##### 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, 2006
 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
 (COMPASS BANCSHARES, INC. LOGO)
 (Exact name of registrant as specified in its charter)
 Delaware
    
    63-0593897(State of Incorporation)
    
    (I.R.S. Employer Identification No.)
 15 South 20th Street
Birmingham, Alabama 35233  (Address of principal executive offices)
 (205) 297-3000  (Registrants telephone number)
 þ o
  þ o o
 o þ
  Class
    
    Outstanding at October 31, 2006Common Stock, $2 Par Value
    
    129,830,625




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##### 



PagePART I. FINANCIAL INFORMATIONItem 1
    
    Financial Statements (Unaudited)Consolidated Balance Sheets as of September 30, 2006 and December 31, 2005
    
    
    3Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2006
and 2005
    
    
    4Consolidated Statements of Changes In Shareholders Equity for the Nine Months Ended
September 30, 2006 and 2005
    
    
    5Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2006 and
2005
    
    
    6Notes to Consolidated Financial Statements (Unaudited)
    
    
    8Item 2
    
    Managements Discussion and Analysis of Results of Operations and Financial Condition
    
    
    27Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    35Item 4
    
    Controls and Procedures
    
    
    36PART II. OTHER INFORMATIONItem 1
    
    Legal Proceedings
    
    
    37Item 1A
    
    Risk Factors
    
    
    37Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    37Item 6
    
    Exhibits
    
    
    37EX-31.(A) SECTION 302 CERTIFICATION OF CEOEX-31.(B) SECTION 302 CERTIFICATION OF CFOEX-32.(A) SECTION 906 CERTIFICATION OF CEOEX-32.(B) SECTION 906 CERTIFICATION OF CFO
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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, 2006
    
    
    December 31, 2005(Unaudited)AssetsCash and due from banks
    
    $
    691,615
    
    
    $
    805,556Federal funds sold and securities purchased
under agreements to resell
    
    
    52,453
    
    
    
    46,393Trading account assets
    
    
    85,813
    
    
    
    76,559Investment securities available for sale
    
    
    4,513,604
    
    
    
    4,704,375Investment securities held to maturity (fair value of
$1,995,538 and $2,212,273 for 2006 and 2005, respectively)
    
    
    2,034,972
    
    
    
    2,245,942Loans
    
    
    24,537,734
    
    
    
    21,372,215Allowance for loan losses
    
    
    (292,012
    )
    
    
    (267,173
    )Net loans
    
    
    24,245,722
    
    
    
    21,105,042Premises and equipment, net
    
    
    595,163
    
    
    
    547,195Bank owned life insurance
    
    
    469,367
    
    
    
    441,226Goodwill
    
    
    675,503
    
    
    
    316,197Other assets
    
    
    592,999
    
    
    
    509,747Total assets
    
    $
    33,957,211
    
    
    $
    30,798,232Liabilities and Shareholders EquityDeposits:Noninterest bearing
    
    $
    6,629,492
    
    
    $
    6,097,881Interest bearing
    
    
    16,193,157
    
    
    
    14,286,234Total deposits
    
    
    22,822,649
    
    
    
    20,384,115Federal funds purchased and securities sold under
agreements to repurchase
    
    
    2,520,674
    
    
    
    3,102,572Other short-term borrowings
    
    
    1,278,401
    
    
    
    652,750FHLB and other borrowings
    
    
    4,211,359
    
    
    
    4,111,462Accrued expenses and other liabilities
    
    
    375,884
    
    
    
    311,304Total liabilities
    
    
    31,208,967
    
    
    
    28,562,203Shareholders equity:Preferred
stock (25,000,000 shares authorized; issued  none)
    
    
    
    
    
    
    Common stock of $2 par value:Authorized
 300,000,000 sharesIssued  135,216,616 shares in 2006 and
133,950,243 shares in 2005
    
    
    270,433
    
    
    
    267,900Treasury stock, at cost (5,533,478 shares in 2006 and
10,411,684 shares in 2005)
    
    
    (202,622
    )
    
    
    (377,327
    )Surplus
    
    
    403,562
    
    
    
    300,375Retained earnings
    
    
    2,312,687
    
    
    
    2,121,310Accumulated other comprehensive loss
    
    
    (33,729
    )
    
    
    (63,156
    )Loans to finance stock purchases
    
    
    (2,087
    )
    
    
    (1,262
    )Unearned restricted stock
    
    
    
    
    
    
    (11,811
    )Total shareholders equity
    
    
    2,748,244
    
    
    
    2,236,029Total liabilities and shareholders equity
    
    $
    33,957,211
    
    
    $
    30,798,232
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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Income
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Interest income:Interest and fees on loans
    
    $
    461,937
    
    
    $
    321,087
    
    
    $
    1,267,569
    
    
    $
    884,110Interest on investment securities available for sale
    
    
    52,164
    
    
    
    48,049
    
    
    
    154,528
    
    
    
    139,911Interest on investment securities held to maturity
    
    
    24,370
    
    
    
    29,550
    
    
    
    76,224
    
    
    
    91,805Interest on federal funds sold and securities
purchased under agreements to resell
    
    
    686
    
    
    
    391
    
    
    
    1,959
    
    
    
    1,020Interest on trading account assets
    
    
    299
    
    
    
    222
    
    
    
    837
    
    
    
    577Total interest income
    
    
    539,456
    
    
    
    399,299
    
    
    
    1,501,117
    
    
    
    1,117,423Interest expense:Interest on deposits
    
    
    142,441
    
    
    
    68,634
    
    
    
    368,160
    
    
    
    177,193Interest on federal funds purchased and securities
sold under agreements to repurchase
    
    
    45,270
    
    
    
    37,194
    
    
    
    118,135
    
    
    
    92,886Interest on other short-term borrowings
    
    
    7,564
    
    
    
    1,418
    
    
    
    22,822
    
    
    
    2,922Interest on FHLB and other borrowings
    
    
    57,605
    
    
    
    44,942
    
    
    
    157,481
    
    
    
    129,268Total interest expense
    
    
    252,880
    
    
    
    152,188
    
    
    
    666,598
    
    
    
    402,269Net interest income
    
    
    286,576
    
    
    
    247,111
    
    
    
    834,519
    
    
    
    715,154Provision for loan losses
    
    
    24,226
    
    
    
    34,195
    
    
    
    68,660
    
    
    
    82,268Net interest income after provision for loan
losses
    
    
    262,350
    
    
    
    212,916
    
    
    
    765,859
    
    
    
    632,886Noninterest income:Service charges on deposit accounts
    
    
    81,155
    
    
    
    78,448
    
    
    
    235,640
    
    
    
    220,024Card and merchant processing fees
    
    
    29,065
    
    
    
    24,496
    
    
    
    83,445
    
    
    
    70,100Insurance commissions
    
    
    14,855
    
    
    
    13,888
    
    
    
    47,936
    
    
    
    45,182Retail investment sales
    
    
    11,188
    
    
    
    8,748
    
    
    
    31,512
    
    
    
    25,977Asset management fees
    
    
    8,301
    
    
    
    7,386
    
    
    
    24,457
    
    
    
    21,093Corporate and correspondent investment sales
    
    
    5,984
    
    
    
    7,037
    
    
    
    16,820
    
    
    
    16,391Bank owned life insurance
    
    
    5,246
    
    
    
    4,396
    
    
    
    15,340
    
    
    
    12,852Gain on prepayment of FHLB advances
    
    
    
    
    
    
    
    
    
    
    14,893
    
    
    
    Investment securities (losses) gains, net
    
    
    
    
    
    
    
    
    
    
    (14,889
    )
    
    
    79Gain on sale of business
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,791Trading gains (losses) and settlements on economic
hedge swaps
    
    
    
    
    
    
    (4,149
    )
    
    
    
    
    
    
    669Other
    
    
    23,056
    
    
    
    26,246
    
    
    
    70,406
    
    
    
    74,734Total noninterest income
    
    
    178,850
    
    
    
    166,496
    
    
    
    525,560
    
    
    
    491,892Noninterest expense:Salaries, benefits and commissions
    
    
    145,340
    
    
    
    122,979
    
    
    
    425,659
    
    
    
    363,085Equipment
    
    
    23,437
    
    
    
    21,048
    
    
    
    67,570
    
    
    
    61,277Net occupancy
    
    
    19,457
    
    
    
    17,036
    
    
    
    55,290
    
    
    
    50,521Professional services
    
    
    15,851
    
    
    
    15,154
    
    
    
    46,651
    
    
    
    44,388Marketing
    
    
    12,816
    
    
    
    10,505
    
    
    
    39,315
    
    
    
    33,866Communications
    
    
    6,752
    
    
    
    5,400
    
    
    
    18,525
    
    
    
    16,323Amortization of intangibles
    
    
    3,456
    
    
    
    1,541
    
    
    
    8,494
    
    
    
    4,656Merger and integration
    
    
    1,840
    
    
    
    454
    
    
    
    9,689
    
    
    
    923Other
    
    
    36,609
    
    
    
    33,279
    
    
    
    104,585
    
    
    
    96,824Total noninterest expense
    
    
    265,558
    
    
    
    227,396
    
    
    
    775,778
    
    
    
    671,863Net income before income tax expense
    
    
    175,642
    
    
    
    152,016
    
    
    
    515,641
    
    
    
    452,915Income tax expense
    
    
    56,875
    
    
    
    51,296
    
    
    
    173,594
    
    
    
    153,223Net income
    
    $
    118,767
    
    
    $
    100,720
    
    
    $
    342,047
    
    
    $
    299,692Basic earnings per share
    
    $
    0.92
    
    
    $
    0.81
    
    
    $
    2.69
    
    
    $
    2.42Basic weighted average shares outstanding
    
    
    129,040
    
    
    
    123,947
    
    
    
    127,158
    
    
    
    123,619Diluted earnings per share
    
    $
    0.90
    
    
    $
    0.80
    
    
    $
    2.63
    
    
    $
    2.37Diluted weighted average shares outstanding
    
    
    131,799
    
    
    
    126,877
    
    
    
    129,893
    
    
    
    126,487Dividends declared per share
    
    $
    0.39
    
    
    $
    0.35
    
    
    $
    1.17
    
    
    $
    1.05
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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, 2005
    
    $
    265,806
    
    
    $
    (333,351
    )
    
    $
    264,400
    
    
    $
    1,894,546
    
    
    $
    (23,376
    )
    
    $
    (11,680
    )
    
    $
    2,056,345Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    299,692
    
    
    
    
    
    
    
    
    
    
    
    299,692
    
    
    $
    299,692Net change in unrealized losses on securities
available for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,429
    )
    
    
    
    
    
    
    (31,429
    )
    
    
    (31,429
    )Net change in accumulated losses on cash-flow hedging instruments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,360
    
    
    
    
    
    
    
    2,360
    
    
    
    2,360Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    270,623Common dividends declared ($1.05 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
    
    
    $
    2,062,796
    
    
    $
    (52,445
    )
    
    $
    (13,576
    )
    
    $
    2,234,577Balance, 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    342,047
    
    
    
    
    
    
    
    
    
    
    
    342,047
    
    
    $
    342,047Net change in unrealized losses on securities
available for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,183
    
    
    
    
    
    
    
    17,183
    
    
    
    17,183Net change in accumulated losses on cash-flow hedging instruments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,296
    
    
    
    
    
    
    
    12,296
    
    
    
    12,296Net change in additional minimum pension
liability, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52
    )
    
    
    
    
    
    
    (52
    )
    
    
    (52
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    371,474Common dividends declared ($1.17 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (149,232
    )
    
    
    
    
    
    
    
    
    
    
    (149,232
    )Exercise of stock options and other issuances
    
    
    2,196
    
    
    
    
    
    
    
    29,693
    
    
    
    (1,438
    )
    
    
    
    
    
    
    
    
    
    
    30,451Issuances of restricted stock, net of cancellations
    
    
    337
    
    
    
    
    
    
    
    (337
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Advances on loans to finance stock purchases,
net of repayments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (825
    )
    
    
    (825
    )Issuance of treasury stock for acquisitions and
stock options
    
    
    
    
    
    
    185,080
    
    
    
    77,306
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    262,386Amortization of restricted stock and stock
option grants
    
    
    
    
    
    
    
    
    
    
    8,336
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,336Purchase of treasury stock
    
    
    
    
    
    
    (10,375
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,375
    )Balance, September 30, 2006
    
    $
    270,433
    
    
    $
    (202,622
    )
    
    $
    403,562
    
    
    $
    2,312,687
    
    
    $
    (33,729
    )
    
    $
    (2,087
    )
    
    $
    2,748,244
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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Cash Flows
 Nine Months EndedSeptember 30,2006
    
    
    2005Operating Activities:Net income
    
    $
    342,047
    
    
    $
    299,692Adjustments to reconcile net income to cash provided by operations:Depreciation and amortization
    
    
    78,568
    
    
    
    75,533Amortization of stock-based compensation
    
    
    8,336
    
    
    
    3,479Accretion of discount and loan fees
    
    
    (14,019
    )
    
    
    (6,479
    )Provision for loan losses
    
    
    68,660
    
    
    
    82,268Net change in trading account assets
    
    
    (8,903
    )
    
    
    4,140Net loss (gain) on sale of investment securities available for sale
    
    
    14,889
    
    
    
    (79
    )Gain on prepayment of FHLB advances
    
    
    (14,893
    )
    
    
    Gain on sale of business
    
    
    
    
    
    
    (4,791
    )Increase in other assets
    
    
    (63,889
    )
    
    
    (63,713
    )Increase in accrued expenses and other liabilities
    
    
    44,021
    
    
    
    114,405Net cash provided by operating activities
    
    
    454,817
    
    
    
    504,455Investing Activities:Proceeds from prepayments, maturities and calls of
investment securities held to maturity
    
    
    286,398
    
    
    
    413,086Purchases of investment securities held to maturity
    
    
    (10,193
    )
    
    
    (5,000
    )Proceeds from sales of investment securities available for sale
    
    
    809,050
    
    
    
    50,870Proceeds from prepayments, maturities and calls of
investment securities available for sale
    
    
    683,137
    
    
    
    520,399Purchases of investment securities available for sale
    
    
    (1,211,216
    )
    
    
    (744,377
    )Net decrease in federal funds sold and securities
purchased under agreements to resell
    
    
    18,828
    
    
    
    10,723Net increase in loan portfolio
    
    
    (1,834,645
    )
    
    
    (2,066,949
    )Net cash paid in acquisitions
    
    
    (190,071
    )
    
    
    (202
    )Net cash received in sale of business
    
    
    
    
    
    
    4,726Purchases of premises and equipment, net
    
    
    (61,126
    )
    
    
    (49,777
    )Proceeds from sales of other real estate owned
    
    
    9,069
    
    
    
    15,841Net cash used by investing activities
    
    
    (1,500,769
    )
    
    
    (1,850,660
    )
  - 6 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows  Continued
 Nine Months EndedSeptember 30,2006
    
    
    2005Financing Activities:Net increase in demand deposits, NOW accounts
and savings accounts
    
    
    574,994
    
    
    
    633,014Net increase in time deposits
    
    
    385,229
    
    
    
    1,158,250Net decrease in federal funds purchased and securities sold
under agreements to repurchase
    
    
    (602,776
    )
    
    
    (126,806
    )Net increase in other short-term borrowings
    
    
    622,963
    
    
    
    19,305Proceeds from FHLB advances and other borrowings
    
    
    1,576,186
    
    
    
    396,902Repayment of FHLB advances and other borrowings
    
    
    (1,504,745
    )
    
    
    (400,376
    )Common dividends paid
    
    
    (149,359
    )
    
    
    (165,702
    )Purchase of treasury stock
    
    
    (2,339
    )
    
    
    (1,904
    )Issuance of treasury stock for benefit plans and stock options
    
    
    2,232
    
    
    
    4,493Repayment of loans to finance stock purchases
    
    
    872
    
    
    
    491Proceeds from exercise of stock options
    
    
    28,754
    
    
    
    17,671Net cash provided by financing activities
    
    
    932,011
    
    
    
    1,535,338Net (decrease) increase in cash and due from banks
    
    
    (113,941
    )
    
    
    189,133Cash and due from banks at beginning of period
    
    
    805,556
    
    
    
    585,679Cash and due from banks at end of period
    
    $
    691,615
    
    
    $
    774,812Schedule of noncash investing and financing activities:Transfers of loans to other real estate owned
    
    $
    13,518
    
    
    $
    8,428Loans to facilitate the sale of other real estate owned
    
    
    375
    
    
    
    780Loans to finance stock purchases
    
    
    1,697
    
    
    
    684Change in unrealized loss on available for sale investment
securities
    
    
    30,749
    
    
    
    (47,593
    )Issuance of restricted stock, net of cancellations
    
    
    11,532
    
    
    
    5,182Treasury stock exchanged for acquisition earnout
    
    
    6,269
    
    
    
    5,840Treasury stock purchased for deferred compensation plan
    
    
    8,143
    
    
    
    Allowance transferred to other liabilities
    
    
    
    
    
    
    12,189Business combinations and divestitures:Common stock issued from treasury stock
    
    
    253,992
    
    
    
    7,869Assets acquired
    
    
    2,012,632
    
    
    
    8,092Liabilities assumed
    
    
    1,568,569
    
    
    
    21Assets sold
    
    
    
    
    
    
    13Liabilities sold
    
    
    
    
    
    
    78
  - 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
 Stock-Based Compensation
 Accounting for Stock-Based Compensation. Accounting for Stock Issued to Employees Share-Based Payments
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2005Net income:As reported
    
    $
    100,720
    
    
    $
    299,692Deduct: Total share-based employee compensation
expense determined under fair value based method
for all awards, net of tax
    
    
    1,485
    
    
    
    5,527Pro forma net income
    
    $
    99,235
    
    
    $
    294,165Basic earnings per share:As reported
    
    $
    0.81
    
    
    $
    2.42Pro forma
    
    
    0.80
    
    
    
    2.38Diluted earnings per share:As reported
    
    $
    0.80
    
    
    $
    2.37Pro forma
    
    
    0.79
    
    
    
    2.33
  - 9 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
   Website Availability of Reports Filed with the SEC
 www.compassbank.com
 NOTE 2  Business Combinations and Divestitures
 TexasBank Acquisition
    Assets:Cash and cash equivalents
    
    $
    41,918Federal funds sold and securities
purchased under agreements to resell
    
    
    24,888Investment securities available for sale
    
    
    77,526Investment securities held to maturity
    
    
    63,397Net loans
    
    
    1,387,248Premises and equipment, net
    
    
    38,002Intangible assets
    
    
    385,071Other assets
    
    
    36,500Total assets
    
    $
    2,054,550Liabilities:Deposits
    
    $
    1,475,862Fed funds purchased and securities
sold under agreements to repurchase
    
    
    20,878Other short-term borrowings
    
    
    2,688FHLB and other borrowings
    
    
    51,722Other liabilities
    
    
    17,419Total liabilities
    
    
    1,568,569Net assets acquired
    
    $
    485,981
 - 10 -




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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 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In Thousands Except Per Share Data)Interest income
    
    $
    539,456
    
    
    $
    425,901
    
    
    $
    1,528,541
    
    
    $
    1,189,412Interest expense
    
    
    252,880
    
    
    
    158,247
    
    
    
    675,023
    
    
    
    417,686Net interest income
    
    
    286,576
    
    
    
    267,654
    
    
    
    853,518
    
    
    
    771,726Provision for loan losses
    
    
    24,226
    
    
    
    35,418
    
    
    
    69,176
    
    
    
    84,996Net interest income after provision for loan losses
    
    
    262,350
    
    
    
    232,236
    
    
    
    784,342
    
    
    
    686,730Noninterest income
    
    
    178,850
    
    
    
    172,173
    
    
    
    530,600
    
    
    
    508,845Noninterest expense
    
    
    265,558
    
    
    
    244,209
    
    
    
    815,192
    
    
    
    718,096Net income before income tax expense
    
    
    175,642
    
    
    
    160,200
    
    
    
    499,750
    
    
    
    477,479Income tax expense
    
    
    56,875
    
    
    
    53,994
    
    
    
    169,226
    
    
    
    161,663Net income
    
    $
    118,767
    
    
    $
    106,206
    
    
    $
    330,524
    
    
    $
    315,816Basic earnings per share
    
    $
    0.92
    
    
    $
    0.82
    
    
    $
    2.57
    
    
    $
    2.46Diluted earnings per share
    
    $
    0.90
    
    
    $
    0.81
    
    
    $
    2.52
    
    
    $
    2.40
 Other Business Combinations
    Divestitures
  NOTE 3  Capital Securities and Preferred Stock
 Capital Securities
  Consolidation of Variable Interest Entities, an interpretation
of ARB No. 51
 - 11 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
   Class B Preferred Stock
    Maturity
    
    September 30,
    
    
    December 31,Dates
    
    2006
    
    
    2005(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
    
    
    
    Fair value of and unamortized fees on hedged
capital securities
    
    2027, 2032
    
    
    (1,828
    )
    
    
    (1,969
    )Class B Preferred Stock
    
    
    
    
    18,126
    
    
    
    18,077Total Capital Securities and Preferred Stock
    
    
    
    $
    454,444
    
    
    $
    428,480
 
 *
    
    - Majority of amounts qualify for Tier I Capital Subordinated Debentures
  - 12 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 NOTE 4
 Earnings Per Share
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In Thousands Except Per Share Data)BASIC EARNINGS PER SHARE:Net income
    
    $
    118,767
    
    
    $
    100,720
    
    
    $
    342,047
    
    
    $
    299,692Weighted average shares outstanding
    
    
    129,040
    
    
    
    123,947
    
    
    
    127,158
    
    
    
    123,619Basic earnings per share
    
    $
    0.92
    
    
    $
    0.81
    
    
    $
    2.69
    
    
    $
    2.42DILUTED EARNINGS PER SHARE:Net income
    
    $
    118,767
    
    
    $
    100,720
    
    
    $
    342,047
    
    
    $
    299,692Weighted average shares outstanding
    
    
    129,040
    
    
    
    123,947
    
    
    
    127,158
    
    
    
    123,619Net 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
    
    
    2,759
    
    
    
    2,930
    
    
    
    2,735
    
    
    
    2,868Weighted average diluted shares outstanding
    
    
    131,799
    
    
    
    126,877
    
    
    
    129,893
    
    
    
    126,487Diluted earnings per share
    
    $
    0.90
    
    
    $
    0.80
    
    
    $
    2.63
    
    
    $
    2.37
 NOTE 5
 Segment Information
        - 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, 2006
(In Thousands)
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    123,182
    
    
    $
    122,073
    
    
    $
    15,799
    
    
    $
    7,707
    
    
    $
    17,815
    
    
    $
    286,576Noninterest income
    
    
    35,436
    
    
    
    126,868
    
    
    
    11,046
    
    
    
    7,132
    
    
    
    (1,632
    )
    
    
    178,850Noninterest expense
    
    
    61,671
    
    
    
    129,759
    
    
    
    13,410
    
    
    
    4,919
    
    
    
    55,799
    
    
    
    265,558Segment income (loss)
    
    $
    96,947
    
    
    $
    119,182
    
    
    $
    13,435
    
    
    $
    9,920
    
    
    $
    (39,616
    )
    
    
    199,868Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,226Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    175,642Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56,875Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    118,767Balance SheetAverage assets
    
    $
    14,098,428
    
    
    $
    9,176,386
    
    
    $
    1,597,249
    
    
    $
    7,137,562
    
    
    $
    1,789,477
    
    
    $
    33,799,102Average loans
    
    
    14,038,979
    
    
    
    8,994,104
    
    
    
    1,596,488
    
    
    
    
    
    
    
    (180,786
    )
    
    
    24,448,785Average deposits
    
    
    5,962,758
    
    
    
    12,887,318
    
    
    
    1,326,407
    
    
    
    2,592,740
    
    
    
    (100,975
    )
    
    
    22,668,248Period-end assets
    
    $
    14,375,146
    
    
    $
    9,275,194
    
    
    $
    1,586,025
    
    
    $
    7,179,724
    
    
    $
    1,541,122
    
    
    $
    33,957,211Period-end loans
    
    
    14,131,337
    
    
    
    9,010,612
    
    
    
    1,573,692
    
    
    
    
    
    
    
    (177,907
    )
    
    
    24,537,734Period-end deposits
    
    
    5,971,935
    
    
    
    13,274,095
    
    
    
    1,546,132
    
    
    
    2,136,205
    
    
    
    (105,718
    )
    
    
    22,822,649
 
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    96,863
    
    
    $
    110,268
    
    
    $
    13,862
    
    
    $
    8,743
    
    
    $
    17,375
    
    
    $
    247,111Noninterest income
    
    
    35,988
    
    
    
    118,653
    
    
    
    9,527
    
    
    
    3,434
    
    
    
    (1,106
    )
    
    
    166,496Noninterest expense
    
    
    51,805
    
    
    
    109,784
    
    
    
    11,903
    
    
    
    5,460
    
    
    
    48,444
    
    
    
    227,396Segment income (loss)
    
    $
    81,046
    
    
    $
    119,137
    
    
    $
    11,486
    
    
    $
    6,717
    
    
    $
    (32,175
    )
    
    
    186,211Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,195Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    152,016Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,296Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    100,720Balance SheetAverage assets
    
    $
    10,678,630
    
    
    $
    8,854,443
    
    
    $
    1,361,038
    
    
    $
    7,586,014
    
    
    $
    1,288,069
    
    
    $
    29,768,194Average loans
    
    
    10,646,541
    
    
    
    8,657,905
    
    
    
    1,361,449
    
    
    
    
    
    
    
    (246,022
    )
    
    
    20,419,873Average deposits
    
    
    4,781,285
    
    
    
    10,308,696
    
    
    
    1,193,899
    
    
    
    2,385,203
    
    
    
    (34,388
    )
    
    
    18,634,695Period-end assets
    
    $
    11,056,421
    
    
    $
    9,068,675
    
    
    $
    1,432,297
    
    
    $
    7,495,515
    
    
    $
    1,080,927
    
    
    $
    30,133,835Period-end loans
    
    
    10,881,742
    
    
    
    8,782,773
    
    
    
    1,421,202
    
    
    
    
    
    
    
    (243,927
    )
    
    
    20,841,790Period-end deposits
    
    
    4,950,555
    
    
    
    10,717,676
    
    
    
    1,191,743
    
    
    
    2,017,815
    
    
    
    (43,563
    )
    
    
    18,834,226
 - 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, 2006
(In Thousands)
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    349,147
    
    
    $
    361,159
    
    
    $
    46,444
    
    
    $
    29,114
    
    
    $
    48,655
    
    
    $
    834,519Noninterest income
    
    
    109,409
    
    
    
    364,290
    
    
    
    32,339
    
    
    
    22,267
    
    
    
    (2,745
    )
    
    
    525,560Noninterest expense
    
    
    178,390
    
    
    
    378,984
    
    
    
    40,608
    
    
    
    15,703
    
    
    
    162,093
    
    
    
    775,778Segment income (loss)
    
    $
    280,166
    
    
    $
    346,465
    
    
    $
    38,175
    
    
    $
    35,678
    
    
    $
    (116,183
    )
    
    
    584,301Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68,660Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    515,641Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    173,594Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    342,047Balance SheetAverage assets
    
    $
    13,131,364
    
    
    $
    9,029,837
    
    
    $
    1,550,963
    
    
    $
    7,194,649
    
    
    $
    1,729,441
    
    
    $
    32,636,254Average loans
    
    
    13,078,480
    
    
    
    8,847,053
    
    
    
    1,550,658
    
    
    
    
    
    
    
    (124,441
    )
    
    
    23,351,750Average deposits
    
    
    5,572,968
    
    
    
    12,261,221
    
    
    
    1,290,538
    
    
    
    2,763,057
    
    
    
    (24,693
    )
    
    
    21,863,091Period-end assets
    
    $
    14,375,146
    
    
    $
    9,275,194
    
    
    $
    1,586,025
    
    
    $
    7,179,724
    
    
    $
    1,541,122
    
    
    $
    33,957,211Period-end loans
    
    
    14,131,337
    
    
    
    9,010,612
    
    
    
    1,573,692
    
    
    
    
    
    
    
    (177,907
    )
    
    
    24,537,734Period-end deposits
    
    
    5,971,935
    
    
    
    13,274,095
    
    
    
    1,546,132
    
    
    
    2,136,205
    
    
    
    (105,718
    )
    
    
    22,822,649
 
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome StatementNet interest income
    
    $
    282,310
    
    
    $
    325,200
    
    
    $
    40,822
    
    
    $
    21,241
    
    
    $
    45,581
    
    
    $
    715,154Noninterest income
    
    
    114,713
    
    
    
    332,008
    
    
    
    28,383
    
    
    
    22,673
    
    
    
    (5,885
    )
    
    
    491,892Noninterest expense
    
    
    151,019
    
    
    
    324,739
    
    
    
    35,419
    
    
    
    15,043
    
    
    
    145,643
    
    
    
    671,863Segment income (loss)
    
    $
    246,004
    
    
    $
    332,469
    
    
    $
    33,786
    
    
    $
    28,871
    
    
    $
    (105,947
    )
    
    
    535,183Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,268Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    452,915Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    153,223Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    299,692Balance SheetAverage assets
    
    $
    10,418,727
    
    
    $
    8,414,596
    
    
    $
    1,319,014
    
    
    $
    7,660,974
    
    
    $
    1,324,962
    
    
    $
    29,138,273Average loans
    
    
    10,402,759
    
    
    
    8,228,825
    
    
    
    1,320,354
    
    
    
    
    
    
    
    (271,525
    )
    
    
    19,680,413Average deposits
    
    
    4,754,642
    
    
    
    10,000,127
    
    
    
    1,199,714
    
    
    
    2,233,936
    
    
    
    (31,661
    )
    
    
    18,156,758Period-end assets
    
    $
    11,056,421
    
    
    $
    9,068,675
    
    
    $
    1,432,297
    
    
    $
    7,495,515
    
    
    $
    1,080,927
    
    
    $
    30,133,835Period-end loans
    
    
    10,881,742
    
    
    
    8,782,773
    
    
    
    1,421,202
    
    
    
    
    
    
    
    (243,927
    )
    
    
    20,841,790Period-end deposits
    
    
    4,950,555
    
    
    
    10,717,676
    
    
    
    1,191,743
    
    
    
    2,017,815
    
    
    
    (43,563
    )
    
    
    18,834,226
 - 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 31,2006
    
    
    2005(In Thousands)Commercial loans:Commercial, financial and agricultural
    
    $
    4,390,920
    
    
    $
    3,896,207Real estate
 construction
    
    
    6,217,848
    
    
    
    4,233,148Commercial
real estate  mortgage
    
    
    4,308,041
    
    
    
    4,080,164Total commercial loans
    
    
    14,916,809
    
    
    
    12,209,519Consumer loans:Residential
real estate  mortgage
    
    
    2,369,541
    
    
    
    1,916,951Equity lines of credit
    
    
    1,738,499
    
    
    
    1,614,608Equity loans
    
    
    1,372,921
    
    
    
    1,160,481Credit card
    
    
    507,677
    
    
    
    523,148Consumer
 direct
    
    
    486,721
    
    
    
    423,278Consumer
 indirect
    
    
    3,145,566
    
    
    
    3,524,230Total consumer loans
    
    
    9,620,925
    
    
    
    9,162,696Total
    
    $
    24,537,734
    
    
    $
    21,372,215
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In Thousands)Balance at beginning of period
    
    $
    289,143
    
    
    $
    254,708
    
    
    $
    267,173
    
    
    $
    258,339Add: Provision charged to income
    
    
    24,226
    
    
    
    34,195
    
    
    
    68,660
    
    
    
    82,268Allowance acquired (transferred)
    
    
    
    
    
    
    
    
    
    
    11,179
    
    
    
    (12,189
    )Deduct: Net charge-offs (recoveries):Commercial, financial and
agricultural
    
    
    3,472
    
    
    
    4,982
    
    
    
    8,728
    
    
    
    8,230Real estate
 construction
    
    
    199
    
    
    
    98
    
    
    
    467
    
    
    
    353Commercial
real estate  mortgage
    
    
    352
    
    
    
    541
    
    
    
    1,797
    
    
    
    1,221Residential
real estate  mortgage
    
    
    1,448
    
    
    
    331
    
    
    
    1,950
    
    
    
    1,106Equity lines of credit
    
    
    323
    
    
    
    564
    
    
    
    1,057
    
    
    
    1,224Equity loans
    
    
    324
    
    
    
    736
    
    
    
    543
    
    
    
    1,556Credit card
    
    
    5,625
    
    
    
    8,331
    
    
    
    15,768
    
    
    
    25,433Consumer
 direct
    
    
    3,974
    
    
    
    4,739
    
    
    
    7,080
    
    
    
    8,796Consumer indirect
    
    
    5,640
    
    
    
    8,069
    
    
    
    17,610
    
    
    
    19,987Total net charge-offs
    
    
    21,357
    
    
    
    28,391
    
    
    
    55,000
    
    
    
    67,906Balance at end of period
    
    $
    292,012
    
    
    $
    260,512
    
    
    $
    292,012
    
    
    $
    260,512
  September 30,
    
    
    December 31,2006
    
    
    2005(In Thousands)Nonaccrual loans
    
    $
    49,340
    
    
    $
    47,578Renegotiated loans
    
    
    3,267
    
    
    
    698Total nonperforming loans
    
    
    52,607
    
    
    
    48,276Other real estate, net
    
    
    15,886
    
    
    
    11,510Total nonperforming assets
    
    $
    68,493
    
    
    $
    59,786
 - 16 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 NOTE 7
 Securitized Assets
   NOTE 8
 Investments
  September 30, 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
    
    $
    9,938
    
    
    $
    8
    
    
    $
    9,866
    
    
    $
    112
    
    
    $
    19,804
    
    
    $
    120Mortgage-backed pass-through securities
    
    
    158,465
    
    
    
    786
    
    
    
    345,955
    
    
    
    11,705
    
    
    
    504,420
    
    
    
    12,491Collateralized mortgage obligations
    
    
    173,777
    
    
    
    758
    
    
    
    2,465,178
    
    
    
    60,370
    
    
    
    2,638,955
    
    
    
    61,128States and political subdivisions
    
    
    
    
    
    
    
    
    
    
    29,442
    
    
    
    355
    
    
    
    29,442
    
    
    
    355Equity securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    342,180
    
    
    $
    1,552
    
    
    $
    2,850,441
    
    
    $
    72,542
    
    
    $
    3,192,621
    
    
    $
    74,094
 December 31, 2005Securities 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
    
    $
    44,845
    
    
    $
    138
    
    
    $
    55
    
    
    $
    1
    
    
    $
    44,900
    
    
    $
    139Mortgage-backed pass-through securities
    
    
    150,147
    
    
    
    2,312
    
    
    
    276,093
    
    
    
    10,136
    
    
    
    426,240
    
    
    
    12,448Collateralized mortgage obligations
    
    
    902,859
    
    
    
    13,080
    
    
    
    2,644,937
    
    
    
    65,567
    
    
    
    3,547,796
    
    
    
    78,647States and political subdivisions
    
    
    35,369
    
    
    
    758
    
    
    
    
    
    
    
    
    
    
    
    35,369
    
    
    
    758Equity securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    1,133,220
    
    
    $
    16,288
    
    
    $
    2,921,085
    
    
    $
    75,704
    
    
    $
    4,054,305
    
    
    $
    91,992
   - 17 -




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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
  September 30, 2006
    
    December 31, 2005Other
    
    
    
    
    
    OtherThan
    
    
    
    
    
    ThanTrading
    
    Trading
    
    Trading
    
    Trading(In Thousands)Forward and futures contracts
    
    $
    317,294
    
    
    $
    25,188
    
    
    $
    304,233
    
    
    $
    25,948Interest rate swap agreements:Pay fixed versus receive float
    
    
    1,865,817
    
    
    
    
    
    
    
    1,723,291
    
    
    
    200,000Receive fixed versus pay float
    
    
    1,865,817
    
    
    
    2,160,381
    
    
    
    1,703,799
    
    
    
    1,258,108Pay float versus receive float
    
    
    22,000
    
    
    
    
    
    
    
    22,000
    
    
    
    Written options
    
    
    446,544
    
    
    
    
    
    
    
    401,950
    
    
    
    Purchased options
    
    
    426,544
    
    
    
    1,500,000
    
    
    
    381,941
    
    
    
    
 Accounting for Derivative Instruments and Hedging
Activities Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities.
   September 30, 2006
    
    December 31, 2005Notional
    
    Carrying
    
    Notional
    
    CarryingValue
    
    Value
    
    Value
    
    Value(In Thousands)Cash Flow Hedges:Interest rate swap agreements
    
    
    850,000
    
    
    
    475
    
    
    $
    400,000
    
    
    $
    (1,110
    )Floors and caps purchased
    
    
    1,500,000
    
    
    
    34,556
    
    
    
    
    
    
    
    Fair Value Hedges:Interest rate swap agreements
    
    
    1,310,381
    
    
    
    10,381
    
    
    
    1,058,108
    
    
    
    22,535Forward contracts (1)
    
    
    25,188
    
    
    
    (197
    )
    
    
    25,948
    
    
    
    (99
    )
 
 (1)
    
    Derivatives related to the Companys mortgage banking activities Interest-Rate Risk
  - 18 -




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##### Table of Contents



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




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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
   Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    
    Value(In Thousands)Nonamortizing goodwill
    
    $
    729,309
    
    
    $
    (53,806
    )
    
    $
    675,503Amortizing intangible assets:Core deposit intangibles
    
    $
    71,927
    
    
    $
    (41,997
    )
    
    $
    29,930Other customer intangibles
    
    
    44,827
    
    
    
    (15,724
    )
    
    
    29,103Total amortizing intangible assets
    
    $
    116,754
    
    
    $
    (57,721
    )
    
    $
    59,033
  - 20 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 NOTE 12  Commitments, Contingencies and Guarantees
    September 30,
    
    December 31,2006
    
    2005(In Thousands)Commitments to extend credit
    
    $
    12,649,661
    
    
    $
    11,498,497Standby and commercial letters of credit
    
    
    1,025,236
    
    
    
    942,176
        - 21 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
   NOTE 13  Stock-Based Compensation
  Accounting for Stock-Based Compensation. Accounting for Stock Issued to Employees Share-Based Payment
  Nine MonthsEndedSeptember 30, 2006Dividend Yield
    
    
    3.54
    %Expected volatility
    

    0.2168Risk-free interest rate
    
    
    4.99
    %Expected life
    
    5.0 yearsForfeiture rate
    
    
    3.25
    %
  - 22 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  Weighted
    
    
    
    
    
    
    AggregateShares
    
    
    Average
    
    
    Contractual
    
    
    IntrinsicUnderlying
    
    
    Exercise
    
    
    Term
    
    
    ValueOptions
    
    
    Price
    
    
    (years)
    
    
    (In Thousands)Outstanding, beginning of the period
    
    
    8,011,142
    
    
    $
    31.54Granted
    
    
    603,721
    
    
    
    55.83Exercised
    
    
    (1,235,252
    )
    
    
    28.04Cancelled
    
    
    (20,200
    )
    
    
    42.47Outstanding, end of the period
    
    
    7,359,411
    
    
    $
    34.08
    
    
    
    6.19
    
    
    $
    168,531Exercisable, end of the period
    
    
    6,268,836
    
    
    $
    31.37
    
    
    
    5.71
    
    
    $
    160,545
    Restricted
    
    
    Grant DateStock
    
    
    Fair ValueNonvested, beginning of the period
    
    
    456,744
    
    
    $
    45.53Granted
    
    
    245,158
    
    
    
    54.93Vested
    
    
    (116,841
    )
    
    
    49.25Forfeited
    
    
    (77,350
    )
    
    
    50.15Nonvested, end of the period
    
    
    507,711
    
    
    $
    48.51
 NOTE 14  Defined Benefit Pension Plan
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(In Thousands)Service cost
    
    $
    1,848
    
    
    $
    1,902
    
    
    $
    5,546
    
    
    $
    5,706Interest cost
    
    
    2,524
    
    
    
    2,381
    
    
    
    7,573
    
    
    
    7,145Expected return on plan assets
    
    
    (3,546
    )
    
    
    (3,189
    )
    
    
    (10,182
    )
    
    
    (9,267
    )Amortization of prior service cost
    
    
    9
    
    
    
    9
    
    
    
    26
    
    
    
    26Amortization of net loss
    
    
    764
    
    
    
    797
    
    
    
    2,291
    
    
    
    2,392Net periodic benefit cost
    
    $
    1,599
    
    
    $
    1,900
    
    
    $
    5,254
    
    
    
    6,002
  - 23 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  NOTE 15  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.
 Share-Based Payment
 Share-Based Payments, , Accounting for Stock-Based Compensation.
 - 24 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
 Accounting Changes and Error Corrections
 Accounting Changes and Error Corrections, a Replacement
of APB Opinion No. 20 and FASB Statement No. 3.
 Accounting for Certain Hybrid Financial Instruments
 Accounting for Certain Hybrid Financial
Instruments  an amendment of FASB Statements No. 133 and 140 Accounting for Derivative Instruments and Hedging Activities Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,
 Accounting for Servicing of Financial Assets
 Accounting for Servicing of Financial Assets  an
amendment of FASB Statement No. 140 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 No. 109 Accounting for Income Taxes
 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 No. 87, 88, 106 and 132(R)
 - 25 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
  - 26 -




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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
   - 27 -




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##### Table of Contents



For the Quarter EndingMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2006
    
    
    2006
    
    
    2006
    
    
    2006
    
    
    TotalActual
    
    
    Actual
    
    
    Actual
    
    
    Projected*
    
    
    Projected*(In Thousands)Hedging derivatives
impact
to net interest
margin
    
    $
    2,010
    
    
    $
    1,322
    
    
    $
    (438
    )
    
    $
    (796
    )
    
    $
    2,098
 For the Quarter EndingMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2005
    
    
    2005
    
    
    2005
    
    
    2005Actual
    
    
    Actual
    
    
    Actual
    
    
    Actual
    
    
    Total(In Thousands)Hedging derivatives
impact
to net interest
margin
    
    $
    2,167
    
    
    $
    2,394
    
    
    $
    1,684
    
    
    $
    1,013
    
    
    $
    7,258
 
 *
    
    Projected impact based on September 30, 2006 interest rates. - 28 -




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##### Table of Contents



October 1, 2006throughDecember 31,
    
    
    For the Year Ended December 31,2006
    
    
    2007
    
    
    2008
    
    
    Thereafter( $ In Thousands)Non-trading interest rate derivativesCash Flow HedgesNotional maturity
    
    $
    
    
    
    $
    
    
    
    $
    500,000
    
    
    $
    1,850,000Weighted average coupon / strike received
on maturities
    
    
    
    %
    
    
    
    %
    
    
    4.88
    %
    
    
    5.26
    %Weighted average time to maturity (months)
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    44Fair Value HedgesNotional maturity
    
    $
    40,000
    
    
    $
    365,500
    
    
    $
    
    
    
    $
    904,881Weighted average coupon / strike received
on maturities
    
    
    4.66
    %
    
    
    7.21
    %
    
    
    
    %
    
    
    6.00
    %Weighted average time to maturity (months)
    
    
    2
    
    
    
    5
    
    
    
    
    
    
    
    139
   Three Months EndedSeptember 30, 2006Change2005To
    
    
    Attributed to2006
    
    
    Volume
    
    
    Rate
    
    
    MixInterest income:Federal funds sold and securities purchased
under agreements to resell
    
    $
    295
    
    
    $
    70
    
    
    $
    191
    
    
    $
    34Trading account assets
    
    
    77
    
    
    
    71
    
    
    
    5
    
    
    
    1Investment securities available for sale
    
    
    4,881
    
    
    
    (737
    )
    
    
    5,705
    
    
    
    (87
    )Investment securities held to maturity
    
    
    (5,100
    )
    
    
    (4,363
    )
    
    
    (862
    )
    
    
    125Loans
    
    
    141,137
    
    
    
    63,414
    
    
    
    64,915
    
    
    
    12,808Increase in interest income
    
    $
    141,290
    
    
    $
    58,455
    
    
    $
    69,954
    
    
    $
    12,881Interest expense:Deposits
    
    $
    73,807
    
    
    $
    21,118
    
    
    $
    41,552
    
    
    $
    11,137Federal funds purchased and securities
sold under agreements to repurchase
    
    
    8,076
    
    
    
    (7,301
    )
    
    
    19,133
    
    
    
    (3,756
    )Other short-term borrowings
    
    
    6,146
    
    
    
    2,928
    
    
    
    1,050
    
    
    
    2,168FHLB and other borrowings
    
    
    12,663
    
    
    
    (971
    )
    
    
    13,935
    
    
    
    (301
    )Increase in interest expense
    
    $
    100,692
    
    
    $
    15,774
    
    
    $
    75,670
    
    
    $
    9,248
 - 29 -




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##### Table of Contents



Nine Months EndedSeptember 30, 2006Change2005To
    
    
    Attributed to2006
    
    
    Volume
    
    
    Rate
    
    
    MixInterest income:Federal funds sold and securities purchased
under agreements to resell
    
    $
    939
    
    
    $
    229
    
    
    $
    580
    
    
    $
    130Trading account assets
    
    
    254
    
    
    
    246
    
    
    
    6
    
    
    
    2Investment securities available for sale
    
    
    15,984
    
    
    
    (1,468
    )
    
    
    17,637
    
    
    
    (185
    )Investment securities held to maturity
    
    
    (15,395
    )
    
    
    (15,010
    )
    
    
    (459
    )
    
    
    74Loans
    
    
    384,132
    
    
    
    165,098
    
    
    
    184,598
    
    
    
    34,436Increase in interest income
    
    $
    385,914
    
    
    $
    149,095
    
    
    $
    202,362
    
    
    $
    34,457Interest expense:Deposits
    
    $
    190,967
    
    
    $
    54,155
    
    
    $
    111,537
    
    
    $
    25,275Federal funds purchased and securities
sold under agreements to repurchase
    
    
    25,249
    
    
    
    (21,170
    )
    
    
    60,121
    
    
    
    (13,702
    )Other short-term borrowings
    
    
    19,900
    
    
    
    8,078
    
    
    
    3,140
    
    
    
    8,682FHLB and other borrowings
    
    
    28,213
    
    
    
    (4,712
    )
    
    
    34,171
    
    
    
    (1,246
    )Increase in interest expense
    
    $
    264,329
    
    
    $
    36,351
    
    
    $
    208,969
    
    
    $
    19,009
 Noninterest Income and Noninterest Expense
   - 30 -




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##### Table of Contents



Income Taxes
  Provision and Allowance for Loan Losses
  Credit  Nonperforming Assets and Past Due Loans
    - 31 -




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COMPASS BANCSHARES, INC. AND SUBSIDIARIES
Allowance for Loan Losses/Nonperforming Assets
 Nine Months EndedSeptember 30,2006
    
    
    2005Allowance for Loan LossesBalance at beginning of period
    
    $
    267,173
    
    
    $
    258,339Add: Provision charged to income
    
    
    68,660
    
    
    
    82,268Allowance acquired (transferred)
    
    
    11,179
    
    
    
    (12,189
    )Deduct: Loans charged off
    
    
    75,512
    
    
    
    89,956Loan recoveries
    
    
    (20,512
    )
    
    
    (22,050
    )Net charge-offs
    
    
    55,000
    
    
    
    67,906Balance at end of period
    
    $
    292,012
    
    
    $
    260,512Net charge-offs as a percentage of
average loans (annualized)
    
    
    0.31
    %
    
    
    0.46
    %
 September 30, 2006
    
    
    December 31, 2005Nonperforming AssetsNonaccrual loans
    
    $
    49,340
    
    
    $
    47,578Renegotiated loans
    
    
    3,267
    
    
    
    698Total nonperforming loans
    
    
    52,607
    
    
    
    48,276Other real estate, net
    
    
    15,886
    
    
    
    11,510Total nonperforming assets
    
    $
    68,493
    
    
    $
    59,786Accruing loans ninety days or more past due
    
    $
    18,190
    
    
    $
    14,539Other repossessed assets
    
    
    494
    
    
    
    763Allowance as a percentage of loans
    
    
    1.19
    %
    
    
    1.25
    %Total nonperforming loans as a percentage
of loans
    
    
    0.21
    
    
    
    0.23Total nonperforming assets as a percentage
of loans and ORE
    
    
    0.28
    
    
    
    0.28Accruing loans ninety days or more past due as a
percentage of loans
    
    
    0.07
    
    
    
    0.07Allowance for loan losses as a percentage of
nonperforming loans
    
    
    555.08
    
    
    
    553.43Allowance for loan losses as a percentage of
nonperforming assets
    
    
    426.34
    
    
    
    446.88
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##### Table of Contents



Financial Condition
 Overview
  Assets and Funding
  Liquidity and Capital Resources
       - 33 -




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##### Table of Contents



- 34 -




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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, 2006:Assets which reprice in: *One year or less
    
    $
    17,394,019
    
    
    
    (5.68
    )%
    
    
    6.34
    %Over one year
    
    
    13,776,827
    
    
    
    (1.55
    )
    
    
    1.23$
    31,170,846
    
    
    
    (4.14
    )
    
    
    4.43Liabilities which reprice in:One year or less
    
    $
    19,859,198
    
    
    
    (9.70
    )%
    
    
    14.79
    %Over one year
    
    
    4,344,393
    
    
    
    (0.00
    )
    
    
    (13.54
    )$
    24,203,591
    
    
    
    (7.83
    )
    
    
    9.33Total net interest income sensitivity
    
    
    
    
    
    
    (0.80
    )%
    
    
    0.01
    %December 31, 2005:Assets which reprice in: *One year or less
    
    $
    14,557,658
    
    
    
    (7.48
    )%
    
    
    7.59
    %Over one year
    
    
    13,839,052
    
    
    
    (2.16
    )
    
    
    1.46$
    28,396,710
    
    
    
    (5.19
    )
    
    
    4.96Liabilities which reprice in:One year or less
    
    $
    17,488,014
    
    
    
    (11.64
    )%
    
    
    15.11
    %Over one year
    
    
    4,665,004
    
    
    
    (0.82
    )
    
    
    2.17$
    22,153,018
    
    
    
    (8.24
    )
    
    
    11.04Total net interest income sensitivity
    
    
    
    
    
    
    (3.01
    )%
    
    
    0.59
    %
 
 *
    
    Excludes noninterest earning trading account assets  - 35 -




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##### Table of Contents



Item 4  Controls and Procedures
   - 36 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
  
 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)July 1, 2006 
July 31, 2006
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    2,925,030August 1, 2006 
August 31, 2006
    
    
    13,905
    
    
    
    58.30
    
    
    
    3,620
    
    
    
    2,921,410September 1, 2006 
September 30, 2006
    
    
    154
    
    
    
    58.00
    
    
    
    
    
    
    
    2,921,410Total
    
    
    14,059
    
    
    $
    58.29
    
    
    
    3,620
 
 (1)
    
    This column includes (a) purchases of the Companys common stock under the Companys publicly
announced share repurchase program described in (2) below and (b) 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
  (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)(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)
 - 37 -




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##### Table of Contents



Exhibits  continued
 (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)
    (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.s 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.s December 31, 2001 Form 10-K, file number 000-06032, filed March 11, 2002 with
the Commission) *(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) *
 - 38 -




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##### Table of Contents



Exhibits  continued
 (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, as
amended and restated as of January 1, 2003 (incorporated by reference to Exhibit 10(p)
to Compass Bancshares, Inc.s March 31, 2006 Form 10-Q, file number 001-31272, filed
May 8, 2006 with the Commission) *(q)
    
    Compass Bancshares, Inc. Supplemental Retirement Plan, dated 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., 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) *(s)
    
    Compass Bancshares, Inc. Special Supplemental Retirement Plan, as amended and
restated as of January 1, 2005 (incorporated by reference to Exhibit 10(s) to Compass
Bancshares, Inc.s June 30, 2006 Form 10-Q, file number 001-31272, filed August 8, 2006
with the Commission) *(t)
    
    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) *(u)
    
    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) *(v)
    
    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) *
 - 39 -




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##### Table of Contents



Exhibits  continued
 (w)
    
    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) *(x)
    
    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) *(y)
    
    2005 Form of Incentive Stock Option Agreement (G. Ray Stone) (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) *(z)
    
    2005 Form of Incentive Stock Option Agreement (Garrett R. Hegel, James D. Barri
and Clayton D. Pledger) (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) *(aa)
    
    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) *(ab)
    
    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) *(ac)
    
    2006 Form of Performance Contingent Restricted Stock Agreement (G. Ray Stone)
(incorporated by reference to Exhibit 10.2 to Compass Bancshares, Inc.s Form 8-K, file
number 001-31272, filed May 31, 2006 with the Commission) *(ad)
    
    2006 Form of Performance Contingent Restricted Stock Agreement (Garrett R.
Hegel, James D. Barri and Clayton D. Pledger) (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) *(ae)
    
    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) *(af)
    
    2006 Form of Incentive Stock Option Agreement (G. Ray Stone) (incorporated by
reference to Exhibit 10.5 to Compass Bancshares, Inc.s Form 8-K, file number
001-31272, filed May 31, 2006 with the Commission)*(ag)
    
    2006 Form of Incentive Stock Option Agreement (Garrett R. Hegel, James D. Barri
and Clayton D. Pledger) (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) *(ah)
    
    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) *(ai)
    
    Summary of Compensation Arrangements for Named Executive Officers and Directors
(incorporated by reference to Exhibit 10(ai) to Compass Bancshares, Inc.s June 30,
2006 Form 10-Q, file number 001-31272, filed August 8, 2006 with the Commission) *(aj)
    
    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)
 - 40 -




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##### Table of Contents



Exhibits  continued
 (ak)
    
    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)
 (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 - 41 -




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##### Table of Contents



COMPASS BANCSHARES, INC. AND SUBSIDIARIES
 
 SIGNATURES
  November 7, 2006
    
    
    
    By:
    
    /s/ Garrett R. HegelDate
    
    
    
    
    
    Garrett R. HegelChief Financial Officer
 - 42 -