##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K/


(Amendment No. 1)


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31, 2004                                                 
|          
|or-       
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

Commission File No. 1-31272





(Exact name of registrant as specified in its charter)


|                                                                                        |  |                                         
|--------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                |  | 63-0593897                              
|(State or other jurisdiction of
    incorporation or organization)                      |  | (I.R.S. Employer
    Identification No.)
|                                                                                       
|15 South
    20thStreet
    Birmingham, Alabama(Address of principal executive offices) |  | 35233(Zip Code)                         

(205) 297-3000


(Registrants telephone number)


þ o


o þ


þ o


Regulation S-K Form 10-K Form 10-K. o


Rule 12b-2 þ o


Rule 12b-2 o þ






Document Incorporated by Reference












---



##### 










COMPASS BANCSHARES, INC.


TABLE OF CONTENTS


FORM 10-K/A


DECEMBER 31, 2004


|                                             |  |                                                                                                                      |  |    
|-------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- |  | ---
|EXPLANATORY NOTE                             |  | 2                                                                                                                   
|PART I                                      
|ITEM 1.                                      |  | BUSINESS                                                                                                             |  | 4  
|ITEM 2.                                      |  | PROPERTIES                                                                                                           |  | 11 
|ITEM 3.                                      |  | LEGAL PROCEEDINGS                                                                                                    |  | 11 
|ITEM 4.                                      |  | SUBMISSION OF MATTERS TO A VOTE OF
    SECURITY HOLDERS                                                              |  | 12 
|                                            
|PART II                                     
|ITEM 5.                                      |  | MARKET FOR REGISTRANTS COMMON
    EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
    EQUITY SECURITIES |  | 13 
|ITEM 6.                                      |  | SELECTED FINANCIAL DATA                                                                                              |  | 14 
|ITEM 7.                                      |  | MANAGEMENTS DISCUSSION AND
    ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                            |  | 16 
|ITEM 7A.                                     |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES
    ABOUT MARKET RISK                                                       |  | 16 
|ITEM 8.                                      |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY
    DATA                                                                      |  | 45 
|ITEM 9.                                      |  | CHANGES IN AND DISAGREEMENTS WITH
    ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                             |  | 100
|ITEM 9A.                                     |  | CONTROLS AND PROCEDURES                                                                                              |  | 100
|ITEM 9B.                                     |  | OTHER INFORMATION                                                                                                    |  | 102
|                                            
|PART III                                    
|ITEM 10.                                     |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE
    REGISTRANT                                                               |  | 102
|ITEM 11.                                     |  | EXECUTIVE COMPENSATION                                                                                               |  | 102
|ITEM 12.                                     |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
    OWNERS AND MANAGEMENT                                                   |  | 102
|ITEM 13.                                     |  | CERTAIN RELATIONSHIPS AND RELATED
    TRANSACTIONS                                                                   |  | 103
|ITEM 14.                                     |  | PRINCIPAL ACCOUNTING FEES AND
    SERVICES                                                                           |  | 103
|                                            
|PART IV                                     
|ITEM 15.                                     |  | EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES                                                                       |  | 103
|SIGNATURES                                   |  | 107                                                                                                                 
|EX-23 CONSENTS OF EXPERTS AND COUNSEL       
|EX-31.A SECTION 302 CERTIFICATION OF THE CEO
|EX-31.B SECTION 302 CERTIFICATION OF THE CFO
|EX-32.A SECTION 906 CERTIFICATION OF THE CEO
|EX-32.B SECTION 906 CERTIFICATION OF THE CFO



1



---



##### Table of Contents






Explanatory Note


Form 10-K Form 10-Q Form 10-K Forms 10-Q Accounting for Derivative Instruments and Hedging
Activities


Form 10-K Form 10-Q.


mark-to




|                           |  |                |         |               |      |   |              |      |  |              |        |   |              |      |         |              |      |   |        |  |  |   |       | 
|-------------------------- |  | -------------- | ------- | ------------- | ---- | - | ------------ | ---- |  | ------------ | ------ | - | ------------ | ---- | ------- | ------------ | ---- | - | ------ |  |  | - | ----- | 
|                           |  |                |         | Nine Months   |      |   |              |      |  |              |        |   |             
|                           |  |                |         | Ended         |      |   | Year Ended   |      |  | Year Ended   |        |   | Year Ended   |      |         | Year Ended   |     
|                           |  |                |         | September 30, |      |   | December 31, |      |  | December 31, |        |   | December 31, |      |         | December 31, |     
|                           |  | Total          |         |               | 2005 |   |              | 2004 |  |              | 2003   |   |              | 2002 |         |              | 2001 |  
|                           |  |                |         |               |      |   |              |      |  |              |        |   |              |      |         |              |      |  
|                           |  | (In thousands) |        
|Interest expense           |  | $              | 94,665  |               |      | $ | 11,248       |      |  | $            | 26,503 |   |              | $    | 30,400  |              |      | $ | 23,146 |  |  | $ | 3,368 | 
|Noninterest income         |  |                | 101,705 |               |      |   | 669          |      |  |              | 11,053 |   |              |      | 9,320   |              |      |   | 71,006 |  |  |   | 9,657 | 
|Provision for income taxes |  |                | 2,514   |               |      |   | (4,013       | )    |  |              | (5,851 | ) |              |      | (7,890  | )            |      |   | 17,914 |  |  |   | 2,354 | 
|                           |  |                |         |               |      |   |              |      |  |              |        |   |              |      |         |              |      |  
|Net income                 |  | $              | 4,526   |               |      | $ | (6,566       | )    |  | $            | (9,599 | ) |              | $    | (13,190 | )            |      | $ | 29,946 |  |  | $ | 3,935 | 
|                           |  |                |         |               |      |   |              |      |  |              |        |   |              |      |         |              |      |  
|Diluted earnings per share |  | $              | 0.02    |               |      | $ | (0.05        | )    |  | $            | (0.08  | ) |              | $    | (0.11   | )            |      | $ | 0.23   |  |  | $ | 0.03  | 

2



---



##### Table of Contents



|                           |  |       |        |                       |      |   |          |      |  |               |       |  |  |   |        |  
|-------------------------- |  | ----- | ------ | --------------------- | ---- | - | -------- | ---- |  | ------------- | ----- |  |  | - | ------ | -
|                           |  |       |        | For the Quarter Ended |     
|                           |  |       |        |                       |     
|                           |  |       |        | March 31,             |      |   | June 30, |      |  | September 30, |      
|                           |  | Total |        |                       | 2005 |   |          | 2005 |  |               | 2005  | 
|                           |  |       |        |                       |      |   |          |      |  |               |       | 
|                           |  |       |        | (In thousands)        |     
|Interest expense           |  | $     | 11,248 |                       |      | $ | 4,703    |      |  | $             | 3,716 |  |  | $ | 2,829  |  
|Noninterest income         |  |       | 669    |                       |      |   | (4,596   | )    |  |               | 9,414 |  |  |   | (4,149 | )
|Provision for income taxes |  |       | (4,013 | )                     |      |   | (3,527   | )    |  |               | 2,161 |  |  |   | (2,647 | )
|                           |  |       |        |                       |      |   |          |      |  |               |       | 
|Net income                 |  | $     | (6,566 | )                     |      | $ | (5,772   | )    |  | $             | 3,537 |  |  | $ | (4,331 | )
|                           |  |       |        |                       |      |   |          |      |  |               |       | 
|Diluted earnings per share |  | $     | (0.05  | )                     |      | $ | (0.04    | )    |  | $             | 0.02  |  |  | $ | (0.03  | )

|                           |  |       |        |                       |      |   |          |      |  |               |         |   |              |      |        |  |  |   |        |  
|-------------------------- |  | ----- | ------ | --------------------- | ---- | - | -------- | ---- |  | ------------- | ------- | - | ------------ | ---- | ------ |  |  | - | ------ | -
|                           |  |       |        | For the Quarter Ended |     
|                           |  |       |        |                       |     
|                           |  |       |        | March 31,             |      |   | June 30, |      |  | September 30, |         |   | December 31, |     
|                           |  | Total |        |                       | 2004 |   |          | 2004 |  |               | 2004    |   |              | 2004 |       
|                           |  |       |        |                       |      |   |          |      |  |               |         |   |              |      |       
|                           |  |       |        | (In thousands)        |     
|Interest expense           |  | $     | 26,503 |                       |      | $ | 7,115    |      |  | $             | 7,161   |   |              | $    | 6,646  |  |  | $ | 5,581  |  
|Noninterest income         |  |       | 11,053 |                       |      |   | 12,554   |      |  |               | (12,360 | ) |              |      | 14,873 |  |  |   | (4,014 | )
|Provision for income taxes |  |       | (5,851 | )                     |      |   | 2,060    |      |  |               | (7,393  | ) |              |      | 3,116  |  |  |   | (3,634 | )
|                           |  |       |        |                       |      |   |          |      |  |               |         |   |              |      |       
|Net income                 |  | $     | (9,599 | )                     |      | $ | 3,379    |      |  | $             | (12,128 | ) |              | $    | 5,111  |  |  | $ | (5,961 | )
|                           |  |       |        |                       |      |   |          |      |  |               |         |   |              |      |       
|Diluted earnings per share |  | $     | (0.08  | )                     |      | $ | 0.03     |      |  | $             | (0.10   | ) |              | $    | 0.04   |  |  | $ | (0.05  | )

|                           |  |       |         |                       |      |   |          |      |  |               |        |  |              |      |        |   |  |   |        |  
|-------------------------- |  | ----- | ------- | --------------------- | ---- | - | -------- | ---- |  | ------------- | ------ |  | ------------ | ---- | ------ | - |  | - | ------ | -
|                           |  |       |         | For the Quarter Ended |     
|                           |  |       |         |                       |     
|                           |  |       |         | March 31,             |      |   | June 30, |      |  | September 30, |        |  | December 31, |     
|                           |  | Total |         |                       | 2003 |   |          | 2003 |  |               | 2003   |  |              | 2003 |       
|                           |  |       |         |                       |      |   |          |      |  |               |        |  |              |      |       
|                           |  |       |         | (In thousands)        |     
|Interest expense           |  | $     | 30,400  |                       |      | $ | 7,868    |      |  | $             | 8,202  |  |              | $    | 7,288  |   |  | $ | 7,042  |  
|Noninterest income         |  |       | 9,320   |                       |      |   | 1,924    |      |  |               | 13,978 |  |              |      | (5,326 | ) |  |   | (1,256 | )
|Provision for income taxes |  |       | (7,890  | )                     |      |   | (2,225   | )    |  |               | 2,162  |  |              |      | (4,721 | ) |  |   | (3,106 | )
|                           |  |       |         |                       |      |   |          |      |  |               |        |  |              |      |       
|Net income                 |  | $     | (13,190 | )                     |      | $ | (3,719   | )    |  | $             | 3,614  |  |              | $    | (7,893 | ) |  | $ | (5,192 | )
|                           |  |       |         |                       |      |   |          |      |  |               |        |  |              |      |       
|Diluted earnings per share |  | $     | (0.11   | )                     |      | $ | (0.03    | )    |  | $             | 0.03   |  |              | $    | (0.06  | ) |  | $ | (0.05  | )



3



---



##### Table of Contents






PART I





ITEM 1  BUSINESS


Form 10-K Form 10-K.


General Development of the Company




Parent Company




Subsidiary Banks






4



---



##### Table of Contents



Lines of Business
















Business Combinations and Divestitures






| |                      
| | ---------------------
| | Business Combinations



5



---



##### Table of Contents

























| |             
| | ------------
| | Divestitures



6



---



##### Table of Contents



Competition






Employees




Government Monetary Policy






SUPERVISION AND REGULATION


The Company




| |        
| | -------
| | General



7



---



##### Table of Contents









| |                                         
| | ----------------------------------------
| | Interstate Banking and Bank Acquisitions

out-of


out-of




| |                                      
| | -------------------------------------
| | Limitations on Loans and Transactions





| |                     
| | --------------------
| | Capital Requirements



8



---



##### Table of Contents











The Subsidiary Banks




| |        
| | -------
| | General





9



---



##### Table of Contents





| |                     
| | --------------------
| | Dividend Limitations







| |                       
| | ----------------------
| | Community Reinvestment









10



---



##### Table of Contents



STATISTICAL DISCLOSURE


|                                                                                    |  |         |           | 
|----------------------------------------------------------------------------------- |  | ------- | --------- | 
|                                                                                    |  | Page(s) |          
|                                                                                    |  |         |          
|Loan Portfolio                                                                      |  |         | 19 and 20 | 
|Managed Loan Portfolio                                                              |  |         | 21        | 
|Investment Securities Held to Maturity and Available for Sale                       |  |         | 22 and 23 | 
|Investment Securities Held to Maturity and Available for Sale
    Maturity Schedule |  |         | 23 and 24 | 
|Trading Account Assets and Liabilities                                              |  |         | 25        | 
|Maturities of Time Deposits                                                         |  |         | 26        | 
|Short-Term Borrowings                                                               |  |         | 27        | 
|Contractual Obligations                                                             |  |         | 28        | 
|Commitments                                                                         |  |         | 29        | 
|Return on Equity and Assets                                                         |  |         | 30        | 
|Capital Ratios                                                                      |  |         | 31        | 
|Consolidated Average Balance Sheets and Rate/ Volume Variances                      |  |         | 36 and 37 | 
|Summary of Loan Loss Experience                                                     |  |         | 39        | 
|Allocation of Allowance for Loan Losses                                             |  |         | 40        | 
|Nonperforming Assets                                                                |  |         | 41        | 

Website Availability of Reports Filed with the Securities and
Exchange Commission


www.compassbank.com Form 10-K, Form 10-Q, Form 8-K







|         |           
|-------- | ----------
|ITEM 2  | PROPERTIES








|         |                  
|-------- | -----------------
|ITEM 3  | LEGAL PROCEEDINGS



11



---



##### Table of Contents








|         |                                                    
|-------- | ---------------------------------------------------
|ITEM 4  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



Executive Officers of the Registrant




|                   |  |                                                                                                                                                                                                                                                                                                                  |  |     |    |            |          |  |      | 
|------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --- | -- | ---------- | -------- |  | ---- | 
|                   |  |                                                                                                                                                                                                                                                                                                                  |  |     |    | Elected to |         
|                   |  |                                                                                                                                                                                                                                                                                                                  |  |     |    | Officer    |         
|Name               |  | Position                                                                                                                                                                                                                                                                                                         |  | Age |    |            | Position | 
|                   |  |                                                                                                                                                                                                                                                                                                                  |  |     |    |            |          | 
|D. Paul Jones, Jr. |  | Chairman of the Board and Chief Executive Officer of Compass
    Bancshares, Inc.                                                                                                                                                                                                                                |  |     | 62 |            |          |  | 1978 | 
|Garrett R. Hegel   |  | Chief Financial Officer of Compass Bancshares, Inc.                                                                                                                                                                                                                                                              |  |     | 54 |            |          |  | 1990 | 
|G. Ray Stone       |  | Senior Executive Vice President and Chief Credit Policy Officer
    of Compass Bancshares, Inc.                                                                                                                                                                                                                  |  |     | 61 |            |          |  | 1991 | 
|George M. Boltwood |  | Senior Executive Vice President  Corporate Banking                                                                                                                                                                                                                                                              |  |     | 55 |            |          |  | 1996 | 
|James D. Barri     |  | Executive Vice President  Retail Banking                                                                                                                                                                                                                                                                        |  |     | 60 |            |          |  | 1997 | 
|E. Lee Harris, Jr. |  | Executive Vice President  Human Resources                                                                                                                                                                                                                                                                       |  |     | 52 |            |          |  | 1994 | 
|William C. Helms   |  | Executive Vice President  Wealth Management Group
    Prior to joining Compass, President of Investment Group for
    Trustmark Bank from 2002 to 2003; Executive Vice President of
    LJH Global Investments from 2001 to 2002; and Co-President of
    Private Banking for Bank of America from 1999 to 2001 |  |     | 53 |            |          |  | 2003 | 
|Clayton D. Pledger |  | Executive Vice President  Chief Information Officer                                                                                                                                                                                                                                                             |  |     | 60 |            |          |  | 1998 | 
|Jerry W. Powell    |  | General Counsel and Secretary of Compass Bancshares, Inc.                                                                                                                                                                                                                                                        |  |     | 55 |            |          |  | 1981 | 



12



---



##### Table of Contents






PART II







|         |                                                                                                                     
|-------- | --------------------------------------------------------------------------------------------------------------------
|ITEM 5  | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
    STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES

Market Information


end-of


|      |                |      |   |       |     |  |   |       |  |  |          |       |  |  |   |        | 
|----- | -------------- | ---- | - | ----- | --- |  | - | ----- |  |  | -------- | ----- |  |  | - | ------ | 
|      |                | High |   |       | Low |  |   | Close |  |  | Dividend |      
|      |                |      |   |       |     |  |   |       |  |  |          |      
|2004: |                |      |   |       |     |  |   |       |  |  |          |       |  |  |   |       
|      | First Quarter  |      | $ | 42.86 |     |  | $ | 37.77 |  |  | $        | 41.47 |  |  | $ | 0.3125 | 
|      | Second Quarter |      |   | 43.25 |     |  |   | 38.20 |  |  |          | 43.00 |  |  |   | 0.3125 | 
|      | Third Quarter  |      |   | 46.25 |     |  |   | 42.50 |  |  |          | 43.82 |  |  |   | 0.3125 | 
|      | Fourth Quarter |      |   | 48.67 |     |  |   | 43.79 |  |  |          | 48.67 |  |  |   | 0.3125 | 
|2003: |                |      |   |       |     |  |   |       |  |  |          |       |  |  |   |       
|      | First Quarter  |      | $ | 32.18 |     |  | $ | 29.99 |  |  | $        | 31.27 |  |  | $ | 0.2800 | 
|      | Second Quarter |      |   | 37.37 |     |  |   | 31.72 |  |  |          | 34.73 |  |  |   | 0.2800 | 
|      | Third Quarter  |      |   | 36.24 |     |  |   | 33.19 |  |  |          | 34.70 |  |  |   | 0.2800 | 
|      | Fourth Quarter |      |   | 39.59 |     |  |   | 35.32 |  |  |          | 39.35 |  |  |   | 0.2800 | 

Dividends




Holders




13



---



##### Table of Contents



Issuer Purchases of Equity Securities


|                                     |       |                     |     |       |                |                     |       |                       |                     |  |                       |   |  |  |           |  | 
|------------------------------------ | ----- | ------------------- | --- | ----- | -------------- | ------------------- | ----- | --------------------- | ------------------- |  | --------------------- | - |  |  | --------- |  | 
|                                     |       |                     |     |       |                | Total Number of     |       |                       | Maximum Number of   | 
|                                     |       |                     |     |       |                | Shares Purchased as |       |                       | Shares that May Yet | 
|                                     |       | Total Number of     |     |       | Average Price  |                     |       | Part of Publicly      |                     |  | be Purchased          |  
|                                     |       | Shares Purchased(1) |     |       | Paid per Share |                     |       | Announced Programs(2) |                     |  | Under the Programs(2) |  
|                                     |       |                     |     |       |                |                     |       |                       |                     |  |                       |  
|October 1, 2004  October 31, 2004   |       |                     | 635 |       |                | $                   | 45.96 |                       |                     |  |                      |   |  |  | 4,338,600 | 
|November 1, 2004  November 30, 2004 |       |                     | 721 |       |                |                     | 46.20 |                       |                     |  |                      |   |  |  | 4,338,600 | 
|December 1, 2004  December 31, 2004 |       |                     | 493 |       |                |                     | 47.85 |                       |                     |  |                      |   |  |  | 4,338,600 | 
|                                     |       |                     |     |       |                |                     |       |                       |                     |  |                       |  
|                                     | Total |                     |     | 1,849 |                |                     | $     | 46.56                 |                     |  |                       |  |  |  |           |  | 
|                                     |       |                     |     |       |                |                     |       |                       |                     |  |                       |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | This column includes (a) the number of shares purchased
    under the Companys publicly announced share repurchase
    programs described in (2) below and (b) the number of
    shares surrendered to the Company by plan participants to
    satisfy the exercise price related to the exercise of employee
    stock options during the period indicated.                                                                                                                                                                                                                                                                                                                   
|   
|(2) | On January 16, 2003, the Company announced that its Board
    of Directors had authorized management to
    purchase 6.3 million shares of the Companys
    outstanding common stock from time to time through open market
    transactions either directly or through brokers or agents, and
    has no expiration date. Additionally, on August 16, 2003,
    the Company announced that its Board of Directors had authorized
    management to purchase an additional 4.1 million shares of
    the Companys outstanding common stock from time to time
    through open market transactions either directly or through
    brokers or agents, and has no expiration date.






|         |                        
|-------- | -----------------------
|ITEM 6  | SELECTED FINANCIAL DATA

Form 10-K


|                          |                                      |                                       |         |            |      |   |         |            |  |   |         |            |  |      |         |            |  |   |         |            | 
|------------------------- | ------------------------------------ | ------------------------------------- | ------- | ---------- | ---- | - | ------- | ---------- |  | - | ------- | ---------- |  | ---- | ------- | ---------- |  | - | ------- | ---------- | 
|                          |                                      | 2004                                  |         |            | 2003 |   |         | 2002       |  |   | 2001    |            |  | 2000 |        
|                          |                                      |                                       |         |            |      |   |         |            |  |   |         |            |  |      |        
|                          |                                      | (In thousands, except per share data) |        
|Net interest income       |                                      | $                                     | 885,325 |            |      | $ | 879,130 |            |  | $ | 901,709 |            |  | $    | 822,491 |            |  | $ | 718,512 |           
|Provision for loan losses |                                      |                                       | 105,658 |            |      |   | 119,681 |            |  |   | 136,331 |            |  |      | 106,241 |            |  |   | 65,578  |           
|Net income                |                                      |                                       | 360,185 |            |      |   | 328,678 |            |  |   | 344,345 |            |  |      | 274,332 |            |  |   | 241,623 |           
|Per share data:           |                                      |                                       |         |            |      |   |         |            |  |   |         |            |  |      |         |            |  |   |         |           
|                          | Basic earnings                       |                                       | $       | 2.95       |      |   | $       | 2.64       |  |   | $       | 2.70       |  |      | $       | 2.16       |  |   | $       | 1.91       | 
|                          | Diluted earnings                     |                                       |         | 2.87       |      |   |         | 2.58       |  |   |         | 2.65       |  |      |         | 2.14       |  |   |         | 1.90       | 
|                          | Cash dividends declared              |                                       |         | 1.25       |      |   |         | 1.12       |  |   |         | 1.00       |  |      |         | 0.92       |  |   |         | 0.88       | 
|Balance sheet:            |                                      |                                       |         |            |      |   |         |            |  |   |         |            |  |      |         |            |  |   |         |           
|                          | Average total equity                 |                                       | $       | 1,968,948  |      |   | $       | 1,965,710  |  |   | $       | 1,910,148  |  |      | $       | 1,661,779  |  |   | $       | 1,353,387  | 
|                          | Average assets                       |                                       |         | 27,660,628 |      |   |         | 25,142,719 |  |   |         | 23,354,327 |  |      |         | 21,992,587 |  |   |         | 19,800,819 | 
|                          | Period-end FHLB and other borrowings |                                       |         | 4,119,771  |      |   |         | 4,794,935  |  |   |         | 4,853,816  |  |      |         | 3,830,192  |  |   |         | 2,585,185  | 
|                          | Period-end total equity              |                                       |         | 2,056,345  |      |   |         | 1,892,574  |  |   |         | 1,965,383  |  |      |         | 1,719,576  |  |   |         | 1,510,004  | 
|                          | Period-end assets                    |                                       |         | 28,181,916 |      |   |         | 26,963,113 |  |   |         | 23,925,589 |  |      |         | 23,015,000 |  |   |         | 20,877,160 | 

14



---



##### Table of Contents





|                                                    |                  |                                       |         |      |                |   |         |               |  |   |                |      |  |            |         |      |          |   |         |            |  |   |          |      |  |   |         |      |  |   |         |      | 
|--------------------------------------------------- | ---------------- | ------------------------------------- | ------- | ---- | -------------- | - | ------- | ------------- |  | - | -------------- | ---- |  | ---------- | ------- | ---- | -------- | - | ------- | ---------- |  | - | -------- | ---- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                                                    |                  | 2004                                  |        
|                                                    |                  |                                       |        
|                                                    |                  | First Quarter                         |         |      | Second Quarter |   |         | Third Quarter |  |   | Fourth Quarter |     
|                                                    |                  |                                       |         |      |                |   |         |               |  |   |                |     
|                                                    |                  | As                                    |         |      |                |   | As      |               |  |   |                | As   |  |            |         |      | As       |   |         |           
|                                                    |                  | Previously                            |         |      | As             |   |         | Previously    |  |   | As             |      |  | Previously |         |      | As       |   |         | Previously |  |   | As       |     
|                                                    |                  | Reported                              |         |      | Restated       |   |         | Reported      |  |   | Restated       |      |  | Reported   |         |      | Restated |   |         | Reported   |  |   | Restated |     
|                                                    |                  |                                       |         |      |                |   |         |               |  |   |                |      |  |            |         |      |          |   |         |            |  |   |          |     
|                                                    |                  | (In thousands, except per share data) |        
|Interest on deposits                                |                  | $                                     | 36,035  |      |                | $ | 38,138  |               |  | $ | 35,925         |      |  | $          | 38,047  |      |          | $ | 37,861  |            |  | $ | 39,873   |      |  | $ | 42,429  |      |  | $ | 43,720  |     
|Interest on FHLB and other borrowings               |                  |                                       | 41,469  |      |                |   | 46,481  |               |  |   | 40,245         |      |  |            | 45,284  |      |          |   | 36,184  |            |  |   | 40,818   |      |  |   | 32,620  |      |  |   | 36,910  |     
|Total interest expense                              |                  |                                       | 87,818  |      |                |   | 94,933  |               |  |   | 86,269         |      |  |            | 93,430  |      |          |   | 89,878  |            |  |   | 96,524   |      |  |   | 97,733  |      |  |   | 103,314 |     
|Net interest income                                 |                  |                                       | 222,861 |      |                |   | 215,746 |               |  |   | 226,739        |      |  |            | 219,578 |      |          |   | 226,531 |            |  |   | 219,885  |      |  |   | 235,697 |      |  |   | 230,116 |     
|Net interest income after provision for loan losses |                  |                                       | 198,516 |      |                |   | 191,401 |               |  |   | 198,561        |      |  |            | 191,400 |      |          |   | 200,914 |            |  |   | 194,268  |      |  |   | 208,179 |      |  |   | 202,598 |     
|Trading gain (losses) on economic hedges            |                  |                                       |        |      |                |   | 12,554  |               |  |   |               |      |  |            | (12,360 | )    |          |   |        |            |  |   | 14,873   |      |  |   |        |      |  |   | (4,014  | )   
|Total noninterest income                            |                  |                                       | 141,911 |      |                |   | 154,465 |               |  |   | 150,019        |      |  |            | 137,659 |      |          |   | 172,314 |            |  |   | 187,187  |      |  |   | 153,346 |      |  |   | 149,332 |     
|Net income before income tax expense                |                  |                                       | 130,280 |      |                |   | 135,719 |               |  |   | 137,399        |      |  |            | 117,878 |      |          |   | 140,727 |            |  |   | 148,954  |      |  |   | 146,876 |      |  |   | 137,281 |     
|Income tax expense                                  |                  |                                       | 44,033  |      |                |   | 46,093  |               |  |   | 45,654         |      |  |            | 38,261  |      |          |   | 47,125  |            |  |   | 50,241   |      |  |   | 48,686  |      |  |   | 45,052  |     
|Net income                                          |                  |                                       | 86,247  |      |                |   | 89,626  |               |  |   | 91,745         |      |  |            | 79,617  |      |          |   | 93,602  |            |  |   | 98,713   |      |  |   | 98,190  |      |  |   | 92,229  |     
|Per common share:                                   |                  |                                       |         |      |                |   |         |               |  |   |                |      |  |            |         |      |          |   |         |            |  |   |          |      |  |   |         |      |  |   |         |     
|                                                    | Basic earnings   |                                       |         | 0.71 |                |   |         | 0.73          |  |   |                | 0.75 |  |            |         | 0.66 |          |   |         | 0.76       |  |   |          | 0.80 |  |   |         | 0.80 |  |   |         | 0.76 | 
|                                                    | Diluted earnings |                                       |         | 0.69 |                |   |         | 0.72          |  |   |                | 0.73 |  |            |         | 0.63 |          |   |         | 0.75       |  |   |          | 0.79 |  |   |         | 0.78 |  |   |         | 0.73 | 

|                                                    |                  |                                       |         |      |                |   |         |               |  |   |                |      |  |            |         |      |          |   |         |            |  |   |          |      |  |   |         |      |  |   |         |      | 
|--------------------------------------------------- | ---------------- | ------------------------------------- | ------- | ---- | -------------- | - | ------- | ------------- |  | - | -------------- | ---- |  | ---------- | ------- | ---- | -------- | - | ------- | ---------- |  | - | -------- | ---- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                                                    |                  | 2003                                  |        
|                                                    |                  |                                       |        
|                                                    |                  | First Quarter                         |         |      | Second Quarter |   |         | Third Quarter |  |   | Fourth Quarter |     
|                                                    |                  |                                       |         |      |                |   |         |               |  |   |                |     
|                                                    |                  | As                                    |         |      |                |   | As      |               |  |   |                | As   |  |            |         |      | As       |   |         |           
|                                                    |                  | Previously                            |         |      | As             |   |         | Previously    |  |   | As             |      |  | Previously |         |      | As       |   |         | Previously |  |   | As       |     
|                                                    |                  | Reported                              |         |      | Restated       |   |         | Reported      |  |   | Restated       |      |  | Reported   |         |      | Restated |   |         | Reported   |  |   | Restated |     
|                                                    |                  |                                       |         |      |                |   |         |               |  |   |                |      |  |            |         |      |          |   |         |            |  |   |          |     
|                                                    |                  | (In thousands, except per share data) |        
|Interest on deposits                                |                  | $                                     | 48,146  |      |                | $ | 51,271  |               |  | $ | 44,022         |      |  | $          | 47,279  |      |          | $ | 35,714  |            |  | $ | 37,983   |      |  | $ | 36,167  |      |  | $ | 38,219  |     
|Interest on FHLB and other borrowings               |                  |                                       | 45,857  |      |                |   | 50,600  |               |  |   | 43,037         |      |  |            | 47,982  |      |          |   | 42,179  |            |  |   | 47,198   |      |  |   | 41,544  |      |  |   | 46,534  |     
|Total interest expense                              |                  |                                       | 99,001  |      |                |   | 106,869 |               |  |   | 94,345         |      |  |            | 102,547 |      |          |   | 86,608  |            |  |   | 93,896   |      |  |   | 87,803  |      |  |   | 94,845  |     
|Net interest income                                 |                  |                                       | 227,245 |      |                |   | 219,377 |               |  |   | 223,329        |      |  |            | 215,127 |      |          |   | 230,258 |            |  |   | 222,970  |      |  |   | 228,698 |      |  |   | 221,656 |     
|Net interest income after provision for loan losses |                  |                                       | 197,466 |      |                |   | 189,598 |               |  |   | 195,420        |      |  |            | 187,218 |      |          |   | 199,904 |            |  |   | 192,616  |      |  |   | 197,059 |      |  |   | 190,017 |     
|Trading gain (losses) on economic hedges            |                  |                                       |        |      |                |   | 1,924   |               |  |   |               |      |  |            | 13,978  |      |          |   |        |            |  |   | (5,326   | )    |  |   |        |      |  |   | (1,256  | )   
|Total noninterest income                            |                  |                                       | 123,107 |      |                |   | 125,031 |               |  |   | 131,973        |      |  |            | 145,951 |      |          |   | 134,012 |            |  |   | 128,686  |      |  |   | 137,092 |      |  |   | 135,836 |     
|Net income before income tax expense                |                  |                                       | 124,440 |      |                |   | 118,496 |               |  |   | 131,896        |      |  |            | 137,672 |      |          |   | 131,236 |            |  |   | 118,622  |      |  |   | 130,578 |      |  |   | 122,280 |     
|Income tax expense                                  |                  |                                       | 42,355  |      |                |   | 40,130  |               |  |   | 44,848         |      |  |            | 47,010  |      |          |   | 44,679  |            |  |   | 39,958   |      |  |   | 44,400  |      |  |   | 41,294  |     
|Net income                                          |                  |                                       | 82,085  |      |                |   | 78,366  |               |  |   | 87,048         |      |  |            | 90,662  |      |          |   | 86,557  |            |  |   | 78,664   |      |  |   | 86,178  |      |  |   | 80,986  |     
|Per common share:                                   |                  |                                       |         |      |                |   |         |               |  |   |                |      |  |            |         |      |          |   |         |            |  |   |          |      |  |   |         |      |  |   |         |     
|                                                    | Basic earnings   |                                       |         | 0.65 |                |   |         | 0.62          |  |   |                | 0.69 |  |            |         | 0.72 |          |   |         | 0.70       |  |   |          | 0.63 |  |   |         | 0.70 |  |   |         | 0.67 | 
|                                                    | Diluted earnings |                                       |         | 0.64 |                |   |         | 0.61          |  |   |                | 0.68 |  |            |         | 0.71 |          |   |         | 0.68       |  |   |          | 0.62 |  |   |         | 0.69 |  |   |         | 0.64 | 

15



---



##### Table of Contents








|         |                                                                                          
|-------- | -----------------------------------------------------------------------------------------
|ITEM 7  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS



mark-to









|          |                                                               
|--------- | --------------------------------------------------------------
|ITEM 7A  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK

Form 10-K.


Forward-Looking Statements






16



---



##### Table of Contents





Form 10-K http://www.sec.gov www.compassbank.com


Critical Accounting Policies




Allowance for Loan Losses:


Derivative Instruments:


17



---



##### Table of Contents



Consolidation: Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of
Liabilities.


Income Taxes:


Goodwill Impairment:


Net Income and Earnings Per Share




Earning Assets




18



---



##### Table of Contents



Loans








Loan Portfolio


|                  |                                        |                        |   |           |            |  |  |        |         |  |          |           |           |         |  |      |          |  |         |           |           |  |          |         |      |        |   |           |           |  |  |      |      |  |   |           |           |  |  |      |      | 
|----------------- | -------------------------------------- | ---------------------- | - | --------- | ---------- |  |  | ------ | ------- |  | -------- | --------- | --------- | ------- |  | ---- | -------- |  | ------- | --------- | --------- |  | -------- | ------- | ---- | ------ | - | --------- | --------- |  |  | ---- | ---- |  | - | --------- | --------- |  |  | ---- | ---- | 
|                  |                                        | December 31            |  
|                  |                                        |                        |  
|                  |                                        | 2004                   |   |           | 2003       |  |  | 2002   |         |  | 2001     |           |           | 2000    | 
|                  |                                        |                        |   |           |            |  |  |        |         |  |          |           |           |         | 
|                  |                                        |                        |   | Percent   |            |  |  |        | Percent |  |          |           |           | Percent |  |      |          |  | Percent |           |           |  |          | Percent |     
|                  |                                        | Amount                 |   |           | of Total   |  |  | Amount |         |  | of Total |           |           | Amount  |  |      | of Total |  |         | Amount    |           |  | of Total |         |      | Amount |   |           | of Total  | 
|                  |                                        |                        |   |           |            |  |  |        |         |  |          |           |           |         |  |      |          |  |         |           |           |  |          |         |      |        |   |           |           | 
|                  |                                        | (In thousands)         |  
|Commercial loans: |                                        |                        |   |           |            |  |  |        |         |  |          |           |           |         |  |      |          |  |         |           |           |  |          |         |      |        |   |           |           |  |  |      |      |  |   |           |           |  |  |     
|                  | Commercial, financial and agricultural |                        | $ | 3,750,063 |            |  |  | 19.9   | %       |  | $        | 3,576,115 |           |         |  | 20.6 | %        |  | $       | 3,693,454 |           |  |          | 22.4    | %    |        | $ | 3,697,639 |           |  |  | 27.0 | %    |  | $ | 3,645,699 |           |  |  | 29.7 | %   
|                  | Real estate  construction             |                        |   | 3,027,228 |            |  |  | 16.1   |         |  |          | 2,481,281 |           |         |  | 14.3 |          |  |         | 2,531,580 |           |  |          | 15.4    |      |        |   | 2,312,591 |           |  |  | 16.9 |      |  |   | 2,291,580 |           |  |  | 18.7 |     
|                  | Commercial real estate  mortgage      |                        |   | 3,943,163 |            |  |  | 20.9   |         |  |          | 3,933,773 |           |         |  | 22.6 |          |  |         | 3,214,712 |           |  |          | 19.5    |      |        |   | 2,417,195 |           |  |  | 17.6 |      |  |   | 2,140,270 |           |  |  | 17.5 |     
|                  |                                        |                        |   |           |            |  |  |        |         |  |          |           |           |         |  |      |          |  |         |           |           |  |          |         |      |        |   |           |           | 
|                  |                                        | Total commercial loans |   |           | 10,720,454 |  |  |        | 56.9    |  |          |           | 9,991,169 |         |  |      | 57.5     |  |         |           | 9,439,746 |  |          |         | 57.3 |        |   |           | 8,427,425 |  |  |      | 61.5 |  |   |           | 8,077,549 |  |  |      | 65.9 | 

19



---



##### Table of Contents



|                                |                                    |                      |            |           |            |  |     |        |         |  |            |           |            |         |     |      |          |  |            |           |            |  |          |         |      |        |            |           |            |  |     |      |      |  |            |           |            |  |     |     |      | 
|------------------------------- | ---------------------------------- | -------------------- | ---------- | --------- | ---------- |  | --- | ------ | ------- |  | ---------- | --------- | ---------- | ------- | --- | ---- | -------- |  | ---------- | --------- | ---------- |  | -------- | ------- | ---- | ------ | ---------- | --------- | ---------- |  | --- | ---- | ---- |  | ---------- | --------- | ---------- |  | --- | --- | ---- | 
|                                |                                    | December 31          |           
|                                |                                    |                      |           
|                                |                                    | 2004                 |            |           | 2003       |  |     | 2002   |         |  | 2001       |           |            | 2000    |    
|                                |                                    |                      |            |           |            |  |     |        |         |  |            |           |            |         |    
|                                |                                    |                      |            | Percent   |            |  |     |        | Percent |  |            |           |            | Percent |     |      |          |  | Percent    |           |            |  |          | Percent |     
|                                |                                    | Amount               |            |           | of Total   |  |     | Amount |         |  | of Total   |           |            | Amount  |     |      | of Total |  |            | Amount    |            |  | of Total |         |      | Amount |            |           | of Total   | 
|                                |                                    |                      |            |           |            |  |     |        |         |  |            |           |            |         |     |      |          |  |            |           |            |  |          |         |      |        |            |           |            | 
|                                |                                    | (In thousands)       |           
|Consumer loans:                 |                                    |                      |            |           |            |  |     |        |         |  |            |           |            |         |     |      |          |  |            |           |            |  |          |         |      |        |            |           |            |  |     |      |      |  |            |           |            |  |     |    
|                                | Residential real estate  mortgage |                      |            | 1,566,370 |            |  |     | 8.3    |         |  |            | 1,653,805 |            |         |     | 9.6  |          |  |            | 1,685,176 |            |  |          | 10.2    |      |        |            | 1,281,090 |            |  |     | 9.4  |      |  |            | 1,137,456 |            |  |     | 9.3 |     
|                                | Equity lines of credit             |                      |            | 1,401,604 |            |  |     | 7.4    |         |  |            | 1,122,725 |            |         |     | 6.5  |          |  |            | 978,920   |            |  |          | 5.9     |      |        |            | 478,424   |            |  |     | 3.5  |      |  |            | 319,107   |            |  |     | 2.6 |     
|                                | Equity loans                       |                      |            | 1,069,614 |            |  |     | 5.7    |         |  |            | 1,046,881 |            |         |     | 6.0  |          |  |            | 1,322,092 |            |  |          | 8.0     |      |        |            | 1,072,437 |            |  |     | 7.8  |      |  |            | 797,825   |            |  |     | 6.5 |     
|                                | Credit card                        |                      |            | 505,090   |            |  |     | 2.7    |         |  |            | 485,487   |            |         |     | 2.8  |          |  |            | 462,252   |            |  |          | 2.8     |      |        |            | 426,644   |            |  |     | 3.1  |      |  |            | 417,002   |            |  |     | 3.4 |     
|                                | Consumer installment  direct      |                      |            | 484,657   |            |  |     | 2.5    |         |  |            | 435,326   |            |         |     | 2.5  |          |  |            | 455,976   |            |  |          | 2.8     |      |        |            | 515,093   |            |  |     | 3.7  |      |  |            | 475,795   |            |  |     | 3.9 |     
|                                | Consumer installment  indirect    |                      |            | 3,109,133 |            |  |     | 16.5   |         |  |            | 2,630,409 |            |         |     | 15.1 |          |  |            | 2,137,158 |            |  |          | 13.0    |      |        |            | 1,506,173 |            |  |     | 11.0 |      |  |            | 1,034,020 |            |  |     | 8.4 |     
|                                |                                    |                      |            |           |            |  |     |        |         |  |            |           |            |         |     |      |          |  |            |           |            |  |          |         |      |        |            |           |            | 
|                                |                                    | Total consumer loans |            |           | 8,136,468  |  |     |        | 43.1    |  |            |           | 7,374,633  |         |     |      | 42.5     |  |            |           | 7,041,574  |  |          |         | 42.7 |        |            |           | 5,279,861  |  |     |      | 38.5 |  |            |           | 4,181,205  |  |     |     | 34.1 | 
|                                |                                    |                      |            |           |            |  |     |        |         |  |            |           |            |         |     |      |          |  |            |           |            |  |          |         |      |        |            |           |            | 
|                                |                                    |                      | 18,856,922 |           |            |  | 100 | %      |         |  | 17,365,802 |           |            |         | 100 | %    |          |  | 16,481,320 |           |            |  | 100      | %       |      |        | 13,707,286 |           |            |  | 100 | %    |      |  | 12,258,754 |           |            |  | 100 | %  
|                                |                                    |                      |            |           |            |  |     |        |         |  |            |           |            |         |     |      |          |  |            |           |            |  |          |         |      |        |            |           |            | 
|Less: Allowance for loan losses |                                    |                      | 258,339    |           |            |  |     |        |         |  | 244,882    |           |            |         |     |      |          |  | 232,830    |           |            |  |          |         |      |        | 191,393    |           |            |  |     |      |      |  | 167,288    |           |            |  |     |    
|                                |                                    |                      |            |           |            |  |     |        |         |  |            |           |            |         |     |      |          |  |            |           |            |  |          |         |      |        |            |           |            | 
|                                |                                    | Net loans            |            | $         | 18,598,583 |  |     |        |         |  |            | $         | 17,120,920 |         |     |      |          |  |            | $         | 16,248,490 |  |          |         |      |        |            | $         | 13,515,893 |  |     |      |      |  |            | $         | 12,091,466 |  |     |     |      | 
|                                |                                    |                      |            |           |            |  |     |        |         |  |            |           |            |         |     |      |          |  |            |           |            |  |          |         |      |        |            |           |            | 

Selected Loan Maturity and Interest Rate Sensitivity


|                                       |  |                |           |                          |                        |   |           |       |  |   |         |  |          |      |           |             |      |   |         |  |  |   |           | 
|-------------------------------------- |  | -------------- | --------- | ------------------------ | ---------------------- | - | --------- | ----- |  | - | ------- |  | -------- | ---- | --------- | ----------- | ---- | - | ------- |  |  | - | --------- | 
|                                       |  |                |           | Rate Structure for Loans |                       
|                                       |  | Maturity       |           |                          | Maturing Over One Year |  
|                                       |  |                |           |                          |                        |  
|                                       |  | One            |           |                          | Over One Year          |   |           | Over  |  |   |         |  | Fixed    |      |           | Floating or |     
|                                       |  | Year or        |           |                          | Through Five           |   |           | Five  |  |   |         |  | Interest |      |           | Adjustable  |     
|                                       |  | Less           |           |                          | Years                  |   |           | Years |  |   | Total   |  |          | Rate |           |             | Rate |  
|                                       |  |                |           |                          |                        |   |           |       |  |   |         |  |          |      |           |             |      |  
|                                       |  | (In thousands) |          
|Commercial, financial and agricultural |  | $              | 1,899,352 |                          |                        | $ | 1,390,557 |       |  | $ | 460,154 |  |          | $    | 3,750,063 |             |      | $ | 395,874 |  |  | $ | 1,454,837 | 
|Real estate construction               |  |                | 1,685,839 |                          |                        |   | 1,193,778 |       |  |   | 147,611 |  |          |      | 3,027,228 |             |      |   | 127,448 |  |  |   | 1,213,941 | 
|                                       |  |                |           |                          |                        |   |           |       |  |   |         |  |          |      |           |             |      |  
|                                       |  | $              | 3,585,191 |                          |                        | $ | 2,584,335 |       |  | $ | 607,765 |  |          | $    | 6,777,291 |             |      | $ | 523,322 |  |  | $ | 2,668,778 | 
|                                       |  |                |           |                          |                        |   |           |       |  |   |         |  |          |      |           |             |      |  





20



---



##### Table of Contents



Managed Loan Portfolio


|                  |                                    |                        |                     |            |            |            |  |        |            |       |       |           |            |            |  |      |       |       |   |           |           |            |  |      |      |       |  
|----------------- | ---------------------------------- | ---------------------- | ------------------- | ---------- | ---------- | ---------- |  | ------ | ---------- | ----- | ----- | --------- | ---------- | ---------- |  | ---- | ----- | ----- | - | --------- | --------- | ---------- |  | ---- | ---- | ----- | -
|                  |                                    | December 31            |                    
|                  |                                    |                        |                    
|                  |                                    | 2004                   |                     |            | 2003       |            |  | 2002   |           
|                  |                                    |                        |                     |            |            |            |  |        |           
|                  |                                    |                        |                     | Percent of |            |            |  |        | Percent of |       |       |           |            | Percent of | 
|                  |                                    |                        |                     | Total      |            |            |  |        | Total      |       |       |           |            | Total      | 
|                  |                                    |                        |                     | Managed    |            |            |  |        | Managed    |       |       |           |            | Managed    | 
|                  |                                    | Amount                 |                     |            | Loans      |            |  | Amount |            |       | Loans |           |            | Amount     |  |      | Loans |      
|                  |                                    |                        |                     |            |            |            |  |        |            |       |       |           |            |            |  |      |       |      
|                  |                                    | (In thousands)         |                    
|Commercial loans: |                                    |                        |                     |            |            |            |  |        |            |       |       |           |            |            |  |      |       |       |   |           |           |            |  |     
|                  | Commercial, financial and          |                        |                     |            |            |            |  |        |            |       |       |           |            |            |  |      |       |       |   |           |           |            |  |      |     
|                  |                                    | agricultural           |                     | $          | 3,890,866  |            |  |        | 19.0       | %     |       | $         | 3,728,172  |            |  |      | 19.7  | %     |   | $         | 3,824,800 |            |  |      | 21.7 | %    
|                  | Real estate  construction         |                        |                     | 3,027,228  |            |            |  | 14.8   |            |       |       | 2,481,281 |            |            |  | 13.2 |       |       |   | 2,531,580 |           |            |  | 14.5 |     
|                  | Commercial real estate  mortgage  |                        |                     | 3,943,163  |            |            |  | 19.3   |            |       |       | 3,933,773 |            |            |  | 20.8 |       |       |   | 3,214,712 |           |            |  | 18.3 |     
|                  |                                    |                        |                     |            |            |            |  |        |            |       |       |           |            |            |  |      |       |      
|                  |                                    | Total commercial loans |                     |            | 10,861,257 |            |  |        | 53.1       |       |       |           | 10,143,226 |            |  |      | 53.7  |       |   |           | 9,571,092 |            |  |      | 54.5 |      
|Consumer loans:   |                                    |                        |                     |            |            |            |  |        |            |       |       |           |            |            |  |      |       |       |   |           |           |            |  |     
|                  | Residential real estate  mortgage |                        |                     | 2,688,768  |            |            |  | 13.1   |            |       |       | 2,514,169 |            |            |  | 13.3 |       |       |   | 2,604,591 |           |            |  | 14.8 |     
|                  | Equity lines of credit             |                        |                     | 1,401,604  |            |            |  | 6.9    |            |       |       | 1,122,725 |            |            |  | 5.9  |       |       |   | 978,920   |           |            |  | 5.6  |     
|                  | Equity loans                       |                        |                     | 1,391,668  |            |            |  | 6.8    |            |       |       | 1,546,894 |            |            |  | 8.2  |       |       |   | 1,322,092 |           |            |  | 7.5  |     
|                  | Credit card                        |                        |                     | 505,090    |            |            |  | 2.5    |            |       |       | 485,487   |            |            |  | 2.6  |       |       |   | 462,252   |           |            |  | 2.6  |     
|                  | Consumer installment  direct      |                        |                     | 484,657    |            |            |  | 2.4    |            |       |       | 435,326   |            |            |  | 2.3  |       |       |   | 455,976   |           |            |  | 2.6  |     
|                  | Consumer installment  indirect    |                        |                     | 3,109,133  |            |            |  | 15.2   |            |       |       | 2,630,409 |            |            |  | 14.0 |       |       |   | 2,166,687 |           |            |  | 12.4 |     
|                  |                                    |                        |                     |            |            |            |  |        |            |       |       |           |            |            |  |      |       |      
|                  |                                    | Total consumer loans   |                     |            | 9,580,920  |            |  |        | 46.9       |       |       |           | 8,735,010  |            |  |      | 46.3  |       |   |           | 7,990,518 |            |  |      | 45.5 |      
|                  |                                    |                        |                     |            |            |            |  |        |            |       |       |           |            |            |  |      |       |      
|                  |                                    |                        | Total managed loans |            | $          | 20,442,177 |  |        |            | 100.0 | %     |           | $          | 18,878,236 |  |      |       | 100.0 | % |           | $         | 17,561,610 |  |      |      | 100.0 | %
|                  |                                    |                        |                     |            |            |            |  |        |            |       |       |           |            |            |  |      |       |      

Investment Securities








21



---



##### Table of Contents











Investment Securities Held to Maturity and Available for
Sale


|                                        |                                           |                |           |           |         |  |           |           |         |  |         |         |         | 
|--------------------------------------- | ----------------------------------------- | -------------- | --------- | --------- | ------- |  | --------- | --------- | ------- |  | ------- | ------- | ------- | 
|                                        |                                           | December 31    |          
|                                        |                                           |                |          
|                                        |                                           | 2004           |           |           | 2003    |  |           | 2002      |        
|                                        |                                           |                |           |           |         |  |           |           |        
|                                        |                                           | (In thousands) |          
|Investment securities held to maturity: |                                           |                |           |           |         |  |           |           |         |  |         |        
|                                        | U.S. Government agencies and corporations |                | $         | 60,860    |         |  | $         | 72,696    |         |  | $       | 87      |        
|                                        | Mortgage-backed pass-through securities   |                |           | 1,125,080 |         |  |           | 1,362,745 |         |  |         | 163,748 |        
|                                        | Collateralized mortgage obligations:      |                |           |           |         |  |           |           |         |  |         |         |        
|                                        |                                           | Agency         |           |           | 455,191 |  |           |           | 466,956 |  |         |         | 9,662   | 
|                                        |                                           | Non-agency     |           |           | 712,096 |  |           |           | 416,669 |  |         |         | 257,557 | 
|                                        | Asset-backed securities                   |                |           | 320,058   |         |  |           | 510,892   |         |  |         |        |        
|                                        | States and political subdivisions         |                |           | 93,714    |         |  |           | 105,886   |         |  |         | 43,791  |        
|                                        | Other                                     |                |           | 100       |         |  |           | 500       |         |  |         | 600     |        
|                                        |                                           |                |           |           |         |  |           |           |        
|                                        |                                           |                | 2,767,099 |           |         |  | 2,936,344 |           |         |  | 475,445 |        
|                                        |                                           |                |           |           |         |  |           |           |        

22



---



##### Table of Contents



|                                          |                                             |                            |            |         |           |           |           |         |           |           |           |           |           |           | 
|----------------------------------------- | ------------------------------------------- | -------------------------- | ---------- | ------- | --------- | --------- | --------- | ------- | --------- | --------- | --------- | --------- | --------- | --------- | 
|                                          |                                             | December 31                |           
|                                          |                                             |                            |           
|                                          |                                             | 2004                       |            |         | 2003      |           |           | 2002    |          
|                                          |                                             |                            |            |         |           |           |           |         |          
|                                          |                                             | (In thousands)             |           
|Investment securities available for sale: |                                             |                            |            |         |           |           |           |         |           |           |           |          
|                                          | U.S. Treasury                               |                            |            | 38,886  |           |           |           | 40,650  |           |           |           | 43,374    |          
|                                          | U.S. Government agencies and corporations   |                            |            | 666     |           |           |           | 792     |           |           |           | 80,890    |          
|                                          | Mortgage-backed pass-through securities     |                            |            | 499,525 |           |           |           | 796,688 |           |           |           | 1,593,399 |          
|                                          | Collateralized mortgage obligations:        |                            |            |         |           |           |           |         |           |           |           |           |          
|                                          |                                             |                            | Agency     |         |           | 3,530,987 |           |         |           | 2,972,164 |           |           |           | 1,254,899 | 
|                                          |                                             |                            | Non-agency |         |           | 2,189     |           |         |           | 94,919    |           |           |           | 1,176,942 | 
|                                          | Asset-backed securities and corporate bonds |                            |            | 1,039   |           |           |           | 3,638   |           |           |           | 50,181    |          
|                                          | States and political subdivisions           |                            |            | 11,943  |           |           |           | 11,007  |           |           |           | 93,444    |          
|                                          | Other                                       |                            |            | 325,379 |           |           |           | 399,292 |           |           |           | 327,597   |          
|                                          |                                             |                            |            |         |           |           |           |         |          
|                                          |                                             |                            | 4,410,614  |         |           |           | 4,319,150 |         |           |           | 4,620,726 |          
|                                          |                                             | Net unrealized gain (loss) |            |         | (12,430   | )         |           |         | 56,058    |           |           |           | 162,970   |          
|                                          |                                             |                            |            |         |           |           |           |         |          
|                                          |                                             |                            | 4,398,184  |         |           |           | 4,375,208 |         |           |           | 4,783,696 |          
|                                          |                                             |                            |            |         |           |           |           |         |          
|                                          |                                             | Total                      |            | $       | 7,165,283 |           |           | $       | 7,311,552 |           |           | $         | 5,259,141 |          
|                                          |                                             |                            |            |         |           |           |           |         |          



Investment Securities Held to Maturity and Available for Sale
Maturity Schedule


|                                        |                                         |                  |       |       |                   |  |      |                  |   |   |           |           |        |        |      |      |       |   |         |         |    |  |       |      |      |   |        |        |   |  |      |      |   |  
|--------------------------------------- | --------------------------------------- | ---------------- | ----- | ----- | ----------------- |  | ---- | ---------------- | - | - | --------- | --------- | ------ | ------ | ---- | ---- | ----- | - | ------- | ------- | -- |  | ----- | ---- | ---- | - | ------ | ------ | - |  | ---- | ---- | - | -
|                                        |                                         | Maturing         |      
|                                        |                                         |                  |      
|                                        |                                         | Within           |       |       | After One but     |  |      | After Five but   |   |   | After     |          
|                                        |                                         | One Year         |       |       | Within Five Years |  |      | Within Ten Years |   |   | Ten Years |          
|                                        |                                         |                  |       |       |                   |  |      |                  |   |   |           |          
|                                        |                                         | Amount           |       |       | Yield             |  |      | Amount           |   |   | Yield     |           |        | Amount |      |      | Yield |   |         | Amount  |    |  | Yield |     
|                                        |                                         |                  |       |       |                   |  |      |                  |   |   |           |           |        |        |      |      |       |   |         |         |    |  |       |     
|                                        |                                         | (In thousands)   |      
|Investment securities held to maturity: |                                         |                  |       |       |                   |  |      |                  |   |   |           |           |        |        |      |      |       |   |         |         |    |  |       |      |      |   |        |        |   |  |      |     
|                                        | U.S. Government agencies                |                  |       |       |                   |  |      |                  |   |   |           |           |        |        |      |      |       |   |         |         |    |  |       |      |      |   |        |        |   |  |      |      |  
|                                        |                                         | and corporations |       | $     |                  |  |      |                  |  | % |           | $         | 60,828 |        |      |      | 6.29  | % |         | $       | 32 |  |       |      | 3.07 | % |        | $      |  |  |      |      |  | %
|                                        | Mortgage-backed pass-through securities |                  |       | 881   |                   |  |      | 6.94             |   |   |           | 761,002   |        |        |      | 4.70 |       |   |         | 356,441 |    |  |       | 4.32 |      |   |        | 6,756  |   |  |      | 6.31 |  
|                                        | Collateralized mortgage obligations     |                  |       | 758   |                   |  |      | 5.17             |   |   |           | 1,154,391 |        |        |      | 4.59 |       |   |         | 12,138  |    |  |       | 5.70 |      |   |        |       |   |  |      |     |  
|                                        | Asset-backed securities                 |                  |       |      |                   |  |      |                 |   |   |           | 320,058   |        |        |      | 4.99 |       |   |         |        |    |  |       |     |      |   |        |       |   |  |      |     |  
|                                        | States and political subdivisions       |                  |       | 7,402 |                   |  |      | 9.29             |   |   |           | 23,142    |        |        |      | 8.30 |       |   |         | 10,565  |    |  |       | 7.92 |      |   |        | 52,605 |   |  |      | 7.32 |  
|                                        | Other                                   |                  |       | 100   |                   |  |      | 6.58             |   |   |           |          |        |        |      |     |       |   |         |        |    |  |       |     |      |   |        |       |   |  |      |     |  
|                                        |                                         |                  |       |       |                   |  |      |                  |   |   |           |           |        |        |      |      |       |   |         |         |    |  |       |     
|                                        |                                         |                  | 9,141 |       |                   |  | 8.69 |                  |   |   | 2,319,421 |           |        |        | 4.76 |      |       |   | 379,176 |         |    |  | 4.47  |      |      |   | 59,361 |        |   |  | 7.20 |     
|                                        |                                         |                  |       |       |                   |  |      |                  |   |   |           |           |        |        |      |      |       |   |         |         |    |  |       |     

23



---



##### Table of Contents



|                                |                                           |                |         |         |                   |  |      |                  |      |  |           |           |           |        |      |       |       |  |         |         |         |  |       |      |      |  |        |        |        |  |      |      |      | 
|------------------------------- | ----------------------------------------- | -------------- | ------- | ------- | ----------------- |  | ---- | ---------------- | ---- |  | --------- | --------- | --------- | ------ | ---- | ----- | ----- |  | ------- | ------- | ------- |  | ----- | ---- | ---- |  | ------ | ------ | ------ |  | ---- | ---- | ---- | 
|                                |                                           | Maturing       |        
|                                |                                           |                |        
|                                |                                           | Within         |         |         | After One but     |  |      | After Five but   |      |  | After     |          
|                                |                                           | One Year       |         |         | Within Five Years |  |      | Within Ten Years |      |  | Ten Years |          
|                                |                                           |                |         |         |                   |  |      |                  |      |  |           |          
|                                |                                           | Amount         |         |         | Yield             |  |      | Amount           |      |  | Yield     |           |           | Amount |      |       | Yield |  |         | Amount  |         |  | Yield |     
|                                |                                           |                |         |         |                   |  |      |                  |      |  |           |           |           |        |      |       |       |  |         |         |         |  |       |     
|                                |                                           | (In thousands) |        
|Investment securities available |                                           |                |         |         |                   |  |      |                  |      |  |           |           |           |        |      |       |       |  |         |         |         |  |       |      |      |  |        |        |        |  |      |     
|                                | for sale  amortized cost:                |                |         |         |                   |  |      |                  |      |  |           |           |           |        |      |       |       |  |         |         |         |  |       |      |      |  |        |        |        |  |      |      |     
|                                | U.S. Treasury                             |                |         |        |                   |  |      |                 |      |  |           | 38,886    |           |        |      | 3.49  |       |  |         |        |         |  |       |     |      |  |        |       |        |  |      |     |     
|                                | U.S. Government agencies and corporations |                |         | 500     |                   |  |      | 4.73             |      |  |           |          |           |        |      |      |       |  |         | 29      |         |  |       | 3.19 |      |  |        | 137    |        |  |      | 2.25 |     
|                                | Mortgage-backed pass-through securities   |                |         | 2,476   |                   |  |      | 6.44             |      |  |           | 457,758   |           |        |      | 4.51  |       |  |         | 36,135  |         |  |       | 5.19 |      |  |        | 3,156  |        |  |      | 5.10 |     
|                                | Collateralized mortgage obligations       |                |         | 63,941  |                   |  |      | 4.28             |      |  |           | 3,306,040 |           |        |      | 3.86  |       |  |         | 163,195 |         |  |       | 4.43 |      |  |        |       |        |  |      |     |     
|                                | Asset-backed securities                   |                |         |        |                   |  |      |                 |      |  |           | 1,039     |           |        |      | 5.90  |       |  |         |        |         |  |       |     |      |  |        |       |        |  |      |     |     
|                                | States and political subdivisions         |                |         | 2,000   |                   |  |      | 7.14             |      |  |           | 3,647     |           |        |      | 7.24  |       |  |         | 119     |         |  |       | 7.23 |      |  |        | 6,177  |        |  |      | 8.97 |     
|                                | Other                                     |                |         | 259,365 |                   |  |      | 3.36             |      |  |           | 36,674    |           |        |      | 10.19 |       |  |         |        |         |  |       |     |      |  |        | 29,340 |        |  |      | 8.89 |     
|                                |                                           |                |         |         |                   |  |      |                  |      |  |           |           |           |        |      |       |       |  |         |         |         |  |       |     
|                                |                                           |                | 328,282 |         |                   |  | 3.59 |                  |      |  | 3,844,044 |           |           |        | 4.00 |       |       |  | 199,478 |         |         |  | 4.57  |      |      |  | 38,810 |        |        |  | 8.57 |     
|                                |                                           |                |         |         |                   |  |      |                  |      |  |           |           |           |        |      |       |       |  |         |         |         |  |       |     
|                                |                                           | Total          |         | $       | 337,423           |  |      |                  | 3.72 |  |           | $         | 6,163,465 |        |      |       | 4.29  |  |         | $       | 578,654 |  |       |      | 4.50 |  |        | $      | 98,171 |  |      |      | 7.74 | 
|                                |                                           |                |         |         |                   |  |      |                  |      |  |           |           |           |        |      |       |       |  |         |         |         |  |       |     







Trading Account Assets and Liabilities




24



---



##### Table of Contents









Trading Account Assets and Liabilities


|                             |                                         |                                   |   |        |        |  |   |        |        | 
|---------------------------- | --------------------------------------- | --------------------------------- | - | ------ | ------ |  | - | ------ | ------ | 
|                             |                                         | December 31                       |  
|                             |                                         |                                   |  
|                             |                                         | 2004                              |   |        | 2003   | 
|                             |                                         |                                   |   |        |        | 
|                             |                                         | (In thousands, restated)          |  
|Trading account assets:      |                                         |                                   |   |        |        |  |   |       
|                             | U.S. Treasury and Government agencies   |                                   | $ | 6,651  |        |  | $ | 2,816  |       
|                             | States and political subdivisions       |                                   |   | 2,834  |        |  |   | 1,881  |       
|                             | Mortgage-backed pass-through securities |                                   |   | 8,060  |        |  |   | 3,039  |       
|                             | Collateralized mortgage obligations     |                                   |   | 4,180  |        |  |   | 864    |       
|                             | Interest rate floors, caps and swaps    |                                   |   | 56,092 |        |  |   | 77,619 |       
|                             |                                         |                                   |   |        |        | 
|                             |                                         | Total trading account assets      |   | $      | 77,817 |  |   | $      | 86,219 | 
|                             |                                         |                                   |   |        |        | 
|Trading account liabilities: |                                         |                                   |   |        |        |  |   |       
|                             | Short sales                             |                                   | $ | 2,956  |        |  | $ | 572    |       
|                             | Interest rate floors, caps and swaps    |                                   |   | 23,746 |        |  |   | 31,426 |       
|                             |                                         |                                   |   |        |        | 
|                             |                                         | Total trading account liabilities |   | $      | 26,702 |  |   | $      | 31,998 | 
|                             |                                         |                                   |   |        |        | 



25



---



##### Table of Contents





Deposits and Borrowed Funds






Maturities of Time Deposits


|                               |  |                          |           |  |            |   |         |       |  |   |           | 
|------------------------------ |  | ------------------------ | --------- |  | ---------- | - | ------- | ----- |  | - | --------- | 
|                               |  | Certificates             |           |  | Other Time |   |         |      
|                               |  | of Deposit               |           |  | Deposits   |   |         |      
|                               |  | Over                     |           |  | Over       |   |         |      
|                               |  | $100,000                 |           |  | $100,000   |   |         | Total | 
|                               |  |                          |           |  |            |   |         |       | 
|                               |  | (In thousands, restated) |          
|Three months or less           |  | $                        | 1,031,198 |  |            | $ | 131,785 |       |  | $ | 1,162,983 | 
|Over three through six months  |  |                          | 220,316   |  |            |   |        |       |  |   | 220,316   | 
|Over six through twelve months |  |                          | 320,394   |  |            |   |        |       |  |   | 320,394   | 
|Over twelve months             |  |                          | 633,023   |  |            |   |        |       |  |   | 633,023   | 
|                               |  |                          |           |  |            |   |         |       | 
|                               |  | $                        | 2,204,931 |  |            | $ | 131,785 |       |  | $ | 2,336,716 | 
|                               |  |                          |           |  |            |   |         |       | 





26



---



##### Table of Contents



Short-Term Borrowings


|                                               |  |                        |           |  |         |   |           |          |  |  |         |          |  |          |           |  |  |  |      |  
|---------------------------------------------- |  | ---------------------- | --------- |  | ------- | - | --------- | -------- |  |  | ------- | -------- |  | -------- | --------- |  |  |  | ---- | -
|                                               |  | Year Ended December 31 |          
|                                               |  |                        |          
|                                               |  | Maximum                |           |  |         |   | Average   |         
|                                               |  | Outstanding            |           |  |         |   | Average   |          |  |  |         | Interest | 
|                                               |  | at any                 |           |  | Average |   |           | Interest |  |  | Ending  |          |  | Rate at  |          
|                                               |  | Month End              |           |  | Balance |   |           | Rate     |  |  | Balance |          |  | Year-End |          
|                                               |  |                        |           |  |         |   |           |          |  |  |         |          |  |          |          
|                                               |  | (In thousands)         |          
|2004                                           |  |                        |           |  |         |   |           |          |  |  |         |          |  |          |           |  |  |  |      |  
|Federal funds purchased                        |  | $                      | 4,374,545 |  |         | $ | 3,906,691 |          |  |  | 1.38    | %        |  | $        | 4,218,045 |  |  |  | 2.17 | %
|Securities sold under agreements to repurchase |  |                        | 425,246   |  |         |   | 371,444   |          |  |  | 1.06    |          |  |          | 313,959   |  |  |  | 1.73 |  
|Short sales                                    |  |                        | 4,324     |  |         |   | 2,058     |          |  |  | 2.96    |          |  |          | 2,956     |  |  |  | 2.99 |  
|Commercial paper                               |  |                        | 97,498    |  |         |   | 77,625    |          |  |  | 0.75    |          |  |          | 97,498    |  |  |  | 1.25 |  
|Other short-term borrowings                    |  |                        | 143,603   |  |         |   | 35,898    |          |  |  | 1.75    |          |  |          | 75,317    |  |  |  | 1.74 |  
|                                               |  |                        |           |  |         |   |           |          |  |  |         |          |  |          |          
|                                               |  | $                      | 5,045,216 |  |         | $ | 4,393,716 |          |  |  |         |          |  | $        | 4,707,775 |  |  |  |      |  
|                                               |  |                        |           |  |         |   |           |          |  |  |         |          |  |          |          
|2003                                           |  |                        |           |  |         |   |           |          |  |  |         |          |  |          |           |  |  |  |      |  
|Federal funds purchased                        |  | $                      | 3,715,593 |  |         | $ | 2,476,686 |          |  |  | 1.06    | %        |  | $        | 3,715,593 |  |  |  | 0.89 | %
|Securities sold under agreements to repurchase |  |                        | 457,078   |  |         |   | 441,896   |          |  |  | 0.85    |          |  |          | 403,031   |  |  |  | 0.71 |  
|Short sales                                    |  |                        | 5,583     |  |         |   | 2,419     |          |  |  | 2.51    |          |  |          | 572       |  |  |  | 3.35 |  
|Commercial paper                               |  |                        | 73,512    |  |         |   | 80,057    |          |  |  | 0.63    |          |  |          | 73,512    |  |  |  | 0.50 |  
|Other short-term borrowings                    |  |                        | 189,453   |  |         |   | 31,074    |          |  |  | 1.45    |          |  |          | 189,453   |  |  |  | 0.70 |  
|                                               |  |                        |           |  |         |   |           |          |  |  |         |          |  |          |          
|                                               |  | $                      | 4,441,219 |  |         | $ | 3,032,132 |          |  |  |         |          |  | $        | 4,382,161 |  |  |  |      |  
|                                               |  |                        |           |  |         |   |           |          |  |  |         |          |  |          |          
|2002                                           |  |                        |           |  |         |   |           |          |  |  |         |          |  |          |           |  |  |  |      |  
|Federal funds purchased                        |  | $                      | 2,923,865 |  |         | $ | 1,842,137 |          |  |  | 1.68    | %        |  | $        | 895,685   |  |  |  | 1.01 | %
|Securities sold under agreements to repurchase |  |                        | 567,180   |  |         |   | 458,465   |          |  |  | 1.40    |          |  |          | 447,515   |  |  |  | 0.94 |  
|Short sales                                    |  |                        | 5,369     |  |         |   | 3,647     |          |  |  | 1.40    |          |  |          | 2,461     |  |  |  | 0.04 |  
|Commercial paper                               |  |                        | 76,928    |  |         |   | 68,980    |          |  |  | 1.18    |          |  |          | 76,928    |  |  |  | 0.76 |  
|Other short-term borrowings                    |  |                        | 452,754   |  |         |   | 79,410    |          |  |  | 2.12    |          |  |          | 211,550   |  |  |  | 0.92 |  
|                                               |  |                        |           |  |         |   |           |          |  |  |         |          |  |          |          
|                                               |  | $                      | 4,026,096 |  |         | $ | 2,452,639 |          |  |  |         |          |  | $        | 1,634,139 |  |  |  |      |  
|                                               |  |                        |           |  |         |   |           |          |  |  |         |          |  |          |          

Liquidity Management


day-to


27



---



##### Table of Contents













Contractual Obligations


|                                   |  |                          |           |             |      |   |           |             |             |   |             |  |  |       |           |  |  |   |           | 
|---------------------------------- |  | ------------------------ | --------- | ----------- | ---- | - | --------- | ----------- | ----------- | - | ----------- |  |  | ----- | --------- |  |  | - | --------- | 
|                                   |  | Payments Due by Period   |          
|                                   |  |                          |          
|                                   |  |                          |           | Less Than 1 |      |   |           |             | More Than 5 |  
|                                   |  | Total                    |           |             | Year |   |           | 1  3 Years |             |   | 3  5 Years |  |  | Years |          
|                                   |  |                          |           |             |      |   |           |             |             |   |             |  |  |       |          
|                                   |  | (In thousands, restated) |          
|FHLB and other borrowings*         |  | $                        | 4,119,771 |             |      | $ | 300,170   |             |             | $ | 700,388     |  |  | $     | 1,614,297 |  |  | $ | 1,504,916 | 
|Capital lease obligations          |  |                          |          |             |      |   |          |             |             |   |            |  |  |       |          |  |  |   |          | 
|Operating leases                   |  |                          | 152,506   |             |      |   | 20,183    |             |             |   | 35,712      |  |  |       | 26,204    |  |  |   | 70,407    | 
|Unconditional purchase obligations |  |                          |          |             |      |   |          |             |             |   |            |  |  |       |          |  |  |   |          | 
|Certificates of deposit            |  |                          | 3,944,769 |             |      |   | 2,412,684 |             |             |   | 1,009,999   |  |  |       | 412,275   |  |  |   | 109,811   | 
|Other time deposits                |  |                          | 131,785   |             |      |   | 131,785   |             |             |   |            |  |  |       |          |  |  |   |          | 
|Other long-term obligations        |  |                          |          |             |      |   |          |             |             |   |            |  |  |       |          |  |  |   |          | 
|                                   |  |                          |           |             |      |   |           |             |             |   |             |  |  |       |          
|                                   |  | $                        | 8,348,831 |             |      | $ | 2,864,822 |             |             | $ | 1,746,099   |  |  | $     | 2,052,776 |  |  | $ | 1,685,134 | 
|                                   |  |                          |           |             |      |   |           |             |             |   |             |  |  |       |          






|  |                                                                                                                                                                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Refer to Note 9, FHLB and Other Borrowings, and
    Note 10, Capital Securities and Preferred Stock, in the
    Notes to Consolidated Financial Statements for additional
    information about these obligations, including certain
    redemption features.

28



---



##### Table of Contents



Commitments


|                                             |  |                        |            |             |      |   |           |       |  |       |         |  |   |       |         |  |  |   |           | 
|-------------------------------------------- |  | ---------------------- | ---------- | ----------- | ---- | - | --------- | ----- |  | ----- | ------- |  | - | ----- | ------- |  |  | - | --------- | 
|                                             |  | Payments Due by Period |           
|                                             |  |                        |           
|                                             |  |                        |            | More Than   |     
|                                             |  |                        |            | Less Than 1 |      |   | 1  3     |       |  | 3  5 |         |  | 5 |      
|                                             |  | Total                  |            |             | Year |   |           | Years |  |       | Years   |  |   | Years |        
|                                             |  |                        |            |             |      |   |           |       |  |       |         |  |   |       |        
|                                             |  | (In thousands)         |           
|Lines of credit                              |  | $                      | 11,265,440 |             |      | $ | 8,096,866 |       |  | $     | 525,108 |  |   | $     | 272,833 |  |  | $ | 2,370,633 | 
|Standby and commercial letters of credit     |  |                        | 716,195    |             |      |   | 76,379    |       |  |       | 248,112 |  |   |       | 287,581 |  |  |   | 104,123   | 
|Other contingent liabilities and commitments |  |                        |           |             |      |   |          |       |  |       |        |  |   |       |        |  |  |   |          | 
|                                             |  |                        |            |             |      |   |           |       |  |       |         |  |   |       |        
|                                             |  | $                      | 11,981,635 |             |      | $ | 8,173,245 |       |  | $     | 773,220 |  |   | $     | 560,414 |  |  | $ | 2,474,756 | 
|                                             |  |                        |            |             |      |   |           |       |  |       |         |  |   |       |        

Interest Rate Sensitivity Management








Capital Resources




th


29



---



##### Table of Contents









Return on Equity and Assets


|                                                            |  |             |       |   |      |  |       |      |  |  |       |  
|----------------------------------------------------------- |  | ----------- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                                            |  | December 31 |      
|                                                            |  |             |      
|                                                            |  | 2004        |       |   | 2003 |  |       | 2002 | 
|                                                            |  |             |       |   |      |  |       |      | 
|Return on average assets                                    |  |             | 1.30  | % |      |  | 1.31  | %    |  |  | 1.47  | %
|Return on average equity                                    |  |             | 18.29 |   |      |  | 16.72 |      |  |  | 18.03 |  
|Dividend payout ratio                                       |  |             | 43.55 |   |      |  | 43.41 |      |  |  | 37.74 |  
|Average common shareholders equity to average assets ratio |  |             | 7.12  |   |      |  | 7.82  |      |  |  | 8.18  |  







30



---



##### Table of Contents







Capital Ratios


|                    |                                            |                          |   |            |      |  |   |            |  
|------------------- | ------------------------------------------ | ------------------------ | - | ---------- | ---- |  | - | ---------- | -
|                    |                                            | December 31              |  
|                    |                                            |                          |  
|                    |                                            | 2004                     |   |            | 2003 | 
|                    |                                            |                          |   |            |      | 
|                    |                                            | (In thousands, restated) |  
|Risk-based capital: |                                            |                          |   |            |      |  |   |           
|                    | Tier I Capital                             |                          | $ | 2,099,593  |      |  | $ | 1,913,192  |  
|                    | Tangible Tier I Capital                    |                          |   | 2,089,013  |      |  |   | 1,900,450  |  
|                    | Total Qualifying Capital                   |                          |   | 2,566,507  |      |  |   | 2,418,575  |  
|Assets:             |                                            |                          |   |            |      |  |   |           
|                    | Net risk-adjusted assets                   |                          | $ | 22,975,381 |      |  | $ | 20,821,477 |  
|                    | Adjusted quarterly average assets          |                          |   | 27,794,720 |      |  |   | 26,117,962 |  
|                    | Adjusted tangible quarterly average assets |                          |   | 27,784,140 |      |  |   | 26,105,220 |  
|Ratios:             |                                            |                          |   |            |      |  |   |           
|                    | Tier I Capital                             |                          |   | 9.14       | %    |  |   | 9.19       | %
|                    | Total Qualifying Capital                   |                          |   | 11.17      |      |  |   | 11.62      |  
|                    | Leverage                                   |                          |   | 7.55       |      |  |   | 7.33       |  
|                    | Tangible leverage                          |                          |   | 7.52       |      |  |   | 7.28       |  



Off-Balance Sheet Activities




| |                            
| | ---------------------------
| | Sunbelt Funding Corporation





31



---



##### Table of Contents







Results of Operations




| |                    
| | -------------------
| | Net Interest Income









32



---



##### Table of Contents















33



---



##### Table of Contents





|                                                           |  |                          |        |  |          |   |        |               |  |   |              |  |  |       |        |  |  |   |        | 
|---------------------------------------------------------- |  | ------------------------ | ------ |  | -------- | - | ------ | ------------- |  | - | ------------ |  |  | ----- | ------ |  |  | - | ------ | 
|                                                           |  | For the Quarter Ending   |        |  |         
|                                                           |  |                          |        |  |         
|                                                           |  | March 31,                |        |  | June 30, |   |        | September 30, |  |   | December 31, |  |  |      
|                                                           |  | 2003                     |        |  | 2003     |   |        | 2003          |  |   | 2003         |  |  |      
|                                                           |  | Actual                   |        |  | Actual   |   |        | Actual        |  |   | Actual       |  |  | Total |       
|                                                           |  |                          |        |  |          |   |        |               |  |   |              |  |  |       |       
|                                                           |  | (In thousands, restated) |       
|Hedging derivatives positive impact to net interest margin |  | $                        | 22,118 |  |          | $ | 18,660 |               |  | $ | 15,306       |  |  | $     | 15,395 |  |  | $ | 71,479 | 
|                                                           |  |                          |        |  |          |   |        |               |  |   |              |  |  |       |       

|                                                           |  |                          |        |  |          |   |       |               |  |   |              |  |  |       |       |  |  |   |        | 
|---------------------------------------------------------- |  | ------------------------ | ------ |  | -------- | - | ----- | ------------- |  | - | ------------ |  |  | ----- | ----- |  |  | - | ------ | 
|                                                           |  | For the Quarter Ending   |        |  |         
|                                                           |  |                          |        |  |         
|                                                           |  | March 31,                |        |  | June 30, |   |       | September 30, |  |   | December 31, |  |  |      
|                                                           |  | 2004                     |        |  | 2004     |   |       | 2004          |  |   | 2004         |  |  |      
|                                                           |  | Actual                   |        |  | Actual   |   |       | Actual        |  |   | Actual       |  |  | Total |      
|                                                           |  |                          |        |  |          |   |       |               |  |   |              |  |  |       |      
|                                                           |  | (In thousands, restated) |       
|Hedging derivatives positive impact to net interest margin |  | $                        | 11,240 |  |          | $ | 7,471 |               |  | $ | 6,019        |  |  | $     | 4,101 |  |  | $ | 28,831 | 
|                                                           |  |                          |        |  |          |   |       |               |  |   |              |  |  |       |      

|                                                           |  |                          |       |  |          |   |       |               |  |   |              |  |  |            |       |  |  |   |        | 
|---------------------------------------------------------- |  | ------------------------ | ----- |  | -------- | - | ----- | ------------- |  | - | ------------ |  |  | ---------- | ----- |  |  | - | ------ | 
|                                                           |  | For the Quarter Ending   |       |  |         
|                                                           |  |                          |       |  |         
|                                                           |  | March 31,                |       |  | June 30, |   |       | September 30, |  |   | December 31, |  |  |           
|                                                           |  | 2005                     |       |  | 2005     |   |       | 2005          |  |   | 2005         |  |  | Total      |      
|                                                           |  | Actual                   |       |  | Actual   |   |       | Actual        |  |   | Projected*   |  |  | Projected* |      
|                                                           |  |                          |       |  |          |   |       |               |  |   |              |  |  |            |      
|                                                           |  | (In thousands, restated) |      
|Hedging derivatives positive impact to net interest margin |  | $                        | 2,455 |  |          | $ | 3,012 |               |  | $ | 3,546        |  |  | $          | 1,855 |  |  | $ | 10,868 | 
|                                                           |  |                          |       |  |          |   |       |               |  |   |              |  |  |            |      






|  |                                                                               
|- | ------------------------------------------------------------------------------
|* | Projected impact based on current interest rates as of
    September 30, 2005.



34



---



##### Table of Contents





|                                     |                                                |                                 |   |         |      |  |   |         |   |  |            |   |   |  |   |         |  
|------------------------------------ | ---------------------------------------------- | ------------------------------- | - | ------- | ---- |  | - | ------- | - |  | ---------- | - | - |  | - | ------- | -
|                                     |                                                | For the Year Ended December 31, |  
|                                     |                                                |                                 |  
|                                     |                                                | 2005                            |   |         | 2006 |  |   | 2007    |   |  | Thereafter |  
|                                     |                                                |                                 |   |         |      |  |   |         |   |  |            |  
|                                     |                                                | (In thousands, restated)        |  
|Non-trading interest rate contracts: |                                                |                                 |   |         |      |  |   |         |   |  |            |   |   |  |   |        
|Cash Flow Hedges:                    |                                                |                                 |   |         |      |  |   |         |   |  |            |   |   |  |   |        
|                                     | Notional maturity                              |                                 | $ | 500,000 |      |  | $ | 200,000 |   |  | $          |  |   |  | $ |        |  
|                                     | Weighted average coupon received on maturities |                                 |   | 2.60    | %    |  |   | 2.13    | % |  |            |  | % |  |   |        | %
|                                     | Weighted average time to maturity (months)     |                                 |   | 7       |      |  |   | 16      |   |  |            |  |   |  |   |        |  
|Fair Value Hedges:                   |                                                |                                 |   |         |      |  |   |         |   |  |            |   |   |  |   |        
|                                     | Notional maturity                              |                                 | $ |        |      |  | $ |        |   |  | $          |  |   |  | $ | 261,700 |  
|                                     | Weighted average coupon received on maturities |                                 |   |        | %    |  |   |        | % |  |            |  | % |  |   | 7.49    | %
|                                     | Weighted average time to maturity (months)     |                                 |   |        |      |  |   |        |   |  |            |  |   |  |   | 54      |  





|                                          |  |             |      |   |      |  |      |      |  |  |      |  
|----------------------------------------- |  | ----------- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                          |  | December 31 |     
|                                          |  |             |     
|                                          |  | 2004        |      |   | 2003 |  |      | 2002 | 
|                                          |  |             |      |   |      |  |      |      | 
|Rate earned on interest earning assets    |  |             | 5.02 | % |      |  | 5.58 | %    |  |  | 6.54 | %
|Rate paid on interest bearing liabilities |  |             | 1.90 |   |      |  | 2.14 |      |  |  | 2.76 |  
|Interest rate spread                      |  |             | 3.12 |   |      |  | 3.44 |      |  |  | 3.78 |  
|Net yield on earning assets               |  |             | 3.49 |   |      |  | 3.85 |      |  |  | 4.26 |  

35



---



##### Table of Contents



Consolidated Average Balance Sheets and Rate/ Volume
Variances




| |                         
| | ------------------------
| | Taxable Equivalent Basis

|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            |  |   |         |           |  |  |      |      | 
|---------------------------------------------------------------------- | ---------------------------------------------------------------------- | ------------------------------------------ | --------- | ---------- | ---------- |  | - | ------- | --------- |  | ------- | ---- | ---- | ------- | --------- | ---------- | ---------- |  | - | ------- | --------- |  |  | ---- | ---- | 
|                                                                       |                                                                        | Year Ended December 31                     |          
|                                                                       |                                                                        |                                            |          
|                                                                       |                                                                        | 2004                                       |           |            | 2003       | 
|                                                                       |                                                                        |                                            |           |            |            | 
|                                                                       |                                                                        | Average                                    |           |            | Income/    |  |   | Yield/  |           |  | Average |      |      | Income/ |           |            | Yield/     | 
|Yield/Rate Analysis                                                    |                                                                        | Balance                                    |           |            | Expense    |  |   | Rate    |           |  | Balance |      |      | Expense |           |            | Rate       | 
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|                                                                       |                                                                        | (Dollars in thousands, restated)           |          
|Assets                                                                 |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            |  |   |         |           |  |  |     
|Earning assets:                                                        |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            |  |   |         |           |  |  |     
|                                                                       | Loans[a]                                                               |                                            | $         | 17,999,355 |            |  | $ | 950,925 |           |  |         | 5.28 | %    |         | $         | 16,796,188 |            |  | $ | 984,045 |           |  |  | 5.86 | %   
|                                                                       | Investment securities available for sale[b]                            |                                            |           | 4,401,132  |            |  |   | 181,234 |           |  |         | 4.12 |      |         |           | 4,702,137  |            |  |   | 224,854 |           |  |  | 4.78 |     
|                                                                      
|                                                                       | Investment securities held to maturity                                 |                                            |           | 2,996,342  |            |  |   | 143,637 |           |  |         | 4.79 |      |         |           | 1,403,812  |            |  |   | 71,085  |           |  |  | 5.06 |     
|                                                                      
|                                                                       | Other[b]                                                               |                                            |           | 60,491     |            |  |   | 1,306   |           |  |         | 2.16 |      |         |           | 44,253     |            |  |   | 1,001   |           |  |  | 2.26 |     
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|                                                                       |                                                                        | Total earning assets                       |           |            | 25,457,320 |  |   |         | 1,277,102 |  |         |      | 5.02 |         |           |            | 22,946,390 |  |   |         | 1,280,985 |  |  |      | 5.58 | 
|Allowance for loan losses                                              |                                                                        |                                            | (251,713  | )          |            |  |   |         |           |  |         |      |      |         | (237,365  | )          |            |  |   |         |           |  |  |     
|Unrealized gain (loss) on investment securities available for
    sale |                                                                        |                                            | 24,865    |            |            |  |   |         |           |  |         |      |      |         | 107,937   |            |            |  |   |         |           |  |  |     
|                                                                      
|Cash and due from banks                                                |                                                                        |                                            | 675,339   |            |            |  |   |         |           |  |         |      |      |         | 625,052   |            |            |  |   |         |           |  |  |     
|Other assets                                                           |                                                                        |                                            | 1,754,817 |            |            |  |   |         |           |  |         |      |      |         | 1,700,705 |            |            |  |   |         |           |  |  |     
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|                                                                       |                                                                        | Total assets                               |           | $          | 27,660,628 |  |   |         |           |  |         |      |      |         |           | $          | 25,142,719 |  |   |         |           |  |  |      |      | 
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|                                                                      
|Liabilities and Shareholders Equity                                   |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            |  |   |         |           |  |  |     
|                                                                      
|Interest bearing liabilities:                                          |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            |  |   |         |           |  |  |     
|                                                                       | Interest bearing demand deposits                                       |                                            | $         | 60,211     |            |  |   | 1,134   |           |  |         | 1.88 |      |         | $         | 95,380     |            |  | $ | 1,051   |           |  |  | 1.10 |     
|                                                                      
|                                                                       | Savings deposits                                                       |                                            |           | 7,570,719  |            |  |   | 46,555  |           |  |         | 0.61 |      |         |           | 7,374,341  |            |  |   | 59,017  |           |  |  | 0.80 |     
|                                                                       | Certificates of deposit less than $100,000 and other time
    deposits |                                            |           | 2,004,181  |            |  |   | 63,321  |           |  |         | 3.16 |      |         |           | 1,900,864  |            |  |   | 67,716  |           |  |  | 3.56 |     
|                                                                      
|                                                                       | Certificates of deposit of $100,000 or more[b]                         |                                            |           | 1,779,343  |            |  |   | 48,768  |           |  |         | 2.74 |      |         |           | 1,436,716  |            |  |   | 46,968  |           |  |  | 3.27 |     
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|                                                                       |                                                                        | Total interest bearing deposits            |           |            | 11,414,454 |  |   |         | 159,778   |  |         |      | 1.40 |         |           |            | 10,807,301 |  |   |         | 174,752   |  |  |      | 1.62 | 
|                                                                       | Federal funds purchased                                                |                                            |           | 3,906,691  |            |  |   | 53,729  |           |  |         | 1.38 |      |         |           | 2,476,686  |            |  |   | 26,332  |           |  |  | 1.06 |     
|                                                                       | Securities sold under agreements to repurchase                         |                                            |           | 371,444    |            |  |   | 3,934   |           |  |         | 1.06 |      |         |           | 441,896    |            |  |   | 3,772   |           |  |  | 0.85 |     
|                                                                      
|                                                                       | Other short-term borrowings[b]                                         |                                            |           | 115,581    |            |  |   | 1,267   |           |  |         | 1.10 |      |         |           | 113,550    |            |  |   | 987     |           |  |  | 0.87 |     
|                                                                       | FHLB and other borrowings[b]                                           |                                            |           | 4,589,059  |            |  |   | 169,493 |           |  |         | 3.69 |      |         |           | 4,770,676  |            |  |   | 192,314 |           |  |  | 4.03 |     
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|                                                                       |                                                                        | Total interest bearing liabilities         |           |            | 20,397,229 |  |   |         | 388,201   |  |         |      | 1.90 |         |           |            | 18,610,109 |  |   |         | 398,157   |  |  |      | 2.14 | 
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|                                                                       | Net interest income/net interest spread                                |                                            |           |            |            |  |   | 888,901 |           |  |         | 3.12 | %    |         |           |            |            |  |   | 882,828 |           |  |  | 3.44 | %   
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|Noninterest bearing demand deposits                                    |                                                                        |                                            | 4,999,763 |            |            |  |   |         |           |  |         |      |      |         | 4,185,527 |            |            |  |   |         |           |  |  |     
|                                                                      
|Accrued expenses and other liabilities                                 |                                                                        |                                            | 294,688   |            |            |  |   |         |           |  |         |      |      |         | 381,373   |            |            |  |   |         |           |  |  |     
|                                                                      
|Shareholders equity                                                   |                                                                        |                                            | 1,968,948 |            |            |  |   |         |           |  |         |      |      |         | 1,965,710 |            |            |  |   |         |           |  |  |     
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|                                                                       |                                                                        | Total liabilities and shareholders equity |           | $          | 27,660,628 |  |   |         |           |  |         |      |      |         |           | $          | 25,142,719 |  |   |         |           |  |  |      |      | 
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|                                                                       | Net yield on earning assets                                            |                                            |           |            |            |  |   |         |           |  |         | 3.49 | %    |         |           |            |            |  |   |         |           |  |  | 3.85 | %   
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|Taxable equivalent adjustment:                                         |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            |  |   |         |           |  |  |     
|                                                                       | Loans                                                                  |                                            |           |            |            |  |   | 764     |           |  |         |      |      |         |           |            |            |  |   | 523     |           |  |  |      |     
|                                                                       | Investment securities available for sale                               |                                            |           |            |            |  |   | 159     |           |  |         |      |      |         |           |            |            |  |   | 1,280   |           |  |  |      |     
|                                                                      
|                                                                       | Investment securities held to maturity                                 |                                            |           |            |            |  |   | 2,613   |           |  |         |      |      |         |           |            |            |  |   | 1,868   |           |  |  |      |     
|                                                                      
|                                                                       | Other                                                                  |                                            |           |            |            |  |   | 40      |           |  |         |      |      |         |           |            |            |  |   | 27      |           |  |  |      |     
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|                                                                       |                                                                        | Total taxable equivalent adjustment        |           |            |            |  |   |         | 3,576     |  |         |      |      |         |           |            |            |  |   |         | 3,698     |  |  |      |      | 
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 
|                                                                       |                                                                        | Net interest income                        |           |            |            |  |   | $       | 885,325   |  |         |      |      |         |           |            |            |  |   | $       | 879,130   |  |  |      |      | 
|                                                                       |                                                                        |                                            |           |            |            |  |   |         |           |  |         |      |      |         |           |            |            | 






|    |  |                                                 
|--- |  | ------------------------------------------------
|[a] |  | Includes nonaccrual loans                       
|   
|[b] |  | Excludes adjustment for mark-to-market valuation

36



---



##### Table of Contents



Consolidated Average Balance Sheets and Rate/ Volume
Variances




| |                         
| | ------------------------
| | Taxable Equivalent Basis

|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|-------------------------------- | ---------- | - | ------------------------------------------------- | - | --------- | ------ |  |  | ------ | - |  | ---- | ------- | - | --- | - | -------- | ------ |  | - | ------- | - |  | --- | ------- | - |  | - | -------- | - |  | - | ------- | -
|Year Ended December 31           |            |   |                                                  
|                                 |            |   | Change in Interest Income/Expense Attributable to |  
|                                 |            |   |                                                  
|2002                             |            |   |                                                   |   |          
|                                 |            |   | 2004                                              |   |           | 2003   | 
|Average                          |            |   | Income/                                           |   |           | Yield/ |  |  |        |   |  |      |        
|Balance                          |            |   | Expense                                           |   |           | Rate   |  |  | Volume |   |  | Rate |         |   | Mix |   |          | Volume |  |   | Rate    |   |  | Mix |        
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|(Dollars in thousands, restated) |           
|$                                | 15,100,844 |   |                                                   | $ | 1,036,269 |        |  |  | 6.86   | % |  | $    | 70,506  |   |     | $ | (97,418  | )      |  | $ | (6,208  | ) |  | $   | 116,301 |   |  | $ | (151,008 | ) |  | $ | (17,517 | )
|                                 | 5,412,176  |   |                                                   |   | 310,949   |        |  |  | 5.75   |   |  |      | (14,388 | ) |     |   | (31,034  | )      |  |   | 1,802   |   |  |     | (40,827 | ) |  |   | (52,498  | ) |  |   | 7,230   |  
|                                 | 712,403    |   |                                                   |   | 42,735    |        |  |  | 6.00   |   |  |      | 80,582  |   |     |   | (3,790   | )      |  |   | (4,240  | ) |  |     | 41,485  |   |  |   | (6,697   | ) |  |   | (6,438  | )
|                                 | 42,254     |   |                                                   |   | 1,373     |        |  |  | 3.25   |   |  |      | 367     |   |     |   | (44      | )      |  |   | (18     | ) |  |     | 65      |   |  |   | (418     | ) |  |   | (19     | )
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|                                 | 21,267,677 |   |                                                   |   | 1,391,326 |        |  |  | 6.54   |   |  |      | 137,067 |   |     |   | (132,286 | )      |  |   | (8,664  | ) |  |     | 117,024 |   |  |   | (210,621 | ) |  |   | (16,744 | )
|                                 | (210,205   | ) |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 | 135,708    |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 | 602,608    |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 | 1,558,539  |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|$                                | 23,354,327 |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|                                
|                                
|                                
|$                                | 83,567     |   |                                                   | $ | 1,374     |        |  |  | 1.64   |   |  |      | (387    | ) |     |   | 744      |        |  |   | (274    | ) |  |     | 194     |   |  |   | (451     | ) |  |   | (66     | )
|                                 | 6,963,573  |   |                                                   |   | 94,528    |        |  |  | 1.36   |   |  |      | 1,571   |   |     |   | (14,011  | )      |  |   | (22     | ) |  |     | 5,586   |   |  |   | (38,996  | ) |  |   | (2,101  | )
|                                 | 2,272,227  |   |                                                   |   | 99,363    |        |  |  | 4.37   |   |  |      | 3,678   |   |     |   | (7,603   | )      |  |   | (470    | ) |  |     | (16,229 | ) |  |   | (18,405  | ) |  |   | 2,987   |  
|                                 | 1,294,230  |   |                                                   |   | 52,956    |        |  |  | 4.09   |   |  |      | 11,204  |   |     |   | (7,615   | )      |  |   | (1,789  | ) |  |     | 5,828   |   |  |   | (10,613  | ) |  |   | (1,203  | )
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|                                 | 10,613,597 |   |                                                   |   | 248,221   |        |  |  | 2.34   |   |  |      | 16,066  |   |     |   | (28,485  | )      |  |   | (2,555  | ) |  |     | (4,621  | ) |  |   | (68,465  | ) |  |   | (383    | )
|                                 | 1,842,137  |   |                                                   |   | 30,910    |        |  |  | 1.68   |   |  |      | 15,158  |   |     |   | 7,925    |        |  |   | 4,314   |   |  |     | 10,660  |   |  |   | (11,421  | ) |  |   | (3,817  | )
|                                 | 458,465    |   |                                                   |   | 6,431     |        |  |  | 1.40   |   |  |      | (599    | ) |     |   | 928      |        |  |   | (167    | ) |  |     | (232    | ) |  |   | (2,522   | ) |  |   | 95      |  
|                                 | 152,037    |   |                                                   |   | 2,544     |        |  |  | 1.67   |   |  |      | 18      |   |     |   | 261      |        |  |   | 1       |   |  |     | (643    | ) |  |   | (1,216   | ) |  |   | 302     |  
|                                 | 4,522,157  |   |                                                   |   | 197,108   |        |  |  | 4.36   |   |  |      | (7,319  | ) |     |   | (16,220  | )      |  |   | 718     |   |  |     | 10,835  |   |  |   | (14,923  | ) |  |   | (706    | )
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|                                 | 17,588,393 |   |                                                   |   | 485,214   |        |  |  | 2.76   |   |  |      | 23,324  |   |     |   | (35,591  | )      |  |   | 2,311   |   |  |     | 15,999  |   |  |   | (98,547  | ) |  |   | (4,509  | )
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|                                 |            |   |                                                   |   | 906,112   |        |  |  | 3.78   | % |  | $    | 113,743 |   |     | $ | (96,695  | )      |  | $ | (10,975 | ) |  | $   | 101,025 |   |  | $ | (112,074 | ) |  | $ | (12,235 | )
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|                                 | 3,527,777  |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 | 328,009    |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 | 1,910,148  |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|$                                | 23,354,327 |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|                                 |            |   |                                                   |   |           |        |  |  | 4.26   | % |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|                                
|                                 |            |   |                                                   |   | 530       |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 |            |   |                                                   |   | 2,108     |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 |            |   |                                                   |   | 1,710     |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 |            |   |                                                   |   | 55        |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|                                 |            |   |                                                   |   | 4,403     |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        
|                                 |            |   |                                                   | $ | 901,709   |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |         |   |  |   |          |   |  |   |         |  
|                                 |            |   |                                                   |   |           |        |  |  |        |   |  |      |         |   |     |   |          |        |  |   |         |   |  |     |        

37



---



##### Table of Contents



Provision for Loan Losses, Net Charge-Offs and Allowance for
Loan Losses










| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Large classified loans, nonaccrual loans and loans considered
    impaired are evaluated individually with specific reserves
    allocated based on managements review.                                                                                                                                                                                                                                                                                                         
|
| |  | Smaller homogenous nonaccrual and adversely classified loans are
    assigned a portion of the allowance based on loan grading.
    Smaller past due loans are assigned a portion of the allowance
    using a formula that is based on the severity of the delinquency.                                                                                                                                                                                                         
|
| |  | The remainder of the portfolio is allocated a portion of the
    allowance based on past loss experience and the economic
    conditions for the particular loan portfolio. Allocation weights
    are assigned based on the Companys historical loan loss
    experience, in accordance with SFAS No. 114, in each
    loan category, although a higher allocation weight may be used
    if current conditions indicate that loan losses may exceed
    historical experience.





38



---



##### Table of Contents





Summary of Loan Loss Experience


|                                                 |                                        |                 |            |         |         |   |            |         |         |   |            |         |         |      |            |         |        |   |            |        |        | 
|------------------------------------------------ | -------------------------------------- | --------------- | ---------- | ------- | ------- | - | ---------- | ------- | ------- | - | ---------- | ------- | ------- | ---- | ---------- | ------- | ------ | - | ---------- | ------ | ------ | 
|                                                 |                                        | 2004            |            |         | 2003    |   |            | 2002    |         |   | 2001       |         |         | 2000 |           
|                                                 |                                        |                 |            |         |         |   |            |         |         |   |            |         |         |      |           
|                                                 |                                        | (In thousands)  |            |         |        
|Average loans outstanding during the year        |                                        | $               | 17,999,355 |         |         | $ | 16,796,188 |         |         | $ | 15,100,844 |         |         | $    | 13,008,761 |         |        | $ | 12,112,471 |       
|                                                 |                                        |                 |            |         |         |   |            |         |         |   |            |         |         |      |           
|Allowance for loan losses, beginning of year     |                                        | $               | 244,882    |         |         | $ | 232,830    |         |         | $ | 191,393    |         |         | $    | 167,288    |         |        | $ | 151,211    |       
|Charge-offs:                                     |                                        |                 |            |         |         |   |            |         |         |   |            |         |         |      |            |         |        |   |            |       
|                                                 | Commercial, financial and agricultural |                 |            | 14,863  |         |   |            | 23,078  |         |   |            | 26,608  |         |      |            | 37,769  |        |   |            | 24,548 |       
|                                                 | Commercial real estate  mortgage      |                 |            | 4,564   |         |   |            | 2,836   |         |   |            | 3,155   |         |      |            | 796     |        |   |            | 196    |       
|                                                 | Real estate  construction             |                 |            | 246     |         |   |            | 2,290   |         |   |            | 3,735   |         |      |            | 1,487   |        |   |            | 140    |       
|                                                 | Residential real estate  mortgage     |                 |            | 1,778   |         |   |            | 1,547   |         |   |            | 1,887   |         |      |            | 1,672   |        |   |            | 1,182  |       
|                                                 | Equity lines of credit                 |                 |            | 2,437   |         |   |            | 2,973   |         |   |            | 1,343   |         |      |            | 462     |        |   |            | 34     |       
|                                                 | Equity loans                           |                 |            | 2,549   |         |   |            | 5,065   |         |   |            | 2,926   |         |      |            | 890     |        |   |            | 270    |       
|                                                 | Credit card                            |                 |            | 37,625  |         |   |            | 36,248  |         |   |            | 35,296  |         |      |            | 23,375  |        |   |            | 17,931 |       
|                                                 | Consumer installment  direct          |                 |            | 14,675  |         |   |            | 15,825  |         |   |            | 11,376  |         |      |            | 11,595  |        |   |            | 11,092 |       
|                                                 | Consumer installment  indirect        |                 |            | 38,860  |         |   |            | 33,865  |         |   |            | 23,061  |         |      |            | 16,613  |        |   |            | 13,800 |       
|                                                 |                                        |                 |            |         |         |   |            |         |         |   |            |         |         |      |           
|                                                 |                                        | Total           |            |         | 117,597 |   |            |         | 123,727 |   |            |         | 109,387 |      |            |         | 94,659 |   |            |        | 69,193 | 
|Recoveries:                                      |                                        |                 |            |         |         |   |            |         |         |   |            |         |         |      |            |         |        |   |            |       
|                                                 | Commercial, financial and agricultural |                 |            | 5,549   |         |   |            | 5,285   |         |   |            | 2,759   |         |      |            | 2,168   |        |   |            | 2,202  |       
|                                                 | Commercial real estate  mortgage      |                 |            | 274     |         |   |            | 149     |         |   |            | 211     |         |      |            | 116     |        |   |            | 23     |       
|                                                 | Real estate  construction             |                 |            | 110     |         |   |            | 472     |         |   |            | 54      |         |      |            | 3       |        |   |            | 5      |       
|                                                 | Residential real estate  mortgage     |                 |            | 133     |         |   |            | 207     |         |   |            | 390     |         |      |            | 236     |        |   |            | 160    |       
|                                                 | Equity lines of credit                 |                 |            | 271     |         |   |            | 54      |         |   |            | 127     |         |      |            | 4       |        |   |            | 4      |       
|                                                 | Equity loans                           |                 |            | 434     |         |   |            | 198     |         |   |            | 18      |         |      |            |        |        |   |            |       |       
|                                                 | Credit card                            |                 |            | 2,830   |         |   |            | 2,038   |         |   |            | 2,015   |         |      |            | 2,086   |        |   |            | 1,881  |       
|                                                 | Consumer installment  direct          |                 |            | 5,966   |         |   |            | 4,786   |         |   |            | 4,570   |         |      |            | 3,985   |        |   |            | 3,279  |       
|                                                 | Consumer installment  indirect        |                 |            | 10,420  |         |   |            | 6,271   |         |   |            | 4,349   |         |      |            | 4,975   |        |   |            | 4,578  |       
|                                                 |                                        |                 |            |         |         |   |            |         |         |   |            |         |         |      |           
|                                                 |                                        | Total           |            |         | 25,987  |   |            |         | 19,460  |   |            |         | 14,493  |      |            |         | 13,573 |   |            |        | 12,132 | 
|                                                 |                                        |                 |            |         |         |   |            |         |         |   |            |         |         |      |           
|                                                 |                                        | Net charge-offs |            |         | 91,610  |   |            |         | 104,267 |   |            |         | 94,894  |      |            |         | 81,086 |   |            |        | 57,061 | 
|                                                 | Provision charged to income            |                 |            | 105,658 |         |   |            | 119,681 |         |   |            | 136,331 |         |      |            | 106,241 |        |   |            | 65,578 |       
|Allowance for loans acquired (sold/ securitized) |                                        |                 | (591       | )       |         |   | (3,362     | )       |         |   |           |         |         |      | (1,050     | )       |        |   | 7,560      |       
|                                                 |                                        |                 |            |         |         |   |            |         |         |   |            |         |         |      |           
|Allowance for loan losses, end of year           |                                        | $               | 258,339    |         |         | $ | 244,882    |         |         | $ | 232,830    |         |         | $    | 191,393    |         |        | $ | 167,288    |       
|                                                 |                                        |                 |            |         |         |   |            |         |         |   |            |         |         |      |           
|Net charge-offs to average loans outstanding     |                                        |                 | .51        | %       |         |   | .62        | %       |         |   | .63        | %       |         |      | .62        | %       |        |   | .47        | %     

39



---



##### Table of Contents





Allocation of Allowance for Loan Losses


|                                       |             |                |         |            |       |  |       |        |            |   |         |        |  |            |       |      |       |   |            |        |  |  |       |            |  |        |         |        |       |  |       |      |  |   |         |        |  |  |       |      | 
|-------------------------------------- | ----------- | -------------- | ------- | ---------- | ----- |  | ----- | ------ | ---------- | - | ------- | ------ |  | ---------- | ----- | ---- | ----- | - | ---------- | ------ |  |  | ----- | ---------- |  | ------ | ------- | ------ | ----- |  | ----- | ---- |  | - | ------- | ------ |  |  | ----- | ---- | 
|                                       |             | December 31    |        
|                                       |             |                |        
|                                       |             | 2004           |         |            | 2003  |  |       | 2002   |            |   | 2001    |        |  | 2000       |      
|                                       |             |                |         |            |       |  |       |        |            |   |         |        |  |            |      
|                                       |             |                |         | Percent of |       |  |       |        | Percent of |   |         |        |  | Percent of |       |      |       |   | Percent of |        |  |  |       | Percent of | 
|                                       |             |                |         | Loans to   |       |  |       |        | Loans to   |   |         |        |  | Loans to   |       |      |       |   | Loans to   |        |  |  |       | Loans to   | 
|                                       |             |                |         | Total      |       |  |       |        | Total      |   |         |        |  | Total      |       |      |       |   | Total      |        |  |  |       | Total      | 
|                                       |             | Amount         |         |            | Loans |  |       | Amount |            |   | Loans   |        |  | Amount     |       |      | Loans |   |            | Amount |  |  | Loans |            |  | Amount |         |        | Loans | 
|                                       |             |                |         |            |       |  |       |        |            |   |         |        |  |            |       |      |       |   |            |        |  |  |       |            |  |        |         |        |       | 
|                                       |             | (In thousands) |        
|Commercial, financial and agricultural |             | $              | 55,077  |            |       |  | 19.9  | %      |            | $ | 59,308  |        |  |            | 20.6  | %    |       | $ | 57,685     |        |  |  | 22.4  | %          |  | $      | 54,400  |        |       |  | 27.0  | %    |  | $ | 66,454  |        |  |  | 29.7  | %   
|Real estate  construction             |             |                | 24,613  |            |       |  | 16.1  |        |            |   | 22,119  |        |  |            | 14.3  |      |       |   | 28,123     |        |  |  | 15.3  |            |  |        | 26,720  |        |       |  | 16.9  |      |  |   | 26,587  |        |  |  | 18.7  |     
|Real estate  mortgage:                |             |                |         |            |       |  |       |        |            |   |         |        |  |            |       |      |       |   |            |        |  |  |       |            |  |        |         |        |       |  |       |      |  |   |         |        |  |  |       |     
|                                       | Residential |                |         | 17,897     |       |  |       | 21.4   |            |   |         | 14,420 |  |            |       | 22.1 |       |   |            | 14,188 |  |  |       | 24.2       |  |        |         | 8,498  |       |  |       | 20.7 |  |   |         | 5,561  |  |  |       | 18.4 | 
|                                       | Commercial  |                |         | 29,011     |       |  |       | 20.9   |            |   |         | 31,746 |  |            |       | 22.6 |       |   |            | 23,642 |  |  |       | 19.5       |  |        |         | 18,787 |       |  |       | 17.6 |  |   |         | 18,760 |  |  |       | 17.5 | 
|Consumer                               |             |                | 131,741 |            |       |  | 21.7  |        |            |   | 117,289 |        |  |            | 20.4  |      |       |   | 109,192    |        |  |  | 18.6  |            |  |        | 82,988  |        |       |  | 17.8  |      |  |   | 49,926  |        |  |  | 15.7  |     
|                                       |             |                |         |            |       |  |       |        |            |   |         |        |  |            |       |      |       |   |            |        |  |  |       |            |  |        |         |        |       | 
|                                       |             | $              | 258,339 |            |       |  | 100.0 | %      |            | $ | 244,882 |        |  |            | 100.0 | %    |       | $ | 232,830    |        |  |  | 100.0 | %          |  | $      | 191,393 |        |       |  | 100.0 | %    |  | $ | 167,288 |        |  |  | 100.0 | %   
|                                       |             |                |         |            |       |  |       |        |            |   |         |        |  |            |       |      |       |   |            |        |  |  |       |            |  |        |         |        |       | 

Nonperforming Assets








40



---



##### Table of Contents





Nonperforming Assets


|                                                                     |                            |                |        |        |      |   |        |        |  |   |        |        |  |      |        |        |  |   |        |         | 
|-------------------------------------------------------------------- | -------------------------- | -------------- | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ |  | ---- | ------ | ------ |  | - | ------ | ------- | 
|                                                                     |                            | December 31    |       
|                                                                     |                            |                |       
|                                                                     |                            | 2004           |        |        | 2003 |   |        | 2002   |  |   | 2001   |        |  | 2000 |       
|                                                                     |                            |                |        |        |      |   |        |        |  |   |        |        |  |      |       
|                                                                     |                            | (In thousands) |       
|Nonaccrual loans                                                     |                            | $              | 49,947 |        |      | $ | 65,870 |        |  | $ | 81,671 |        |  | $    | 65,470 |        |  | $ | 86,168 |        
|Renegotiated loans                                                   |                            |                | 734    |        |      |   | 218    |        |  |   | 38     |        |  |      | 327    |        |  |   | 84     |        
|                                                                     |                            |                |        |        |      |   |        |        |  |   |        |        |  |      |       
|                                                                     | Total nonperforming loans  |                |        | 50,681 |      |   |        | 66,088 |  |   |        | 81,709 |  |      |        | 65,797 |  |   |        | 86,252  | 
|Other real estate                                                    |                            |                | 19,998 |        |      |   | 29,014 |        |  |   | 17,300 |        |  |      | 26,478 |        |  |   | 15,476 |        
|                                                                     |                            |                |        |        |      |   |        |        |  |   |        |        |  |      |       
|                                                                     | Total nonperforming assets |                | $      | 70,679 |      |   | $      | 95,102 |  |   | $      | 99,009 |  |      | $      | 92,275 |  |   | $      | 101,728 | 
|                                                                     |                            |                |        |        |      |   |        |        |  |   |        |        |  |      |       
|Accruing loans 90 days or more past due                              |                            | $              | 15,509 |        |      | $ | 26,159 |        |  | $ | 16,907 |        |  | $    | 17,577 |        |  | $ | 19,884 |        
|Total nonperforming loans as a percentage of loans                   |                            |                | .27    | %      |      |   | .38    | %      |  |   | .50    | %      |  |      | .48    | %      |  |   | .70    | %      
|Total nonperforming assets as a percentage of loans and ORE          |                            |                | .37    |        |      |   | .55    |        |  |   | .60    |        |  |      | .67    |        |  |   | .83    |        
|Accruing loans 90 days or more past due as a percentage of
    loans |                            |                | .08    |        |      |   | .15    |        |  |   | .10    |        |  |      | .13    |        |  |   | .16    |        



|                                                            |  |                |        |  |      |   |        |      |  |   |        | 
|----------------------------------------------------------- |  | -------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                                                            |  | 2004           |        |  | 2003 |   |        | 2002 | 
|                                                            |  |                |        |  |      |   |        |      | 
|                                                            |  | (In thousands) |       
|Principal balance                                           |  | $              | 49,947 |  |      | $ | 65,870 |      |  | $ | 81,671 | 
|Interest that would have been recorded under original terms |  |                | 4,819  |  |      |   | 6,228  |      |  |   | 7,979  | 
|Interest actually recorded                                  |  |                | 2,195  |  |      |   | 2,736  |      |  |   | 4,007  | 

Noninterest Income










41



---



##### Table of Contents











mark-to


Noninterest Expense












42



---



##### Table of Contents







Income Taxes




Accounting Pronouncements




| |                                            
| | -------------------------------------------
| | 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.


43



---



##### Table of Contents







| |                                                             
| | ------------------------------------------------------------
| | Application of Accounting Principles to
    Loan Commitments

Application of Accounting
Principles to Loan Commitments.




| |                     
| | --------------------
| | Share-Based Payments

Share-Based Payments.


Impact of Inflation and Changing Prices




Form 10-K


44



---



##### Table of Contents








|         |                                            
|-------- | -------------------------------------------
|ITEM 8  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Regulation S-X Regulation S-K


Compass Bancshares, Inc. and Subsidiaries


Financial Statements


|                                                                                                             |  |      |    | 
|------------------------------------------------------------------------------------------------------------ |  | ---- | -- | 
|                                                                                                             |  | Page |   
|                                                                                                             |  |      |   
|Report of Independent Registered Public
    Accounting Firm                                                  |  |      | 46 | 
|Consolidated Balance Sheets as of
    December 31, 2004 and 2003                                             |  |      | 48 | 
|Consolidated Statements of Income for the
    years ended December 31, 2004, 2003 and 2002                   |  |      | 49 | 
|Consolidated Statements of
    Shareholders Equity for the years ended December 31,
    2004, 2003 and 2002 |  |      | 50 | 
|Consolidated Statements of Cash Flows for
    the years ended December 31, 2004, 2003 and 2002               |  |      | 51 | 
|Notes to Consolidated Financial
    Statements  December 31, 2004, 2003 and 2002                            |  |      | 52 | 

45



---



##### Table of Contents






Report of Independent Registered Public Accounting Firm






Consolidated financial statements






Internal control over financial reporting


Internal Control 
Integrated Framework






46



---



##### Table of Contents













Internal Control  Integrated Framework Internal Control 
Integrated Framework


/s/ PricewaterhouseCoopers LLP






47



---



##### Table of Contents






Compass Bancshares, Inc. and Subsidiaries


Consolidated Balance Sheets


|                                                                                                                     |                                                                                     |                                                                                                                             |                            |                                            |         |            |            |            |         |            |            | 
|-------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ------- | ---------- | ---------- | ---------- | ------- | ---------- | ---------- | 
|                                                                                                                     |                                                                                     | December 31                                                                                                                 |                           
|                                                                                                                     |                                                                                     |                                                                                                                             |                           
|                                                                                                                     |                                                                                     | 2004                                                                                                                        |                            |                                            | 2003    |           
|                                                                                                                     |                                                                                     |                                                                                                                             |                            |                                            |         |           
|                                                                                                                     |                                                                                     | (In thousands, restated)                                                                                                    |                           
|ASSETS                                                                                                              
|Cash and due from banks                                                                                              |                                                                                     | $                                                                                                                           | 585,679                    |                                            |         | $          | 726,492    |           
|Federal funds sold and securities purchased under agreements to
    resell                                           |                                                                                     |                                                                                                                             | 46,948                     |                                            |         |            | 78,165     |           
|Trading account assets                                                                                               |                                                                                     |                                                                                                                             | 77,817                     |                                            |         |            | 86,219     |           
|Investment securities available for sale                                                                             |                                                                                     |                                                                                                                             | 4,398,184                  |                                            |         |            | 4,375,208  |           
|Investment securities held to maturity (fair value of $2,768,334
    and $2,949,023 for 2004 and 2003, respectively) |                                                                                     |                                                                                                                             | 2,767,099                  |                                            |         |            | 2,936,344  |           
|Loans                                                                                                                |                                                                                     |                                                                                                                             | 18,856,922                 |                                            |         |            | 17,365,802 |           
|Allowance for loan losses                                                                                            |                                                                                     |                                                                                                                             | (258,339                   | )                                          |         |            | (244,882   | )         
|                                                                                                                     |                                                                                     |                                                                                                                             |                            |                                            |         |           
|                                                                                                                     |                                                                                     |                                                                                                                             | Net loans                  |                                            |         | 18,598,583 |            |            |         | 17,120,920 |           
|Premises and equipment, net                                                                                          |                                                                                     |                                                                                                                             | 537,466                    |                                            |         |            | 527,295    |           
|Bank owned life insurance                                                                                            |                                                                                     |                                                                                                                             | 423,942                    |                                            |         |            | 409,188    |           
|Goodwill                                                                                                             |                                                                                     |                                                                                                                             | 302,619                    |                                            |         |            | 293,839    |           
|Other assets                                                                                                         |                                                                                     |                                                                                                                             | 443,579                    |                                            |         |            | 409,443    |           
|                                                                                                                     |                                                                                     |                                                                                                                             |                            |                                            |         |           
|                                                                                                                     |                                                                                     |                                                                                                                             |                            | Total assets                               |         | $          | 28,181,916 |            |         | $          | 26,963,113 | 
|                                                                                                                     |                                                                                     |                                                                                                                             |                            |                                            |         |           
|                                                                                                                    
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                
|Deposits:                                                                                                            |                                                                                     |                                                                                                                             |                            |                                            |         |            |            |           
|                                                                                                                     | Noninterest bearing                                                                 |                                                                                                                             | $                          | 5,476,140                                  |         |            | $          | 4,627,153  |        
|                                                                                                                     | Interest bearing                                                                    |                                                                                                                             |                            | 11,566,592                                 |         |            |            | 11,060,479 |        
|                                                                                                                     |                                                                                     |                                                                                                                             |                            |                                            |         |           
|                                                                                                                     |                                                                                     |                                                                                                                             | Total deposits             |                                            |         | 17,042,732 |            |            |         | 15,687,632 |           
|Federal funds purchased and securities sold under agreements to
    repurchase                                       |                                                                                     |                                                                                                                             | 4,532,004                  |                                            |         |            | 4,118,624  |           
|Other short-term borrowings                                                                                          |                                                                                     |                                                                                                                             | 175,771                    |                                            |         |            | 263,537    |           
|FHLB and other borrowings                                                                                            |                                                                                     |                                                                                                                             | 4,119,771                  |                                            |         |            | 4,794,935  |           
|Accrued expenses and other liabilities                                                                               |                                                                                     |                                                                                                                             | 255,293                    |                                            |         |            | 205,811    |           
|                                                                                                                     |                                                                                     |                                                                                                                             |                            |                                            |         |           
|                                                                                                                     |                                                                                     |                                                                                                                             |                            | Total liabilities                          |         |            | 26,125,571 |            |         |            | 25,070,539 | 
|Shareholders equity:                                                                                                |                                                                                     |                                                                                                                             |                            |                                            |         |            |            |           
|                                                                                                                     | Preferred stock (25,000,000 shares authorized)                                      |                                                                                                                             |                            |                                           |         |            |            |           |        
|                                                                                                                     | Common stock of $2 par value:                                                       |                                                                                                                             |                            |                                            |         |            |            |            |        
|                                                                                                                     |                                                                                     | Authorized  300,000,000 shares in 2004 and 2003
    Issued  132,903,225 shares in 2004 and
    131,569,085 shares in 2003 |                            |                                            | 265,806 |            |            |            | 263,138 |           
|                                                                                                                     | Treasury stock, at cost (9,639,194 shares in 2004 and
    9,482,900 shares in 2003) |                                                                                                                             |                            | (333,351                                   | )       |            |            | (317,669   | )      
|                                                                                                                     | Surplus                                                                             |                                                                                                                             |                            | 264,400                                    |         |            |            | 227,404    |        
|                                                                                                                     | Loans to finance stock purchases                                                    |                                                                                                                             |                            | (1,056                                     | )       |            |            | (809       | )      
|                                                                                                                     | Unearned restricted stock                                                           |                                                                                                                             |                            | (10,624                                    | )       |            |            | (6,485     | )      
|                                                                                                                     | Accumulated other comprehensive income (loss)                                       |                                                                                                                             |                            | (23,376                                    | )       |            |            | 37,306     |        
|                                                                                                                     | Retained earnings                                                                   |                                                                                                                             |                            | 1,894,546                                  |         |            |            | 1,689,689  |        
|                                                                                                                     |                                                                                     |                                                                                                                             |                            |                                            |         |           
|                                                                                                                     |                                                                                     |                                                                                                                             | Total shareholders equity |                                            |         | 2,056,345  |            |            |         | 1,892,574  |           
|                                                                                                                     |                                                                                     |                                                                                                                             |                            |                                            |         |           
|                                                                                                                     |                                                                                     |                                                                                                                             |                            | Total liabilities and shareholders equity |         | $          | 28,181,916 |            |         | $          | 26,963,113 | 
|                                                                                                                     |                                                                                     |                                                                                                                             |                            |                                            |         |           



48



---



##### Table of Contents






Compass Bancshares, Inc. and Subsidiaries


Consolidated Statements of Income


|                                            |                                                                                            |                                                     |         |         |           |   |         |         |           |   |         |           |           | 
|------------------------------------------- | ------------------------------------------------------------------------------------------ | --------------------------------------------------- | ------- | ------- | --------- | - | ------- | ------- | --------- | - | ------- | --------- | --------- | 
|                                            |                                                                                            | Year Ended December 31                              |        
|                                            |                                                                                            |                                                     |        
|                                            |                                                                                            | 2004                                                |         |         | 2003      |   |         | 2002    |          
|                                            |                                                                                            |                                                     |         |         |           |   |         |         |          
|                                            |                                                                                            | (In thousands, except per share data,               |        
|                                            |                                                                                            | restated)                                           |        
|Interest income:                            |                                                                                            |                                                     |         |         |           |   |         |         |           |   |         |          
|                                            | Interest and fees on loans                                                                 |                                                     | $       | 950,161 |           |   | $       | 983,522 |           |   | $       | 1,035,739 |          
|                                            | Interest on investment securities available for sale                                       |                                                     |         | 181,075 |           |   |         | 223,574 |           |   |         | 308,841   |          
|                                            | Interest on investment securities held to maturity                                         |                                                     |         | 141,024 |           |   |         | 69,217  |           |   |         | 41,025    |          
|                                            | Interest on federal funds sold and securities purchased under
    agreements to resell     |                                                     |         | 801     |           |   |         | 485     |           |   |         | 508       |          
|                                            | Interest on trading account assets                                                         |                                                     |         | 465     |           |   |         | 489     |           |   |         | 810       |          
|                                            |                                                                                            |                                                     |         |         |           |   |         |         |          
|                                            |                                                                                            | Total interest income                               |         |         | 1,273,526 |   |         |         | 1,277,287 |   |         |           | 1,386,923 | 
|Interest expense:                           |                                                                                            |                                                     |         |         |           |   |         |         |           |   |         |          
|                                            | Interest on deposits                                                                       |                                                     |         | 159,778 |           |   |         | 174,752 |           |   |         | 248,221   |          
|                                            | Interest on federal funds purchased and securities sold under
    agreements to repurchase |                                                     |         | 57,663  |           |   |         | 30,104  |           |   |         | 37,341    |          
|                                            | Interest on other short-term borrowings                                                    |                                                     |         | 1,267   |           |   |         | 987     |           |   |         | 2,544     |          
|                                            | Interest on FHLB and other borrowings                                                      |                                                     |         | 169,493 |           |   |         | 192,314 |           |   |         | 197,108   |          
|                                            |                                                                                            |                                                     |         |         |           |   |         |         |          
|                                            |                                                                                            | Total interest expense                              |         |         | 388,201   |   |         |         | 398,157   |   |         |           | 485,214   | 
|                                            |                                                                                            |                                                     |         |         |           |   |         |         |          
|                                            |                                                                                            | Net interest income                                 |         |         | 885,325   |   |         |         | 879,130   |   |         |           | 901,709   | 
|Provision for loan losses                   |                                                                                            |                                                     | 105,658 |         |           |   | 119,681 |         |           |   | 136,331 |          
|                                            |                                                                                            |                                                     |         |         |           |   |         |         |          
|                                            |                                                                                            | Net interest income after provision for loan losses |         |         | 779,667   |   |         |         | 759,449   |   |         |           | 765,378   | 
|Noninterest income:                         |                                                                                            |                                                     |         |         |           |   |         |         |           |   |         |          
|                                            | Service charges on deposit accounts                                                        |                                                     |         | 282,808 |           |   |         | 241,419 |           |   |         | 191,642   |          
|                                            | Card and merchant processing fees                                                          |                                                     |         | 75,548  |           |   |         | 60,067  |           |   |         | 51,220    |          
|                                            | Insurance commissions                                                                      |                                                     |         | 51,437  |           |   |         | 44,024  |           |   |         | 21,452    |          
|                                            | Retail investment sales                                                                    |                                                     |         | 31,316  |           |   |         | 27,440  |           |   |         | 26,105    |          
|                                            | Asset management fees                                                                      |                                                     |         | 22,666  |           |   |         | 21,994  |           |   |         | 20,149    |          
|                                            | Corporate and correspondent investment sales                                               |                                                     |         | 20,457  |           |   |         | 28,957  |           |   |         | 25,997    |          
|                                            | Bank owned life insurance                                                                  |                                                     |         | 17,169  |           |   |         | 16,928  |           |   |         | 18,839    |          
|                                            | Investment securities gains (losses), net                                                  |                                                     |         | 27,336  |           |   |         | (43     | )         |   |         | 4,233     |          
|                                            | Trading gains (losses) on economic hedges                                                  |                                                     |         | 11,053  |           |   |         | 9,320   |           |   |         | 71,006    |          
|                                            | Other                                                                                      |                                                     |         | 88,853  |           |   |         | 85,398  |           |   |         | 81,426    |          
|                                            |                                                                                            |                                                     |         |         |           |   |         |         |          
|                                            |                                                                                            | Total noninterest income                            |         |         | 628,643   |   |         |         | 535,504   |   |         |           | 512,069   | 
|Noninterest expense:                        |                                                                                            |                                                     |         |         |           |   |         |         |           |   |         |          
|                                            | Salaries, benefits and commissions                                                         |                                                     |         | 458,356 |           |   |         | 429,486 |           |   |         | 391,056   |          
|                                            | Equipment                                                                                  |                                                     |         | 76,169  |           |   |         | 72,302  |           |   |         | 65,429    |          
|                                            | Net occupancy                                                                              |                                                     |         | 65,791  |           |   |         | 61,607  |           |   |         | 57,137    |          
|                                            | Professional services                                                                      |                                                     |         | 57,380  |           |   |         | 56,518  |           |   |         | 53,146    |          
|                                            | Marketing                                                                                  |                                                     |         | 33,249  |           |   |         | 31,946  |           |   |         | 28,290    |          
|                                            | Communications                                                                             |                                                     |         | 21,859  |           |   |         | 24,548  |           |   |         | 22,140    |          
|                                            | Amortization of intangibles                                                                |                                                     |         | 6,543   |           |   |         | 7,302   |           |   |         | 9,175     |          
|                                            | Merger and integration                                                                     |                                                     |         | 1,275   |           |   |         | 1,853   |           |   |         | 2,842     |          
|                                            | Loss on prepayment of FHLB advances                                                        |                                                     |         | 25,136  |           |   |         |        |           |   |         |          |          
|                                            | Other                                                                                      |                                                     |         | 122,720 |           |   |         | 112,321 |           |   |         | 123,214   |          
|                                            |                                                                                            |                                                     |         |         |           |   |         |         |          
|                                            |                                                                                            | Total noninterest expense                           |         |         | 868,478   |   |         |         | 797,883   |   |         |           | 752,429   | 
|                                            |                                                                                            |                                                     |         |         |           |   |         |         |          
|                                            |                                                                                            | Net income before income tax expense                |         |         | 539,832   |   |         |         | 497,070   |   |         |           | 525,018   | 
|Income tax expense                          |                                                                                            |                                                     | 179,647 |         |           |   | 168,392 |         |           |   | 180,673 |          
|                                            |                                                                                            |                                                     |         |         |           |   |         |         |          
|                                            |                                                                                            | Net income                                          |         | $       | 360,185   |   |         | $       | 328,678   |   |         | $         | 344,345   | 
|                                            |                                                                                            |                                                     |         |         |           |   |         |         |          
|Basic earnings per share                    |                                                                                            | $                                                   | 2.95    |         |           | $ | 2.64    |         |           | $ | 2.70    |          
|Basic weighted average shares outstanding   |                                                                                            |                                                     | 122,254 |         |           |   | 124,656 |         |           |   | 127,575 |          
|Diluted earnings per share                  |                                                                                            | $                                                   | 2.87    |         |           | $ | 2.58    |         |           | $ | 2.65    |          
|Diluted weighted average shares outstanding |                                                                                            |                                                     | 125,416 |         |           |   | 127,186 |         |           |   | 129,850 |          



49



---



##### Table of Contents






Compass Bancshares, Inc. and Subsidiaries


Consolidated Statements of Shareholders Equity


Years Ended December 31, 2004, 2003 and 2002


|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |        |   |   |           |          |   |  |   |         |  
|-------------------------- | ----------------------------------------------------------------------------------------- | ------------------------ | ------- | ----- | -------- | - | -------- | -------- | - | ------------- | -------- | ------ | ------ | ------ | --------- | -------- | ----- | ------------- | ------- | ------- | ------ | - | ------- | ------ | - | - | --------- | -------- | - |  | - | ------- | -
|                           |                                                                                           |                          |         |       |          |   |          |          |   | Accumulated   |          |        |        |        |           |          |      
|                           |                                                                                           |                          |         |       |          |   |          |          |   | Other         |          |        |        |        |           |          |      
|                           |                                                                                           |                          |         |       |          |   |          |          |   | Comprehensive |          |        |        |        | Total     |          |       | Comprehensive |        
|                           |                                                                                           | Common                   |         |       | Treasury |   |          |          |   | Retained      |          |        | Income |        |           |          |       | Shareholders |         |         | Income |  
|                           |                                                                                           | Stock                    |         |       | Stock    |   |          | Surplus  |   |               | Earnings |        |        | (Loss) |           |          | Other |               |         | Equity  |        |   | (Loss)  |       
|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |       
|                           |                                                                                           | (In thousands, restated) |        
|Balance, December 31, 2001 |                                                                                           | $                        | 257,520 |       |          | $ | (50,146  | )        |   | $             | 160,441  |        |        | $      | 1,287,536 |          |       | $             | 69,938  |         |        | $ | (5,713  | )      |   | $ | 1,719,576 |          |   |  |   |        
|                           | Net income  2002                                                                         |                          |         |      |          |   |          |         |   |               |          |       |        |        |           | 344,345  |       |               |         |        |        |   |         |       |   |   |           | 344,345  |   |  | $ | 344,345 |  
|                           | Net change in unrealized gains on securities available for sale,
    net of tax           |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         | 72,515  |        |   |         |       |   |   |           | 72,515   |   |  |   | 72,515  |  
|                           | Net change in accumulated gains on cash-flow hedging
    instruments, net of tax          |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         | (6,344  | )      |   |         |       |   |   |           | (6,344   | ) |  |   | (6,344  | )
|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |       
|                           | Comprehensive income                                                                      |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |        |   |   |           |          |   |  | $ | 410,516 |  
|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |       
|                           | Common dividends declared ($1.00 per share)                                               |                          |         |      |          |   |          |         |   |               |          |       |        |        |           | (127,893 | )     |               |         |        |        |   |         |       |   |   |           | (127,893 | ) |  |   |         |  
|                           | Exercise of stock options and other issuances                                             |                          |         | 3,112 |          |   |          |         |   |               |          | 32,400 |        |        |           | (1,590   | )     |               |         |        |        |   |         |       |   |   |           | 33,922   |   |  |   |         |  
|                           | Issuance of restricted stock                                                              |                          |         | 192   |          |   |          |         |   |               |          | 2,572  |        |        |           |         |       |               |         |        |        |   |         | (2,764 | ) |   |           |         |   |  |   |         |  
|                           | Issuance of treasury stock for acquisitions, stock options and
    benefit plans          |                          |         |      |          |   |          | 51,318   |   |               |          | 4,494  |        |        |           |         |       |               |         |        |        |   |         |       |   |   |           | 55,812   |   |  |   |         |  
|                           | Repayments on loans to finance stock purchases, net of advances                           |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         |        |        |   |         | 1,836  |   |   |           | 1,836    |   |  |   |         |  
|                           | Amortization of restricted stock                                                          |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         |        |        |   |         | 2,201  |   |   |           | 2,201    |   |  |   |         |  
|                           | Purchase of treasury stock                                                                |                          |         |      |          |   |          | (130,587 | ) |               |          |       |        |        |           |         |       |               |         |        |        |   |         |       |   |   |           | (130,587 | ) |  |   |         |  
|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |       
|Balance, December 31, 2002 |                                                                                           |                          | 260,824 |       |          |   | (129,415 | )        |   |               | 199,907  |        |        |        | 1,502,398 |          |       |               | 136,109 |         |        |   | (4,440  | )      |   |   | 1,965,383 |          |   |  |   |        
|                           | Net income  2003                                                                         |                          |         |      |          |   |          |         |   |               |          |       |        |        |           | 328,678  |       |               |         |        |        |   |         |       |   |   |           | 328,678  |   |  | $ | 328,678 |  
|                           | Net change in unrealized gains on securities available for sale,
    net of tax           |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         | (68,238 | )      |   |         |       |   |   |           | (68,238  | ) |  |   | (68,238 | )
|                           | Net change in accumulated gains on cash-flow hedging
    instruments, net of tax          |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         | (30,565 | )      |   |         |       |   |   |           | (30,565  | ) |  |   | (30,565 | )
|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |       
|                           | Comprehensive income                                                                      |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |        |   |   |           |          |   |  | $ | 229,875 |  
|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |       
|                           | Common dividends declared ($1.12 per share)                                               |                          |         |      |          |   |          |         |   |               |          |       |        |        |           | (140,450 | )     |               |         |        |        |   |         |       |   |   |           | (140,450 | ) |  |   |         |  
|                           | Exercise of stock options and other issuances                                             |                          |         | 1,974 |          |   |          |         |   |               |          | 22,077 |        |        |           | (937     | )     |               |         |        |        |   |         |       |   |   |           | 23,114   |   |  |   |         |  
|                           | Issuance of restricted stock                                                              |                          |         | 340   |          |   |          |         |   |               |          | 6,206  |        |        |           |         |       |               |         |        |        |   |         | (6,546 | ) |   |           |         |   |  |   |         |  
|                           | Issuance of treasury stock for acquisitions, stock options and
    benefit plans          |                          |         |      |          |   |          | 24,973   |   |               |          | (786   | )      |        |           |         |       |               |         |        |        |   |         |       |   |   |           | 24,187   |   |  |   |         |  
|                           | Repayments on loans to finance stock purchases, net of advances                           |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         |        |        |   |         | 754    |   |   |           | 754      |   |  |   |         |  
|                           | Amortization of restricted stock                                                          |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         |        |        |   |         | 2,938  |   |   |           | 2,938    |   |  |   |         |  
|                           | Purchase of treasury stock                                                                |                          |         |      |          |   |          | (213,227 | ) |               |          |       |        |        |           |         |       |               |         |        |        |   |         |       |   |   |           | (213,227 | ) |  |   |         |  
|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |       
|Balance, December 31, 2003 |                                                                                           |                          | 263,138 |       |          |   | (317,669 | )        |   |               | 227,404  |        |        |        | 1,689,689 |          |       |               | 37,306  |         |        |   | (7,294  | )      |   |   | 1,892,574 |          |   |  |   |        
|                           | Net income  2004                                                                         |                          |         |      |          |   |          |         |   |               |          |       |        |        |           | 360,185  |       |               |         |        |        |   |         |       |   |   |           | 360,185  |   |  | $ | 360,185 |  
|                           | Net change in unrealized gains (losses) on securities
    available for sale, net of tax  |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         | (49,422 | )      |   |         |       |   |   |           | (49,422  | ) |  |   | (49,422 | )
|                           | Net change in accumulated gains (losses) on cash-flow hedging
    instruments, net of tax |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         | (9,095  | )      |   |         |       |   |   |           | (9,095   | ) |  |   | (9,095  | )
|                           | Net change in additional minimum pension liability, net of
    tax                        |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         | (2,165  | )      |   |         |       |   |   |           | (2,165   | ) |  |   | (2,165  | )
|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |       
|                           | Comprehensive income                                                                      |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |        |   |   |           |          |   |  | $ | 299,503 |  
|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |       
|                           | Common dividends declared ($1.25 per share)                                               |                          |         |      |          |   |          |         |   |               |          |       |        |        |           | (153,970 | )     |               |         |        |        |   |         |       |   |   |           | (153,970 | ) |  |   |         |  
|                           | Exercise of stock options and other issuances, net of shares
    surrendered              |                          |         | 2,362 |          |   |          |         |   |               |          | 28,481 |        |        |           | (1,358   | )     |               |         |        |        |   |         |       |   |   |           | 29,485   |   |  |   |         |  
|                           | Issuance of restricted stock, net of cancellations                                        |                          |         | 306   |          |   |          |         |   |               |          | 8,265  |        |        |           |         |       |               |         |        |        |   |         | (8,571 | ) |   |           |         |   |  |   |         |  
|                           | Issuance of treasury stock for acquisitions, stock options
    and benefit plans          |                          |         |      |          |   |          | 18,147   |   |               |          | 250    |        |        |           |         |       |               |         |        |        |   |         |       |   |   |           | 18,397   |   |  |   |         |  
|                           | Advances on loans to finance stock purchases, net of
    repayments                       |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         |        |        |   |         | (247   | ) |   |           | (247     | ) |  |   |         |  
|                           | Amortization of restricted stock                                                          |                          |         |      |          |   |          |         |   |               |          |       |        |        |           |         |       |               |         |        |        |   |         | 4,432  |   |   |           | 4,432    |   |  |   |         |  
|                           | Purchase of treasury stock                                                                |                          |         |      |          |   |          | (33,829  | ) |               |          |       |        |        |           |         |       |               |         |        |        |   |         |       |   |   |           | (33,829  | ) |  |   |         |  
|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |       
|Balance, December 31, 2004 |                                                                                           | $                        | 265,806 |       |          | $ | (333,351 | )        |   | $             | 264,400  |        |        | $      | 1,894,546 |          |       | $             | (23,376 | )       |        | $ | (11,680 | )      |   | $ | 2,056,345 |          |   |  |   |        
|                           |                                                                                           |                          |         |       |          |   |          |          |   |               |          |        |        |        |           |          |       |               |         |         |        |   |         |       



50



---



##### Table of Contents






Compass Bancshares, Inc. and Subsidiaries


Consolidated Statements of Cash Flows


|                                                   |                                                                                                                                                         |                                                                         |                                           |            |         |            |         |            |         |            |         |            |         |          |  
|-------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | ----------------------------------------- | ---------- | ------- | ---------- | ------- | ---------- | ------- | ---------- | ------- | ---------- | ------- | -------- | -
|                                                   |                                                                                                                                                         | Year Ended December 31                                                  |                                          
|                                                   |                                                                                                                                                         |                                                                         |                                          
|                                                   |                                                                                                                                                         | 2004                                                                    |                                           |            | 2003    |            |         | 2002       |        
|                                                   |                                                                                                                                                         |                                                                         |                                           |            |         |            |         |            |        
|                                                   |                                                                                                                                                         | (In thousands, restated)                                                |                                          
|Operating Activities:                              |                                                                                                                                                         |                                                                         |                                           |            |         |            |         |            |         |            |         |           
|                                                   | Net income                                                                                                                                              |                                                                         | $                                         | 360,185    |         |            | $       | 328,678    |         |            | $       | 344,345    |        
|                                                   | Adjustments to reconcile net income to cash provided by
    operations:                                                                                 |                                                                         |                                           |            |         |            |         |            |         |            |         |            |        
|                                                   |                                                                                                                                                         | Depreciation and amortization                                           |                                           |            | 108,845 |            |         |            | 117,586 |            |         |            | 119,135 |         
|                                                   |                                                                                                                                                         | Accretion of discount and loan fees                                     |                                           |            | (18,550 | )          |         |            | (20,057 | )          |         |            | (31,585 | )       
|                                                   |                                                                                                                                                         | Provision for loan losses                                               |                                           |            | 105,658 |            |         |            | 119,681 |            |         |            | 136,331 |         
|                                                   |                                                                                                                                                         | Net change in trading account assets                                    |                                           |            | 11,004  |            |         |            | 26,542  |            |         |            | (39,399 | )       
|                                                   |                                                                                                                                                         | Deferred tax expense (benefit)                                          |                                           |            | (2,243  | )          |         |            | (8,770  | )          |         |            | 31,180  |         
|                                                   |                                                                                                                                                         | Net (gain) loss on sale of investment securities available
    for sale |                                           |            | (27,336 | )          |         |            | 43      |            |         |            | (4,233  | )       
|                                                   |                                                                                                                                                         | Loss on prepayment of FHLB advances                                     |                                           |            | 25,136  |            |         |            |        |            |         |            |        |         
|                                                   |                                                                                                                                                         | Gain on sale of branches                                                |                                           |            |        |            |         |            | (2,128  | )          |         |            |        |         
|                                                   |                                                                                                                                                         | (Increase) decrease in other assets                                     |                                           |            | (76,086 | )          |         |            | (86,032 | )          |         |            | 33,796  |         
|                                                   |                                                                                                                                                         | Increase (decrease) in other liabilities                                |                                           |            | 27,917  |            |         |            | (65,852 | )          |         |            | (42,248 | )       
|                                                   |                                                                                                                                                         |                                                                         |                                           |            |         |            |         |            |        
|                                                   |                                                                                                                                                         |                                                                         | Net cash provided by operating activities |            |         | 514,530    |         |            |         | 409,691    |         |            |         | 547,322  |  
|Investing Activities:                              |                                                                                                                                                         |                                                                         |                                           |            |         |            |         |            |         |            |         |           
|                                                   | Proceeds from maturities/calls of investment securities held to
    maturity                                                                            |                                                                         |                                           | 736,367    |         |            |         | 706,752    |         |            |         | 427,860    |        
|                                                   | Purchases of investment securities held to maturity                                                                                                     |                                                                         |                                           |           |         |            |         |           |         |            |         | (201,400   | )      
|                                                   | Proceeds from sales of investment securities available for sale                                                                                         |                                                                         |                                           | 814,036    |         |            |         | 268,263    |         |            |         | 582,274    |        
|                                                   | Proceeds from maturities/calls of investment securities
    available for sale                                                                          |                                                                         |                                           | 846,600    |         |            |         | 2,229,999  |         |            |         | 2,072,280  |        
|                                                   | Purchases of investment securities available for sale                                                                                                   |                                                                         |                                           | (1,731,966 | )       |            |         | (4,237,230 | )       |            |         | (798,003   | )      
|                                                   | Net (increase) decrease in federal funds sold and securities
    purchased under agreements to resell                                                   |                                                                         |                                           | 31,217     |         |            |         | (53,343    | )       |            |         | (5,621     | )      
|                                                   | Net increase in loan portfolio                                                                                                                          |                                                                         |                                           | (2,188,966 | )       |            |         | (2,197,523 | )       |            |         | (2,863,844 | )      
|                                                   | Net cash received (paid) in acquisitions/dispositions                                                                                                   |                                                                         |                                           | 268        |         |            |         | (24,382    | )       |            |         | (5,292     | )      
|                                                   | Purchases of premises and equipment, net                                                                                                                |                                                                         |                                           | (69,265    | )       |            |         | (87,849    | )       |            |         | (83,587    | )      
|                                                   | Proceeds from sales of other real estate owned                                                                                                          |                                                                         |                                           | 30,845     |         |            |         | 23,455     |         |            |         | 17,716     |        
|                                                   |                                                                                                                                                         |                                                                         |                                           |            |         |            |         |            |        
|                                                   |                                                                                                                                                         |                                                                         | Net cash used by investing activities     |            |         | (1,530,864 | )       |            |         | (3,371,858 | )       |            |         | (857,617 | )
|Financing Activities:                              |                                                                                                                                                         |                                                                         |                                           |            |         |            |         |            |         |            |         |           
|                                                   | Net increase in demand deposits, NOW accounts and savings
    accounts                                                                                  |                                                                         |                                           | 725,615    |         |            |         | 1,191,274  |         |            |         | 771,239    |        
|                                                   | Net increase (decrease) in time deposits                                                                                                                |                                                                         |                                           | 628,458    |         |            |         | (562,915   | )       |            |         | 618,833    |        
|                                                   | Net increase (decrease) in federal funds purchased and
    securities sold under agreements to repurchase                                               |                                                                         |                                           | 413,380    |         |            |         | 2,775,424  |         |            |         | (1,579,602 | )      
|                                                   | Net decrease in other short-term borrowings                                                                                                             |                                                                         |                                           | (87,766    | )       |            |         | (36,856    | )       |            |         | (260,368   | )      
|                                                   | Proceeds from FHLB advances and other borrowings                                                                                                        |                                                                         |                                           | 1,125,100  |         |            |         | 1,300,000  |         |            |         | 800,000    |        
|                                                   | Repayment of FHLB advances and other borrowings                                                                                                         |                                                                         |                                           | (1,793,140 | )       |            |         | (1,380,539 | )       |            |         | (100,427   | )      
|                                                   | Issuance (redemption) of guaranteed preferred beneficial
    interests in Companys junior subordinated deferrable
    interest debentures, net of fees |                                                                         |                                           | (23,000    | )       |            |         | (12,000    | )       |            |         | 292,125    |        
|                                                   | Common dividends paid                                                                                                                                   |                                                                         |                                           | (118,533   | )       |            |         | (139,376   | )       |            |         | (128,183   | )      
|                                                   | Purchase of treasury stock                                                                                                                              |                                                                         |                                           | (33,829    | )       |            |         | (213,227   | )       |            |         | (130,587   | )      
|                                                   | Issuance of treasury stock for benefit plans and stock options                                                                                          |                                                                         |                                           | 9,998      |         |            |         | 8,466      |         |            |         | 10,056     |        
|                                                   | Repayment of loans to finance stock purchases                                                                                                           |                                                                         |                                           | 616        |         |            |         | 1,126      |         |            |         | 5,404      |        
|                                                   | Proceeds from exercise of stock options                                                                                                                 |                                                                         |                                           | 28,622     |         |            |         | 22,742     |         |            |         | 30,354     |        
|                                                   |                                                                                                                                                         |                                                                         |                                           |            |         |            |         |            |        
|                                                   |                                                                                                                                                         |                                                                         | Net cash provided by financing activities |            |         | 875,521    |         |            |         | 2,954,119  |         |            |         | 328,844  |  
|                                                   |                                                                                                                                                         |                                                                         |                                           |            |         |            |         |            |        
|Net increase (decrease) in cash and due from banks |                                                                                                                                                         |                                                                         | (140,813                                  | )          |         |            | (8,048  | )          |         |            | 18,549  |           
|Cash and due from banks at beginning of the year   |                                                                                                                                                         |                                                                         | 726,492                                   |            |         |            | 734,540 |            |         |            | 715,991 |           
|                                                   |                                                                                                                                                         |                                                                         |                                           |            |         |            |         |            |        
|Cash and due from banks at end of the year         |                                                                                                                                                         | $                                                                       | 585,679                                   |            |         | $          | 726,492 |            |         | $          | 734,540 |           
|                                                   |                                                                                                                                                         |                                                                         |                                           |            |         |            |         |            |        



51



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries





Notes to Consolidated Financial Statements


December 31, 2004, 2003 and 2002




|    |            
|--- | -----------
|(1) | Restatement

Accounting for Derivative Instruments and
Hedging Activities


Form 10-K Form 10-Q.


mark-to


52



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                                            |  |                         |            |  |                         |   |            |            |  |   |            |  |  |   |            | 
|------------------------------------------- |  | ----------------------- | ---------- |  | ----------------------- | - | ---------- | ---------- |  | - | ---------- |  |  | - | ---------- | 
|                                            |  | As of December 31, 2004 |            |  | As of December 31, 2003 |  
|                                            |  |                         |            |  |                         |  
|                                            |  | As                      |            |  |                         |   | As         |            |  |  
|                                            |  | Previously              |            |  | As                      |   |            | Previously |  |   | As         | 
|                                            |  | Reported                |            |  | Restated                |   |            | Reported   |  |   | Restated   | 
|                                            |  |                         |            |  |                         |   |            |            |  |   |            | 
|                                            |  | (In thousands)          |           
|Trading account assets                      |  | $                       | 60,156     |  |                         | $ | 77,817     |            |  | $ | 59,024     |  |  | $ | 86,219     | 
|Other assets                                |  |                         | 463,952    |  |                         |   | 443,579    |            |  |   | 436,638    |  |  |   | 409,443    | 
|Total assets                                |  |                         | 28,184,628 |  |                         |   | 28,181,916 |            |  |   | 26,963,113 |  |  |   | 26,963,113 | 
|Interest bearing deposits                   |  |                         | 11,563,011 |  |                         |   | 11,566,592 |            |  |   | 11,060,670 |  |  |   | 11,060,479 | 
|Total deposits                              |  |                         | 17,039,151 |  |                         |   | 17,042,732 |            |  |   | 15,687,823 |  |  |   | 15,687,632 | 
|FHLB and other borrowings                   |  |                         | 4,140,972  |  |                         |   | 4,119,771  |            |  |   | 4,827,814  |  |  |   | 4,794,935  | 
|Accrued expenses and other liabilities      |  |                         | 251,477    |  |                         |   | 255,293    |            |  |   | 193,432    |  |  |   | 205,811    | 
|Total liabilities                           |  |                         | 26,139,375 |  |                         |   | 26,125,571 |            |  |   | 25,091,230 |  |  |   | 25,070,539 | 
|Retained earnings                           |  |                         | 1,883,454  |  |                         |   | 1,894,546  |            |  |   | 1,668,998  |  |  |   | 1,689,689  | 
|Total shareholders equity                  |  |                         | 2,045,253  |  |                         |   | 2,056,345  |            |  |   | 1,871,883  |  |  |   | 1,892,574  | 
|Total liabilities and shareholderss equity |  |                         | 28,184,628 |  |                         |   | 28,181,916 |            |  |   | 26,963,113 |  |  |   | 26,963,113 | 






|                                                    |                  |                                       |         |      |          |   |         |            |  |   |          |      |  |            |         |      |          |   |         |      |  |   |         |      | 
|--------------------------------------------------- | ---------------- | ------------------------------------- | ------- | ---- | -------- | - | ------- | ---------- |  | - | -------- | ---- |  | ---------- | ------- | ---- | -------- | - | ------- | ---- |  | - | ------- | ---- | 
|                                                    |                  | For the Year Ended December 31,       |        
|                                                    |                  |                                       |        
|                                                    |                  | 2004                                  |         |      | 2003     |   |         | 2002       | 
|                                                    |                  |                                       |         |      |          |   |         |            | 
|                                                    |                  | As                                    |         |      |          |   | As      |            |  |   |          | As   |  |            |        
|                                                    |                  | Previously                            |         |      | As       |   |         | Previously |  |   | As       |      |  | Previously |         |      | As       |  
|                                                    |                  | Reported                              |         |      | Restated |   |         | Reported   |  |   | Restated |      |  | Reported   |         |      | Restated |  
|                                                    |                  |                                       |         |      |          |   |         |            |  |   |          |      |  |            |         |      |          |  
|                                                    |                  | (In thousands, except per share data) |        
|Interest on deposits                                |                  | $                                     | 152,250 |      |          | $ | 159,778 |            |  | $ | 164,049  |      |  | $          | 174,752 |      |          | $ | 239,694 |      |  | $ | 248,221 |     
|Interest on FHLB and other borrowings               |                  |                                       | 150,518 |      |          |   | 169,493 |            |  |   | 172,617  |      |  |            | 192,314 |      |          |   | 182,489 |      |  |   | 197,108 |     
|Total interest expense                              |                  |                                       | 361,698 |      |          |   | 388,201 |            |  |   | 367,757  |      |  |            | 398,157 |      |          |   | 462,068 |      |  |   | 485,214 |     
|Net interest income                                 |                  |                                       | 911,828 |      |          |   | 885,325 |            |  |   | 909,530  |      |  |            | 879,130 |      |          |   | 924,855 |      |  |   | 901,709 |     
|Net interest income after provision for loan losses |                  |                                       | 806,170 |      |          |   | 779,667 |            |  |   | 789,849  |      |  |            | 759,449 |      |          |   | 788,524 |      |  |   | 765,378 |     
|Trading gains (losses) on economic hedges           |                  |                                       |        |      |          |   | 11,053  |            |  |   |         |      |  |            | 9,320   |      |          |   |        |      |  |   | 71,006  |     
|Total noninterest income                            |                  |                                       | 617,590 |      |          |   | 628,643 |            |  |   | 526,184  |      |  |            | 535,504 |      |          |   | 441,063 |      |  |   | 512,069 |     
|Net income before income tax expense                |                  |                                       | 555,282 |      |          |   | 539,832 |            |  |   | 518,150  |      |  |            | 497,070 |      |          |   | 477,158 |      |  |   | 525,018 |     
|Income tax expense                                  |                  |                                       | 185,498 |      |          |   | 179,647 |            |  |   | 176,282  |      |  |            | 168,392 |      |          |   | 162,759 |      |  |   | 180,673 |     
|Net income                                          |                  | $                                     | 369,784 |      |          | $ | 360,185 |            |  | $ | 341,868  |      |  | $          | 328,678 |      |          | $ | 314,399 |      |  | $ | 344,345 |     
|Per common share:                                   |                  |                                       |         |      |          |   |         |            |  |   |          |      |  |            |         |      |          |   |         |      |  |   |         |     
|                                                    | Basic earnings   |                                       | $       | 3.02 |          |   | $       | 2.95       |  |   | $        | 2.74 |  |            | $       | 2.64 |          |   | $       | 2.46 |  |   | $       | 2.70 | 
|                                                    | Diluted earnings |                                       | $       | 2.95 |          |   | $       | 2.87       |  |   | $        | 2.69 |  |            | $       | 2.58 |          |   | $       | 2.42 |  |   | $       | 2.65 | 




53



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                    |  |                                 |           |  |             |   |            |          |  |   |             |            |  |          |           |  |             |   |           |  |  |   |           | 
|----------------------------------- |  | ------------------------------- | --------- |  | ----------- | - | ---------- | -------- |  | - | ----------- | ---------- |  | -------- | --------- |  | ----------- | - | --------- |  |  | - | --------- | 
|                                    |  | For the Year Ended December 31, |          
|                                    |  |                                 |          
|                                    |  | 2004                            |           |  | 2003        |   |            | 2002     | 
|                                    |  |                                 |           |  |             |   |            |          | 
|                                    |  | As                              |           |  |             |   | As         |          |  |   |             | As         |  |          |          
|                                    |  | Previously                      |           |  |             |   | Previously |          |  |   |             | Previously |  |          |          
|                                    |  | Reported                        |           |  | As Restated |   |            | Reported |  |   | As Restated |            |  | Reported |           |  | As Restated |  
|                                    |  |                                 |           |  |             |   |            |          |  |   |             |            |  |          |           |  |             |  
|                                    |  | (In thousands)                  |          
|Balance, beginning of period        |  | $                               | 1,871,883 |  |             | $ | 1,892,574  |          |  | $ | 1,931,502   |            |  | $        | 1,965,383 |  |             | $ | 1,715,641 |  |  | $ | 1,719,576 | 
|Increase attributable to net income |  |                                 | 369,784   |  |             |   | 360,185    |          |  |   | 341,868     |            |  |          | 328,678   |  |             |   | 314,399   |  |  |   | 344,345   | 
|Balance, end of period              |  |                                 | 2,045,253 |  |             |   | 2,056,345  |          |  |   | 1,871,883   |            |  |          | 1,892,574 |  |             |   | 1,931,502 |  |  |   | 1,965,383 | 








|    |                                                                        
|--- | -----------------------------------------------------------------------
|(2) | Nature of Operations and Summary of Significant Accounting
    Policies







| |                      
| | ---------------------
| | Basis of Presentation





| |                     
| | --------------------
| | Nature of Operations





| |                 
| | ----------------
| | Use of Estimates



54



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




| |           
| | ----------
| | Securities









| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | Securities Purchased Under Agreements to Resell and
    Securities Sold Under Agreements to Repurchase





| |      
| | -----
| | Loans







55



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |                          
| | -------------------------
| | Allowance for Loan Losses







| |                                
| | -------------------------------
| | Merger and Integration Expenses





| |            
| | -----------
| | Intangibles





| |                        
| | -----------------------
| | Other Real Estate Owned





| |                       
| | ----------------------
| | Premises and Equipment



56



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |             
| | ------------
| | Income Taxes





| |                                                  
| | -------------------------------------------------
| | Accounting for Derivatives and Hedging Activities









57



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)








| |                                        
| | ---------------------------------------
| | Securitization and Sales of Receivables





| |                  
| | -----------------
| | Reclassifications





| |                   
| | ------------------
| | Earnings per Share





| |                         
| | ------------------------
| | Stock-Based Compensation



58



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)


Accounting for Stock Issued to Employees










|                            |                                                                                                                                     |                        |   |         |      |  |   |         |  |  |   |         | 
|--------------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | - | ------- | ---- |  | - | ------- |  |  | - | ------- | 
|                            |                                                                                                                                     | Year Ended December 31 |  
|                            |                                                                                                                                     |                        |  
|                            |                                                                                                                                     | 2004                   |   |         | 2003 |  |   | 2002    | 
|                            |                                                                                                                                     |                        |   |         |      |  |   |         | 
|Net income:                 |                                                                                                                                     |                        |   |         |      |  |   |         |  |  |   |        
|                            | As reported                                                                                                                         |                        | $ | 360,185 |      |  | $ | 328,678 |  |  | $ | 344,345 | 
|                            | Deduct: Total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    tax |                        |   | 9,402   |      |  |   | 10,791  |  |  |   | 14,488  | 
|                            |                                                                                                                                     |                        |   |         |      |  |   |         | 
|                            | Pro forma net income                                                                                                                |                        | $ | 350,783 |      |  | $ | 317,887 |  |  | $ | 329,857 | 
|                            |                                                                                                                                     |                        |   |         |      |  |   |         | 
|Basic earnings per share:   |                                                                                                                                     |                        |   |         |      |  |   |         |  |  |   |        
|                            | As reported                                                                                                                         |                        | $ | 2.95    |      |  | $ | 2.64    |  |  | $ | 2.70    | 
|                            | Pro forma                                                                                                                           |                        |   | 2.87    |      |  |   | 2.55    |  |  |   | 2.59    | 
|Diluted earnings per share: |                                                                                                                                     |                        |   |         |      |  |   |         |  |  |   |        
|                            | As reported                                                                                                                         |                        | $ | 2.87    |      |  | $ | 2.58    |  |  | $ | 2.65    | 
|                            | Pro forma                                                                                                                           |                        |   | 2.80    |      |  |   | 2.50    |  |  |   | 2.54    | 

59



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)


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




| |                                                             
| | ------------------------------------------------------------
| | Application of Accounting Principles to
    Loan Commitments

Application of Accounting
Principles to Loan Commitments


60



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |                     
| | --------------------
| | Share-Based Payments

Share-Based Payments




|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(3) | Investment Securities Held to Maturity and Investment
    Securities Available for Sale



|                                        |                                           |                |   |           |            |  |          |           |           |  |            |           |           |  |   |           |           | 
|--------------------------------------- | ----------------------------------------- | -------------- | - | --------- | ---------- |  | -------- | --------- | --------- |  | ---------- | --------- | --------- |  | - | --------- | --------- | 
|                                        |                                           | 2004           |   |           | 2003       | 
|                                        |                                           |                |   |           |            | 
|                                        |                                           | Carrying       |   |           |            |  | Carrying |           |           | 
|                                        |                                           | Amount         |   |           | Fair Value |  |          | Amount    |           |  | Fair Value |          
|                                        |                                           |                |   |           |            |  |          |           |           |  |            |          
|                                        |                                           | (In thousands) |  
|Investment securities held to maturity: |                                           |                |   |           |            |  |          |           |           |  |            |           |           |  |   |          
|                                        | U.S. Government agencies and corporations |                | $ | 60,860    |            |  | $        | 61,387    |           |  | $          | 72,696    |           |  | $ | 72,548    |          
|                                        | Mortgage-backed pass-through securities   |                |   | 1,125,080 |            |  |          | 1,133,696 |           |  |            | 1,362,745 |           |  |   | 1,377,698 |          
|                                        | Collateralized mortgage obligations       |                |   | 1,167,287 |            |  |          | 1,163,914 |           |  |            | 883,625   |           |  |   | 880,464   |          
|                                        | Asset-backed securities                   |                |   | 320,058   |            |  |          | 312,864   |           |  |            | 510,892   |           |  |   | 508,985   |          
|                                        | States and political subdivisions         |                |   | 93,714    |            |  |          | 96,373    |           |  |            | 105,886   |           |  |   | 108,828   |          
|                                        | Other                                     |                |   | 100       |            |  |          | 100       |           |  |            | 500       |           |  |   | 500       |          
|                                        |                                           |                |   |           |            |  |          |           |           |  |            |          
|                                        |                                           | Total          |   | $         | 2,767,099  |  |          | $         | 2,768,334 |  |            | $         | 2,936,344 |  |   | $         | 2,949,023 | 
|                                        |                                           |                |   |           |            |  |          |           |           |  |            |          

61



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)


|                                          |                   |                                                                       |       |           |           |           |  |            |           |           |      |         |           |           |  |         |           |           | 
|----------------------------------------- | ----------------- | --------------------------------------------------------------------- | ----- | --------- | --------- | --------- |  | ---------- | --------- | --------- | ---- | ------- | --------- | --------- |  | ------- | --------- | --------- | 
|                                          |                   | 2004                                                                  |       |           | 2003      |          
|                                          |                   |                                                                       |       |           |           |          
|                                          |                   |                                                                       |       | Amortized |           |           |  |            | Amortized |          
|                                          |                   | Fair Value                                                            |       |           | Cost      |           |  | Fair Value |           |           | Cost |        
|                                          |                   |                                                                       |       |           |           |           |  |            |           |           |      |        
|                                          |                   | (In thousands)                                                        |      
|Investment securities available for sale: |                   |                                                                       |       |           |           |           |  |            |           |           |      |         |           |           |  |        
|                                          | Debt securities:  |                                                                       |       |           |           |           |  |            |           |           |      |         |           |           |  |         |          
|                                          |                   | U.S. Treasury and other U.S. Government agencies and
    corporations |       | $         | 39,828    |           |  | $          | 39,552    |           |      | $       | 42,746    |           |  | $       | 41,442    |          
|                                          |                   | Mortgage-backed pass-through securities                               |       |           | 501,978   |           |  |            | 499,525   |           |      |         | 830,699   |           |  |         | 796,688   |          
|                                          |                   | Collateralized mortgage obligations                                   |       |           | 3,512,515 |           |  |            | 3,533,176 |           |      |         | 3,086,743 |           |  |         | 3,067,083 |          
|                                          |                   | Asset-backed securities and corporate bonds                           |       |           | 1,059     |           |  |            | 1,039     |           |      |         | 3,716     |           |  |         | 3,638     |          
|                                          |                   | States and political subdivisions                                     |       |           | 12,118    |           |  |            | 11,943    |           |      |         | 11,329    |           |  |         | 11,007    |          
|                                          |                   | Other                                                                 |       |           | 125,040   |           |  |            | 119,746   |           |      |         | 173,642   |           |  |         | 172,978   |          
|                                          | Equity securities |                                                                       |       | 205,646   |           |           |  | 205,633    |           |           |      | 226,333 |           |           |  | 226,314 |          
|                                          |                   |                                                                       |       |           |           |           |  |            |           |           |      |        
|                                          |                   |                                                                       | Total |           | $         | 4,398,184 |  |            | $         | 4,410,614 |      |         | $         | 4,375,208 |  |         | $         | 4,319,150 | 
|                                          |                   |                                                                       |       |           |           |           |  |            |           |           |      |        

62



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                          |                                           |                                                                       |       |        |            |        |   |            |        |        |            |        |        |        |   |       |       |        | 
|----------------------------------------- | ----------------------------------------- | --------------------------------------------------------------------- | ----- | ------ | ---------- | ------ | - | ---------- | ------ | ------ | ---------- | ------ | ------ | ------ | - | ----- | ----- | ------ | 
|                                          |                                           | 2004                                                                  |       |        | 2003       |       
|                                          |                                           |                                                                       |       |        |            |       
|                                          |                                           | Unrealized                                                            |       |        | Unrealized |        |   | Unrealized |        |        | Unrealized |       
|                                          |                                           | Gains                                                                 |       |        | Losses     |        |   | Gains      |        |        | Losses     |       
|                                          |                                           |                                                                       |       |        |            |        |   |            |        |        |            |       
|                                          |                                           | (In thousands)                                                        |      
|Investment securities held to maturity:   |                                           |                                                                       |       |        |            |        |   |            |        |        |            |        |        |        |   |      
|                                          | U.S. Government agencies and corporations |                                                                       | $     | 546    |            |        | $ | 19         |        |        | $          | 96     |        |        | $ | 244   |      
|                                          | Mortgage-backed pass-through securities   |                                                                       |       | 11,457 |            |        |   | 2,841      |        |        |            | 18,560 |        |        |   | 3,607 |      
|                                          | Collateralized mortgage obligations       |                                                                       |       | 6,698  |            |        |   | 10,071     |        |        |            | 3,227  |        |        |   | 6,388 |      
|                                          | Asset-backed securities                   |                                                                       |       |       |            |        |   | 7,194      |        |        |            |       |        |        |   | 1,907 |      
|                                          | States and political subdivisions         |                                                                       |       | 2,659  |            |        |   |           |        |        |            | 2,942  |        |        |   |      |      
|                                          | Other                                     |                                                                       |       |       |            |        |   |           |        |        |            |       |        |        |   |      |      
|                                          |                                           |                                                                       |       |        |            |        |   |            |        |        |            |       
|                                          |                                           |                                                                       | Total |        | $          | 21,360 |   |            | $      | 20,125 |            |        | $      | 24,825 |   |       | $     | 12,146 | 
|                                          |                                           |                                                                       |       |        |            |        |   |            |        |        |            |       
|Investment securities available for sale: |                                           |                                                                       |       |        |            |        |   |            |        |        |            |        |        |        |   |      
|                                          | Debt securities:                          |                                                                       |       |        |            |        |   |            |        |        |            |        |        |        |   |       |      
|                                          |                                           | U.S. Treasury and other U.S. Government agencies and
    corporations |       | $      | 277        |        |   | $          | 1      |        |            | $      | 1,314  |        |   | $     | 10    |       
|                                          |                                           | Mortgage-backed pass-through securities                               |       |        | 6,373      |        |   |            | 3,920  |        |            |        | 35,038 |        |   |       | 1,027 |       
|                                          |                                           | Collateralized mortgage obligations                                   |       |        | 3,586      |        |   |            | 24,247 |        |            |        | 29,345 |        |   |       | 9,685 |       
|                                          |                                           | Asset-backed securities and corporate bonds                           |       |        | 20         |        |   |            |       |        |            |        | 78     |        |   |       |      |       
|                                          |                                           | States and political subdivisions                                     |       |        | 203        |        |   |            | 28     |        |            |        | 392    |        |   |       | 70    |       
|                                          |                                           | Other                                                                 |       |        | 5,294      |        |   |            |       |        |            |        | 664    |        |   |       |      |       
|Equity securities                         |                                           |                                                                       | 13    |        |            |        |  |            |        |        | 19         |        |        |        |  |      
|                                          |                                           |                                                                       |       |        |            |        |   |            |        |        |            |       
|                                          |                                           |                                                                       | Total |        | $          | 15,766 |   |            | $      | 28,196 |            |        | $      | 66,850 |   |       | $     | 10,792 | 
|                                          |                                           |                                                                       |       |        |            |        |   |            |        |        |            |       

63



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                          |                   |                                                                       |       |            |                     |           |  |            |            |        |        |   |         |            |  |   |        |       |  |   |           |           |  |   |        |        | 
|----------------------------------------- | ----------------- | --------------------------------------------------------------------- | ----- | ---------- | ------------------- | --------- |  | ---------- | ---------- | ------ | ------ | - | ------- | ---------- |  | - | ------ | ----- |  | - | --------- | --------- |  | - | ------ | ------ | 
|                                          |                   | Securities in a                                                       |       |            | Securities in a     |           |  |            |            |       
|                                          |                   | Loss Position for                                                     |       |            | Loss Position for   |           |  |           
|                                          |                   | Less Than 12 Months                                                   |       |            | 12 Months or Longer |           |  | Total      |           
|                                          |                   |                                                                       |       |            |                     |           |  |            |           
|                                          |                   |                                                                       |       | Unrealized |                     |           |  |            | Unrealized |        |        |   |         | Unrealized | 
|                                          |                   | Fair Value                                                            |       |            | Losses              |           |  | Fair Value |            |        | Losses |   |         | Fair Value |  |   | Losses |      
|                                          |                   |                                                                       |       |            |                     |           |  |            |            |        |        |   |         |            |  |   |        |      
|                                          |                   | (In thousands)                                                        |      
|Investment securities available for sale: |                   |                                                                       |       |            |                     |           |  |            |            |        |        |   |         |            |  |   |        |       |  |   |           |           |  |  
|                                          | Debt securities:  |                                                                       |       |            |                     |           |  |            |            |        |        |   |         |            |  |   |        |       |  |   |           |           |  |   |       
|                                          |                   | U.S. Treasury and other U.S. Government agencies and
    corporations |       | $          |                    |           |  | $          |           |        |        | $ | 439     |            |  | $ | 1      |       |  | $ | 439       |           |  | $ | 1      |       
|                                          |                   | Mortgage-backed pass-through securities                               |       |            | 327,904             |           |  |            | 3,163      |        |        |   | 45,240  |            |  |   | 757    |       |  |   | 373,144   |           |  |   | 3,920  |       
|                                          |                   | Collateralized mortgage obligations                                   |       |            | 2,439,241           |           |  |            | 18,892     |        |        |   | 410,809 |            |  |   | 5,355  |       |  |   | 2,850,050 |           |  |   | 24,247 |       
|                                          |                   | Asset-backed securities and corporate bonds                           |       |            |                    |           |  |            |           |        |        |   |        |            |  |   |       |       |  |   |          |           |  |   |       |       
|                                          |                   | States and political subdivisions                                     |       |            | 862                 |           |  |            | 28         |        |        |   |        |            |  |   |       |       |  |   | 862       |           |  |   | 28     |       
|                                          |                   | Other                                                                 |       |            |                    |           |  |            |           |        |        |   |        |            |  |   |       |       |  |   |          |           |  |   |       |       
|                                          | Equity securities |                                                                       |       |           |                     |           |  |           |            |        |        |  |         |            |  |  |        |       |  |  |           |           |  |  |       
|                                          |                   |                                                                       |       |            |                     |           |  |            |            |        |        |   |         |            |  |   |        |      
|                                          |                   |                                                                       | Total |            | $                   | 2,768,007 |  |            | $          | 22,083 |        |   | $       | 456,488    |  |   | $      | 6,113 |  |   | $         | 3,224,495 |  |   | $      | 28,196 | 
|                                          |                   |                                                                       |       |            |                     |           |  |            |            |        |        |   |         |            |  |   |        |      





|                                        |                                                                        |                |         |           |            |  |         |           |           | 
|--------------------------------------- | ---------------------------------------------------------------------- | -------------- | ------- | --------- | ---------- |  | ------- | --------- | --------- | 
|                                        |                                                                        | 2004           |        
|                                        |                                                                        |                |        
|                                        |                                                                        | Carrying       |         |           |           
|                                        |                                                                        | Amount         |         |           | Fair Value | 
|                                        |                                                                        |                |         |           |            | 
|                                        |                                                                        | (In thousands) |        
|Investment securities held to maturity: |                                                                        |                |         |           |            |  |         |          
|                                        | Maturing within one year                                               |                | $       | 7,502     |            |  | $       | 7,580     |          
|                                        | Maturing after one but within five years                               |                |         | 404,028   |            |  |         | 398,335   |          
|                                        | Maturing after five but within ten years                               |                |         | 10,597    |            |  |         | 10,931    |          
|                                        | Maturing after ten years                                               |                |         | 52,605    |            |  |         | 53,878    |          
|                                        |                                                                        |                |         |           |            | 
|                                        |                                                                        |                | 474,732 |           |            |  | 470,724 |          
|                                        | Mortgage-backed securities and collateralized mortgage
    obligations |                |         | 2,292,367 |            |  |         | 2,297,610 |          
|                                        |                                                                        |                |         |           |            | 
|                                        |                                                                        | Total          |         | $         | 2,767,099  |  |         | $         | 2,768,334 | 
|                                        |                                                                        |                |         |           |            | 

64



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)


|                                          |                                                                        |                |         |           |           |  |         |           |           | 
|----------------------------------------- | ---------------------------------------------------------------------- | -------------- | ------- | --------- | --------- |  | ------- | --------- | --------- | 
|                                          |                                                                        |                |         | Amortized |          
|                                          |                                                                        | Fair Value     |         |           | Cost      | 
|                                          |                                                                        |                |         |           |           | 
|                                          |                                                                        | (In thousands) |        
|Investment securities available for sale: |                                                                        |                |         |           |           |  |         |          
|                                          | Maturing within one year                                               |                | $       | 261,897   |           |  | $       | 261,865   |          
|                                          | Maturing after one but within five years                               |                |         | 82,842    |           |  |         | 80,246    |          
|                                          | Maturing after five but within ten years                               |                |         | 150       |           |  |         | 148       |          
|                                          | Maturing after ten years                                               |                |         | 38,802    |           |  |         | 35,654    |          
|                                          |                                                                        |                |         |           |           | 
|                                          |                                                                        |                | 383,691 |           |           |  | 377,913 |          
|                                          | Mortgage-backed securities and collateralized mortgage
    obligations |                |         | 4,014,493 |           |  |         | 4,032,701 |          
|                                          |                                                                        |                |         |           |           | 
|                                          |                                                                        | Total          |         | $         | 4,398,184 |  |         | $         | 4,410,614 | 
|                                          |                                                                        |                |         |           |           | 





|    |                                    
|--- | -----------------------------------
|(4) | Loans and Allowance for Loan Losses



|                  |                                        |                        |       |           |            |            |   |           |           |            | 
|----------------- | -------------------------------------- | ---------------------- | ----- | --------- | ---------- | ---------- | - | --------- | --------- | ---------- | 
|                  |                                        | 2004                   |       |           | 2003       |           
|                  |                                        |                        |       |           |            |           
|                  |                                        | (In thousands)         |      
|Commercial loans: |                                        |                        |       |           |            |            |   |          
|                  | Commercial, financial and agricultural |                        | $     | 3,750,063 |            |            | $ | 3,576,115 |          
|                  | Real estate  construction             |                        |       | 3,027,228 |            |            |   | 2,481,281 |          
|                  | Commercial real estate  mortgage      |                        |       | 3,943,163 |            |            |   | 3,933,773 |          
|                  |                                        |                        |       |           |            |           
|                  |                                        | Total commercial loans |       |           | 10,720,454 |            |   |           | 9,991,169 |           
|Consumer loans:   |                                        |                        |       |           |            |            |   |          
|                  | Residential real estate  mortgage     |                        |       | 1,566,370 |            |            |   | 1,653,805 |          
|                  | Equity lines of credit                 |                        |       | 1,401,604 |            |            |   | 1,122,725 |          
|                  | Equity loans                           |                        |       | 1,069,614 |            |            |   | 1,046,881 |          
|                  | Credit card                            |                        |       | 505,090   |            |            |   | 485,487   |          
|                  | Consumer installment  direct          |                        |       | 484,657   |            |            |   | 435,326   |          
|                  | Consumer installment  indirect        |                        |       | 3,109,133 |            |            |   | 2,630,409 |          
|                  |                                        |                        |       |           |            |           
|                  |                                        | Total consumer loans   |       |           | 8,136,468  |            |   |           | 7,374,633 |           
|                  |                                        |                        |       |           |            |           
|                  |                                        |                        | Total |           | $          | 18,856,922 |   |           | $         | 17,365,802 | 
|                  |                                        |                        |       |           |            |           



65



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                      |                 |                |          |         |      |   |          |          |   |   |          |         |  
|------------------------------------- | --------------- | -------------- | -------- | ------- | ---- | - | -------- | -------- | - | - | -------- | ------- | -
|                                      |                 | 2004           |          |         | 2003 |   |          | 2002     |  
|                                      |                 |                |          |         |      |   |          |          |  
|                                      |                 | (In thousands) |         
|Balance at beginning of year          |                 | $              | 244,882  |         |      | $ | 232,830  |          |   | $ | 191,393  |        
|Provision charged to income           |                 |                | 105,658  |         |      |   | 119,681  |          |   |   | 136,331  |        
|Allowance for loans sold/ securitized |                 |                | (591     | )       |      |   | (3,362   | )        |   |   |         |        
|Loans charged off                     |                 |                | (117,597 | )       |      |   | (123,727 | )        |   |   | (109,387 | )      
|Loan recoveries                       |                 |                | 25,987   |         |      |   | 19,460   |          |   |   | 14,493   |        
|                                      |                 |                |          |         |      |   |          |          |  
|                                      | Net charge-offs |                |          | (91,610 | )    |   |          | (104,267 | ) |   |          | (94,894 | )
|                                      |                 |                |          |         |      |   |          |          |  
|Balance at end of year                |                 | $              | 258,339  |         |      | $ | 244,882  |          |   | $ | 232,830  |        
|                                      |                 |                |          |         |      |   |          |          |  





|                   |                            |                |        |        |      |   |        |        |  |   |        |        | 
|------------------ | -------------------------- | -------------- | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|                   |                            | December 31    |       
|                   |                            |                |       
|                   |                            | 2004           |        |        | 2003 |   |        | 2002   | 
|                   |                            |                |        |        |      |   |        |        | 
|                   |                            | (In thousands) |       
|Nonaccrual loans   |                            | $              | 49,947 |        |      | $ | 65,870 |        |  | $ | 81,671 |       
|Renegotiated loans |                            |                | 734    |        |      |   | 218    |        |  |   | 38     |       
|                   |                            |                |        |        |      |   |        |        | 
|                   | Total nonperforming loans  |                |        | 50,681 |      |   |        | 66,088 |  |   |        | 81,709 | 
|Other real estate  |                            |                | 19,998 |        |      |   | 29,014 |        |  |   | 17,300 |       
|                   |                            |                |        |        |      |   |        |        | 
|                   | Total nonperforming assets |                | $      | 70,679 |      |   | $      | 95,102 |  |   | $      | 99,009 | 
|                   |                            |                |        |        |      |   |        |        | 



|                                                            |  |                |        |  |      |   |        |      |  |   |        | 
|----------------------------------------------------------- |  | -------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                                                            |  | 2004           |        |  | 2003 |   |        | 2002 | 
|                                                            |  |                |        |  |      |   |        |      | 
|                                                            |  | (In thousands) |       
|Principal balance                                           |  | $              | 49,947 |  |      | $ | 65,870 |      |  | $ | 81,671 | 
|Interest that would have been recorded under original terms |  |                | 4,819  |  |      |   | 6,228  |      |  |   | 7,979  | 
|Interest actually recorded                                  |  |                | 2,195  |  |      |   | 2,736  |      |  |   | 4,007  | 



|    |              
|--- | -------------
|(5) | Managed Loans



66



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|                                                 |                                            |            |           |             |           |   |        |        |  
|------------------------------------------------ | ------------------------------------------ | ---------- | --------- | ----------- | --------- | - | ------ | ------ | -
|                                                 |                                            |            |           | Residential |          
|                                                 |                                            | Equity I/O |           |             | Mortgage  |  
|                                                 |                                            | Strip      |           |             | I/O Strip |  
|                                                 |                                            |            |           |             |           |  
|Carrying amount/fair value of retained interests |                                            | $          | 22,802    |             |           | $ | 16,580 |       
|Weighted-average life (in years)                 |                                            |            | 1.2       |             |           |   | 2.4    |       
|Prepayment speed assumption (annual rate)        |                                            |            | 30/36 CPR | *           |           |   | 45CPR  |       
|                                                 | Impact on fair value of 10% adverse change |            | $         | (676        | )         |   | $      | (983   | )
|                                                 | Impact on fair value of 20% adverse change |            | $         | (1,317      | )         |   | $      | (1,873 | )
|Expected credit losses (annual rate)             |                                            |            | 0.68      | %           |           |   | 0.25   | %     
|                                                 | Impact on fair value of 10% adverse change |            | $         | (330        | )         |   | $      | (81    | )
|                                                 | Impact on fair value of 20% adverse change |            | $         | (659        | )         |   | $      | (163   | )
|Residual cash flows discount rate (annual)       |                                            |            | 10.0      | %           |           |   | 10.0   | %     
|                                                 | Impact on fair value of 10% adverse change |            | $         | (297        | )         |   | $      | (355   | )
|                                                 | Impact on fair value of 20% adverse change |            | $         | (588        | )         |   | $      | (700   | )






|  |                                                                                                 
|- | ------------------------------------------------------------------------------------------------
|* | Constant prepayment rate (CPR) of 30 percent for first
    liens and 36 percent for second liens







|                                   |  |      |       |  |      |  |       |      |  |  |       |  |  |      |       |  |  |  |       | 
|---------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- |  |  | ---- | ----- |  |  |  | ----- | 
|                                   |  | 2004 |       |  | 2005 |  |       | 2006 |  |  | 2007  |  |  | 2008 |      
|                                   |  |      |       |  |      |  |       |      |  |  |       |  |  |      |      
|Actual and Projected Credit Losses |  |      | 0.24% |  |      |  | 0.15% |      |  |  | 0.11% |  |  |      | 0.08% |  |  |  | 0.01% | 



67



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




| |                         
| | ------------------------
| | Term Securitization Sold





| |                          
| | -------------------------
| | Securitization Cash Flows



|                          |  |                        |         |  |      |   |         |      |  |   |         | 
|------------------------- |  | ---------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|                          |  | Year Ended December 31 |        
|                          |  |                        |        
|                          |  | 2004                   |         |  | 2003 |   |         | 2002 | 
|                          |  |                        |         |  |      |   |         |      | 
|Proceeds from collections |  | $                      | 619,600 |  |      | $ | 779,438 |      |  | $ | 701,839 | 
|Servicing fees received   |  |                        | 4,219   |  |      |   | 2,437   |      |  |   | 4,725   | 



|                                                                               |                         |                 |            |            |                 |   |        |            |  |   |        |        | 
|------------------------------------------------------------------------------ | ----------------------- | --------------- | ---------- | ---------- | --------------- | - | ------ | ---------- |  | - | ------ | ------ | 
|                                                                               |                         |                 |            | Principal  |                 |   |       
|                                                                               |                         |                 |            | Amount of  |                 |   |       
|                                                                               |                         | Total Principal |            |            | Nonaccrual and  |   |        |           
|                                                                               |                         | Amount of       |            |            | 90 Days or More |   |        | Net Credit | 
|                                                                               |                         | Loans           |            |            | Past Due Loans  |   |        | Losses     | 
|                                                                               |                         |                 |            |            |                 |   |        |            | 
|December 31, 2004:                                                             |                         |                 |            |            |                 |   |        |            |  |   |        |       
|Loan category:                                                                 |                         |                 |            |            |                 |   |        |            |  |   |        |       
|Commercial, financial and agricultural                                         |                         | $               | 3,890,866  |            |                 | $ | 14,369 |            |  | $ | 9,314  |       
|Commercial real estate  mortgage                                              |                         |                 | 3,943,163  |            |                 |   | 15,908 |            |  |   | 4,290  |       
|Real estate  construction                                                     |                         |                 | 3,027,228  |            |                 |   | 5,073  |            |  |   | 136    |       
|Residential real estate                                                        |                         |                 | 5,482,040  |            |                 |   | 21,918 |            |  |   | 8,188  |       
|Credit card                                                                    |                         |                 | 505,090    |            |                 |   | 8,957  |            |  |   | 34,795 |       
|Consumer installment                                                           |                         |                 | 3,593,790  |            |                 |   | 8,769  |            |  |   | 37,149 |       
|                                                                               |                         |                 |            |            |                 |   |        |            | 
|                                                                               | Total managed loans     |                 |            | 20,442,177 |                 |   | $      | 74,994     |  |   | $      | 93,872 | 
|                                                                               |                         |                 |            |            |                 |   |        |            | 
|Loans securitized and sold to third parties                                    |                         |                 | (140,803   | )          |                 |   |        |            |  |   |        |       
|Loans securitized and classified as investment securities
    held to maturity |                         |                 | (1,444,452 | )          |                 |   |        |            |  |   |        |       
|                                                                               |                         |                 |            |            |                 |   |        |            | 
|                                                                               | Loans held in portfolio |                 | $          | 18,856,922 |                 |   |        |            |  |   |        |        | 
|                                                                               |                         |                 |            |            |                 |   |        |            | 

68



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)


|                                                                               |                         |                 |            |            |                 |   |        |            |  |   |        |         | 
|------------------------------------------------------------------------------ | ----------------------- | --------------- | ---------- | ---------- | --------------- | - | ------ | ---------- |  | - | ------ | ------- | 
|                                                                               |                         |                 |            | Principal  |                 |   |       
|                                                                               |                         |                 |            | Amount of  |                 |   |       
|                                                                               |                         | Total Principal |            |            | Nonaccrual and  |   |        |           
|                                                                               |                         | Amount of       |            |            | 90 Days or More |   |        | Net Credit | 
|                                                                               |                         | Loans           |            |            | Past Due Loans  |   |        | Losses     | 
|                                                                               |                         |                 |            |            |                 |   |        |            | 
|December 31, 2003:                                                             |                         |                 |            |            |                 |   |        |            |  |   |        |        
|Loan category:                                                                 |                         |                 |            |            |                 |   |        |            |  |   |        |        
|Commercial, financial and agricultural                                         |                         | $               | 3,728,172  |            |                 | $ | 30,468 |            |  | $ | 17,793 |        
|Commercial real estate  mortgage                                              |                         |                 | 3,933,773  |            |                 |   | 19,974 |            |  |   | 2,687  |        
|Real estate  construction                                                     |                         |                 | 2,481,281  |            |                 |   | 10,594 |            |  |   | 1,818  |        
|Residential real estate                                                        |                         |                 | 5,183,788  |            |                 |   | 20,610 |            |  |   | 9,936  |        
|Credit card                                                                    |                         |                 | 485,487    |            |                 |   | 11,161 |            |  |   | 34,210 |        
|Consumer installment                                                           |                         |                 | 3,065,735  |            |                 |   | 8,662  |            |  |   | 38,633 |        
|                                                                               |                         |                 |            |            |                 |   |        |            | 
|                                                                               | Total managed loans     |                 |            | 18,878,236 |                 |   | $      | 101,469    |  |   | $      | 105,077 | 
|                                                                               |                         |                 |            |            |                 |   |        |            | 
|Loans securitized and sold to third parties                                    |                         |                 | (152,057   | )          |                 |   |        |            |  |   |        |        
|Loans securitized and classified as investment securities held
    to maturity |                         |                 | (1,360,377 | )          |                 |   |        |            |  |   |        |        
|                                                                               |                         |                 |            |            |                 |   |        |            | 
|                                                                               | Loans held in portfolio |                 | $          | 17,365,802 |                 |   |        |            |  |   |        |         | 
|                                                                               |                         |                 |            |            |                 |   |        |            | 





|    |                                              
|--- | ---------------------------------------------
|(6) | Goodwill and Other Acquired Intangible Assets







|                              |                            |                                    |         |        |              |   |         |              |         |   |         |        |        | 
|----------------------------- | -------------------------- | ---------------------------------- | ------- | ------ | ------------ | - | ------- | ------------ | ------- | - | ------- | ------ | ------ | 
|                              |                            | As of December 31, 2004            |        
|                              |                            |                                    |        
|                              |                            | Gross                              |         |        |             
|                              |                            | Carrying                           |         |        | Accumulated  |   |         | Net Carrying |        
|                              |                            | Amount                             |         |        | Amortization |   |         | Value        |        
|                              |                            |                                    |         |        |              |   |         |              |        
|                              |                            | (In thousands)                     |        
|Nonamortizing goodwill        |                            | $                                  | 356,351 |        |              | $ | (53,732 | )            |         | $ | 302,619 |       
|                              |                            |                                    |         |        |              |   |         |              |        
|Amortizing intangible assets: |                            |                                    |         |        |              |   |         |              |         |   |         |       
|                              | Core deposit intangibles   |                                    | $       | 63,890 |              |   | $       | (53,173      | )       |   | $       | 10,717 |       
|                              | Other customer intangibles |                                    |         | 39,271 |              |   |         | (10,766      | )       |   |         | 28,505 |       
|                              |                            |                                    |         |        |              |   |         |              |        
|                              |                            | Total amortizing intangible assets |         | $      | 103,161      |   |         | $            | (63,939 | ) |         | $      | 39,222 | 
|                              |                            |                                    |         |        |              |   |         |              |        

69



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|    |         
|--- | --------
|(7) | Deposits



|           |       |   |           |           | 
|---------- | ----- | - | --------- | --------- | 
|2005       |       | $ | 2,412,684 |          
|2006       |       |   | 344,452   |          
|2007       |       |   | 665,547   |          
|2008       |       |   | 192,011   |          
|2009       |       |   | 220,264   |          
|Thereafter |       |   | 109,811   |          
|           |       |   |          
|           | Total |   | $         | 3,944,769 | 
|           |       |   |          



|    |                      
|--- | ---------------------
|(8) | Short-Term Borrowings



|                                               |                             |                |           |           |          |  |      |         |          |   |           |           |  |  |      |   | 
|---------------------------------------------- | --------------------------- | -------------- | --------- | --------- | -------- |  | ---- | ------- | -------- | - | --------- | --------- |  |  | ---- | - | 
|                                               |                             | December 31    |          
|                                               |                             |                |          
|                                               |                             | 2004           |           |           | 2003     | 
|                                               |                             |                |           |           |          | 
|                                               |                             |                |           | Average   |          |  |      |         | Average  |  
|                                               |                             |                |           | Interest  |          |  |      |         | Interest |  
|                                               |                             | Ending         |           |           | Rate at  |  |      | Ending  |          |   | Rate at   |          
|                                               |                             | Balance        |           |           | Year-End |  |      | Balance |          |   | Year-End  |          
|                                               |                             |                |           |           |          |  |      |         |          |   |           |          
|                                               |                             | (In thousands) |          
|Federal funds purchased                        |                             | $              | 4,218,045 |           |          |  | 2.17 | %       |          | $ | 3,715,593 |           |  |  | 0.89 | %
|Securities sold under agreements to repurchase |                             |                | 313,959   |           |          |  | 1.73 |         |          |   | 403,031   |           |  |  | 0.71 |  
|                                               |                             |                |           |           |          |  |      |         |          |   |           |          
|                                               | Total                       |                |           | 4,532,004 |          |  |      |         |          |   |           | 4,118,624 |  |  |      |   | 
|Short sales                                    |                             |                | 2,956     |           |          |  | 2.99 |         |          |   | 572       |           |  |  | 3.35 |  
|Commercial paper                               |                             |                | 97,498    |           |          |  | 1.25 |         |          |   | 73,512    |           |  |  | 0.50 |  
|Other short-term borrowings                    |                             |                | 75,317    |           |          |  | 1.74 |         |          |   | 189,453   |           |  |  | 0.70 |  
|                                               |                             |                |           |           |          |  |      |         |          |   |           |          
|                                               | Total                       |                |           | 175,771   |          |  |      |         |          |   |           | 263,537   |  |  |      |   | 
|                                               |                             |                |           |           |          |  |      |         |          |   |           |          
|                                               | Total short-term borrowings |                | $         | 4,707,775 |          |  |      |         |          |   | $         | 4,382,161 |  |  |      |   | 
|                                               |                             |                |           |           |          |  |      |         |          |   |           |          



70



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|    |                                                         
|--- | --------------------------------------------------------
|(9) | Federal Home Loan Bank (FHLB) and Other
    Borrowings



|                         |                                                                 |                                              |      |             |      |   |           |           |           |   |           |           |           | 
|------------------------ | --------------------------------------------------------------- | -------------------------------------------- | ---- | ----------- | ---- | - | --------- | --------- | --------- | - | --------- | --------- | --------- | 
|                         |                                                                 |                                              |      | December 31 |     
|                         |                                                                 | Maturity                                     |      |             |      |  
|                         |                                                                 | Dates                                        |      |             | 2004 |   |           | 2003      |          
|                         |                                                                 |                                              |      |             |      |   |           |           |          
|                         |                                                                 | (In thousands, restated)                     |     
|FHLB Advances:           |                                                                 |                                              |      |             |      |   |           |           |           |   |           |          
|                         | LIBOR-based floating rate (weighted average rate of 3.33%)      |                                              |      | 2005-2012   |      |   | $         | 1,825,000 |           |   | $         | 1,700,000 |          
|                         | CMS-based floating rate (weighted average rate of 2.25%)        |                                              |      | 2006-2009   |      |   |           | 800,000   |           |   |           | 1,300,000 |          
|                         | Fixed rate, callable quarterly (weighted average rate of 4.19%) |                                              |      | 2004-2014   |      |   |           | 788,536   |           |   |           | 988,742   |          
|                         | Unamortized discount                                            |                                              |      |             |      |   |           | (15,368   | )         |   |           |          |          
|                         |                                                                 |                                              |      |             |      |   |           |           |          
|                         |                                                                 | Total FHLB Advances                          |      |             |      |   |           |           | 3,398,168 |   |           |           | 3,988,742 | 
|Subordinated Debentures: |                                                                 |                                              |      |             |      |   |           |           |           |   |           |          
|                         | 8.375% subordinated debentures                                  |                                              |      | 2004        |      |   |           |          |           |   |           | 50,000    |          
|                         | 8.10% subordinated debentures                                   |                                              |      | 2009        |      |   |           | 165,000   |           |   |           | 165,000   |          
|                         | 6.45% subordinated debentures                                   |                                              |      | 2009        |      |   |           | 96,700    |           |   |           | 96,700    |          
|                         | Fair value of hedged subordinated debentures                    |                                              |      |             |      |   |           | 33,444    |           |   |           | 46,043    |          
|                         | Unamortized discount                                            |                                              |      |             |      |   |           | (981      | )         |   |           | (1,226    | )        
|                         |                                                                 |                                              |      |             |      |   |           |           |          
|                         |                                                                 | Total Subordinated Debentures                |      |             |      |   |           |           | 294,163   |   |           |           | 356,517   | 
|Capital Securities:      |                                                                 |                                              |      |             |      |   |           |           |           |   |           |          
|                         | 8.23% debentures payable to Compass Trust I*                    |                                              |      | 2027        |      |   |           | 103,093   |           |   |           | 103,093   |          
|                         | 9.38% debentures payable to FW Capital I*                       |                                              |      | 2029        |      |   |           |          |           |   |           | 23,711    |          
|                         | 7.35% debentures payable to Compass Trust III*                  |                                              |      | 2032        |      |   |           | 309,279   |           |   |           | 309,279   |          
|                         | Unamortized discount                                            |                                              |      |             |      |   |           | (3,544    | )         |   |           | (5,119    | )        
|                         | Class B Preferred Stock                                         |                                              |      | N/A         |      |   |           | 18,012    |           |   |           | 17,955    |          
|                         |                                                                 |                                              |      |             |      |   |           |           |          
|                         |                                                                 | Total Capital Securities and Preferred Stock |      |             |      |   |           |           | 426,840   |   |           |           | 448,919   | 
|8.25% mortgage payable   |                                                                 |                                              | 2008 |             |      |   | 600       |           |           |   | 757       |          
|                         |                                                                 |                                              |      |             |      |   |           |           |          
|                         |                                                                 |                                              |      |             |      | $ | 4,119,771 |           |           | $ | 4,794,935 |          
|                         |                                                                 |                                              |      |             |      |   |           |           |          






|  |                                              
|- | ---------------------------------------------
|* | Majority of amounts qualify as Tier I Capital



71



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|            |       |                          |           |           |              |   |         |            |  |   |          |         |  |   |     |     | 
|----------- | ----- | ------------------------ | --------- | --------- | ------------ | - | ------- | ---------- |  | - | -------- | ------- |  | - | --- | --- | 
|            |       | FHLB                     |           |           | Subordinated |   |         | Capital    |  |   | Mortgage |        
|            |       | Advances                 |           |           | Debentures   |   |         | Securities |  |   | Payable  |        
|            |       |                          |           |           |              |   |         |            |  |   |          |        
|            |       | (In thousands, restated) |          
|Maturing:   |       |                          |           |           |              |   |         |            |  |   |          |         |  |   |     |    
|2005        |       | $                        | 300,000   |           |              | $ |        |            |  | $ |         |         |  | $ | 170 |    
|2006        |       |                          | 600,000   |           |              |   |        |            |  |   |         |         |  |   | 186 |    
|2007        |       |                          | 100,000   |           |              |   |        |            |  |   |         |         |  |   | 202 |    
|2008        |       |                          | 710,460   |           |              |   |        |            |  |   |         |         |  |   | 42  |    
|2009*       |       |                          | 609,632   |           |              |   | 294,163 |            |  |   |         |         |  |   |    |    
|Thereafter* |       |                          | 1,078,076 |           |              |   |        |            |  |   | 426,840  |         |  |   |    |    
|            |       |                          |           |           |              |   |         |            |  |   |          |        
|            | Total |                          | $         | 3,398,168 |              |   | $       | 294,163    |  |   | $        | 426,840 |  |   | $   | 600 | 
|            |       |                          |           |           |              |   |         |            |  |   |          |        






|  |                                                                                      
|- | -------------------------------------------------------------------------------------
|* | Includes the fair value of hedged subordinated debentures and
    Capital Securities.



|     |                                       
|---- | --------------------------------------
|(10) | Capital Securities and Preferred Stock



| |                   
| | ------------------
| | Capital Securities









72



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |                        
| | -----------------------
| | Class B Preferred Stock







|     |                                                      
|---- | -----------------------------------------------------
|(11) | Off-Balance Sheet Activities, Derivatives and Hedging



| |                                                                 
| | ----------------------------------------------------------------
| | Accounting for Derivative Instruments and Hedging
    Activities



|                               |                                |                          |         |           |         |   |        |         |       |   |         |           |  |   |   |           | 
|------------------------------ | ------------------------------ | ------------------------ | ------- | --------- | ------- | - | ------ | ------- | ----- | - | ------- | --------- |  | - | - | --------- | 
|                               |                                | 2004                     |         |           | 2003    |  
|                               |                                |                          |         |           |         |  
|                               |                                |                          |         | Other     |         |   |        |         | Other |  
|                               |                                |                          |         | Than      |         |   |        |         | Than  |  
|                               |                                | Trading                  |         |           | Trading |   |        | Trading |       |   | Trading |          
|                               |                                |                          |         |           |         |   |        |         |       |   |         |          
|                               |                                | (In thousands, restated) |        
|Forward and futures contracts  |                                | $                        | 271,863 |           |         | $ | 18,708 |         |       | $ | 771,993 |           |  | $ |  |          
|Interest rate swap agreements: |                                |                          |         |           |         |   |        |         |       |   |         |           |  |   |   |          
|                               | Pay fixed versus receive float |                          |         | 1,384,586 |         |   |        |        |       |   |         | 1,491,175 |  |   |   |          | 
|                               | Receive fixed versus pay float |                          |         | 1,944,325 |         |   |        | 961,700 |       |   |         | 2,008,064 |  |   |   | 1,311,700 | 
|Written options                |                                |                          | 63,229  |           |         |   | 19,812 | (1)     |       |   | 32,850  |           |  |   |  |          
|Purchased options              |                                |                          | 97,358  |           |         |   |       |         |       |   | 78,551  |           |  |   |  |          






|    |                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Written options classified as other than trading represent
    interest rate loan commitments related to the Companys
    Mortgage banking activities





73



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)








over-the


|                   |                               |                          |   |         |                   |  |   |          |   |  |          |           |  |  |   |        | 
|------------------ | ----------------------------- | ------------------------ | - | ------- | ----------------- |  | - | -------- | - |  | -------- | --------- |  |  | - | ------ | 
|                   |                               | December 31, 2004        |   |         | December 31, 2003 | 
|                   |                               |                          |   |         |                   | 
|                   |                               | Notional                 |   |         | Carrying          |  |   | Notional |   |  | Carrying |          
|                   |                               | Value                    |   |         | Value             |  |   | Value    |   |  | Value    |          
|                   |                               |                          |   |         |                   |  |   |          |   |  |          |          
|                   |                               | (In thousands, restated) |  
|Cash Flow Hedges:  |                               |                          |   |         |                   |  |   |          |   |  |          |           |  |  |   |       
|                   | Interest rate swap agreements |                          | $ | 700,000 |                   |  | $ | (3,654   | ) |  | $        | 1,000,000 |  |  | $ | 589    | 
|Fair Value Hedges: |                               |                          |   |         |                   |  |   |          |   |  |          |           |  |  |   |       
|                   | Interest rate swap agreements |                          |   | 261,700 |                   |  |   | 33,444   |   |  |          | 311,700   |  |  |   | 46,043 | 
|                   | Forward contracts(1)          |                          |   | 18,708  |                   |  |   | 9        |   |  |          |          |  |  |   |       | 






|    |                                                                    
|--- | -------------------------------------------------------------------
|(1) | Derivatives relate to the Companys mortgage banking
    activities





74



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |                   
| | ------------------
| | Interest-Rate Risk













| |                  
| | -----------------
| | Fair-Value Hedges



75



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)








| |                 
| | ----------------
| | Cash-Flow Hedges





| |                             
| | ----------------------------
| | Off-Balance Sheet Activities





76



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)








|     |                                          
|---- | -----------------------------------------
|(12) | Commitments, Contingencies and Guarantees





|           |  |   |         | 
|---------- |  | - | ------- | 
|2005       |  | $ | 20,183  | 
|2006       |  |   | 19,253  | 
|2007       |  |   | 16,459  | 
|2008       |  |   | 14,424  | 
|2009       |  |   | 11,780  | 
|Thereafter |  |   | 70,407  | 
|           |  |   |        
|           |  | $ | 152,506 | 
|           |  |   |        





|                                         |  |                |            |  |      |   |           | 
|---------------------------------------- |  | -------------- | ---------- |  | ---- | - | --------- | 
|                                         |  | 2004           |            |  | 2003 |  
|                                         |  |                |            |  |      |  
|                                         |  | (In thousands) |           
|Commitments to extend credit             |  | $              | 11,265,440 |  |      | $ | 9,993,691 | 
|Standby and commercial letters of credit |  |                | 716,195    |  |      |   | 451,868   | 

77



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)


















78



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






|     |                                                   
|---- | --------------------------------------------------
|(13) | Regulatory Matters and Dividends from Subsidiaries









|                         |              |                  |   |           |                |  |  |          |   |  |       |           |  |        |  |      |       |  |   |           |  |  |  |      |  
|------------------------ | ------------ | ---------------- | - | --------- | -------------- |  |  | -------- | - |  | ----- | --------- |  | ------ |  | ---- | ----- |  | - | --------- |  |  |  | ---- | -
|                         |              | Total Qualifying |   |           |                |  | 
|                         |              | Capital          |   |           | Tier I Capital |  |  | Leverage |  
|                         |              |                  |   |           |                |  |  |          |  
|                         |              | Amount           |   |           | Ratio          |  |  | Amount   |   |  | Ratio |           |  | Amount |  |      | Ratio | 
|                         |              |                  |   |           |                |  |  |          |   |  |       |           |  |        |  |      |       | 
|As of December 31, 2004: |              |                  |   |           |                |  |  |          |   |  |       |           |  |        |  |      |       |  |   |           |  |  |  |     
|                         | Consolidated |                  | $ | 2,566,507 |                |  |  | 11.17    | % |  | $     | 2,099,593 |  |        |  | 9.14 | %     |  | $ | 2,099,593 |  |  |  | 7.55 | %
|                         | Compass Bank |                  |   | 2,418,343 |                |  |  | 10.55    |   |  |       | 1,891,429 |  |        |  | 8.25 |       |  |   | 1,891,429 |  |  |  | 6.83 |  
|As of December 31, 2003: |              |                  |   |           |                |  |  |          |   |  |       |           |  |        |  |      |       |  |   |           |  |  |  |     
|                         | Consolidated |                  | $ | 2,418,575 |                |  |  | 11.62    | % |  | $     | 1,913,192 |  |        |  | 9.19 | %     |  | $ | 1,913,192 |  |  |  | 7.33 | %
|                         | Compass Bank |                  |   | 2,213,650 |                |  |  | 10.67    |   |  |       | 1,648,267 |  |        |  | 7.94 |       |  |   | 1,648,267 |  |  |  | 6.33 |  



79



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)








|     |                         
|---- | ------------------------
|(14) | Stock Based Compensation





80



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                                               |  |         |            |          |       |   |       |         |          |   |            |   |  |          |       |  |       |   |            |   |  |   |       | 
|-------------------------------------------------------------- |  | ------- | ---------- | -------- | ----- | - | ----- | ------- | -------- | - | ---------- | - |  | -------- | ----- |  | ----- | - | ---------- | - |  | - | ----- | 
|                                                               |  | 2004    |            |          | 2003  |   |       | 2002    |         
|                                                               |  |         |            |          |       |   |       |         |         
|                                                               |  |         |            | Weighted |       |   |       |         | Weighted |   |            |   |  | Weighted |      
|                                                               |  |         |            | Average  |       |   |       |         | Average  |   |            |   |  | Average  |      
|                                                               |  |         |            | Exercise |       |   |       |         | Exercise |   |            |   |  | Exercise |      
|                                                               |  | Options |            |          | Price |   |       | Options |          |   | Price      |   |  | Options  |       |  | Price |  
|                                                               |  |         |            |          |       |   |       |         |          |   |            |   |  |          |       |  |       |  
|Outstanding, beginning of the year                             |  |         | 7,723,209  |          |       | $ | 25.54 |         |          |   | 7,112,497  |   |  | $        | 23.36 |  |       |   | 7,008,182  |   |  | $ | 20.89 | 
|Granted                                                        |  |         | 1,499,337  |          |       |   | 38.44 |         |          |   | 1,806,794  |   |  |          | 31.82 |  |       |   | 1,974,313  |   |  |   | 29.11 | 
|Exercised                                                      |  |         | (1,268,139 | )        |       |   | 22.75 |         |          |   | (1,032,136 | ) |  |          | 21.16 |  |       |   | (1,712,799 | ) |  |   | 19.85 | 
|Forfeited                                                      |  |         | (186,437   | )        |       |   | 30.00 |         |          |   | (163,946   | ) |  |          | 27.57 |  |       |   | (157,199   | ) |  |   | 23.60 | 
|                                                               |  |         |            |          |       |   |       |         |          |   |            |   |  |          |       |  |       |  
|Outstanding, end of The year                                   |  |         | 7,767,970  |          |       | $ | 28.42 |         |          |   | 7,723,209  |   |  | $        | 25.54 |  |       |   | 7,112,497  |   |  | $ | 23.36 | 
|                                                               |  |         |            |          |       |   |       |         |          |   |            |   |  |          |       |  |       |  
|Weighted average fair Value of options granted During the year |  | $       | 7.14       |          |       |   |       |         |          | $ | 5.90       |   |  |          |       |  |       | $ | 5.87       |   |  |   |       | 
|Exercisable, end of The year                                   |  |         | 5,055,339  |          |       |   |       |         |          |   | 4,747,002  |   |  |          |       |  |       |   | 4,567,702  |   |  |   |       | 





|                         |  |             |           |           |          |           |         |             |  |  |      | 
|------------------------ |  | ----------- | --------- | --------- | -------- | --------- | ------- | ----------- |  |  | ---- | 
|                         |  |             |           |           |          | Weighted- |        
|                         |  |             |           | Weighted- |          |           | Average |            
|                         |  | Stock       |           |           | Average  |           |         | Remaining   | 
|                         |  | Options     |           |           | Exercise |           |         | Contractual | 
|Range of Exercise Prices |  | Outstanding |           |           | Price    |           |         | Life        | 
|                         |  |             |           |           |          |           |         |             | 
|$10.00 - $14.99          |  |             | 130,973   |           |          | $         | 13.30   |             |  |  | 0.68 | 
|$15.00 - $19.99          |  |             | 820,839   |           |          |           | 17.41   |             |  |  | 4.44 | 
|$20.00 - $24.99          |  |             | 1,688,334 |           |          |           | 22.03   |             |  |  | 5.21 | 
|$25.00 - $29.99          |  |             | 1,966,879 |           |          |           | 28.92   |             |  |  | 5.97 | 
|$30.00 or more           |  |             | 3,160,945 |           |          |           | 35.00   |             |  |  | 8.72 | 
|                         |  |             |           |           |          |           |         |             | 
|                         |  |             | 7,767,970 |           |          |           |         |             |  |  |      | 
|                         |  |             |           |           |          |           |         |             | 





81



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|     |              
|---- | -------------
|(15) | Benefit Plans



Obligations and Funded Status


|                             |                                                        |                                          |   |         |         |  |   |         |         | 
|---------------------------- | ------------------------------------------------------ | ---------------------------------------- | - | ------- | ------- |  | - | ------- | ------- | 
|                             |                                                        | Pension Benefits                         |  
|                             |                                                        | December 31                              |  
|                             |                                                        |                                          |  
|                             |                                                        | 2004                                     |   |         | 2003    | 
|                             |                                                        |                                          |   |         |         | 
|                             |                                                        | (In thousands)                           |  
|Change in benefit obligation |                                                        |                                          |   |         |         |  |   |        
|                             | Benefit obligation at beginning of year                |                                          | $ | 136,147 |         |  | $ | 117,707 |        
|                             | Service cost                                           |                                          |   | 6,829   |         |  |   | 6,179   |        
|                             | Interest cost                                          |                                          |   | 8,448   |         |  |   | 7,798   |        
|                             | Actuarial loss                                         |                                          |   | 20,490  |         |  |   | 7,201   |        
|                             | Benefits paid                                          |                                          |   | (3,053  | )       |  |   | (2,738  | )      
|                             |                                                        |                                          |   |         |         | 
|                             |                                                        | Benefit obligation at end of year        |   |         | 168,861 |  |   |         | 136,147 | 
|                             |                                                        |                                          |   |         |         | 
|Change in plan assets        |                                                        |                                          |   |         |         |  |   |        
|                             | Fair value of plan assets at the beginning of the year |                                          |   | 143,552 |         |  |   | 116,360 |        
|                             | Actual return on plan assets                           |                                          |   | 10,539  |         |  |   | 8,930   |        
|                             | Employer contribution                                  |                                          |   | 13,220  |         |  |   | 21,000  |        
|                             | Benefits paid                                          |                                          |   | (3,053  | )       |  |   | (2,738  | )      
|                             |                                                        |                                          |   |         |         | 
|                             |                                                        | Fair value of plan assets at end of year |   |         | 164,258 |  |   |         | 143,552 | 
|                             |                                                        |                                          |   |         |         | 
|                             | Funded status                                          |                                          |   | (4,603  | )       |  |   | 7,405   |        
|                             | Unrecognized net actuarial loss                        |                                          |   | 49,726  |         |  |   | 30,281  |        
|                             | Unrecognized prior service cost                        |                                          |   | 266     |         |  |   | 300     |        
|                             |                                                        |                                          |   |         |         | 
|                             |                                                        | Net amount recognized                    |   | $       | 45,389  |  |   | $       | 37,986  | 
|                             |                                                        |                                          |   |         |         | 

82



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                       |                       |                  |        |        |      |   |        |        | 
|-------------------------------------- | --------------------- | ---------------- | ------ | ------ | ---- | - | ------ | ------ | 
|                                       |                       | Pension Benefits |       
|                                       |                       | December 31      |       
|                                       |                       |                  |       
|                                       |                       | 2004             |        |        | 2003 |  
|                                       |                       |                  |        |        |      |  
|                                       |                       | (In thousands)   |       
|Prepaid benefit cost                   |                       | $                | 45,389 |        |      | $ | 37,986 |       
|Accrued benefit liability              |                       |                  |       |        |      |   |       |       
|Intangible asset                       |                       |                  |       |        |      |   |       |       
|Accumulated other comprehensive income |                       |                  |       |        |      |   |       |       
|                                       |                       |                  |        |        |      |  
|                                       | Net amount recognized |                  | $      | 45,389 |      |   | $      | 37,986 | 
|                                       |                       |                  |        |        |      |  



Components of Net Periodic Benefit Cost


|                                     |  |                  |         |   |      |   |         |  
|------------------------------------ |  | ---------------- | ------- | - | ---- | - | ------- | -
|                                     |  | Pension Benefits |        
|                                     |  |                  |        
|                                     |  | 2004             |         |   | 2003 |  
|                                     |  |                  |         |   |      |  
|                                     |  | (In thousands)   |        
|Service cost                         |  | $                | 6,829   |   |      | $ | 6,179   |  
|Interest cost                        |  |                  | 8,448   |   |      |   | 7,798   |  
|Expected return on plan assets       |  |                  | (11,128 | ) |      |   | (10,059 | )
|Amortization of prior service cost   |  |                  | 34      |   |      |   | 34      |  
|Recognized net actuarial (gain) loss |  |                  | 1,634   |   |      |   | 1,009   |  
|                                     |  |                  |         |   |      |  
|Net periodic benefit cost            |  | $                | 5,817   |   |      | $ | 4,961   |  
|                                     |  |                  |         |   |      |  

Additional Information


|                                                                                        |                                |                  |   |      |      |   |   |      |  
|--------------------------------------------------------------------------------------- | ------------------------------ | ---------------- | - | ---- | ---- | - | - | ---- | -
|                                                                                        |                                | Pension Benefits |  
|                                                                                        |                                |                  |  
|                                                                                        |                                | 2004             |   |      | 2003 |  
|                                                                                        |                                |                  |   |      |      |  
|                                                                                        |                                | (In thousands)   |  
|Increase in minimum liability included in other comprehensive
    income                |                                | $                |  |      |      | $ |  |     
|                                                                                        | Assumptions                    |                  |   |      |      |   |   |      |  
|Weighted average assumptions used to determine benefit
    obligation at December 31,   |                                |                  |   |      |      |   |   |     
|                                                                                        | Discount rate                  |                  |   | 5.75 | %    |   |   | 6.25 | %
|                                                                                        | Rate of compensation increase  |                  |   | 4.00 |      |   |   | 3.50 |  
|Weighted average assumptions used to determine net cost for
    year ended December 31, |                                |                  |   |      |      |   |   |     
|                                                                                        | Discount rate                  |                  |   | 6.25 | %    |   |   | 6.75 | %
|                                                                                        | Expected return on plan assets |                  |   | 7.50 |      |   |   | 8.00 |  
|                                                                                        | Rate of compensation increase  |                  |   | 3.50 |      |   |   | 4.00 |  



83



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




Plan Assets




|                  |       |               |      |       |      |  |      |       |  
|----------------- | ----- | ------------- | ---- | ----- | ---- |  | ---- | ----- | -
|                  |       | Percentage of |     
|                  |       | Plan Assets   |     
|                  |       | December 31   |     
|                  |       |               |     
|Asset Category    |       | 2004          |      |       | 2003 | 
|                  |       |               |      |       |      | 
|Cash Securities   |       |               | 2.1  | %     |      |  | 39.4 | %    
|Equity Securities |       |               | 60.0 |       |      |  | 40.8 |      
|Debt Securities   |       |               | 37.9 |       |      |  | 19.8 |      
|                  |       |               |      |       |      | 
|                  | Total |               |      | 100.0 | %    |  |      | 100.0 | %
|                  |       |               |      |       |      | 







84



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)










|     |                                       
|---- | --------------------------------------
|(16) | Business Combinations and Divestitures



| |                      
| | ---------------------
| | Business Combinations



85



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






















86



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




| |             
| | ------------
| | Divestitures





|     |             
|---- | ------------
|(17) | Income Taxes



|                                       |         |                          |         |         |         |   |         |         |         |   |         |         |         | 
|-------------------------------------- | ------- | ------------------------ | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                       |         | 2004                     |         |         | 2003    |   |         | 2002    |        
|                                       |         |                          |         |         |         |   |         |         |        
|                                       |         | (In thousands, restated) |        
|Current income tax expense:            |         |                          |         |         |         |   |         |         |         |   |         |        
|                                       | Federal |                          | $       | 174,118 |         |   | $       | 167,415 |         |   | $       | 141,442 |        
|                                       | State   |                          |         | 7,772   |         |   |         | 9,747   |         |   |         | 8,051   |        
|                                       |         |                          |         |         |         |   |         |         |        
|                                       |         | Total                    |         |         | 181,890 |   |         |         | 177,162 |   |         |         | 149,493 | 
|                                       |         |                          |         |         |         |   |         |         |        
|Deferred income tax expense (benefit): |         |                          |         |         |         |   |         |         |         |   |         |        
|                                       | Federal |                          |         | (1,749  | )       |   |         | (6,376  | )       |   |         | 29,924  |        
|                                       | State   |                          |         | (494    | )       |   |         | (2,394  | )       |   |         | 1,256   |        
|                                       |         |                          |         |         |         |   |         |         |        
|                                       |         | Total                    |         |         | (2,243  | ) |         |         | (8,770  | ) |         |         | 31,180  | 
|                                       |         |                          |         |         |         |   |         |         |        
|Total income tax expense               |         | $                        | 179,647 |         |         | $ | 168,392 |         |         | $ | 180,673 |        
|                                       |         |                          |         |         |         |   |         |         |        





|                                             |                                                            |                          |         |           |          |  |      |        |           |   |          |        |         |           |      |      |          |   |         |        |         |  |      |      |      |  
|-------------------------------------------- | ---------------------------------------------------------- | ------------------------ | ------- | --------- | -------- |  | ---- | ------ | --------- | - | -------- | ------ | ------- | --------- | ---- | ---- | -------- | - | ------- | ------ | ------- |  | ---- | ---- | ---- | -
|                                             |                                                            | 2004                     |         |           | 2003     |  |      | 2002   |          
|                                             |                                                            |                          |         |           |          |  |      |        |          
|                                             |                                                            |                          |         | Percent   |          |  |      |        | Percent   |   |          |        |         | Percent   |     
|                                             |                                                            |                          |         | of Pretax |          |  |      |        | of Pretax |   |          |        |         | of Pretax |     
|                                             |                                                            | Amount                   |         |           | Earnings |  |      | Amount |           |   | Earnings |        |         | Amount    |      |      | Earnings |  
|                                             |                                                            |                          |         |           |          |  |      |        |           |   |          |        |         |           |      |      |          |  
|                                             |                                                            | (In thousands, restated) |        
|Income tax expense at federal Statutory rate |                                                            | $                        | 188,941 |           |          |  | 35.0 | %      |           | $ | 173,975  |        |         |           | 35.0 | %    |          | $ | 183,756 |        |         |  | 35.0 | %   
|Increase (decrease) resulting from:          |                                                            |                          |         |           |          |  |      |        |           |   |          |        |         |           |      |      |          |   |         |        |         |  |      |     
|                                             | Tax-exempt income                                          |                          |         | (8,631    | )        |  |      | (1.6   | )         |   |          | (8,538 | )       |           |      | (1.7 | )        |   |         | (9,754 | )       |  |      | (1.9 | )   
|                                             | State income tax expense net of federal income tax benefit |                          |         | 4,731     |          |  |      | 0.9    |           |   |          | 4,780  |         |           |      | 1.0  |          |   |         | 6,049  |         |  |      | 1.2  |     
|                                             | Other                                                      |                          |         | (5,394    | )        |  |      | (1.0   | )         |   |          | (1,825 | )       |           |      | (0.4 | )        |   |         | 622    |         |  |      | 0.1  |     
|                                             |                                                            |                          |         |           |          |  |      |        |           |   |          |        |         |           |      |      |          |  
|                                             |                                                            | Income tax expense       |         | $         | 179,647  |  |      |        | 33.3      | % |          | $      | 168,392 |           |      |      | 33.9     | % |         | $      | 180,673 |  |      |      | 34.4 | %
|                                             |                                                            |                          |         |           |          |  |      |        |           |   |          |        |         |           |      |      |          |  

87



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                   |                                                                                                                          |                          |        |        |         |   |         |        |         | 
|---------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | ------------------------ | ------ | ------ | ------- | - | ------- | ------ | ------- | 
|                                   |                                                                                                                          | 2004                     |        |        | 2003    |  
|                                   |                                                                                                                          |                          |        |        |         |  
|                                   |                                                                                                                          | (In thousands, restated) |       
|Deferred tax assets:               |                                                                                                                          |                          |        |        |         |   |         |       
|                                   | Allowance for loan losses                                                                                                |                          | $      | 98,721 |         |   | $       | 94,824 |        
|                                   | Net unrealized losses on securities available for sale, hedging
    instruments and additional minimum pension liability |                          |        | 14,080 |         |   |         |       |        
|                                   | Other deferred tax assets                                                                                                |                          |        | 23,235 |         |   |         | 15,090 |        
|                                   |                                                                                                                          |                          |        |        |         |  
|                                   |                                                                                                                          | Total assets             |        |        | 136,036 |   |         |        | 109,914 | 
|                                   |                                                                                                                          |                          |        |        |         |  
|Deferred tax liabilities:          |                                                                                                                          |                          |        |        |         |   |         |       
|                                   | Premises and equipment                                                                                                   |                          |        | 42,884 |         |   |         | 34,303 |        
|                                   | Lease financing                                                                                                          |                          |        | 24,145 |         |   |         | 37,623 |        
|                                   | Net unrealized gains on securities available for sale and
    hedging instruments                                        |                          |        |       |         |   |         | 20,322 |        
|                                   | Core deposit and other acquired intangibles                                                                              |                          |        | 19,607 |         |   |         | 18,785 |        
|                                   | Prepaid pension benefit cost                                                                                             |                          |        | 17,157 |         |   |         | 14,344 |        
|                                   | Loan costs                                                                                                               |                          |        | 16,011 |         |   |         |       |        
|                                   | Mark-to-market on derivative financial instruments                                                                       |                          |        | 6,527  |         |   |         | 12,378 |        
|                                   | Other deferred tax liabilities                                                                                           |                          |        | 16,086 |         |   |         | 15,185 |        
|                                   |                                                                                                                          |                          |        |        |         |  
|                                   |                                                                                                                          | Total liabilities        |        |        | 142,417 |   |         |        | 152,940 | 
|                                   |                                                                                                                          |                          |        |        |         |  
|Net deferred tax asset (liability) |                                                                                                                          | $                        | (6,381 | )      |         | $ | (43,026 | )     
|                                   |                                                                                                                          |                          |        |        |         |  

88



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|     |               
|---- | --------------
|(18) | Parent Company





| |               
| | --------------
| | Balance Sheets

|                                     |                                                                          |                                            |   |           |           |  |   |           |           | 
|------------------------------------ | ------------------------------------------------------------------------ | ------------------------------------------ | - | --------- | --------- |  | - | --------- | --------- | 
|                                     |                                                                          | December 31                                |  
|                                     |                                                                          |                                            |  
|                                     |                                                                          | 2004                                       |   |           | 2003      | 
|                                     |                                                                          |                                            |   |           |           | 
|                                     |                                                                          | (In thousands, restated)                   |  
|Assets                               |                                                                          |                                            |   |           |           |  |   |          
|                                     | Cash and due from banks *                                                |                                            | $ | 254,212   |           |  | $ | 300,322   |          
|                                     |                                                                          |                                            |   |           |           |  | 2 |          
|                                     | Trading account assets                                                   |                                            |   | 17,657    |           |  |   | 27,760    |          
|                                     | Investment securities available for sale                                 |                                            |   | 29,621    |           |  |   | 30,810    |          
|                                     | Investment in subsidiaries *                                             |                                            |   | 2,294,945 |           |  |   | 2,095,976 |          
|                                     | Other assets *                                                           |                                            |   | 28,108    |           |  |   | 25,226    |          
|                                     |                                                                          |                                            |   |           |           | 
|                                     |                                                                          | Total assets                               |   | $         | 2,624,543 |  |   | $         | 2,480,094 | 
|                                     |                                                                          |                                            |   |           |           | 
|Liabilities and Shareholders Equity |                                                                          |                                            |   |           |           |  |   |          
|                                     | Commercial paper                                                         |                                            | $ | 97,498    |           |  | $ | 73,512    |          
|                                     | Accrued expenses and other liabilities *                                 |                                            |   | 61,872    |           |  |   | 31,096    |          
|                                     | Junior subordinated debt payable to unconsolidated subsidiary
    trusts |                                            |   | 408,828   |           |  |   | 430,965   |          
|                                     | Subordinated debentures and other borrowings                             |                                            |   |          |           |  |   | 51,947    |          
|                                     |                                                                          |                                            |   |           |           | 
|                                     |                                                                          | Total liabilities                          |   |           | 568,198   |  |   |           | 587,520   | 
|                                     | Shareholders equity                                                     |                                            |   | 2,056,345 |           |  |   | 1,892,574 |          
|                                     |                                                                          |                                            |   |           |           | 
|                                     |                                                                          | Total liabilities and shareholders equity |   | $         | 2,624,543 |  |   | $         | 2,480,094 | 
|                                     |                                                                          |                                            |   |           |           | 






|  |                            
|- | ---------------------------
|* | Eliminates in consolidation

89



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




| |                     
| | --------------------
| | Statements of Income

|                                                  |                                                                                           |                          |         |         |         |  |         |         |         |  |         |         |         | 
|------------------------------------------------- | ----------------------------------------------------------------------------------------- | ------------------------ | ------- | ------- | ------- |  | ------- | ------- | ------- |  | ------- | ------- | ------- | 
|                                                  |                                                                                           | Year Ended December 31   |        
|                                                  |                                                                                           |                          |        
|                                                  |                                                                                           | 2004                     |         |         | 2003    |  |         | 2002    |        
|                                                  |                                                                                           |                          |         |         |         |  |         |         |        
|                                                  |                                                                                           | (In thousands, restated) |        
|Income:                                           |                                                                                           |                          |         |         |         |  |         |         |         |  |         |        
|                                                  | Cash dividends from subsidiaries *                                                        |                          | $       | 120,000 |         |  | $       | 350,371 |         |  | $       | 205,319 |        
|                                                  | Interest on investments with affiliates *                                                 |                          |         | 7,466   |         |  |         | 7,797   |         |  |         | 7,740   |        
|                                                  | Other                                                                                     |                          |         | 10,542  |         |  |         | 7,951   |         |  |         | 54,241  |        
|                                                  |                                                                                           |                          |         |         |         |  |         |         |        
|                                                  |                                                                                           | Total income             |         |         | 138,008 |  |         |         | 366,119 |  |         |         | 267,300 | 
|Expense:                                          |                                                                                           |                          |         |         |         |  |         |         |         |  |         |        
|                                                  | Interest on commercial paper and other borrowings                                         |                          |         | 1,586   |         |  |         | 4,828   |         |  |         | 21,670  |        
|                                                  | Other                                                                                     |                          |         | 39,596  |         |  |         | 38,574  |         |  |         | 19,837  |        
|                                                  |                                                                                           |                          |         |         |         |  |         |         |        
|                                                  |                                                                                           | Total expense            |         |         | 41,182  |  |         |         | 43,402  |  |         |         | 41,507  | 
|                                                  | Income before income tax benefit and equity in undistributed
    earnings of subsidiaries |                          |         | 96,826  |         |  |         | 322,717 |         |  |         | 225,793 |        
|                                                  | Applicable income tax benefit                                                             |                          |         | (8,765  | )       |  |         | (10,401 | )       |  |         | 7,660   |        
|                                                  |                                                                                           |                          |         |         |         |  |         |         |        
|                                                  |                                                                                           |                          | 105,591 |         |         |  | 333,118 |         |         |  | 218,133 |        
|Equity in undistributed earnings of subsidiaries* |                                                                                           |                          | 254,594 |         |         |  | (4,440  | )       |         |  | 126,212 |        
|                                                  |                                                                                           |                          |         |         |         |  |         |         |        
|                                                  |                                                                                           | Net income               |         | $       | 360,185 |  |         | $       | 328,678 |  |         | $       | 344,345 | 
|                                                  |                                                                                           |                          |         |         |         |  |         |         |        






|  |                            
|- | ---------------------------
|* | Eliminates in consolidation

90



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




| |                         
| | ------------------------
| | Statements of Cash Flows

|                                                   |                                                                                    |                                          |                                                     |          |          |          |         |          |         |          |         |          |          |         | 
|-------------------------------------------------- | ---------------------------------------------------------------------------------- | ---------------------------------------- | --------------------------------------------------- | -------- | -------- | -------- | ------- | -------- | ------- | -------- | ------- | -------- | -------- | ------- | 
|                                                   |                                                                                    | Year Ended December 31                   |                                                    
|                                                   |                                                                                    |                                          |                                                    
|                                                   |                                                                                    | 2004                                     |                                                     |          | 2003     |          |         | 2002     |        
|                                                   |                                                                                    |                                          |                                                     |          |          |          |         |          |        
|                                                   |                                                                                    | (In thousands, restated)                 |                                                    
|Operating Activities:                              |                                                                                    |                                          |                                                     |          |          |          |         |          |         |          |         |         
|                                                   | Net income                                                                         |                                          | $                                                   | 360,185  |          |          | $       | 328,678  |         |          | $       | 344,345  |         
|                                                   | Adjustments to reconcile net income to cash provided by
    operations:            |                                          |                                                     |          |          |          |         |          |         |          |         |          |         
|                                                   |                                                                                    | Depreciation and amortization            |                                                     |          | 6,034    |          |         |          | 4,569   |          |         |          | 3,475    |        
|                                                   |                                                                                    | Accretion of discount                    |                                                     |          | (1,575   | )        |         |          | (1,575  | )        |         |          | (1,182   | )      
|                                                   |                                                                                    | Trading assets                           |                                                     |          | 11,678   |          |         |          | 13,437  |          |         |          | (31,182  | )      
|                                                   |                                                                                    | Equity in undistributed earnings         |                                                     |          | (254,595 | )        |         |          | 4,441   |          |         |          | (126,212 | )      
|                                                   |                                                                                    | Increase in other assets                 |                                                     |          | (4,857   | )        |         |          | (2,954  | )        |         |          | (8,061   | )      
|                                                   |                                                                                    | Increase (decrease) in other liabilities |                                                     |          | (5,833   | )        |         |          | (12,522 | )        |         |          | 22,763   |        
|                                                   |                                                                                    |                                          |                                                     |          |          |          |         |          |        
|                                                   |                                                                                    |                                          | Net cash provided by operating activities           |          |          | 111,037  |         |          |         | 334,074  |         |          |          | 203,946 | 
|Investing Activities:                              |                                                                                    |                                          |                                                     |          |          |          |         |          |         |          |         |         
|                                                   | Proceeds from sales of investment securities available for sale                    |                                          |                                                     |         |          |          |         |         |         |          |         | 1,441    |         
|                                                   | Proceeds from call of investment securities available for sale                     |                                          |                                                     | 4,310    |          |          |         |         |         |          |         |         |         
|                                                   | Capital receipts from (contributions to) subsidiaries                              |                                          |                                                     | 683      |          |          |         | (1,683   | )       |          |         | (368     | )       
|                                                   |                                                                                    |                                          |                                                     |          |          |          |         |          |        
|                                                   |                                                                                    |                                          | Net cash (used in) provided by investing activities |          |          | 4,993    |         |          |         | (1,683   | )       |          |          | 1,073   | 
|Financing Activities:                              |                                                                                    |                                          |                                                     |          |          |          |         |          |         |          |         |         
|                                                   | Net increase (decrease) in commercial paper                                        |                                          |                                                     | 23,986   |          |          |         | (3,416   | )       |          |         | (18,172  | )       
|                                                   | Repayment of other borrowings                                                      |                                          |                                                     | (50,000  | )        |          |         | (75,000  | )       |          |         |         |         
|                                                   | Issuance (repurchase) of junior subordinated debt payable
    to subsidiary trusts |                                          |                                                     | (23,000  | )        |          |         | (12,000  | )       |          |         | 292,125  |         
|                                                   | Common dividends paid                                                              |                                          |                                                     | (118,533 | )        |          |         | (139,376 | )       |          |         | (128,183 | )       
|                                                   | Purchase of treasury stock                                                         |                                          |                                                     | (33,829  | )        |          |         | (213,227 | )       |          |         | (130,587 | )       
|                                                   | Issuance of treasury stock for benefit plans and stock options                     |                                          |                                                     | 9,998    |          |          |         | 8,466    |         |          |         | 10,056   |         
|                                                   | Repayment of loans to finance stock purchases                                      |                                          |                                                     | 616      |          |          |         | 1,126    |         |          |         | 5,404    |         
|                                                   | Proceeds from exercise of stock options                                            |                                          |                                                     | 28,622   |          |          |         | 22,742   |         |          |         | 30,354   |         
|                                                   |                                                                                    |                                          |                                                     |          |          |          |         |          |        
|                                                   |                                                                                    |                                          | Net cash (used in) provided by financing activities |          |          | (162,140 | )       |          |         | (410,685 | )       |          |          | 60,997  | 
|                                                   |                                                                                    |                                          |                                                     |          |          |          |         |          |        
|Net increase (decrease) in cash and due from banks |                                                                                    |                                          | (46,110                                             | )        |          |          | (78,294 | )        |         |          | 266,016 |         
|Cash and due from banks at beginning of the year   |                                                                                    |                                          | 300,322                                             |          |          |          | 378,616 |          |         |          | 112,600 |         
|                                                   |                                                                                    |                                          |                                                     |          |          |          |         |          |        
|Cash and due from banks at end of the year         |                                                                                    | $                                        | 254,212                                             |          |          | $        | 300,322 |          |         | $        | 378,616 |         
|                                                   |                                                                                    |                                          |                                                     |          |          |          |         |          |        



|     |                                    
|---- | -----------------------------------
|(19) | Fair Value of Financial Instruments



91



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)








| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cash and due from banks: Fair value equals the
    carrying value of such assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | Investment securities held to maturity and investment
    securities available for sale: Fair values of investment
    securities held to maturity and investment securities available
    for sale are based primarily on quoted or other independent
    market prices. If quoted market prices are not available, then
    fair values are estimated using pricing models, quoted prices of
    instruments with similar characteristics or discounted cash
    flows.                                                                                                 
|
| | Trading account assets: Fair values of trading
    account assets are based primarily on quoted or other
    independent market prices. If quoted market prices are not
    available, then fair values are estimated using pricing models,
    quoted prices of instruments with similar characteristics or
    discounted cash flows.                                                                                                                                                                                                                                   
|
| | Federal funds sold and securities purchased under
    agreements to resell: Due to the short-term nature of
    these assets, the carrying values of these assets approximate
    their fair value.                                                                                                                                                                                                                                                                                                                                                                       
|
| | Loans: Loans were valued using discounted cash
    flows. The discount rate used to determine the present value of
    these loans was based on interest rates currently being charged
    by the Company on comparable loans as to credit risk and term.                                                                                                                                                                                                                                                                                                                 
|
| | Off-balance sheet instruments: The Companys
    loan commitments are negotiated at current market rates and are
    relatively short-term in nature and, as a matter of policy, the
    Company generally makes commitments for fixed rate loans for
    relatively short periods of time. Therefore, the estimated value
    of the Companys loan commitments approximates carrying
    amount.                                                                                                                                                                        
|
| | Derivatives: Derivative instruments (forwards,
    swaps, caps, floors and options written) are recorded on the
    balance sheet at fair value. Fair value is calculated using
    pricing models designed to approximate dealer quoted prices.                                                                                                                                                                                                                                                                                                                          
|
| | Deposit liabilities: The fair values of demand
    deposits are equal to the carrying value of such deposits.
    Demand deposits include noninterest bearing demand deposits,
    savings accounts, NOW accounts and money market demand accounts.
    Discounted cash flows have been used to value fixed rate term
    deposits and variable rate term deposits having an interest rate
    floor that has been reached. The discount rate used is based on
    interest rates currently being offered by the Company on
    comparable deposits as to amount and term.
|
| | Short-term borrowings: The carrying value of
    federal funds purchased, securities sold under agreements to
    repurchase and other short-term borrowings approximates their
    carrying values.                                                                                                                                                                                                                                                                                                                                                                      
|
| | FHLB and other borrowings: The fair value of the
    Companys fixed rate borrowings, which includes the
    Companys Capital Securities, are estimated using
    discounted cash flows, based on the Companys current
    incremental borrowing rates for similar types of borrowing
    arrangements. The carrying amount of the Companys variable
    rate borrowings approximates their fair values.                                                                                                                                                               

92



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)


|                       |              |                                                                                |  |                          |                      |  |  |          |            |  |            |   |            |  |  |   |            | 
|---------------------- | ------------ | ------------------------------------------------------------------------------ |  | ------------------------ | -------------------- |  |  | -------- | ---------- |  | ---------- | - | ---------- |  |  | - | ---------- | 
|                       |              | At December 31, 2004                                                           |  |                          | At December 31, 2003 | 
|                       |              |                                                                                |  |                          |                      | 
|                       |              | Carrying                                                                       |  |                          | Estimated            |  |  | Carrying |            |  | Estimated  |  
|                       |              | Amount                                                                         |  |                          | Fair Value           |  |  | Amount   |            |  | Fair Value |  
|                       |              |                                                                                |  |                          |                      |  |  |          |            |  |            |  
|                       |              |                                                                                |  | (In thousands, restated) |                      |  | 
|Financial Instruments: |              |                                                                                |  |                          |                      |  |  |          |            |  |            |   |            |  |  |  
|                       | Assets:      |                                                                                |  |                          |                      |  |  |          |            |  |            |   |            |  |  |   |           
|                       |              | Cash and due from banks                                                        |  | $                        | 585,679              |  |  | $        | 585,679    |  |            | $ | 726,492    |  |  | $ | 726,492    | 
|                       |              | Investment securities held to maturity                                         |  |                          | 2,767,099            |  |  |          | 2,768,334  |  |            |   | 2,936,344  |  |  |   | 2,949,023  | 
|                       |              | Investment securities available for sale                                       |  |                          | 4,398,184            |  |  |          | 4,398,184  |  |            |   | 4,375,208  |  |  |   | 4,375,208  | 
|                       |              | Trading account assets                                                         |  |                          | 77,817               |  |  |          | 77,817     |  |            |   | 86,219     |  |  |   | 86,219     | 
|                       |              | Federal funds sold and securities purchased under agreements to
    resell     |  |                          | 46,948               |  |  |          | 46,948     |  |            |   | 78,165     |  |  |   | 78,165     | 
|                       |              | Loans                                                                          |  |                          | 18,856,922           |  |  |          | 18,542,415 |  |            |   | 17,365,802 |  |  |   | 17,397,215 | 
|                       | Liabilities: |                                                                                |  |                          |                      |  |  |          |            |  |            |   |            |  |  |   |           
|                       |              | Noninterest bearing deposits                                                   |  | $                        | 5,476,140            |  |  | $        | 5,476,140  |  |            | $ | 4,627,153  |  |  | $ | 4,627,153  | 
|                       |              | Interest bearing deposits                                                      |  |                          | 11,566,592           |  |  |          | 11,568,839 |  |            |   | 11,060,479 |  |  |   | 11,101,440 | 
|                       |              | Federal funds purchased and securities sold under agreements to
    repurchase |  |                          | 4,532,004            |  |  |          | 4,532,004  |  |            |   | 4,118,624  |  |  |   | 4,118,624  | 
|                       |              | Other short-term borrowings                                                    |  |                          | 175,771              |  |  |          | 175,771    |  |            |   | 263,537    |  |  |   | 263,537    | 
|                       |              | FHLB and other borrowings                                                      |  |                          | 4,119,771            |  |  |          | 4,156,322  |  |            |   | 4,794,935  |  |  |   | 5,034,436  | 



|     |                    
|---- | -------------------
|(20) | Segment Information







93



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)










|                          |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |          |   |   |            |         | 
|------------------------- | ------------------------- | ------------------------------------ | ---------- | --------- | ------- | - | --------- | ---------- |  | - | --------- | ------ | ----------- | ----- | --------- | ------ | ------------ | - | --------- | -------- | - | - | ---------- | ------- | 
|                          |                           | For the Year Ended December 31, 2004 |           
|                          |                           |                                      |           
|                          |                           |                                      |            | Corporate |         |   |          
|                          |                           | Corporate                            |            |           | Retail  |   |           | Wealth     |  |   |           |        | Support and |       |           |       
|                          |                           | Banking                              |            |           | Banking |   |           | Management |  |   | Treasury  |        |             | Other |           |        | Consolidated |  
|                          |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|                          |                           | (In thousands)                       |           
|Income Statement:         |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |          |   |   |            |        
|Net interest income       |                           | $                                    | 343,097    |           |         | $ | 344,673   |            |  | $ | 47,549    |        |             | $     | 54,382    |        |              | $ | 95,624    |          |   | $ | 885,325    |        
|Noninterest income        |                           |                                      | 139,763    |           |         |   | 402,495   |            |  |   | 29,316    |        |             |       | 66,948    |        |              |   | (9,879    | )        |   |   | 628,643    |        
|Noninterest expense       |                           |                                      | 197,038    |           |         |   | 392,312   |            |  |   | 39,359    |        |             |       | 40,886    |        |              |   | 198,883   |          |   |   | 868,478    |        
|                          |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|                          | Segment net income (loss) |                                      | $          | 285,822   |         |   | $         | 354,856    |  |   | $         | 37,506 |             |       | $         | 80,444 |              |   | $         | (113,138 | ) |   |            | 645,490 | 
|                          |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|Provision for loan losses |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |          |   |   | 105,658    |        
|                          |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|Net income before income  |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |          |   |   |            |        
|                          | Tax expense               |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |          |   |   |            | 539,832 | 
|Income tax expense        |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |          |   |   | 179,647    |        
|                          |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|Net income                |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |          |   | $ | 360,185    |        
|                          |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|Balance Sheet:            |                           |                                      |            |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |          |   |   |            |        
|Average assets            |                           | $                                    | 9,927,938  |           |         | $ | 6,717,578 |            |  | $ | 1,213,556 |        |             | $     | 7,657,118 |        |              | $ | 2,144,438 |          |   | $ | 27,660,628 |        
|Average loans             |                           |                                      | 9,789,575  |           |         |   | 6,467,840 |            |  |   | 1,204,768 |        |             |       |          |        |              |   | 537,172   |          |   |   | 17,999,355 |        
|Average deposits          |                           |                                      | 4,609,496  |           |         |   | 9,287,107 |            |  |   | 1,243,356 |        |             |       | 1,285,590 |        |              |   | (11,847   | )        |   |   | 16,413,702 |        
|Period-end assets         |                           | $                                    | 10,238,188 |           |         | $ | 7,104,790 |            |  | $ | 1,294,636 |        |             | $     | 7,666,740 |        |              | $ | 1,877,562 |          |   | $ | 28,181,916 |        
|Period-end loans          |                           |                                      | 10,101,932 |           |         |   | 6,848,770 |            |  |   | 1,285,285 |        |             |       |          |        |              |   | 620,935   |          |   |   | 18,856,922 |        
|Period-end deposits       |                           |                                      | 4,826,556  |           |         |   | 9,615,470 |            |  |   | 1,211,464 |        |             |       | 1,424,073 |        |              |   | (34,831   | )        |   |   | 17,042,732 |        

94



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)


|                          |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |        |  |   |            |         | 
|------------------------- | ------------------ | ------------------------------------ | --------- | --------- | ------- | - | --------- | ---------- |  | - | --------- | ------ | ----------- | ----- | --------- | ------ | ------------ | - | --------- | ------ |  | - | ---------- | ------- | 
|                          |                    | For the Year Ended December 31, 2003 |          
|                          |                    |                                      |          
|                          |                    |                                      |           | Corporate |         |   |          
|                          |                    | Corporate                            |           |           | Retail  |   |           | Wealth     |  |   |           |        | Support and |       |           |       
|                          |                    | Banking                              |           |           | Banking |   |           | Management |  |   | Treasury  |        |             | Other |           |        | Consolidated |  
|                          |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|                          |                    | (In thousands)                       |          
|Income Statement:         |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |        |  |   |            |        
|Net interest income       |                    | $                                    | 313,011   |           |         | $ | 277,847   |            |  | $ | 37,758    |        |             | $     | 34,294    |        |              | $ | 216,220   |        |  | $ | 879,130    |        
|Noninterest income        |                    |                                      | 131,738   |           |         |   | 349,410   |            |  |   | 28,286    |        |             |       | 35,633    |        |              |   | (9,563    | )      |  |   | 535,504    |        
|Noninterest expense       |                    |                                      | 185,164   |           |         |   | 368,128   |            |  |   | 38,325    |        |             |       | 12,073    |        |              |   | 194,193   |        |  |   | 797,883    |        
|                          |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|                          | Segment net income |                                      | $         | 259,585   |         |   | $         | 259,129    |  |   | $         | 27,719 |             |       | $         | 57,854 |              |   | $         | 12,464 |  |   |            | 616,751 | 
|                          |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|Provision for loan losses |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |        |  |   | 119,681    |        
|                          |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|Net income before income  |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |        |  |   |            |        
|                          | Tax expense        |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |        |  |   |            | 497,070 | 
|Income tax expense        |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |        |  |   | 168,392    |        
|                          |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|Net income                |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |        |  | $ | 328,678    |        
|                          |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |  
|Balance Sheet:            |                    |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |        |              |   |           |        |  |   |            |        
|Average assets            |                    | $                                    | 9,230,631 |           |         | $ | 5,958,776 |            |  | $ | 1,025,863 |        |             | $     | 6,687,490 |        |              | $ | 2,239,959 |        |  | $ | 25,142,719 |        
|Average loans             |                    |                                      | 9,074,624 |           |         |   | 5,723,692 |            |  |   | 1,017,144 |        |             |       |          |        |              |   | 980,728   |        |  |   | 16,796,188 |        
|Average deposits          |                    |                                      | 3,995,440 |           |         |   | 8,946,112 |            |  |   | 1,226,041 |        |             |       | 784,988   |        |              |   | 39,269    |        |  |   | 14,991,850 |        
|Period-end assets         |                    | $                                    | 9,555,757 |           |         | $ | 6,406,731 |            |  | $ | 1,092,830 |        |             | $     | 7,673,763 |        |              | $ | 2,234,032 |        |  | $ | 26,963,113 |        
|Period-end loans          |                    |                                      | 9,421,536 |           |         |   | 6,135,978 |            |  |   | 1,084,268 |        |             |       |          |        |              |   | 724,020   |        |  |   | 17,365,802 |        
|Period-end deposits       |                    |                                      | 4,383,398 |           |         |   | 9,035,555 |            |  |   | 1,265,937 |        |             |       | 1,014,766 |        |              |   | (12,024   | )      |  |   | 15,687,632 |        

95



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)


|                          |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |   |           |          |   |   |            |         | 
|------------------------- | ------------------------- | ------------------------------------ | --------- | --------- | ------- | - | --------- | ---------- |  | - | --------- | ------ | ----------- | ----- | --------- | ------- | ------------ | - | --------- | -------- | - | - | ---------- | ------- | 
|                          |                           | For the Year Ended December 31, 2002 |          
|                          |                           |                                      |          
|                          |                           |                                      |           | Corporate |         |   |          
|                          |                           | Corporate                            |           |           | Retail  |   |           | Wealth     |  |   |           |        | Support and |       |           |        
|                          |                           | Banking                              |           |           | Banking |   |           | Management |  |   | Treasury  |        |             | Other |           |         | Consolidated |  
|                          |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |  
|                          |                           | (In thousands)                       |          
|Income Statement:         |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |   |           |          |   |   |            |        
|Net interest income       |                           | $                                    | 375,991   |           |         | $ | 370,955   |            |  | $ | 51,643    |        |             | $     | 92,367    |         |              | $ | 10,753    |          |   | $ | 901,709    |        
|Noninterest income        |                           |                                      | 92,325    |           |         |   | 289,205   |            |  |   | 26,006    |        |             |       | 104,544   |         |              |   | (11       | )        |   |   | 512,069    |        
|Noninterest expense       |                           |                                      | 174,645   |           |         |   | 336,332   |            |  |   | 35,579    |        |             |       | 18,551    |         |              |   | 187,322   |          |   |   | 752,429    |        
|                          |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |  
|                          | Segment net income (loss) |                                      | $         | 293,671   |         |   | $         | 323,828    |  |   | $         | 42,070 |             |       | $         | 178,360 |              |   | $         | (176,580 | ) |   |            | 661,349 | 
|                          |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |  
|Provision for loan losses |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |   |           |          |   |   | 136,331    |        
|                          |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |  
|Net income before income  |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |   |           |          |   |   |            |        
|                          | Tax expense               |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |   |           |          |   |   |            | 525,018 | 
|Income tax expense        |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |   |           |          |   |   | 180,673    |        
|                          |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |  
|Net income                |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |   |           |          |   | $ | 344,345    |        
|                          |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |  
|Balance Sheet:            |                           |                                      |           |           |         |   |           |            |  |   |           |        |             |       |           |         |              |   |           |          |   |   |            |        
|Average assets            |                           | $                                    | 8,908,143 |           |         | $ | 5,016,144 |            |  | $ | 883,500   |        |             | $     | 7,043,444 |         |              | $ | 1,503,096 |          |   | $ | 23,354,327 |        
|Average loans             |                           |                                      | 8,800,787 |           |         |   | 4,750,679 |            |  |   | 874,054   |        |             |       |          |         |              |   | 675,324   |          |   |   | 15,100,844 |        
|Average deposits          |                           |                                      | 3,501,461 |           |         |   | 8,831,532 |            |  |   | 1,126,950 |        |             |       | 609,740   |         |              |   | 70,417    |          |   |   | 14,140,100 |        
|Period-end assets         |                           | $                                    | 9,054,074 |           |         | $ | 5,596,187 |            |  | $ | 951,353   |        |             | $     | 6,180,044 |         |              | $ | 2,143,931 |          |   | $ | 23,925,589 |        
|Period-end loans          |                           |                                      | 8,914,602 |           |         |   | 5,335,406 |            |  |   | 942,034   |        |             |       |          |         |              |   | 1,289,278 |          |   |   | 16,481,320 |        
|Period-end deposits       |                           |                                      | 3,865,850 |           |         |   | 8,782,925 |            |  |   | 1,212,364 |        |             |       | 1,197,196 |         |              |   | 69,218    |          |   |   | 15,127,553 |        





96



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|     |                   
|---- | ------------------
|(21) | Earnings Per Share



|                            |                                                                                                                                                                         |                                      |   |         |      |  |   |         |  |  |   |         | 
|--------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | - | ------- | ---- |  | - | ------- |  |  | - | ------- | 
|                            |                                                                                                                                                                         | Year Ended December 31               |  
|                            |                                                                                                                                                                         |                                      |  
|                            |                                                                                                                                                                         | 2004                                 |   |         | 2003 |  |   | 2002    | 
|                            |                                                                                                                                                                         |                                      |   |         |      |  |   |         | 
|                            |                                                                                                                                                                         | (In thousands, except per share data |  
|                            |                                                                                                                                                                         | restated)                            |  
|BASIC EARNINGS PER SHARE:   |                                                                                                                                                                         |                                      |   |         |      |  |   |         |  |  |   |        
|                            | Net income                                                                                                                                                              |                                      | $ | 360,185 |      |  | $ | 328,678 |  |  | $ | 344,345 | 
|                            | Plus: Adjustment                                                                                                                                                        |                                      |   |        |      |  |   |        |  |  |   |        | 
|                            |                                                                                                                                                                         |                                      |   |         |      |  |   |         | 
|                            | Net income available to common shareholders                                                                                                                             |                                      | $ | 360,185 |      |  | $ | 328,678 |  |  | $ | 344,345 | 
|                            |                                                                                                                                                                         |                                      |   |         |      |  |   |         | 
|                            | Weighted average basic common shares outstanding                                                                                                                        |                                      |   | 122,254 |      |  |   | 124,656 |  |  |   | 127,575 | 
|                            |                                                                                                                                                                         |                                      |   |         |      |  |   |         | 
|                            | Basic earnings per share                                                                                                                                                |                                      | $ | 2.95    |      |  | $ | 2.64    |  |  | $ | 2.70    | 
|                            |                                                                                                                                                                         |                                      |   |         |      |  |   |         | 
|DILUTED EARNINGS PER SHARE: |                                                                                                                                                                         |                                      |   |         |      |  |   |         |  |  |   |        
|                            | Net income                                                                                                                                                              |                                      | $ | 360,185 |      |  | $ | 328,678 |  |  | $ | 344,345 | 
|                            | Plus: Adjustment                                                                                                                                                        |                                      |   |        |      |  |   |        |  |  |   |        | 
|                            |                                                                                                                                                                         |                                      |   |         |      |  |   |         | 
|                            | Net income available to common shareholders and assumed
    conversions                                                                                                 |                                      | $ | 360,185 |      |  | $ | 328,678 |  |  | $ | 344,345 | 
|                            |                                                                                                                                                                         |                                      |   |         |      |  |   |         | 
|                            | Weighted average common shares outstanding                                                                                                                              |                                      |   | 122,254 |      |  |   | 124,656 |  |  |   | 127,575 | 
|                            | Net effect of nonvested restricted stock and the assumed
    exercise of stock options  based on the treasury
    stock method using average market price for the year |                                      |   | 3,162   |      |  |   | 2,530   |  |  |   | 2,275   | 
|                            |                                                                                                                                                                         |                                      |   |         |      |  |   |         | 
|                            | Weighted average diluted common shares outstanding                                                                                                                      |                                      |   | 125,416 |      |  |   | 127,186 |  |  |   | 129,850 | 
|                            |                                                                                                                                                                         |                                      |   |         |      |  |   |         | 
|                            | Diluted earnings per share                                                                                                                                              |                                      | $ | 2.87    |      |  | $ | 2.58    |  |  | $ | 2.65    | 
|                            |                                                                                                                                                                         |                                      |   |         |      |  |   |         | 



|     |                     
|---- | --------------------
|(22) | Comprehensive Income



97



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                                                        |                                                                                                                                                         |                                                                              |   |         |         |   |   |          |         |   |   |         |        | 
|----------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | - | ------- | ------- | - | - | -------- | ------- | - | - | ------- | ------ | 
|                                                                        |                                                                                                                                                         | Year Ended December 31                                                       |  
|                                                                        |                                                                                                                                                         |                                                                              |  
|                                                                        |                                                                                                                                                         | 2004                                                                         |   |         | 2003    |   |   | 2002     |        
|                                                                        |                                                                                                                                                         |                                                                              |   |         |         |   |   |          |        
|                                                                        |                                                                                                                                                         | (In thousands)                                                               |  
|Other comprehensive income (loss), before tax:                          |                                                                                                                                                         |                                                                              |   |         |         |   |   |          |         |   |   |        
|                                                                        | Unrealized holding gain (loss) on investment securities
    available for sale, net                                                                     |                                                                              | $ | (41,152 | )       |   | $ | (106,955 | )       |   | $ | 119,306 |       
|                                                                        | Less reclassification adjustment for gains (losses) on
    investment securities available for sale                                                     |                                                                              |   | 27,336  |         |   |   | (43      | )       |   |   | 4,233   |       
|                                                                        | Net change in additional minimum pension liability                                                                                                      |                                                                              |   | (3,469  | )       |   |   |         |         |   |   |        |       
|                                                                        | Amortization of unrealized net holding losses on investment
    securities available for sale transferred to investment
    securities held to maturity |                                                                              |   | (10,702 | )       |   |   | (2,437   | )       |   |   |        |       
|                                                                        | Net change in accumulated losses on cash-flow hedging instruments                                                                                       |                                                                              |   | (14,572 | )       |   |   | (48,974  | )       |   |   | (10,165 | )     
|                                                                        |                                                                                                                                                         |                                                                              |   |         |         |   |   |          |        
|                                                                        | Other comprehensive income (loss), before income taxes and
    cumulative effect adjustment                                                             |                                                                              |   | (97,231 | )       |   |   | (158,323 | )       |   |   | 104,908 |       
|                                                                        |                                                                                                                                                         |                                                                              |   |         |         |   |   |          |        
|Income tax expense (benefit) related to other Comprehensive
    income: |                                                                                                                                                         |                                                                              |   |         |         |   |   |          |         |   |   |        
|                                                                        | Unrealized holding gain (loss) on investment securities
    available for sale                                                                          |                                                                              |   | (15,469 | )       |   |   | (40,211  | )       |   |   | 44,149  |       
|                                                                        | Less reclassification adjustment for gains (losses) on
    investment securities available for sale                                                     |                                                                              |   | 10,276  |         |   |   | (16      | )       |   |   | 1,591   |       
|                                                                        | Net change in additional minimum pension liability                                                                                                      |                                                                              |   | (1,304  | )       |   |   |         |         |   |   |        |       
|                                                                        | Amortization of unrealized net holding losses on investment
    securities available for sale transferred to investment
    securities held to maturity |                                                                              |   | (4,023  | )       |   |   | (916     | )       |   |   |        |       
|                                                                        | Net change in accumulated gains (losses) on cash-flow hedging
    instruments                                                                           |                                                                              |   | (5,477  | )       |   |   | (18,409  | )       |   |   | (3,821  | )     
|                                                                        |                                                                                                                                                         |                                                                              |   |         |         |   |   |          |        
|                                                                        |                                                                                                                                                         | Total income tax expense (benefit) related to other
    comprehensive income |   |         | (36,549 | ) |   |          | (59,520 | ) |   |         | 38,737 | 
|                                                                        |                                                                                                                                                         |                                                                              |   |         |         |   |   |          |        
|                                                                        | Other comprehensive income (loss), after income taxes                                                                                                   |                                                                              | $ | (60,682 | )       |   | $ | (98,803  | )       |   | $ | 66,171  |       
|                                                                        |                                                                                                                                                         |                                                                              |   |         |         |   |   |          |        

98



---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|     |                                                    
|---- | ---------------------------------------------------
|(23) | Supplemental Disclosure for Statement of Cash Flows



|                                                                                                                         |                     |                |         |       |      |   |           |        |  |   |         |        | 
|------------------------------------------------------------------------------------------------------------------------ | ------------------- | -------------- | ------- | ----- | ---- | - | --------- | ------ |  | - | ------- | ------ | 
|                                                                                                                         |                     | December 31    |        
|                                                                                                                         |                     |                |        
|                                                                                                                         |                     | 2004           |         |       | 2003 |   |           | 2002   | 
|                                                                                                                         |                     |                |         |       |      |   |           |        | 
|                                                                                                                         |                     | (In thousands) |        
|Schedule of noncash investing and financing activities:                                                                  |                     |                |         |       |      |   |           |        |  |   |         |       
|Transfers of loans to other real estate owned                                                                            |                     | $              | 21,982  |       |      | $ | 32,255    |        |  | $ | 17,901  |       
|Transfers of investment securities to held to maturity securities                                                        |                     |                |        |       |      |   | 2,766,955 |        |  |   |        |       
|Increase in other assets and investment securities available for
    sale and long-term debt from FIN 46 deconsolidation |                     |                |        |       |      |   | 43,893    |        |  |   |        |       
|Loans to facilitate the sale of other real estate owned                                                                  |                     |                | 1,006   |       |      |   | 324       |        |  |   | 291     |       
|Assets retained in loan securitizations                                                                                  |                     |                | 589,912 |       |      |   | 1,141,866 |        |  |   |        |       
|Loans to finance stock purchases                                                                                         |                     |                | 863     |       |      |   | 372       |        |  |   | 3,568   |       
|Change in unrealized gain (loss) on available-for-sale securities                                                        |                     |                | (68,488 | )     |      |   | (106,912  | )      |  |   | 115,073 |       
|Issuance of restricted stock, net of cancellations                                                                       |                     |                | 8,571   |       |      |   | 6,546     |        |  |   | 2,764   |       
|Treasury stock exchanged for acquisition earnout                                                                         |                     |                | 4,741   |       |      |   |          |        |  |   |        |       
|Business combinations and divestitures:                                                                                  |                     |                |         |       |      |   |           |        |  |   |         |       
|                                                                                                                         | Common stock issued |                |         | 3,658 |      |   |           | 15,721 |  |   |         | 43,690 | 
|                                                                                                                         | Assets acquired     |                |         | 5,771 |      |   |           | 20,876 |  |   |         | 73,637 | 
|                                                                                                                         | Liabilities assumed |                |         | 2,381 |      |   |           | 6,824  |  |   |         | 24,606 | 
|                                                                                                                         | Assets sold         |                |         |      |      |   |           | 41,853 |  |   |         | 1,180  | 
|                                                                                                                         | Liabilities sold    |                |         |      |      |   |           | 70,032 |  |   |         | 1,136  | 

99



---



##### Table of Contents








|         |                                                                                         
|-------- | ----------------------------------------------------------------------------------------
|ITEM 9  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE








|          |                        
|--------- | -----------------------
|ITEM 9A  | CONTROLS AND PROCEDURES



|    |             
|--- | ------------
|(a) | Restatement.







|    |                                                 
|--- | ------------------------------------------------
|(b) | Evaluation of Disclosure Controls and Procedures





| |                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a failure to ensure the correct application of generally
    accepted accounting principles, including SFAS 133 and its
    related interpretations for certain derivative transactions, as
    described in (a) above, and failure to correct that error
    subsequently.





|    |                                                     
|--- | ----------------------------------------------------
|(c) | Remediation of Material Weakness in Internal Control





| |                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. improved training, education and accounting reviews
    designed to ensure that all relevant personnel involved in
    derivatives transactions understand and apply hedge accounting
    in compliance with generally accepted accounting principles,
    including SFAS 133 and its related interpretations;
|
| | 2. retested our internal financial controls with respect to
    the types of hedging transactions affected by the restatement to
    ensure compliance with generally accepted accounting principles,
    including SFAS 133 and its related interpretations;                                                    

100



---



##### Table of Contents





| |                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3. updated our derivative policy to specifically require
    utilization of the long-haul method for documenting
    the effectiveness of swaps related to brokered certificates of
    deposit and Trust Preferred debt; and
|
| | 4. redesignated all swaps related to brokered certificates
    of deposit and Trust Preferred debt during the fourth
    quarter, to be subject to the long-haul method of
    documenting hedge effectiveness.              

Form 10-K,






|    |                                                                                          
|--- | -----------------------------------------------------------------------------------------
|(d) | Managements Annual Report on Internal Control Over
    Financial Reporting (as restated)





Internal Control 
Integrated Framework




101



---



##### Table of Contents








|          |                  
|--------- | -----------------
|ITEM 9B  | OTHER INFORMATION






PART III







|          |                                                   
|--------- | --------------------------------------------------
|ITEM 10  | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Form 10-K,







|          |                       
|--------- | ----------------------
|ITEM 11  | EXECUTIVE COMPENSATION

Form 10-K







|          |                                                                   
|--------- | ------------------------------------------------------------------
|ITEM 12  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT



Equity Compensation Plan Information




|                                                           |                         |                            |           |                  |                   |                      |              |                      |     |  |           |           | 
|---------------------------------------------------------- | ----------------------- | -------------------------- | --------- | ---------------- | ----------------- | -------------------- | ------------ | -------------------- | --- |  | --------- | --------- | 
|                                                           |                         |                            |           |                  |                   | Number of Securities |             
|                                                           |                         |                            |           |                  |                   | Remaining Available  |             
|                                                           |                         |                            |           |                  |                   | for Future Issuance  |             
|                                                           |                         |                            |           | Weighted-Average |                   |                      | Under Equity |                     
|                                                           |                         | Number of Securities to be |           |                  | Exercise Price of |                      |              | Compensation Plans   |    
|                                                           |                         | Issued Upon Exercise of    |           |                  | Outstanding       |                      |              | (Excluding           |    
|                                                           |                         | Outstanding Options,       |           |                  | Options, Warrants |                      |              | Securities Reflected |    
|                                                           |                         | Warrants and Rights        |           |                  | and Rights        |                      |              | in Column(a))        |    
|Plan Category                                              |                         | (a)                        |           |                  | (b)               |                      |              | (c)                  |    
|                                                           |                         |                            |           |                  |                   |                      |              |                      |    
|Equity compensation plans approved by security holders     |                         |                            |           |                  |                   |                      |              |                      |     |  |           |          
|                                                           | Stock option awards(1)  |                            |           | 8,154,533        | (2)               |                      | $            | 28.42                |     |  |           | 3,479,632 | 
|                                                           | Stock purchase plans(3) |                            |           |                 | (4)               |                      |              |                     | (4) |  |           | 3,184,044 | 
|Equity compensation plans not approved by security holders |                         |                            |          |                  |                   |                      |             |                      |     |  |          |          
|                                                           |                         |                            |           |                  |                   |                      |              |                      |    
|Total                                                      |                         |                            | 8,154,533 |                  |                   | $                    | 28.42        |                      |     |  | 6,663,676 |          
|                                                           |                         |                            |           |                  |                   |                      |              |                      |    






|    |                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Consists of awards granted under the 1996 Long-Term Incentive
    Plan, the 1999 Omnibus Incentive Compensation Plan and the 2002
    Incentive Compensation Plan.
|   
|(2) | Amount includes 386,563 of restricted shares awarded, subject to
    vesting requirements.                                                                        
|   
|(3) | Consists of the Compass Share Accumulation Plan, formerly known
    as the Compass ShareBuilder Plan                                                              

102



---



##### Table of Contents





|    |                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | The number of shares that may be issued pursuant to
    Compass stock purchase plans during a given period and the
    purchase price of such shares cannot be determined in advance of
    such purchases






|          |                                               
|--------- | ----------------------------------------------
|ITEM 13  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS








|          |                                       
|--------- | --------------------------------------
|ITEM 14  | PRINCIPAL ACCOUNTING FEES AND SERVICES






PART IV







|          |                                           
|--------- | ------------------------------------------
|ITEM 15  | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Compass Bancshares, Inc. and Subsidiaries


Financial Statements


|                                                                                                         |  |      |    | 
|-------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                         |  | Page |   
|                                                                                                         |  |      |   
|Report of Independent Registered Public Accounting Firm                                                  |  |      | 46 | 
|Consolidated Balance Sheets as of December 31, 2004 and 2003                                             |  |      | 48 | 
|Consolidated Statements of Income for the years ended
    December 31, 2004, 2003 and 2002               |  |      | 49 | 
|Consolidated Statements of Shareholders Equity for the
    years ended December 31, 2004, 2003 and 2002 |  |      | 50 | 
|Consolidated Statements of Cash Flows for the years ended
    December 31, 2004, 2003 and 2002           |  |      | 51 | 
|Notes to Consolidated Financial Statements 
    December 31, 2004, 2003 and 2002                        |  |      | 52 | 

Exhibits




| |     |  |  |                                                                                                                                                                                                                                                                                                                                             
| | --- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) |  |  | Restated Certificate of Incorporation of Compass Bancshares,
    Inc., as amended, dated May 17, 1982 (incorporated by
    reference to Exhibit 3(a) to Compass Bancshares,
    Inc.s December 31, 1997 Form 10-K, file number
    000-06032, filed March 23, 1998 with the Commission)                                                    
|
| | (b) |  |  | Certificate of Amendment, dated May 20, 1986, to Restated
    Certificate of Incorporation of Compass Bancshares, Inc.
    (incorporated by reference to Exhibit 3.2 to Compass
    Bancshares, Inc.s Registration Statement on Form S-4,
    Registration No. 33-46086, filed with the Commission)                                        
|
| | (c) |  |  | Certificate of Amendment, dated May 15, 1987, to Restated
    Certificate of Incorporation of Compass Bancshares, Inc.
    (incorporated by reference to Exhibit 3.1.2 to Compass
    Bancshares, Inc.s Post-Effective Amendment No. 1 to
    Registration Statement on Form S-4, Registration
    No. 33-10797, filed with the Commission)
|
| | (d) |  |  | Certificate of Amendment, dated September 16, 1994, to
    Restated Certificate of Incorporation of Compass Bancshares,
    Inc. (incorporated by reference to Exhibit 3.5(1) to
    Compass Bancshares, Inc.s Registration Statement on
    Form S-4, Registration No. 33-55899, filed with the
    Commission)                           
|
| | (e) |  |  | Certificate of Amendment, dated November 3, 1993, to
    Restated Certificate of Incorporation of Compass Bancshares,
    Inc. (incorporated by reference to Exhibit 3(d) to Compass
    Bancshares, Inc.s Registration Statement on Form S-4,
    Registration No. 33-51919, filed with the Commission)                                   

103



---



##### Table of Contents



| |     |  |  |                                                                                                                                                                                                                                                                                                                       
| | --- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (f) |  |  | Certificate of Amendment, dated May 15, 1998, to Restated
    Certificate of Incorporation of Compass Bancshares, Inc. (filed
    as exhibit 4.6 to Compass Bancshares, Inc.s
    Registration Statement on Form S-3, Registration Statement
    No. 333-60725, filed with the Commission)                           
|
| | (g) |  |  | Certificate of Amendment, dated May 1, 2002, to Restated
    Certificate of Incorporation of Compass Bancshares, Inc.
    (incorporated by reference to Exhibit 4.7 to Compass
    Bancshares, Inc.s Registration Statement on Form S-8,
    Registration No. 333-90806, filed June 19, 2002 with
    the Commission)
|
| | (h) |  |  | Bylaws of Compass Bancshares, Inc. (Amended and Restated as of
    March 15, 1982) (incorporated by reference to
    Exhibit 3(f) to Compass Bancshares, Inc.s
    December 31, 1997 Form 10-K, file number 000-06032,
    filed March 23, 1998 with the Commission)                                                 



| |     |  |  |                                                                                                                                                                                                                                                                                                                                                                     
| | --- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) |  |  | Form of Indenture between Compass Bancshares, Inc. (formerly
    Central Bancshares of the South, Inc.) and JPMorgan Chase Bank
    (formerly Chemical Bank), as Senior Trustee (incorporated by
    reference to Exhibit 4(g) to Compass Bancshares,
    Inc.s Registration Statement on Form S-3,
    Registration No. 33-61018, filed with the Commission)      
| | (b) |  |  | Form of Indenture between Compass Bancshares, Inc. (formerly
    Central Bancshares of the South, Inc.) and JPMorgan Chase Bank
    (formerly Chemical Bank), as Subordinated Trustee (incorporated
    by reference to Exhibit 4(f) to Compass Bancshares,
    Inc.s Registration Statement on Form S-3,
    Registration No. 33-61018, filed with the Commission)



| |     |  |  |                                                                                                                                                                                                                                                                                                                       
| | --- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) |  |  | Compass Bancshares, Inc., 1996 Long Term Incentive Plan
    (incorporated by reference to Exhibit 4(g) to Compass
    Bancshares, Inc.s Registration Statement on Form S-8,
    Registration No. 333-15117, filed October 30, 1996
    with the Commission)*                                                         
|
| | (b) |  |  | Compass Bancshares, Inc., 1999 Omnibus Incentive Compensation
    Plan (incorporated by reference to Exhibit 10(a) to Compass
    Bancshares, Inc.s Registration Statement on Form S-8,
    Registration No. 333-86455, filed September 2, 1999 with
    the Commission)*                                            
|
| | (c) |  |  | Employment Agreement, dated December 14, 1994, between
    Compass Bancshares, Inc. and D. Paul Jones, Jr.
    (incorporated by reference to Exhibit 10(e) to Compass
    Bancshares, Inc.s March 31, 2000 Form 10-Q, file
    number 000-06032, filed May 15, 2000 with the Commission)*                            
|
| | (d) |  |  | Employment Agreement, dated December 14, 1994, between
    Compass Bancshares, Inc. and Garrett R. Hegel (incorporated by
    reference to Exhibit 10(g) to Compass Bancshares,
    Inc.s March 31, 2000 Form 10-Q, file number
    000-06032, filed May 15, 2000 with the Commission)*                              
|
| | (e) |  |  | Employment Agreement, dated November 24, 1997, between
    Compass Bancshares, Inc. and James D. Barri (incorporated by
    reference to Exhibit 10(j) to Compass Bancshares,
    Inc.s March 31, 2000 Form 10-Q, file number
    000-06032, filed May 15, 2000 with the Commission)*                                
|
| | (f) |  |  | Employment Agreement, dated December 14, 1994, between
    Compass Bancshares, Inc. and G. Ray Stone (incorporated by
    reference to Exhibit 10(i) to Compass Bancshares, Inc.
    Registration Statement on Form S-4, Registration
    No. 333-15373, filed November 1, 1996 with the
    Commission)*             
|
| | (g) |  |  | Employment Agreement, dated March 1, 1998, between Compass
    Bancshares, Inc. and Clayton D. Pledger (incorporated by
    reference to Exhibit 10(g) to Compass Bancshares, Inc.
    December 31, 2001 Form 10-K, file number 000-06032,
    filed March 11, 2002 with the Commission)*                             
|
| | (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)*

104



---



##### Table of Contents



| |     |  |  |                                                                                                                                                                                                                                                                                                                               
| | --- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) |  |  | First Amendment to Employment Agreement, dated April 14,
    1997, between Compass Bancshares, Inc. and Garrett R. Hegel
    (incorporated by reference to Exhibit 10(i) to Compass
    Bancshares, Inc.s December 31, 2004 Form 10-K,
    file number 001-31272, filed February 28, 2005 with the
    Commission)*          
|
| | (j) |  |  | First Amendment to Employment Agreement, dated April 18,
    1997, between Compass Bancshares, Inc. and G. Ray Stone
    (incorporated by reference to Exhibit 10(j) to Compass
    Bancshares, Inc.s December 31, 2004 Form 10-K,
    file number 001-31272, filed February 28, 2005 with the
    Commission)*              
|
| | (k) |  |  | Amendment to Employment Agreement, dated October 12, 2001,
    between Compass Bancshares, Inc. and D. Paul
    Jones, Jr. (incorporated by reference to Exhibit 10(i)
    to Compass Bancshares, Inc.s December 31, 2001
    Form 10-K, file number 000-06032, filed March 11, 2002
    with the Commission)*               
|
| | (l) |  |  | Amendment to Employment Agreement, dated October 12, 2001,
    between Compass Bancshares, Inc. and Garrett R. Hegel
    (incorporated by reference to Exhibit 10(j) to Compass
    Bancshares, Inc.s December 31, 2001 Form 10-K,
    file number 000-06032, filed March 11, 2002 with the
    Commission)*                 
|
| | (m) |  |  | Amendment to Employment Agreement, dated October 12, 2001,
    between Compass Bancshares, Inc. and James D. Barri
    (incorporated by reference to Exhibit 10(l) to Compass
    Bancshares, Inc.s December 31, 2001 Form 10-K,
    file number 000-06032, filed March 11, 2002 with the
    Commission)*                   
|
| | (n) |  |  | Amendment to Employment Agreement, dated October 12, 2001,
    between Compass Bancshares, Inc. and Clayton D. Pledger
    (incorporated by reference to Exhibit 10(h) to Compass
    Bancshares, Inc.s December 31, 2001 Form 10-K,
    file number 000-06032, filed March 11, 2002 with the
    Commission)*               
|
| | (o) |  |  | Amendment to Employment Agreement, dated October 12, 2001,
    between Compass Bancshares, Inc. and G. Ray Stone
    (incorporated by reference to Exhibit 10(o) to Compass
    Bancshares, Inc.s December 31, 2004 Form 10-K,
    file number 001-31272, filed February 28, 2005 with the
    Commission)*                  
|
| | (p) |  |  | Compass Bancshares, Inc., Employee Stock Ownership Benefit
    Restoration Plan, dated as of May 1, 1997 (incorporated by
    reference to Exhibit 10(j) to Compass Bancshares,
    Inc.s December 31, 1999 Form 10-K, file number
    000-06032, filed March 23, 2000 with the Commission)*                                 
|
| | (q) |  |  | Compass Bancshares, Inc., Supplemental Retirement Plan, dated as
    of May 1, 1997 (incorporated by reference to
    Exhibit 10(k) to Compass Bancshares, Inc.s
    December 31, 1999 Form 10-K, file number 000-06032,
    filed March 23, 2000 with the Commission)*                                                      
|
| | (r) |  |  | Deferred Compensation Plan for Compass Bancshares, Inc., dated
    as of February 1, 1996. (Amended and Restated as of
    May 1, 1998) (incorporated by reference to
    Exhibit 10(l) to Compass Bancshares, Inc.s
    December 31, 1999 Form 10-K, file number 000-06032,
    filed March 23, 2000 with the Commission)*  
|
| | (s) |  |  | Compass Bancshares, Inc. Special Supplemental Retirement Plan,
    dated as of May 1, 1997. (Amended and Restated as of
    February 27, 2000) (incorporated by reference to
    Exhibit 10(n) to Compass Bancshares, Inc.s
    March 31, 2000 Form 10-Q, file number 000-06032, filed
    May 15, 2000 with the Commission)*
|
| | (t) |  |  | Amendment Number One to the Compass Bancshares, Inc., Special
    Supplemental Retirement Plan, dated April 26, 2000
    (incorporated by reference to Exhibit 10(q) to Compass
    Bancshares, Inc.s December 31, 2001
    Form 10-K, file 000-06032, filed March 11, 2002 with
    the Commission)*                        
|
| | (u) |  |  | Amendment Number Two to the Compass Bancshares, Inc., Special
    Supplemental Retirement Plan, dated as of February 9,
    2001(incorporated by reference to Exhibit 10(r) to Compass
    Bancshares, Inc.s December 31, 2001 Form 10-K,
    file number 000-06032, filed March 11, 2002 with the
    Commission)*          

105



---



##### Table of Contents



| |         |  |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | ------- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (v)     |  |  | Compass Bancshares, Inc., Director & Executive Stock
    Purchase Plan (formerly known as Monthly Investment Plan), as
    Amended and Restated, effective as of September 1, 2001
    (incorporated by reference to Exhibit 4.8 to Compass
    Bancshares, Inc.s Registration Statement on Form S-8,
    Registration No. 333-26884, filed July 31, 2001 with
    the Commission)*
|
| | (w)     |  |  | Compass Bancshares, Inc. 2002 Incentive Compensation Plan
    (incorporated by reference to Exhibit 4.9 to Compass
    Bancshares, Inc.s Registration Statement on Form S-8,
    Registration No. 333-90806, filed June 19, 2002 with
    the Commission)*                                                                                                                         
|
| | (x)     |  |  | Form of Performance Contingent Restricted Stock Agreement
    (incorporated by reference to Exhibit 10.1 to Compass
    Bancshares, Inc.s Form 8-K, file number 001-31272,
    filed February 22, 2005 with the Commission)*                                                                                                                                                       
|
| | (y)     |  |  | Form of Amendment Number One to the Performance Contingent
    Restricted Stock Award Agreement (incorporated by reference to
    Compass Bancshares, Inc.s Form 8-K, file number
    001-31272, filed October 21, 2005 with the Commission)*                                                                                                                                      
|
| | (z)     |  |  | Form of Incentive Stock Option Agreement (incorporated by
    reference to Exhibit 10.2 to Compass Bancshares,
    Inc.s Form 8-K, file number 001-31272, filed
    February 22, 2005 with the Commission)*                                                                                                                                                                        
|
| | (aa)    |  |  | Form of Incentive Stock Option Agreement (incorporated by
    reference to Exhibit 10.3 to Compass Bancshares,
    Inc.s Form 8-K, file number 001-31272, filed
    February 22, 2005 with the Commission)*                                                                                                                                                                        
|
| | (ab)    |  |  | Form of Incentive Stock Option Agreement (incorporated by
    reference to Exhibit 10.4 to Compass Bancshares,
    Inc.s Form 8-K, file number 001-31272, filed
    February 22, 2005 with the Commission)*                                                                                                                                                                        
|
| | (ac)    |  |  | Executive Officer Compensation Arrangements (incorporated by
    reference to Exhibit 10(y) to Compass Bancshares,
    Inc.s March 31, 2005 Form 10-Q, file number
    001-31272, filed May 6, 2005 with the Commission)*                                                                                                                                                          
|
| | (ad)    |  |  | Form of Stock Option Agreement for Non-Employee Directors
    (incorporated by reference to Exhibit 10(cc) to Compass
    Bancshares, Inc.s March 31, 2005 Form 10-Q, file
    number 001-31272, filed May 6, 2005 with the Commission)*                                                                                                                                           
|
| | (21)    |  |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                                                                                                                                      
|
| | (23)    |  |  | Consents of experts and counsel                                                                                                                                                                                                                                                                                                                                                     
|
| | (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                                                                                                                                                                                                         



| |                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain financial statement schedules and exhibits have been
    omitted because they are either not required or the information
    is otherwise included in the Notes to Consolidated Financial
    Statements.






|  |                                                        
|- | -------------------------------------------------------
|* | Management contract or compensatory plan or arrangement

Exhibit 21  Subsidiaries of the Registrant


|                          |  |                        |         | 
|------------------------- |  | ---------------------- | ------- | 
|Subsidiaries              |  | State of Incorporation |        
|                          |  |                        |        
|Compass Bank              |  |                        | Alabama | 
|Central Bank of the South |  |                        | Alabama | 
|Compass Southwest LP      |  |                        | Texas   | 

106



---



##### Table of Contents






SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.




| |                         
| | ------------------------
| | COMPASS BANCSHARES, INC.



| |     |                       
| | --- | ----------------------
| | By: | /s/ D. Paul Jones, Jr.

| |                                     
| | ------------------------------------
| |                                     
| | D. Paul Jones, Jr.                  
| | Chairman and Chief Executive Officer



Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.


|                                                 |  |                                      |  |                  |  | 
|------------------------------------------------ |  | ------------------------------------ |  | ---------------- |  | 
|Signature                                        |  | Title                                |  | Date            
|                                                 |  |                                      |  |                 
|                                                
|/s/ D. Paul
    Jones, Jr.D. Paul Jones, Jr.     |  | Chairman and Chief Executive Officer |  | January 10, 2006
|                                                
|/s/ Garrett R. HegelGarrett R. Hegel             |  | Chief Financial Officer              |  | January 10, 2006
|                                                
|/s/ Kirk P. PressleyKirk P. Pressley             |  | Chief Accounting Officer             |  | January 10, 2006
|                                                
|/s/ James H.
    Click, Jr.James H. Click, Jr.   |  | Director                             |  | January 10, 2006
|                                                
|/s/ Charles W. DanielCharles W. Daniel           |  | Director                             |  | January 10, 2006
|                                                
|/s/ W. Eugene DavenportW. Eugene Davenport       |  | Director                             |  | January 10, 2006
|                                                
|/s/ Tranum FitzpatrickTranum Fitzpatrick         |  | Director                             |  | January 10, 2006
|                                                
|/s/ Carl J.
    Gessler, Jr.Carl J. Gessler, Jr. |  | Director                             |  | January 10, 2006
|                                                
|/s/ Charles E. McMahenCharles E. McMahen         |  | Director                             |  | January 10, 2006
|                                                
|/s/ John S. SteinJohn S. Stein                   |  | Director                             |  | January 10, 2006
|                                                
|/s/ J. Terry StrangeJ. Terry Strange             |  | Director                             |  | January 10, 2006

107