit 10.2 to Compass Bancshares, Inc.s Form 8-K, file
number 001-31272, filed January 29, 2007 with the Commission) *(bb)
    
    Form of Performance Contingent Restricted Stock Award Agreement (Stone)
(incorporated by reference to Exhibit 10.3 to Compass Bancshares, Inc.s Form 8-K, file
number 001-31272, filed January 29, 2007 with the Commission) *(cc)
    
    Form of Performance Contingent Restricted Stock Award Agreement (executive
officer) (incorporated by reference to Exhibit 10.4 to Compass Bancshares, Inc.s Form
8-K, file number 001-31272, filed January 29, 2007 with the Commission) *(dd)
    
    Form of Stock Option Agreement (Jones) (incorporated by reference to Exhibit
10.5 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed January 29,
2007 with the Commission) *(ee)
    
    Form of Stock Option Agreement (Stone) (incorporated by reference to Exhibit
10.6 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed January 29,
2007 with the Commission) *(ff)
    
    Form of Stock Option Agreement (executive officer) (incorporated by reference
to Exhibit 10.7 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed
January 29, 2007 with the Commission) *(gg)
    
    Summary of Compensation Arrangements for Named Executive Officers and Directors
(incorporated by reference to Exhibit 10(cc) to Compass Bancshares, Inc.s December 31,
2006 Form 10-K, file number 001-31272, filed February 27, 2007 with the Commission)*(hh)
    
    Distribution Agreement, dated March 13, 2006, among Compass Bank and Compass
Bancshares, Inc., and Citigroup Global Markets Inc., Keefe, Bruyette & Woods, Inc.
Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Sandler
ONeill & Partners, L.P. as agents (incorporated by reference to Exhibit 10(ae) to
Compass Bancshares, Inc.s March 31, 2006 Form 10-Q, file number 001-31272, filed May
8, 2006 with the Commission)(ii)
    
    Issuing and Paying Agency Agreement, dated March 13, 2006, between Compass
Bank, as issuer, and Compass Bank, as issuing and paying agent (incorporated by
reference to Exhibit 10(af) to Compass Bancshares, Inc.s March 31, 2006 Form 10-Q,
file number 001-31272, filed May 8, 2006 with the Commission)(jj)
    
    Employment Agreement, dated as of February 16, 2007, among Compass Bancshares,
Inc., Banco Bilbao Vizcaya Argentaria, S.A. and D. Paul Jones, Jr. (incorporated by
reference to Exhibit 10.1 to Compass Bancshares, Inc.s Form 8-K, file number
001-31272, filed February 22, 2007 with the Commission)*(kk)
    
    Form of Employment Agreement, dated as of February 16, 2007, among Compass
Bancshares, Inc. Banco Bilbao Vizcaya Argentaria, S.A. and each of the executive
officers (incorporated by reference to Exhibit 10.2 to Compass Bancshares, Inc.s Form
8-K, file number 001-31272, filed February 22, 2007 with the Commission)*
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##### Table of Contents



Exhibits  continued
 (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 Officer
  
 *
    
    Management contract or compensatory plan or arrangement - 39 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 SIGNATURES
  August 7, 2007
    
    By:
    
    /s/ Garrett R. HegelDate
    
    
    
    Garrett R. HegelChief Financial Officer
 - 40 -