##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
 -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
 (COMPASS BANCSHARES, INC. LOGO)
 (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
    
    35233(Address of principal executive offices)
    
    (Zip Code)
 (205) 297-3000
 
   Title of each class
    
    Name of each exchange on which registeredCommon Stock 
7.35% Capital Securities of Compass Trust III (and 
guarantee of Compass Bancshares, Inc. with respect thereto)
    
    The NASDAQ Stock Market LLC
New York Stock Exchange
  þ o
 o þ
 þ o
 o
  þ o o
 o þ
   Document Incorporated by Reference




---



##### 



COMPASS BANCSHARES, INC.
 TABLE OF CONTENTS
 FORM 10-K
 DECEMBER 31, 2006
 PART IITEM 1. BUSINESS
    
    
    2ITEM 1A. RISK FACTORS
    
    
    7ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    9ITEM 2. PROPERTIES
    
    
    10ITEM 3. LEGAL PROCEEDINGS
    
    
    10ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    11PART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
    
    
    11ITEM 6. SELECTED FINANCIAL DATA
    
    
    12ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    13ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
    
    
    13ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    40ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    93ITEM 9A. CONTROLS AND PROCEDURES
    
    
    94ITEM 9B. OTHER INFORMATION
    
    
    94PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
    
    
    95ITEM 11. EXECUTIVE COMPENSATION
    
    
    95ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED SHAREHOLDER MATTERS
    
    
    95ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE
    
    
    95ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    96PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    96SIGNATURES
    
    
    100EX-10.(D) SUPPLEMENTAL RETIREMENT PLANEX-10.(E) SPECIAL SUPPLEMENTAL RETIREMENT PLANEX-10.(F) EMPLOYEE STOCK OWNERSHIP BENEFIT RESTORATION PLANEX-10.(G) SMARTINVESTOR RETIREMENT BENEFIT RESTORATION PLANEX-10.(U) FORM OF RESTRICTED STOCK AWARD AGREEMENT FOR NON-EMPLOYEE DIRECTORSEX-10.(CC) SUMMARY OF COMPENSATION ARRANGEMENTSEX-21 SUBSIDIARIES OF THE REGISTRANTEX-23.(A) CONSENT OF ERNST & YOUNG LLPEX-23.(B) CONSENT OF PRICEWATERHOUSECOOPERS LLPEX-31.(A) SECTION 302 CERTIFICATION OF CEOEX-31.(B) SECTION 302 CERTIFICATION OF CFOEX-32.(A) SECTION 906 CERTIFICATION OF CEOEX-32.(B) SECTION 906 CERTIFICATION OF CFO
  -1-




---



##### Table of Contents



PART I
 
 ITEM 1  BUSINESS
  General Development of the Company
  Recent Developments
     Parent Company
  Subsidiary Banks
   Lines of Business
  -2-




---



##### Table of Contents



Business Combinations and Divestitures
  Business Combinations
     -3-




---



##### Table of Contents



Divestitures
  Competition
   Employees
  Government Monetary Policy
   SUPERVISION AND REGULATION
 The Company
 General
  -4-




---



##### Table of Contents



Interstate Banking and Bank Acquisitions
   Limitations on Loans and Transactions
  Capital Requirements
  -5-




---



##### Table of Contents



The Subsidiary Banks
 General
   Dividend Limitations
  -6-




---



##### Table of Contents



Laws and Regulations
     Website Availability of Reports Filed with the Securities and Exchange Commission
  
 ITEM 1A  RISK FACTORS
  We have entered into a definitive agreement providing for the acquisition of the Company, which is
subject to a number of conditions.
  The extent to which market interest rates change, the direction in which they move and the
composition of our interest-earning assets and interest-bearing liabilities could affect net
interest income.
  The trade, monetary and fiscal policies of the federal government and its agencies may affect the
economic environment in which we operate and, therefore, impact our financial condition and results
of operations.
  As a financial services company, our financial condition and results of operations are
significantly affected by general business and economic conditions.
  The
credit quality of our portfolio can have a significant impact on our
earnings.
  -7-




---



##### Table of Contents



Our
revenue may be negatively impacted by competition and changes in the markets we serve.
  Our
results of operations could be affected by the success of our strategic initiatives.
  Our financial performance depends in part on our ability to efficiently utilize technology to
develop, market and deliver new and innovative products and
services.
  We may
experience operational or risk management failures due to technological or other factors.
  Regulation by federal and state agencies could adversely affect our business and results of
operations.
  -8-




---



##### Table of Contents



We may become subject to new legal obligations, or the resolution of pending litigation may have an
adverse effect on our financial results.
  The Company and its Subsidiary Banks must meet specific capital requirements imposed by federal
banking regulators.
  Changing conditions in the capital markets may have a significant negative effect on our business
and results of operations.
  Our business could suffer upon the occurrence of events such as natural disasters, terrorist
activities or military actions.
  Changes
in accounting rules or tax laws could have a significant adverse effect on our results.
  
 ITEM
1B  UNRESOLVED STAFF COMMENTS
  -9-




---



##### Table of Contents



STATISTICAL DISCLOSURE
 Page(s)Loan Portfolio
    
    
    16Selected Loan Maturity and Interest Rate Sensitivity
    
    
    16Managed Loan Portfolio
    
    
    17Investment Securities Held to Maturity and Available for Sale
    
    
    18Investment Securities Held to Maturity and Available for Sale Maturity Schedule
    
    
    19Trading Account Assets and Liabilities
    
    
    20Maturities of Time Deposits
    
    
    21Short-Term Borrowings
    
    
    22Contractual Obligations
    
    
    23Commitments
    
    
    23Net Interest Income Sensitivity
    
    
    24Return on Equity and Assets
    
    
    25Capital Ratios
    
    
    26Consolidated Average Balance Sheets and Rate/Volume Variances
    
    30 and 31Summary of Loan Loss Experience
    
    
    33Allocation of Allowance for Loan Losses
    
    
    34Nonperforming Assets
    
    
    35
 
 ITEM 2  PROPERTIES
 th
 
 ITEM 3  LEGAL PROCEEDINGS
   -10-




---



##### Table of Contents



ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5  MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
 Market Information
 SM
 High
    
    Low
    
    Close
    
    Dividend2006:First Quarter
    
    $
    51.68
    
    
    $
    47.74
    
    
    $
    50.61
    
    
    $
    0.39Second Quarter
    
    
    56.40
    
    
    
    50.38
    
    
    
    55.60
    
    
    
    0.39Third Quarter
    
    
    59.86
    
    
    
    53.24
    
    
    
    56.98
    
    
    
    0.39Fourth Quarter
    
    
    60.49
    
    
    
    55.57
    
    
    
    59.65
    
    
    
    0.392005:First Quarter
    
    $
    48.14
    
    
    $
    44.20
    
    
    $
    45.40
    
    
    $
    0.35Second Quarter
    
    
    46.25
    
    
    
    42.88
    
    
    
    45.00
    
    
    
    0.35Third Quarter
    
    
    49.66
    
    
    
    44.92
    
    
    
    45.83
    
    
    
    0.35Fourth Quarter
    
    
    49.68
    
    
    
    43.64
    
    
    
    48.25
    
    
    
    0.35
 Dividends
  Holders
  -11-




---



##### Table of Contents



Issuer Purchases of Equity Securities
 Total Number of
    
    
    Maximum Number ofShares Purchased as
    
    
    Shares that May YetTotal Number of
    
    
    Average Price
    
    
    Part of Publicly
    
    
    Be PurchasedShares Purchased (1)
    
    
    Paid Per Share
    
    
    Announced Programs (2)
    
    
    Under the Programs (2)October 1, 2006 
October 31, 2006
    
    
    2,615
    
    
    $
    56.69
    
    
    
    
    
    
    
    2,921,410November 1, 2006 
November 30, 2006
    
    
    682
    
    
    
    56.92
    
    
    
    
    
    
    
    2,921,410December 1, 2006 
December 31, 2006
    
    
    1,947
    
    
    
    59.13
    
    
    
    
    
    
    
    2,921,410Total
    
    
    5,244
    
    
    $
    57.63
    
    
    
    
 
 (1)
    
    This column includes (a) purchases of the Companys common stock under the Companys publicly announced share repurchase
programs described in (2) below and (b) the surrender to the Company by plan participants to satisfy the exercise price and
tax withholdings related to the exercise of employee stock options and restricted stock during the period indicated.(2)
    
    In 2003, the Company announced that its Board of Directors authorized management to purchase 4.1 million shares of the
Companys outstanding common stock. 
 ITEM 6  SELECTED FINANCIAL DATA
  2006
    
    2005
    
    2004
    
    2003
    
    2002(In Thousands, Except Per Share Data)Net interest income
    
    $
    1,115,134
    
    
    $
    968,979
    
    
    $
    885,325
    
    
    $
    879,130
    
    
    $
    901,709Provision for loan losses
    
    
    89,702
    
    
    
    117,818
    
    
    
    105,658
    
    
    
    119,681
    
    
    
    136,331Net income
    
    
    460,363
    
    
    
    401,830
    
    
    
    360,185
    
    
    
    328,678
    
    
    
    344,345Per share data:Basic earnings
    
    $
    3.60
    
    
    $
    3.25
    
    
    $
    2.95
    
    
    $
    2.64
    
    
    $
    2.70Diluted earnings
    
    
    3.53
    
    
    
    3.18
    
    
    
    2.87
    
    
    
    2.58
    
    
    
    2.65Cash dividends declared
    
    
    1.56
    
    
    
    1.40
    
    
    
    1.25
    
    
    
    1.12
    
    
    
    1.00Balance sheet:Average total equity
    
    $
    2,603,166
    
    
    $
    2,170,062
    
    
    $
    1,968,948
    
    
    $
    1,965,710
    
    
    $
    1,910,148Average assets
    
    
    33,012,350
    
    
    
    29,444,232
    
    
    
    27,660,628
    
    
    
    25,142,719
    
    
    
    23,354,327Period-end FHLB and
other borrowings
    
    
    3,511,601
    
    
    
    4,111,462
    
    
    
    4,119,771
    
    
    
    4,794,935
    
    
    
    4,853,816Period-end total equity
    
    
    2,824,134
    
    
    
    2,236,029
    
    
    
    2,056,345
    
    
    
    1,892,574
    
    
    
    1,965,383Period-end assets
    
    
    34,199,755
    
    
    
    30,798,232
    
    
    
    28,181,916
    
    
    
    26,963,113
    
    
    
    23,925,589
 -12-




---



##### Table of Contents



First
    
    Second
    
    Third
    
    FourthQuarter
    
    Quarter
    
    Quarter
    
    Quarter(In Thousands, Except Per Share Data)2006Total interest income
    
    $
    450,198
    
    
    $
    511,463
    
    
    $
    539,456
    
    
    $
    543,434Total interest expense
    
    
    189,937
    
    
    
    223,781
    
    
    
    252,880
    
    
    
    262,819Net interest income
    
    
    260,261
    
    
    
    287,682
    
    
    
    286,576
    
    
    
    280,615Provision for loan losses
    
    
    17,112
    
    
    
    27,322
    
    
    
    24,226
    
    
    
    21,042Net interest income after provision for loan losses
    
    
    243,149
    
    
    
    260,360
    
    
    
    262,350
    
    
    
    259,573Total noninterest income
    
    
    165,344
    
    
    
    181,366
    
    
    
    178,850
    
    
    
    185,700Total noninterest expense
    
    
    244,370
    
    
    
    265,850
    
    
    
    265,558
    
    
    
    273,497Income tax expense
    
    
    56,214
    
    
    
    60,505
    
    
    
    56,875
    
    
    
    53,460Net income
    
    
    107,909
    
    
    
    115,371
    
    
    
    118,767
    
    
    
    118,316Per common share:Basic earnings
    
    
    0.87
    
    
    
    0.90
    
    
    
    0.92
    
    
    
    0.91Diluted earnings
    
    
    0.85
    
    
    
    0.88
    
    
    
    0.90
    
    
    
    0.902005Total interest income
    
    $
    347,952
    
    
    $
    370,172
    
    
    $
    399,299
    
    
    $
    427,729Total interest expense
    
    
    116,379
    
    
    
    133,702
    
    
    
    152,188
    
    
    
    173,904Net interest income
    
    
    231,573
    
    
    
    236,470
    
    
    
    247,111
    
    
    
    253,825Provision for loan losses
    
    
    20,273
    
    
    
    27,800
    
    
    
    34,195
    
    
    
    35,550Net interest income after provision for loan losses
    
    
    211,300
    
    
    
    208,670
    
    
    
    212,916
    
    
    
    218,275Total noninterest income
    
    
    149,965
    
    
    
    175,431
    
    
    
    166,496
    
    
    
    166,786Total noninterest expense
    
    
    221,872
    
    
    
    222,595
    
    
    
    227,396
    
    
    
    229,940Income tax expense
    
    
    46,409
    
    
    
    55,518
    
    
    
    51,296
    
    
    
    52,983Net income
    
    
    92,984
    
    
    
    105,988
    
    
    
    100,720
    
    
    
    102,138Per common share:Basic earnings
    
    
    0.75
    
    
    
    0.86
    
    
    
    0.81
    
    
    
    0.83Diluted earnings
    
    
    0.74
    
    
    
    0.83
    
    
    
    0.80
    
    
    
    0.81
 
 ITEM 7
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
 
 ITEM
7A  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Forward-Looking Statements
   -13-




---



##### Table of Contents



Critical Accounting Policies
  Allowance for Loan Losses
 Derivative Instruments
 Consolidation
 -14-




---



##### Table of Contents



Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities
 Income Taxes
 Goodwill Calculation and Impairment
 Net Income and Earnings Per Share
  Earning Assets
  Loans
  -15-




---



##### Table of Contents



Loan Portfolio
 December 312006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    PercentAmount
    
    
    of Total
    
    
    Amount
    
    
    of Total
    
    
    Amount
    
    
    of Total
    
    
    Amount
    
    
    of Total
    
    
    Amount
    
    
    of TotalCommercial loans:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (In Thousands)Commercial, financial and
agricultural
    
    $
    4,376,572
    
    
    
    17.7
    %
    
    $
    3,896,207
    
    
    
    18.2
    %
    
    $
    3,750,063
    
    
    
    19.9
    %
    
    $
    3,576,115
    
    
    
    20.6
    %
    
    $
    3,693,454
    
    
    
    22.4
    %Real estate  construction
    
    
    6,365,283
    
    
    
    25.8
    
    
    
    4,233,148
    
    
    
    19.8
    
    
    
    3,027,228
    
    
    
    16.1
    
    
    
    2,481,281
    
    
    
    14.3
    
    
    
    2,531,580
    
    
    
    15.4Commercial real estate  mortgage
    
    
    4,266,776
    
    
    
    17.3
    
    
    
    4,080,164
    
    
    
    19.1
    
    
    
    3,943,163
    
    
    
    20.9
    
    
    
    3,933,773
    
    
    
    22.6
    
    
    
    3,214,712
    
    
    
    19.5Total commercial loans
    
    
    15,008,631
    
    
    
    60.8
    
    
    
    12,209,519
    
    
    
    57.1
    
    
    
    10,720,454
    
    
    
    56.9
    
    
    
    9,991,169
    
    
    
    57.5
    
    
    
    9,439,746
    
    
    
    57.3Consumer loans:Residential real estate  mortgage
    
    
    2,454,565
    
    
    
    10.0
    
    
    
    1,916,951
    
    
    
    9.0
    
    
    
    1,566,370
    
    
    
    8.3
    
    
    
    1,653,805
    
    
    
    9.6
    
    
    
    1,685,176
    
    
    
    10.2Equity lines of credit
    
    
    1,786,211
    
    
    
    7.2
    
    
    
    1,614,608
    
    
    
    7.6
    
    
    
    1,401,604
    
    
    
    7.4
    
    
    
    1,122,725
    
    
    
    6.5
    
    
    
    978,920
    
    
    
    5.9Equity loans
    
    
    1,382,779
    
    
    
    5.6
    
    
    
    1,160,481
    
    
    
    5.4
    
    
    
    1,069,614
    
    
    
    5.7
    
    
    
    1,046,881
    
    
    
    6.0
    
    
    
    1,322,092
    
    
    
    8.0Credit card
    
    
    505,216
    
    
    
    2.1
    
    
    
    523,148
    
    
    
    2.4
    
    
    
    505,090
    
    
    
    2.7
    
    
    
    485,487
    
    
    
    2.8
    
    
    
    462,252
    
    
    
    2.8Consumer  direct
    
    
    409,277
    
    
    
    1.7
    
    
    
    423,278
    
    
    
    2.0
    
    
    
    484,657
    
    
    
    2.5
    
    
    
    435,326
    
    
    
    2.5
    
    
    
    455,976
    
    
    
    2.8Consumer  indirect
    
    
    3,118,594
    
    
    
    12.6
    
    
    
    3,524,230
    
    
    
    16.5
    
    
    
    3,109,133
    
    
    
    16.5
    
    
    
    2,630,409
    
    
    
    15.1
    
    
    
    2,137,158
    
    
    
    13.0Total consumer loans
    
    
    9,656,642
    
    
    
    39.2
    
    
    
    9,162,696
    
    
    
    42.9
    
    
    
    8,136,468
    
    
    
    43.1
    
    
    
    7,374,633
    
    
    
    42.5
    
    
    
    7,041,574
    
    
    
    42.724,665,273
    
    
    
    100.0
    %
    
    
    21,372,215
    
    
    
    100.0
    %
    
    
    18,856,922
    
    
    
    100
    %
    
    
    17,365,802
    
    
    
    100
    %
    
    
    16,481,320
    
    
    
    100
    %Less: Allowance for loan losses
    
    
    291,050
    
    
    
    
    
    
    
    267,173
    
    
    
    
    
    
    
    258,339
    
    
    
    
    
    
    
    244,882
    
    
    
    
    
    
    
    232,830Net loans
    
    $
    24,374,223
    
    
    
    
    
    
    $
    21,105,042
    
    
    
    
    
    
    $
    18,598,583
    
    
    
    
    
    
    $
    17,120,920
    
    
    
    
    
    
    $
    16,248,490
 
 Selected Loan Maturity and Interest Rate Sensitivity
 Rate Structure For LoansMaturity
    
    
    Maturing Over One YearOne
    
    
    Over One Year
    
    
    Over
    
    
    
    
    
    
    Fixed
    
    
    Floating orYear or
    
    
    Through Five
    
    
    Five
    
    
    
    
    
    
    Interest
    
    
    AdjustableLess
    
    
    Years
    
    
    Years
    
    
    Total
    
    
    Rate
    
    
    Rate(In Thousands)Commercial, financial
and agricultural
    
    $
    2,151,109
    
    
    $
    1,605,328
    
    
    $
    620,135
    
    
    $
    4,376,572
    
    
    $
    508,544
    
    
    $
    1,716,919Real estate construction
    
    
    3,187,448
    
    
    
    2,928,619
    
    
    
    249,216
    
    
    
    6,365,283
    
    
    
    230,320
    
    
    
    2,947,515$
    5,338,557
    
    
    $
    4,533,947
    
    
    $
    869,351
    
    
    $
    10,741,855
    
    
    $
    738,864
    
    
    $
    4,664,434
  -16-




---



##### Table of Contents



Managed Loan Portfolio
 December 312006
    
    
    2005
    
    
    2004Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percentof Total
    
    
    
    
    
    
    of Total
    
    
    
    
    
    
    of TotalManaged
    
    
    
    
    
    
    Managed
    
    
    
    
    
    
    ManagedAmount
    
    
    Loans
    
    
    Amount
    
    
    Loans
    
    
    Amount
    
    
    Loans(In Thousands)Commercial loans:Commercial, financial and
agricultural
    
    $
    4,404,634
    
    
    
    17.1
    %
    
    $
    3,910,405
    
    
    
    17.3
    %
    
    $
    3,890,866
    
    
    
    19.0
    %Real estate  construction
    
    
    6,365,283
    
    
    
    24.8
    
    
    
    4,233,148
    
    
    
    18.7
    
    
    
    3,027,228
    
    
    
    14.8Commercial real estate  mortgage
    
    
    4,382,024
    
    
    
    17.1
    
    
    
    4,202,966
    
    
    
    18.6
    
    
    
    3,943,163
    
    
    
    19.3Total commercial loans
    
    
    15,151,941
    
    
    
    59.0
    
    
    
    12,346,519
    
    
    
    54.6
    
    
    
    10,861,257
    
    
    
    53.1Consumer loans:Residential real estate  mortgage
    
    
    3,146,151
    
    
    
    12.3
    
    
    
    2,786,051
    
    
    
    12.3
    
    
    
    2,688,768
    
    
    
    13.1Equity lines of credit
    
    
    1,786,211
    
    
    
    7.0
    
    
    
    1,614,608
    
    
    
    7.2
    
    
    
    1,401,604
    
    
    
    6.9Equity loans
    
    
    1,545,362
    
    
    
    6.0
    
    
    
    1,382,565
    
    
    
    6.1
    
    
    
    1,391,668
    
    
    
    6.8Credit card
    
    
    505,216
    
    
    
    2.0
    
    
    
    523,148
    
    
    
    2.3
    
    
    
    505,090
    
    
    
    2.5Consumer  direct
    
    
    409,277
    
    
    
    1.6
    
    
    
    423,278
    
    
    
    1.9
    
    
    
    484,657
    
    
    
    2.4Consumer  indirect
    
    
    3,118,594
    
    
    
    12.1
    
    
    
    3,524,230
    
    
    
    15.6
    
    
    
    3,109,133
    
    
    
    15.2Total consumer loans
    
    
    10,510,811
    
    
    
    41.0
    
    
    
    10,253,880
    
    
    
    45.4
    
    
    
    9,580,920
    
    
    
    46.9Total managed loans
    
    $
    25,662,752
    
    
    
    100.0
    %
    
    $
    22,600,399
    
    
    
    100.0
    %
    
    $
    20,442,177
    
    
    
    100.0
    %
 Investment Securities
     -17-




---



##### Table of Contents



Investment Securities Held to Maturity and Available for Sale
 December 312006
    
    
    2005
    
    
    2004(In Thousands)Investment securities held to maturity:U.S. Government agencies and corporations
    
    $
    25,136
    
    
    $
    39,275
    
    
    $
    60,860Mortgage-backed pass-through securities
    
    
    819,812
    
    
    
    932,785
    
    
    
    1,125,080Collateralized mortgage obligations:Agency
    
    
    427,554
    
    
    
    443,796
    
    
    
    455,191Non-agency
    
    
    400,194
    
    
    
    521,570
    
    
    
    712,096Asset-backed securities
    
    
    160,624
    
    
    
    219,583
    
    
    
    320,058States and political subdivisions
    
    
    119,846
    
    
    
    88,933
    
    
    
    93,714Other
    
    
    
    
    
    
    
    
    
    
    100$
    1,953,166
    
    
    $
    2,245,942
    
    
    $
    2,767,099Investment securities available for sale:U.S. Treasury
    
    $
    19,932
    
    
    $
    47,956
    
    
    $
    38,886U.S. Government agencies and corporations
    
    
    198
    
    
    
    639
    
    
    
    666Mortgage-backed pass-through securities
    
    
    982,221
    
    
    
    537,288
    
    
    
    499,525Collateralized mortgage obligations:Agency
    
    
    2,779,454
    
    
    
    3,505,754
    
    
    
    3,530,987Non-agency
    
    
    255,336
    
    
    
    234,214
    
    
    
    2,189Asset-backed securities and corporate bonds
    
    
    
    
    
    
    
    
    
    
    1,039States and political subdivisions
    
    
    287,997
    
    
    
    45,331
    
    
    
    11,943Other
    
    
    410,069
    
    
    
    414,051
    
    
    
    325,3794,735,207
    
    
    
    4,785,233
    
    
    
    4,410,614Net unrealized loss
    
    
    (47,425
    )
    
    
    (80,858
    )
    
    
    (12,430
    )4,687,782
    
    
    
    4,704,375
    
    
    
    4,398,184Total
    
    $
    6,640,948
    
    
    $
    6,950,317
    
    
    $
    7,165,283
 -18-




---



##### Table of Contents



Investment Securities Held to Maturity and Available for Sale Maturity Schedule
 MaturingWithin
    
    
    After One But
    
    
    After Five But
    
    
    AfterOne Year
    
    
    Within Five Years
    
    
    Within Ten Years
    
    
    Ten YearsAmount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield
    
    
    Amount
    
    
    Yield(In Thousands)Investment securities held to maturity:U.S. Government agencies
and corporations
    
    $
    
    
    
    
    
    %
    
    $
    25,110
    
    
    
    6.27
    %
    
    $
    26
    
    
    
    6.26
    %
    
    $
    
    
    
    
    
    %Mortgage-backed pass-through securities
    
    
    2,837
    
    
    
    5.95
    
    
    
    628,600
    
    
    
    4.30
    
    
    
    182,970
    
    
    
    5.44
    
    
    
    5,405
    
    
    
    6.77Collateralized mortgage obligations
    
    
    10,808
    
    
    
    3.44
    
    
    
    747,154
    
    
    
    4.36
    
    
    
    69,786
    
    
    
    7.56
    
    
    
    
    
    
    
    Asset-backed securities
    
    
    
    
    
    
    
    
    
    
    160,624
    
    
    
    5.03
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    States and political subdivisions
    
    
    8,669
    
    
    
    7.65
    
    
    
    30,587
    
    
    
    7.50
    
    
    
    49,546
    
    
    
    6.65
    
    
    
    31,044
    
    
    
    7.74Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,314
    
    
    
    5.40
    
    
    
    1,592,075
    
    
    
    4.49
    
    
    
    302,328
    
    
    
    6.13
    
    
    
    36,449
    
    
    
    7.59Investment securities available for
sale  amortized cost:U.S. Treasury
    
    
    19,932
    
    
    
    4.19
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    U.S. Government agencies
and corporations
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    6.41
    
    
    
    54
    
    
    
    5.94
    
    
    
    122
    
    
    
    5.86Mortgage-backed pass-through securities
    
    
    1,019
    
    
    
    7.50
    
    
    
    901,006
    
    
    
    5.53
    
    
    
    71,857
    
    
    
    5.48
    
    
    
    8,339
    
    
    
    5.55Collateralized mortgage obligations
    
    
    288,764
    
    
    
    3.67
    
    
    
    2,325,991
    
    
    
    4.42
    
    
    
    406,679
    
    
    
    5.44
    
    
    
    13,356
    
    
    
    5.54Asset-backed securities and corporate
bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    States and political subdivisions
    
    
    1,312
    
    
    
    7.36
    
    
    
    36,350
    
    
    
    5.84
    
    
    
    201,961
    
    
    
    6.03
    
    
    
    48,374
    
    
    
    6.45Other
    
    
    354,998
    
    
    
    5.51
    
    
    
    23,191
    
    
    
    31.59
    
    
    
    
    
    
    
    
    
    
    
    31,880
    
    
    
    9.25666,025
    
    
    
    4.68
    
    
    
    3,286,560
    
    
    
    4.93
    
    
    
    680,551
    
    
    
    5.62
    
    
    
    102,071
    
    
    
    7.13Total
    
    $
    688,339
    
    
    
    4.70
    
    
    $
    4,878,635
    
    
    
    4.79
    
    
    $
    982,879
    
    
    
    5.78
    
    
    $
    138,520
    
    
    
    7.25
   -19-




---



##### Table of Contents



Trading Account Assets and Liabilities
    
 Trading Account Assets and Liabilities
 December 312006
    
    
    2005Trading account assets:U.S. Treasury and Government agencies
    
    $
    15,832
    
    
    $
    7,285States and political subdivisions
    
    
    5,867
    
    
    
    3,376Mortgage-backed pass-through securities
    
    
    9,067
    
    
    
    6,951Collateralized mortgage obligations
    
    
    2,671
    
    
    
    8,767Other debt securities
    
    
    1,376
    
    
    
    1,406Interest rate floors, caps and swaps
    
    
    51,893
    
    
    
    48,774Total trading account assets
    
    $
    86,706
    
    
    $
    76,559Trading account liabilities:Short sales
    
    $
    4,992
    
    
    $
    4,861Interest rate floors, caps and swaps
    
    
    24,566
    
    
    
    25,401Total trading account liabilities
    
    $
    29,558
    
    
    $
    30,262
 -20-




---



##### Table of Contents



Deposits and Borrowed Funds
    
 Maturities of Time Deposits
 Certificates
    
    
    Other Timeof Deposit
    
    
    DepositsOver
    
    
    Over$100,000
    
    
    $100,000
    
    
    Total(In Thousands)Three months or less
    
    $
    1,992,242
    
    
    $
    136,837
    
    
    $
    2,129,079Over three through six months
    
    
    931,884
    
    
    
    
    
    
    
    931,884Over six through twelve months
    
    
    365,596
    
    
    
    
    
    
    
    365,596Over twelve months
    
    
    647,167
    
    
    
    
    
    
    
    647,167$
    3,936,889
    
    
    $
    136,837
    
    
    $
    4,073,726
   -21-




---



##### Table of Contents



Short-Term Borrowings
 Year Ended December 31Maximum
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AverageOutstanding
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    InterestAt Any
    
    
    Average
    
    
    Interest
    
    
    Ending
    
    
    Rate AtMonth End
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    Year-End(In Thousands)2006Federal funds purchased
    
    $
    3,555,640
    
    
    $
    2,918,734
    
    
    
    4.99
    %
    
    $
    2,948,855
    
    
    
    5.23
    %Securities sold under agreements
to repurchase
    
    
    360,740
    
    
    
    290,436
    
    
    
    4.51
    
    
    
    230,496
    
    
    
    4.58Short sales
    
    
    22,816
    
    
    
    5,782
    
    
    
    4.64
    
    
    
    4,992
    
    
    
    4.56Commercial paper
    
    
    82,186
    
    
    
    86,943
    
    
    
    4.00
    
    
    
    67,770
    
    
    
    4.31Other short-term borrowings
    
    
    1,352,424
    
    
    
    591,680
    
    
    
    5.07
    
    
    
    1,170,201
    
    
    
    5.24$
    5,373,806
    
    
    $
    3,893,575
    
    
    
    
    
    
    $
    4,422,3142005Federal funds purchased
    
    $
    4,542,326
    
    
    $
    3,845,028
    
    
    
    3.23
    %
    
    $
    2,802,536
    
    
    
    4.04
    %Securities sold under agreements
to repurchase
    
    
    365,508
    
    
    
    330,813
    
    
    
    2.89
    
    
    
    300,036
    
    
    
    3.82Short sales
    
    
    6,979
    
    
    
    2,828
    
    
    
    3.51
    
    
    
    4,861
    
    
    
    3.33Commercial paper
    
    
    128,119
    
    
    
    114,043
    
    
    
    2.15
    
    
    
    76,764
    
    
    
    3.39Other short-term borrowings
    
    
    571,125
    
    
    
    66,040
    
    
    
    3.69
    
    
    
    571,125
    
    
    
    3.98$
    5,614,057
    
    
    $
    4,358,752
    
    
    
    
    
    
    $
    3,755,3222004Federal 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
    
    
    
    1.73Short sales
    
    
    4,324
    
    
    
    2,058
    
    
    
    2.96
    
    
    
    2,956
    
    
    
    2.99Commercial paper
    
    
    97,498
    
    
    
    77,625
    
    
    
    0.75
    
    
    
    97,498
    
    
    
    1.25Other short-term borrowings
    
    
    143,603
    
    
    
    35,898
    
    
    
    1.75
    
    
    
    75,317
    
    
    
    1.74$
    5,045,216
    
    
    $
    4,393,716
    
    
    
    
    
    
    $
    4,707,775
 Liquidity Management
   -22-




---



##### Table of Contents



Contractual Obligations
 Payments Due by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    Year
    
    
    1  3 Years
    
    
    3 5 Years
    
    
    Years(In Thousands)FHLB and other borrowings *
    
    $
    3,511,601
    
    
    $
    105,932
    
    
    $
    899,991
    
    
    $
    1,175,100
    
    
    $
    1,330,578Capital lease obligations
    
    
    9,527
    
    
    
    396
    
    
    
    828
    
    
    
    879
    
    
    
    7,424Operating leases
    
    
    164,910
    
    
    
    22,228
    
    
    
    41,153
    
    
    
    29,234
    
    
    
    72,295Unconditional purchase
obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Certificates of deposit
    
    
    7,237,663
    
    
    
    5,654,302
    
    
    
    999,315
    
    
    
    520,203
    
    
    
    63,843Other time deposits
    
    
    136,837
    
    
    
    136,837
    
    
    
    
    
    
    
    
    
    
    
    Other long-term obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    11,060,538
    
    
    $
    5,919,695
    
    
    $
    1,941,287
    
    
    $
    1,725,416
    
    
    $
    1,474,140
 
 *
    
    Refer to Note 10, FHLB and Other Borrowings, and Note 11, Capital Securities and Preferred
Stock, in the Notes to Consolidated Financial Statements for additional information about these
obligations, including certain redemption features. 
 Commitments**
 Payments Due by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    Year
    
    
    1  3 Years
    
    
    3 5 Years
    
    
    Years(In Thousands)Commitments to extend credit
    
    $
    12,661,226
    
    
    $
    7,549,550
    
    
    $
    2,753,673
    
    
    $
    1,015,363
    
    
    $
    1,342,640Standby and commercial
letters
of credit
    
    
    1,136,441
    
    
    
    125,048
    
    
    
    256,892
    
    
    
    562,428
    
    
    
    192,073Other contingent liabilities
and commitments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    13,797,667
    
    
    $
    7,674,598
    
    
    $
    3,010,565
    
    
    $
    1,577,791
    
    
    $
    1,534,713
 
 **
    
    Refer to Note 13, Commitments, Contingencies and Guarantees, in the Notes to Consolidated
Financial Statements for additional information about these commitments. -23-




---



##### Table of Contents



Interest Rate Sensitivity Management
    
 Net Interest Income Sensitivity
 Principal
    
    
    PercentageAmount of Earning
    
    
    Increase/(Decrease)Assets, Interest
    
    
    in Interest Income/ExpenseBearing Liabilities
    
    
    Down 100
    
    
    Up 100and Swaps
    
    
    Basis Points
    
    
    Basis Points(In Thousands)December 31, 2006:Assets which reprice in: *One year or less
    
    $
    17,658,529
    
    
    
    (5.79
    )%
    
    
    6.48
    %Over one year
    
    
    13,706,928
    
    
    
    (1.41
    )
    
    
    1.14$
    31,365,457
    
    
    
    (4.14
    )
    
    
    4.46Liabilities which reprice in:One year or less
    
    $
    20,389,514
    
    
    
    (10.14
    )%
    
    
    12.73
    %Over one year
    
    
    4,130,261
    
    
    
    
    
    
    
    (5.71
    )$
    24,519,775
    
    
    
    (8.34
    )
    
    
    9.47Total net interest income sensitivity
    
    
    
    
    
    
    (0.23
    )%
    
    
    (0.18
    )%December 31, 2005:Assets which reprice in: *One year or less
    
    $
    14,557,658
    
    
    
    (7.48
    )%
    
    
    7.59
    %Over one year
    
    
    13,839,052
    
    
    
    (2.16
    )
    
    
    1.46$
    28,396,710
    
    
    
    (5.19
    )
    
    
    4.96Liabilities which reprice in:One year or less
    
    $
    17,488,014
    
    
    
    (11.64
    )%
    
    
    15.11
    %Over one year
    
    
    4,665,004
    
    
    
    (0.82
    )
    
    
    2.17$
    22,153,018
    
    
    
    (8.24
    )
    
    
    11.04Total net interest income sensitivity
    
    
    
    
    
    
    (3.01
    )%
    
    
    0.59
    %
 
 *
    
    Excludes noninterest earning trading account assets  -24-




---



##### Table of Contents



Capital Resources
  . th
    
 Return on Equity and Assets
 December 312006
    
    2005
    
    2004Return on average assets
    
    
    1.39
    %
    
    
    1.36
    %
    
    
    1.30
    %Return on average equity
    
    
    17.68
    
    
    
    18.52
    
    
    
    18.29Dividend payout ratio
    
    
    44.19
    
    
    
    44.03
    
    
    
    43.55Average common shareholders equity to average assets ratio
    
    
    7.89
    
    
    
    7.37
    
    
    
    7.12
 -25-




---



##### Table of Contents



Capital Ratios
 December 312006
    
    2005(In Thousands)Risk-based capital:Tier I Capital
    
    $
    2,543,189
    
    
    $
    2,313,682Tangible Tier I Capital
    
    
    2,534,552
    
    
    
    2,304,269Total Qualifying Capital
    
    
    3,513,448
    
    
    
    3,038,507Assets:Net risk-adjusted assets
    
    $
    29,947,437
    
    
    $
    26,460,438Adjusted quarterly average assets
    
    
    33,426,336
    
    
    
    30,055,681Adjusted tangible quarterly average assets
    
    
    33,417,699
    
    
    
    30,046,268Ratios:Tier I Capital
    
    
    8.49
    %
    
    
    8.74
    %Total Qualifying Capital
    
    
    11.73
    
    
    
    11.48Leverage
    
    
    7.61
    
    
    
    7.70Tangible leverage
    
    
    7.58
    
    
    
    7.67
  -26-




---



##### Table of Contents



Off-Balance Sheet Activities
 Sunbelt Funding Corporation
    Results of Operations
 Net Interest Income
   -27-




---



##### Table of Contents



-28-




---



##### Table of Contents



For the Year Ended December 312007
    
    2008
    
    2009
    
    Thereafter(In Thousands)Non-trading interest rate contracts:Cash Flow Hedges:Notional maturity
    
    $
    
    
    
    $
    500,000
    
    
    $
    350,000
    
    
    $
    1,500,000Weighted average coupon received
on maturities
    
    
    
    %
    
    
    4.88
    %
    
    
    5.32
    %
    
    
    5.25
    %Weighted average time to
maturity (months)
    
    
    
    
    
    
    13
    
    
    
    32
    
    
    
    43Fair Value Hedges:Notional maturity
    
    $
    405,500
    
    
    $
    
    
    
    $
    329,882
    
    
    $
    575,000Weighted average coupon received
on maturities
    
    
    6.96
    %
    
    
    
    %
    
    
    6.53
    %
    
    
    5.69
    %Weighted average time to
maturity (months)
    
    
    3
    
    
    
    
    
    
    
    31
    
    
    
    196
   December 312006
    
    2005
    
    2004Rate earned on interest earning assets
    
    
    6.74
    %
    
    
    5.70
    %
    
    
    5.02
    %Rate paid on interest bearing liabilities
    
    
    3.90
    
    
    
    2.71
    
    
    
    1.90Interest rate spread
    
    
    2.84
    
    
    
    2.99
    
    
    
    3.12Net yield on earning assets
    
    
    3.69
    
    
    
    3.58
    
    
    
    3.49
 -29-




---



##### Table of Contents



Consolidated Average Balance Sheets and Rate/Volume Variances
 Taxable Equivalent Basis
  Year Ended December 312006
    
    
    2005Average
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Yield/Rate Analysis
    
    Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateASSETSEarning assets:Loans [a]
    
    $
    23,713,038
    
    
    $
    1,735,236
    
    
    
    7.32
    %
    
    $
    20,049,588
    
    
    $
    1,236,153
    
    
    
    6.17
    %Investment securities
available for sale [b]
    
    
    4,528,184
    
    
    
    212,543
    
    
    
    4.69
    
    
    
    4,570,904
    
    
    
    189,333
    
    
    
    4.14Investment securities held
to maturity
    
    
    2,121,500
    
    
    
    101,269
    
    
    
    4.77
    
    
    
    2,509,642
    
    
    
    121,405
    
    
    
    4.84Other [c]
    
    
    73,127
    
    
    
    3,649
    
    
    
    4.99
    
    
    
    61,410
    
    
    
    2,347
    
    
    
    3.82Total earning assets
    
    
    30,435,849
    
    
    
    2,052,697
    
    
    
    6.74
    
    
    
    27,191,544
    
    
    
    1,549,238
    
    
    
    5.70Allowance for loan losses
    
    
    (285,189
    )
    
    
    
    
    
    
    
    
    
    
    (257,919
    )Unrealized gain (loss) on
investment
securities available for sale
    
    
    (82,636
    )
    
    
    
    
    
    
    
    
    
    
    (49,453
    )Cash and due from banks
    
    
    710,747
    
    
    
    
    
    
    
    
    
    
    
    746,393Other assets
    
    
    2,233,579
    
    
    
    
    
    
    
    
    
    
    
    1,813,667Total assets
    
    $
    33,012,350
    
    
    
    
    
    
    
    
    
    
    $
    29,444,232LIABILITIES AND SHAREHOLDERS EQUITYInterest bearing liabilities:Interest bearing demand
deposits
    
    $
    346,733
    
    
    
    2,933
    
    
    
    0.85
    
    
    $
    211,655
    
    
    
    1,529
    
    
    
    0.72Savings deposits
    
    
    8,424,252
    
    
    
    187,839
    
    
    
    2.23
    
    
    
    7,185,061
    
    
    
    72,657
    
    
    
    1.01Certificates of deposit less
than $100,000
and other time deposits
    
    
    3,430,703
    
    
    
    155,259
    
    
    
    4.53
    
    
    
    2,542,086
    
    
    
    88,495
    
    
    
    3.48Certificates of deposit of
$100,000 or more
    
    
    3,728,787
    
    
    
    173,752
    
    
    
    4.66
    
    
    
    2,826,672
    
    
    
    98,298
    
    
    
    3.48Total interest bearing
deposits [b]
    
    
    15,930,475
    
    
    
    519,783
    
    
    
    3.26
    
    
    
    12,765,474
    
    
    
    260,979
    
    
    
    2.04Federal funds purchased
    
    
    2,918,734
    
    
    
    145,515
    
    
    
    4.99
    
    
    
    3,845,028
    
    
    
    124,019
    
    
    
    3.23Securities sold under
agreements to repurchase
    
    
    290,436
    
    
    
    13,087
    
    
    
    4.51
    
    
    
    330,813
    
    
    
    9,576
    
    
    
    2.89Other short-term borrowings
[c]
    
    
    684,405
    
    
    
    33,733
    
    
    
    4.93
    
    
    
    182,911
    
    
    
    4,994
    
    
    
    2.73FHLB and other borrowings [b]
    
    
    4,000,673
    
    
    
    217,299
    
    
    
    5.43
    
    
    
    4,114,354
    
    
    
    176,605
    
    
    
    4.29Total interest bearing
liabilities
    
    
    23,824,723
    
    
    
    929,417
    
    
    
    3.90
    
    
    
    21,238,580
    
    
    
    576,173
    
    
    
    2.71Net interest income/net
interest spread
    
    
    
    
    
    
    1,123,280
    
    
    
    2.84
    %
    
    
    
    
    
    
    973,065
    
    
    
    2.99
    %Noninterest bearing demand
deposits
    
    
    6,196,642
    
    
    
    
    
    
    
    
    
    
    
    5,702,201Accrued expenses and other
liabilities
    
    
    387,819
    
    
    
    
    
    
    
    
    
    
    
    333,389Shareholders equity
    
    
    2,603,166
    
    
    
    
    
    
    
    
    
    
    
    2,170,062Total liabilities and
shareholders equity
    
    $
    33,012,350
    
    
    
    
    
    
    
    
    
    
    $
    29,444,232Net yield on earning assets
    
    
    
    
    
    
    
    
    
    
    3.69
    %
    
    
    
    
    
    
    
    
    
    
    3.58
    %Taxable equivalent adjustment:Loans
    
    
    
    
    
    
    2,303
    
    
    
    
    
    
    
    
    
    
    
    1,224Investment securities
available for sale
    
    
    
    
    
    
    3,225
    
    
    
    
    
    
    
    
    
    
    
    560Investment securities held
to maturity
    
    
    
    
    
    
    2,580
    
    
    
    
    
    
    
    
    
    
    
    2,261Other
    
    
    
    
    
    
    38
    
    
    
    
    
    
    
    
    
    
    
    41Total taxable equivalent
adjustment
    
    
    
    
    
    
    8,146
    
    
    
    
    
    
    
    
    
    
    
    4,086Net interest income
    
    
    
    
    
    $
    1,115,134
    
    
    
    
    
    
    
    
    
    
    $
    968,979
 
 [a]
    
    Includes nonaccrual loans[b]
    
    Excludes adjustment for mark-to-market valuation[c]
    
    Excludes noninterest earning trading assets and liabilities -30-




---



##### Table of Contents



Year Ended December 312004
    
    
    Change in Interest Income/Expense Attributable toAverage
    
    
    Income/
    
    
    Yield/
    
    
    2006
    
    
    2005Balance
    
    
    Expense
    
    
    Rate
    
    
    Volume
    
    
    Rate
    
    
    Mix
    
    
    Volume
    
    
    Rate
    
    
    Mix$
    17,999,355
    
    
    $
    950,925
    
    
    
    5.28
    %
    
    $
    226,035
    
    
    $
    230,570
    
    
    $
    42,478
    
    
    $
    108,252
    
    
    $
    160,194
    
    
    $
    16,7824,401,132
    
    
    
    181,234
    
    
    
    4.12
    
    
    
    (1,769
    )
    
    
    25,140
    
    
    
    (161
    )
    
    
    6,995
    
    
    
    880
    
    
    
    2242,996,342
    
    
    
    143,637
    
    
    
    4.79
    
    
    
    (18,786
    )
    
    
    (1,757
    )
    
    
    407
    
    
    
    (23,313
    )
    
    
    1,498
    
    
    
    (417
    )60,491
    
    
    
    1,306
    
    
    
    2.16
    
    
    
    448
    
    
    
    718
    
    
    
    136
    
    
    
    20
    
    
    
    1,004
    
    
    
    1725,457,320
    
    
    
    1,277,102
    
    
    
    5.02
    
    
    
    205,928
    
    
    
    254,671
    
    
    
    42,860
    
    
    
    91,954
    
    
    
    163,576
    
    
    
    16,606(251,713
    )24,865675,3391,754,817$
    27,660,628$
    60,211
    
    
    
    1,134
    
    
    
    1.88
    
    
    
    973
    
    
    
    275
    
    
    
    156
    
    
    
    2,847
    
    
    
    (698
    )
    
    
    (1,754
    )7,570,719
    
    
    
    46,555
    
    
    
    0.61
    
    
    
    12,516
    
    
    
    87,658
    
    
    
    15,008
    
    
    
    (2,353
    )
    
    
    30,283
    
    
    
    (1,828
    )2,004,181
    
    
    
    63,321
    
    
    
    3.16
    
    
    
    30,924
    
    
    
    26,692
    
    
    
    9,148
    
    
    
    16,998
    
    
    
    6,413
    
    
    
    1,7631,779,343
    
    
    
    48,768
    
    
    
    2.74
    
    
    
    31,394
    
    
    
    33,355
    
    
    
    10,705
    
    
    
    28,697
    
    
    
    13,167
    
    
    
    7,66611,414,454
    
    
    
    159,778
    
    
    
    1.40
    
    
    
    75,807
    
    
    
    147,980
    
    
    
    35,017
    
    
    
    46,189
    
    
    
    49,165
    
    
    
    5,8473,906,691
    
    
    
    53,729
    
    
    
    1.38
    
    
    
    (29,919
    )
    
    
    67,672
    
    
    
    (16,257
    )
    
    
    (851
    )
    
    
    72,274
    
    
    
    (1,133
    )371,444
    
    
    
    3,934
    
    
    
    1.06
    
    
    
    (1,167
    )
    
    
    5,359
    
    
    
    (681
    )
    
    
    (431
    )
    
    
    6,797
    
    
    
    (724
    )115,581
    
    
    
    1,267
    
    
    
    1.10
    
    
    
    13,691
    
    
    
    4,024
    
    
    
    11,024
    
    
    
    741
    
    
    
    1,884
    
    
    
    1,1024,589,059
    
    
    
    169,493
    
    
    
    3.69
    
    
    
    (4,877
    )
    
    
    46,904
    
    
    
    (1,333
    )
    
    
    (17,517
    )
    
    
    27,534
    
    
    
    (2,905
    )20,397,229
    
    
    
    388,201
    
    
    
    1.90
    
    
    
    53,535
    
    
    
    271,939
    
    
    
    27,770
    
    
    
    28,131
    
    
    
    157,654
    
    
    
    2,187888,901
    
    
    
    3.12
    %
    
    $
    152,393
    
    
    $
    (17,268
    )
    
    $
    15,090
    
    
    $
    63,823
    
    
    $
    5,922
    
    
    $
    14,4194,999,763294,6881,968,948$
    27,660,6283.49
    %7641592,613403,576$
    885,325
 -31-




---



##### 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 114, Accounting by Creditors for Impairment of a Loan, in each loan category,
although a higher allocation weight may be used if current conditions indicate that loan
losses may exceed historical experience.
   -32-




---



##### Table of Contents



Summary of Loan Loss Experience
 2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(In Thousands)Average loans outstanding
during the year
    
    $
    23,713,038
    
    
    $
    20,049,588
    
    
    $
    17,999,355
    
    
    $
    16,796,188
    
    
    $
    15,100,844Allowance for loan losses,
beginning of year
    
    $
    267,173
    
    
    $
    258,339
    
    
    $
    244,882
    
    
    $
    232,830
    
    
    $
    191,393Charge-offs:Commercial, financial and
agricultural
    
    
    15,720
    
    
    
    15,897
    
    
    
    14,863
    
    
    
    23,078
    
    
    
    26,608Commercial real estate  mortgage
    
    
    2,075
    
    
    
    1,760
    
    
    
    4,564
    
    
    
    2,836
    
    
    
    3,155Real estate  construction
    
    
    826
    
    
    
    740
    
    
    
    246
    
    
    
    2,290
    
    
    
    3,735Residential real estate  mortgage
    
    
    2,289
    
    
    
    1,915
    
    
    
    1,778
    
    
    
    1,547
    
    
    
    1,887Equity lines of credit
    
    
    1,852
    
    
    
    1,606
    
    
    
    2,437
    
    
    
    2,973
    
    
    
    1,343Equity loans
    
    
    1,041
    
    
    
    2,021
    
    
    
    2,549
    
    
    
    5,065
    
    
    
    2,926Credit card
    
    
    25,235
    
    
    
    39,106
    
    
    
    37,625
    
    
    
    36,248
    
    
    
    35,296Consumer  direct
    
    
    19,122
    
    
    
    21,124
    
    
    
    14,675
    
    
    
    15,825
    
    
    
    11,376Consumer  indirect
    
    
    38,325
    
    
    
    41,575
    
    
    
    38,860
    
    
    
    33,865
    
    
    
    23,061Total
    
    
    106,485
    
    
    
    125,744
    
    
    
    117,597
    
    
    
    123,727
    
    
    
    109,387Recoveries:Commercial, financial and
agricultural
    
    
    1,834
    
    
    
    4,070
    
    
    
    5,549
    
    
    
    5,285
    
    
    
    2,759Commercial real estate  mortgage
    
    
    77
    
    
    
    184
    
    
    
    274
    
    
    
    149
    
    
    
    211Real estate  construction
    
    
    125
    
    
    
    93
    
    
    
    110
    
    
    
    472
    
    
    
    54Residential real estate  mortgage
    
    
    89
    
    
    
    116
    
    
    
    133
    
    
    
    207
    
    
    
    390Equity lines of credit
    
    
    303
    
    
    
    234
    
    
    
    271
    
    
    
    54
    
    
    
    127Equity loans
    
    
    285
    
    
    
    344
    
    
    
    434
    
    
    
    198
    
    
    
    18Credit card
    
    
    2,976
    
    
    
    3,019
    
    
    
    2,830
    
    
    
    2,038
    
    
    
    2,015Consumer  direct
    
    
    10,527
    
    
    
    8,508
    
    
    
    5,966
    
    
    
    4,786
    
    
    
    4,570Consumer  indirect
    
    
    13,265
    
    
    
    12,381
    
    
    
    10,420
    
    
    
    6,271
    
    
    
    4,349Total
    
    
    29,481
    
    
    
    28,949
    
    
    
    25,987
    
    
    
    19,460
    
    
    
    14,493Net charge-offs
    
    
    77,004
    
    
    
    96,795
    
    
    
    91,610
    
    
    
    104,267
    
    
    
    94,894Provision charged to income
    
    
    89,702
    
    
    
    117,818
    
    
    
    105,658
    
    
    
    119,681
    
    
    
    136,331Allowance for loans
sold / securitized
    
    
    
    
    
    
    
    
    
    
    (591
    )
    
    
    (3,362
    )
    
    
    Allowance transferred to other
liabilities
    
    
    
    
    
    
    (12,189
    )
    
    
    
    
    
    
    
    
    
    
    Allowance acquired
    
    
    11,179
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Allowance for loan losses, end
of year
    
    $
    291,050
    
    
    $
    267,173
    
    
    $
    258,339
    
    
    $
    244,882
    
    
    $
    232,830Net charge-offs to average
loans outstanding
    
    
    0.32
    %
    
    
    0.48
    %
    
    
    0.51
    %
    
    
    0.62
    %
    
    
    0.63
    %
 -33-




---



##### Table of Contents



Allocation of Allowance for Loan Losses
 December 312006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent ofLoans to
    
    
    
    
    
    
    Loans to
    
    
    
    
    
    
    Loans to
    
    
    
    
    
    
    Loans to
    
    
    
    
    
    
    Loans toAmount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans(In Thousands)Commercial, financial
and agricultural
    
    $
    55,389
    
    
    
    17.7
    %
    
    $
    47,688
    
    
    
    18.2
    %
    
    $
    55,077
    
    
    
    19.9
    %
    
    $
    59,308
    
    
    
    20.6
    %
    
    $
    57,685
    
    
    
    22.4
    %Real estate 
construction
    
    
    72,363
    
    
    
    25.8
    
    
    
    25,668
    
    
    
    19.8
    
    
    
    24,613
    
    
    
    16.1
    
    
    
    22,119
    
    
    
    14.3
    
    
    
    28,123
    
    
    
    15.3Real estate 
mortgage:Residential
    
    
    38,820
    
    
    
    22.8
    
    
    
    22,321
    
    
    
    22.0
    
    
    
    17,897
    
    
    
    21.4
    
    
    
    14,420
    
    
    
    22.1
    
    
    
    14,188
    
    
    
    24.2Commercial
    
    
    27,297
    
    
    
    17.3
    
    
    
    27,432
    
    
    
    19.1
    
    
    
    29,011
    
    
    
    20.9
    
    
    
    31,746
    
    
    
    22.6
    
    
    
    23,642
    
    
    
    19.5Consumer
    
    
    97,181
    
    
    
    16.4
    
    
    
    144,064
    
    
    
    20.9
    
    
    
    131,741
    
    
    
    21.7
    
    
    
    117,289
    
    
    
    20.4
    
    
    
    109,192
    
    
    
    18.6$
    291,050
    
    
    
    100.0
    %
    
    $
    267,173
    
    
    
    100.0
    %
    
    $
    258,339
    
    
    
    100.0
    %
    
    $
    244,882
    
    
    
    100.0
    %
    
    $
    232,830
    
    
    
    100.0
    %
 Nonperforming Assets
    -34-




---



##### Table of Contents



Nonperforming Assets
 December 312006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(In Thousands)Nonaccrual loans
    
    $
    53,014
    
    
    $
    47,578
    
    
    $
    49,947
    
    
    $
    65,870
    
    
    $
    81,671Renegotiated loans
    
    
    3,258
    
    
    
    698
    
    
    
    734
    
    
    
    218
    
    
    
    38Total nonperforming loans
    
    
    56,272
    
    
    
    48,276
    
    
    
    50,681
    
    
    
    66,088
    
    
    
    81,709Other real estate
    
    
    17,105
    
    
    
    11,510
    
    
    
    19,998
    
    
    
    29,014
    
    
    
    17,300Total nonperforming assets
    
    $
    73,377
    
    
    $
    59,786
    
    
    $
    70,679
    
    
    $
    95,102
    
    
    $
    99,009Accruing loans 90 days or more past due
    
    $
    18,023
    
    
    $
    14,539
    
    
    $
    15,509
    
    
    $
    26,159
    
    
    $
    16,907Total nonperforming loans as
a percentage of loans
    
    
    .23
    %
    
    
    .23
    %
    
    
    .27
    %
    
    
    .38
    %
    
    
    .50
    %Total nonperforming assets as
a percentage of loans and ORE
    
    
    .30
    
    
    
    .28
    
    
    
    .37
    
    
    
    .55
    
    
    
    .60Accruing loans 90 days or more past
due as a percentage of loans
    
    
    .07
    
    
    
    .07
    
    
    
    .08
    
    
    
    .15
    
    
    
    .10
  2006
    
    2005
    
    2004Principal balance
    
    $
    53,014
    
    
    $
    47,578
    
    
    $
    49,947Interest that would have been recorded under original terms
    
    
    5,105
    
    
    
    4,789
    
    
    
    4,819Interest actually recorded
    
    
    1,655
    
    
    
    2,070
    
    
    
    2,195
 Noninterest Income
     -35-




---



##### Table of Contents



Noninterest Expense
      -36-




---



##### 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 51,
  Accounting for Certain Loans or Debt Securities Acquired in a Transfer
 Accounting for Certain Loans or Debt Securities Acquired in a Transfer.
 -37-




---



##### Table of Contents



Share-Based Payments
 Share-Based Payment, , Accounting for Stock-Based Compensation.
 Accounting Changes and Error Corrections
 Accounting Changes and Error Corrections, a Replacement
of APB Opinion 20 and FASB Statement 3
 Accounting for Certain Hybrid Financial Instruments
 Accounting for Certain Hybrid Financial
Instruments  an amendment of FASB Statements 133 and 140 Accounting
for Derivative Instruments and Hedging Activities Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities
 Accounting for Servicing of Financial Assets
 Accounting for Servicing of Financial Assets  an
amendment of FASB Statement 140 Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities
 Accounting for Uncertainty in Income Taxes
 Accounting for Uncertainty in
Income Taxes  an interpretation of FASB Statement 109 Accounting for Income Taxes
 -38-




---



##### Table of Contents



Fair Value Measurements
 Fair Value Measurements
 Accounting for Defined Pension and Other Postretirement Plans
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans  an amendment of FASB Statements 87, 88, 106 and 132(R)
 Considering the Effects of Misstatements
 Financial Statements
 Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current
Year Financial Statements
 Impact of Inflation and Changing Prices
   -39-




---



##### Table of Contents



ITEM 8  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  Compass Bancshares, Inc. and Subsidiaries
Financial Statements
 PageReports of Independent Registered Public Accounting Firms
    
    
    41Consolidated Balance Sheets as of
December 31, 2006 and 2005
    
    
    44Consolidated Statements of Income for the years ended
December 31, 2006, 2005 and 2004
    
    
    45Consolidated Statements of Shareholders Equity for the
years ended December 31, 2006, 2005 and 2004
    
    
    46Consolidated Statements of Cash Flows for the years
ended December 31, 2006, 2005 and 2004
    
    
    47Notes to Consolidated Financial Statements 
December 31, 2006, 2005 and 2004
    
    
    48
 -40-




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
        
 -41-




---



##### Table of Contents



Report
of Independent Registered Public Accounting Firm On Internal
Control Over Financial Reporting
      .
   
 -42-




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
   
 -43-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
 
 Consolidated Balance Sheets
 December 312006
    
    
    2005(In Thousands)AssetsCash and due from banks
    
    $
    738,168
    
    
    $
    805,556Federal funds sold and securities purchased
under agreements to resell
    
    
    24,423
    
    
    
    46,393Trading account assets
    
    
    86,706
    
    
    
    76,559Investment securities available for sale
    
    
    4,687,782
    
    
    
    4,704,375Investment securities held to maturity (fair value of
$1,914,863 and $2,212,273 for 2006 and 2005, respectively)
    
    
    1,953,166
    
    
    
    2,245,942Loans
    
    
    24,665,273
    
    
    
    21,372,215Allowance for loan losses
    
    
    (291,050
    )
    
    
    (267,173
    )Net loans
    
    
    24,374,223
    
    
    
    21,105,042Premises and equipment, net
    
    
    589,264
    
    
    
    547,195Bank owned life insurance
    
    
    474,664
    
    
    
    441,226Goodwill
    
    
    677,314
    
    
    
    316,197Other assets
    
    
    594,045
    
    
    
    509,747Total assets
    
    $
    34,199,755
    
    
    $
    30,798,232Liabilities and Shareholders EquityDeposits:Noninterest bearing
    
    $
    6,459,669
    
    
    $
    6,097,881Interest bearing
    
    
    16,585,860
    
    
    
    14,286,234Total deposits
    
    
    23,045,529
    
    
    
    20,384,115Federal funds purchased and securities sold under
agreements to repurchase
    
    
    3,179,351
    
    
    
    3,102,572Other short-term borrowings
    
    
    1,242,963
    
    
    
    652,750FHLB and other borrowings
    
    
    3,511,601
    
    
    
    4,111,462Accrued expenses and other liabilities
    
    
    396,177
    
    
    
    311,304Total liabilities
    
    
    31,375,621
    
    
    
    28,562,203Shareholders equity:Preferred stock (25,000,000 shares authorized)
    
    
    
    
    
    
    Common stock of $2 par value:Authorized  300,000,000 shares in 2006 and 2005Issued  135,603,484 shares in 2006 and
133,950,243 shares in 2005
    
    
    271,207
    
    
    
    267,900Treasury stock, at cost (5,520,533 shares in 2006 and
10,411,684 shares in 2005)
    
    
    (201,950
    )
    
    
    (377,327
    )Surplus
    
    
    430,826
    
    
    
    300,375Loans to finance stock purchases
    
    
    (2,177
    )
    
    
    (1,262
    )Unearned restricted stock
    
    
    
    
    
    
    (11,811
    )Accumulated other comprehensive loss
    
    
    (53,932
    )
    
    
    (63,156
    )Retained earnings
    
    
    2,380,160
    
    
    
    2,121,310Total shareholders equity
    
    
    2,824,134
    
    
    
    2,236,029Total liabilities and shareholders equity
    
    $
    34,199,755
    
    
    $
    30,798,232
  -44-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
 
 Consolidated Statements of Income
 Year Ended December 312006
    
    
    2005
    
    
    2004(In Thousands, Except Per Share Data)Interest income:Interest and fees on loans
    
    $
    1,732,933
    
    
    $
    1,234,929
    
    
    $
    950,161Interest on investment securities available for sale
    
    
    209,318
    
    
    
    188,773
    
    
    
    181,075Interest on investment securities held to maturity
    
    
    98,689
    
    
    
    119,144
    
    
    
    141,024Interest on federal funds sold and securities
purchased under agreements to resell
    
    
    2,470
    
    
    
    1,537
    
    
    
    801Interest on trading account assets
    
    
    1,141
    
    
    
    769
    
    
    
    465Total interest income
    
    
    2,044,551
    
    
    
    1,545,152
    
    
    
    1,273,526Interest expense:Interest on deposits
    
    
    519,783
    
    
    
    260,979
    
    
    
    159,778Interest on federal funds purchased and securities
sold under agreements to repurchase
    
    
    158,602
    
    
    
    133,595
    
    
    
    57,663Interest on other short-term borrowings
    
    
    33,733
    
    
    
    4,994
    
    
    
    1,267Interest on FHLB and other borrowings
    
    
    217,299
    
    
    
    176,605
    
    
    
    169,493Total interest expense
    
    
    929,417
    
    
    
    576,173
    
    
    
    388,201Net interest income
    
    
    1,115,134
    
    
    
    968,979
    
    
    
    885,325Provision for loan losses
    
    
    89,702
    
    
    
    117,818
    
    
    
    105,658Net interest income after provision for loan losses
    
    
    1,025,432
    
    
    
    851,161
    
    
    
    779,667Noninterest income:Service charges on deposit accounts
    
    
    311,520
    
    
    
    297,080
    
    
    
    282,808Card and merchant processing fees
    
    
    111,302
    
    
    
    95,591
    
    
    
    75,548Insurance commissions
    
    
    61,634
    
    
    
    59,362
    
    
    
    51,437Retail investment sales
    
    
    41,338
    
    
    
    33,890
    
    
    
    31,316Asset management fees
    
    
    33,882
    
    
    
    28,689
    
    
    
    22,666Corporate and correspondent investment sales
    
    
    22,799
    
    
    
    23,487
    
    
    
    20,457Gain on prepayment of FHLB advances
    
    
    21,084
    
    
    
    
    
    
    
    Bank owned life insurance
    
    
    20,638
    
    
    
    17,467
    
    
    
    17,169Gain on sale of business and branches
    
    
    
    
    
    
    6,391
    
    
    
    Investment securities gains (losses), net
    
    
    (14,889
    )
    
    
    79
    
    
    
    27,336Trading gains (losses) and settlements on economic hedge swaps
    
    
    
    
    
    
    (3,235
    )
    
    
    11,053Other
    
    
    101,952
    
    
    
    99,877
    
    
    
    88,853Total noninterest income
    
    
    711,260
    
    
    
    658,678
    
    
    
    628,643Noninterest expense:Salaries, benefits and commissions
    
    
    569,761
    
    
    
    487,819
    
    
    
    458,356Equipment
    
    
    91,325
    
    
    
    81,979
    
    
    
    76,169Net occupancy
    
    
    74,272
    
    
    
    66,937
    
    
    
    65,791Professional services
    
    
    63,609
    
    
    
    61,640
    
    
    
    57,380Marketing
    
    
    50,879
    
    
    
    43,802
    
    
    
    33,249Communications
    
    
    24,509
    
    
    
    21,793
    
    
    
    21,859Amortization of intangibles
    
    
    12,377
    
    
    
    6,151
    
    
    
    6,543Merger and integration
    
    
    10,659
    
    
    
    1,641
    
    
    
    1,275Loss on prepayment of FHLB advances
    
    
    
    
    
    
    
    
    
    
    25,136Other
    
    
    151,884
    
    
    
    130,041
    
    
    
    122,720Total noninterest expense
    
    
    1,049,275
    
    
    
    901,803
    
    
    
    868,478Net income before income tax expense
    
    
    687,417
    
    
    
    608,036
    
    
    
    539,832Income tax expense
    
    
    227,054
    
    
    
    206,206
    
    
    
    179,647Net income
    
    $
    460,363
    
    
    $
    401,830
    
    
    $
    360,185Basic earnings per share
    
    $
    3.60
    
    
    $
    3.25
    
    
    $
    2.95Basic weighted average shares outstanding
    
    
    127,857
    
    
    
    123,550
    
    
    
    122,254Diluted earnings per share
    
    $
    3.53
    
    
    $
    3.18
    
    
    $
    2.87Diluted weighted average shares outstanding
    
    
    130,458
    
    
    
    126,423
    
    
    
    125,416
  -45-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
 
 Consolidated Statements of Shareholders Equity
 Years Ended December 31, 2006, 2005 and 2004
 AccumulatedOtherComprehensive
    
    
    
    Total
    
    ComprehensiveCommon
    
    Treasury
    
    
    
    Retained
    
    Income
    
    
    
    Shareholders
    
    IncomeStock
    
    Stock
    
    Surplus
    
    Earnings
    
    (Loss)
    
    Other
    
    Equity
    
    (Loss)(In Thousands)Balance, December 31, 2003
    
    $
    263,138
    
    
    $
    (317,669
    )
    
    $
    227,404
    
    
    $
    1,689,689
    
    
    $
    37,306
    
    
    $
    (7,294
    )
    
    $
    1,892,574Net income   2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    360,185
    
    
    
    
    
    
    
    
    
    
    
    360,185
    
    
    $
    360,185Net 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    299,503Common dividends declared ($1.25 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (153,970
    )
    
    
    
    
    
    
    
    
    
    
    (153,970
    )Exercise of stock options and other issuances
    
    
    2,362
    
    
    
    
    
    
    
    28,481
    
    
    
    (1,358
    )
    
    
    
    
    
    
    
    
    
    
    29,485Issuance 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,397Advances on loans to finance stock purchases,
net of repayments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (247
    )
    
    
    (247
    )Amortization of restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,432
    
    
    
    4,432Purchase of treasury stock
    
    
    
    
    
    
    (33,829
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,829
    )Balance, December 31, 2004
    
    
    265,806
    
    
    
    (333,351
    )
    
    
    264,400
    
    
    
    1,894,546
    
    
    
    (23,376
    )
    
    
    (11,680
    )
    
    
    2,056,345Net income   2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    401,830
    
    
    
    
    
    
    
    
    
    
    
    401,830
    
    
    $
    401,830Net change in unrealized losses on securities
available for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (44,297
    )
    
    
    
    
    
    
    (44,297
    )
    
    
    (44,297
    )Net change in accumulated losses on cash-flow
hedging instruments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,665
    
    
    
    
    
    
    
    3,665
    
    
    
    3,665Net change in additional minimum pension
liability, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    852
    
    
    
    
    
    
    
    852
    
    
    
    852Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    362,050Common dividends declared ($1.40 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (173,524
    )
    
    
    
    
    
    
    
    
    
    
    (173,524
    )Exercise of stock options and other issuances
    
    
    1,842
    
    
    
    
    
    
    
    25,844
    
    
    
    (1,542
    )
    
    
    
    
    
    
    
    
    
    
    26,144Issuance of restricted stock, net of cancellations
    
    
    252
    
    
    
    
    
    
    
    6,419
    
    
    
    
    
    
    
    
    
    
    
    (6,671
    )
    
    
    Issuance of treasury stock for acquisitions, stock
options and benefit plans
    
    
    
    
    
    
    19,271
    
    
    
    3,712
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,983Advances on loans to finance stock purchases,
net of repayments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (206
    )
    
    
    (206
    )Amortization of restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,484
    
    
    
    5,484Purchase of treasury stock
    
    
    
    
    
    
    (63,247
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (63,247
    )Balance, December 31, 2005
    
    
    267,900
    
    
    
    (377,327
    )
    
    
    300,375
    
    
    
    2,121,310
    
    
    
    (63,156
    )
    
    
    (13,073
    )
    
    
    2,236,029Net income   2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    460,363
    
    
    
    
    
    
    
    
    
    
    
    460,363
    
    
    $
    460,363Net change in unrealized losses on securities
available for sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,016
    
    
    
    
    
    
    
    19,016
    
    
    
    19,016Net change in accumulated gains (losses) on cash-
flow hedging instruments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,494
    
    
    
    
    
    
    
    8,494
    
    
    
    8,494Net change in additional minimum pension
liability, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (325
    )
    
    
    
    
    
    
    (325
    )
    
    
    (325
    )Net change in funded pension asset, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,961
    )
    
    
    
    
    
    
    (17,961
    )
    
    
    (17,961
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    469,587Common dividends declared ($1.56 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (199,927
    )
    
    
    
    
    
    
    
    
    
    
    (199,927
    )Adoption of SFAS 123R
    
    
    
    
    
    
    
    
    
    
    (11,811
    )
    
    
    
    
    
    
    
    
    
    
    11,811
    
    
    
    Exercise of stock options and other issuances
    
    
    2,980
    
    
    
    
    
    
    
    53,043
    
    
    
    (1,586
    )
    
    
    
    
    
    
    
    
    
    
    54,437Issuance of restricted stock, net of cancellations
    
    
    327
    
    
    
    
    
    
    
    (327
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Advances on loans to finance
stock purchases, net of repayments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (915
    )
    
    
    (915
    )Issuance of treasury stock for acquisitions and
stock options
    
    
    
    
    
    
    186,054
    
    
    
    77,306
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    263,360Amortization of restricted stock and stock
option grants
    
    
    
    
    
    
    
    
    
    
    12,240
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,240Purchase of treasury stock
    
    
    
    
    
    
    (10,677
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,677
    )Balance, December 31, 2006
    
    $
    271,207
    
    
    $
    (201,950
    )
    
    $
    430,826
    
    
    $
    2,380,160
    
    
    $
    (53,932
    )
    
    $
    (2,177
    )
    
    $
    2,824,134
  -46-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
 
 Consolidated Statements of Cash Flows
 Year Ended December 312006
    
    
    2005
    
    
    2004(In Thousands)Operating Activities:Net income
    
    $
    460,363
    
    
    $
    401,830
    
    
    $
    360,185Adjustments to reconcile net income to cash provided by operations:Depreciation and amortization
    
    
    107,338
    
    
    
    100,524
    
    
    
    104,413Amortization of stock-based compensation
    
    
    12,240
    
    
    
    5,484
    
    
    
    4,432Accretion of discount and loan fees
    
    
    (16,019
    )
    
    
    (5,917
    )
    
    
    (18,550
    )Provision for loan losses
    
    
    89,702
    
    
    
    117,818
    
    
    
    105,658Net (increase) decrease in trading account assets
    
    
    (9,825
    )
    
    
    2,530
    
    
    
    11,004Deferred tax benefit
    
    
    (22,043
    )
    
    
    (31,145
    )
    
    
    (2,243
    )Net (gain) loss on sale of investment securities available for sale
    
    
    14,889
    
    
    
    (79
    )
    
    
    (27,336
    )(Gain) loss on prepayment of FHLB advances
    
    
    (21,084
    )
    
    
    
    
    
    
    25,136Gain on sale of business and branches
    
    
    
    
    
    
    (6,391
    )
    
    
    Increase in other assets
    
    
    (44,551
    )
    
    
    (39,632
    )
    
    
    (76,086
    )Increase in other liabilities
    
    
    42,623
    
    
    
    66,502
    
    
    
    27,917Net cash provided by operating activities
    
    
    613,633
    
    
    
    611,524
    
    
    
    514,530Investing Activities:Proceeds from prepayments, maturities and calls of investment securities
held to maturity
    
    
    367,956
    
    
    
    527,601
    
    
    
    736,367Purchases of investment securities held to maturity
    
    
    (10,193
    )
    
    
    (5,000
    )
    
    
    Proceeds from sales of investment securities available for sale
    
    
    799,163
    
    
    
    78,594
    
    
    
    814,036Proceeds from prepayments, maturities and calls of investment securities
available for sale
    
    
    891,016
    
    
    
    717,790
    
    
    
    846,600Purchases of investment securities available for sale
    
    
    (1,580,205
    )
    
    
    (1,183,296
    )
    
    
    (1,731,966
    )Net decrease in federal funds sold and securities purchased under
agreements to resell
    
    
    46,858
    
    
    
    555
    
    
    
    31,217Net increase in loan portfolio
    
    
    (1,990,249
    )
    
    
    (2,636,218
    )
    
    
    (2,188,966
    )Net cash received (paid) in acquisitions/dispositions
    
    
    (190,071
    )
    
    
    (16,945
    )
    
    
    268Purchases of premises and equipment, net
    
    
    (84,111
    )
    
    
    (69,755
    )
    
    
    (69,265
    )Proceeds from sales of other real estate owned
    
    
    11,155
    
    
    
    21,207
    
    
    
    30,845Net cash used by investing activities
    
    
    (1,738,681
    )
    
    
    (2,565,467
    )
    
    
    (1,530,864
    )Financing Activities:Net increase in demand deposits, NOW accounts
and savings accounts
    
    
    666,583
    
    
    
    930,127
    
    
    
    725,615Net increase in time deposits
    
    
    516,871
    
    
    
    2,437,410
    
    
    
    628,458Net increase (decrease) in federal funds purchased and
securities sold under agreements to repurchase
    
    
    55,901
    
    
    
    (1,429,432
    )
    
    
    413,380Net increase (decrease) in other short-term borrowings
    
    
    587,525
    
    
    
    476,979
    
    
    
    (87,766
    )Proceeds from FHLB advances and other borrowings
    
    
    1,876,186
    
    
    
    396,902
    
    
    
    1,125,100Repayment of FHLB advances and other borrowings
    
    
    (2,499,304
    )
    
    
    (400,537
    )
    
    
    (1,793,140
    )Redemption of guaranteed preferred beneficial interests in the
Companys junior subordinated deferrable interest debentures
    
    
    
    
    
    
    
    
    
    
    (23,000
    )Common dividends paid
    
    
    (199,989
    )
    
    
    (208,756
    )
    
    
    (118,533
    )Purchase of treasury stock
    
    
    (2,734
    )
    
    
    (63,247
    )
    
    
    (33,829
    )Issuance of treasury stock for benefit plans and stock options
    
    
    3,099
    
    
    
    9,274
    
    
    
    9,998Repayment of loans to finance stock purchases
    
    
    982
    
    
    
    679
    
    
    
    616Excess tax benefits from share-based payments
    
    
    13,317
    
    
    
    
    
    
    
    Proceeds from exercise of stock options
    
    
    39,223
    
    
    
    24,421
    
    
    
    28,622Net cash provided by financing activities
    
    
    1,057,660
    
    
    
    2,173,820
    
    
    
    875,521Net increase (decrease) in cash and due from banks
    
    
    (67,388
    )
    
    
    219,877
    
    
    
    (140,813
    )Cash and due from banks at beginning of the year
    
    
    805,556
    
    
    
    585,679
    
    
    
    726,492Cash and due from banks at end of the year
    
    $
    738,168
    
    
    $
    805,556
    
    
    $
    585,679
  -47-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements
 December 31, 2006, 2005 and 2004
 (1) Nature of Operations and Summary of Significant Accounting Policies
   Basis of Presentation
  Nature of Operations
  Use of Estimates
  Securities
   -48-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase
  Loans
    Loans Held for Sale
  Allowance for Loan Losses
  -49-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
   Goodwill
   Intangibles
  Other Real Estate Owned
  Premises and Equipment
   Premises and leasehold improvements
    
    10-40 yearsFurniture and equipment
    
    3-7 years
 Income Taxes
  Merger and Integration Expenses
  -50-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  Accounting for Derivatives and Hedging Activities
      -51-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  Securitization and Sales of Receivables
  Reclassifications
  Earnings per Share
  Stock-Based Compensation
 Accounting for Stock-Based Compensation Accounting for Stock
Issued to Employees Share-Based Payment
 Accounting for Stock-Based Compensation
 -52-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
     Year Ended December 312005
    
    
    2004Net income:As reported
    
    $
    401,830
    
    
    $
    360,185Deduct: Total stock-based employee
compensation
expense determined under fair value based
method for all awards, net of tax
    
    
    11,718
    
    
    
    9,402Pro forma net income
    
    $
    390,112
    
    
    $
    350,783Basic earnings per share:As reported
    
    $
    3.25
    
    
    $
    2.95Pro forma
    
    
    3.16
    
    
    
    2.87Diluted earnings per share:As reported
    
    $
    3.18
    
    
    $
    2.87Pro forma
    
    
    3.09
    
    
    
    2.80
 Recently Issued Accounting Standards
 Consolidation of Variable Interest Entities
 Consolidation of Variable Interest
Entities
 -53-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 Consolidation of Variable Interest Entities,
an interpretation of ARB 51,
  Accounting for Certain Loans or Debt Securities Acquired in a Transfer
 Accounting for Certain Loans or Debt Securities Acquired in a Transfer.
 Share-Based Payments
 Share-Based Payment, , Accounting for Stock-Based Compensation.
 Accounting Changes and Error Corrections
 Accounting Changes and Error Corrections, a Replacement
of APB Opinion 20 and FASB Statement 3
 -54-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  Accounting for Certain Hybrid Financial Instruments
 Accounting for Certain Hybrid Financial
Instruments  an amendment of FASB Statements 133 and 140 Accounting
for Derivative Instruments and Hedging Activities Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities
 Accounting for Servicing of Financial Assets
 Accounting for Servicing of Financial Assets  an
amendment of FASB Statement 140 Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities
 Accounting for Uncertainty in Income Taxes
 Accounting for Uncertainty in
Income Taxes  an interpretation of FASB Statement 109 Accounting for Income Taxes
 Fair Value Measurements
 Fair Value Measurements
 Accounting for Defined Pension and Other Postretirement Plans
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans  an amendment of FASB Statements 87, 88, 106 and 132(R)
 -55-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  Considering the Effects of Misstatements
 Financial Statements
- Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current
Year Financial Statements
 (2) Subsequent
Events (unaudited)
     (3) Investment Securities Held to Maturity and Investment Securities Available for Sale
  2006
    
    
    2005Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    ValueInvestment securities held to maturity:U.S. Government agencies and corporations
    
    $
    25,136
    
    
    $
    25,554
    
    
    $
    39,275
    
    
    $
    39,730Mortgage-backed pass-through securities
    
    
    819,812
    
    
    
    802,230
    
    
    
    932,785
    
    
    
    921,076Collateralized mortgage obligations
    
    
    827,748
    
    
    
    813,955
    
    
    
    965,366
    
    
    
    949,395Asset-backed securities
    
    
    160,624
    
    
    
    152,726
    
    
    
    219,583
    
    
    
    212,056States and political subdivisions
    
    
    119,846
    
    
    
    120,398
    
    
    
    88,933
    
    
    
    90,016Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    1,953,166
    
    
    $
    1,914,863
    
    
    $
    2,245,942
    
    
    $
    2,212,273
 2006
    
    
    2005Fair
    
    
    Amortized
    
    
    Fair
    
    
    AmortizedValue
    
    
    Cost
    
    
    Value
    
    
    CostInvestment securities available for sale:Debt securities:U.S. Treasury and other U.S. Government
agencies and corporations
    
    $
    20,039
    
    
    $
    20,130
    
    
    $
    48,463
    
    
    $
    48,595Mortgage-backed pass-through securities
    
    
    974,947
    
    
    
    982,221
    
    
    
    527,785
    
    
    
    537,288Collateralized mortgage obligations
    
    
    2,979,048
    
    
    
    3,034,790
    
    
    
    3,661,828
    
    
    
    3,739,968Asset-backed securities and corporate bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    States and political subdivisions
    
    
    290,806
    
    
    
    287,997
    
    
    
    44,652
    
    
    
    45,331Other
    
    
    252,822
    
    
    
    240,038
    
    
    
    227,329
    
    
    
    219,753Equity securities
    
    
    170,120
    
    
    
    170,031
    
    
    
    194,318
    
    
    
    194,298Total
    
    $
    4,687,782
    
    
    $
    4,735,207
    
    
    $
    4,704,375
    
    
    $
    4,785,233
 -56-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  2006
    
    
    2005Unrealized
    
    
    Unrealized
    
    
    Unrealized
    
    
    UnrealizedGains
    
    
    Losses
    
    
    Gains
    
    
    Losses(In Thousands)Investment securities held to maturity:U.S. Government agencies and corporations
    
    $
    418
    
    
    $
    
    
    
    $
    455
    
    
    $
    Mortgage-backed pass-through securities
    
    
    2,048
    
    
    
    19,630
    
    
    
    3,351
    
    
    
    15,060Collateralized mortgage obligations
    
    
    1,709
    
    
    
    15,502
    
    
    
    2,913
    
    
    
    18,884Asset-backed securities
    
    
    
    
    
    
    7,898
    
    
    
    
    
    
    
    7,527States and political subdivisions
    
    
    784
    
    
    
    232
    
    
    
    1,220
    
    
    
    137Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    4,959
    
    
    $
    43,262
    
    
    $
    7,939
    
    
    $
    41,608Investment securities available for sale:Debt securities:U.S. Treasury and other U.S. Government
agencies and corporations
    
    $
    
    
    
    $
    91
    
    
    $
    7
    
    
    $
    139Mortgage-backed pass-through securities
    
    
    4,256
    
    
    
    11,530
    
    
    
    2,945
    
    
    
    12,448Collateralized mortgage obligations
    
    
    1,480
    
    
    
    57,222
    
    
    
    507
    
    
    
    78,647Asset-backed securities and corporate bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    States and political subdivisions
    
    
    3,411
    
    
    
    602
    
    
    
    79
    
    
    
    758Other
    
    
    12,784
    
    
    
    
    
    
    
    7,576
    
    
    
    Equity securities
    
    
    89
    
    
    
    
    
    
    
    20
    
    
    
    Total
    
    $
    22,020
    
    
    $
    69,445
    
    
    $
    11,134
    
    
    $
    91,992
  December 31, 2006Securities in a loss position
    
    
    Securities in a loss positionfor less than 12 months
    
    
    for 12 months or longer
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedFair 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
    
    $
    10,006
    
    
    $
    2
    
    
    $
    9,910
    
    
    $
    89
    
    
    $
    19,916
    
    
    $
    91Mortgage-backed pass-through securities
    
    
    203,198
    
    
    
    908
    
    
    
    364,104
    
    
    
    10,622
    
    
    
    567,302
    
    
    
    11,530Collateralized mortgage obligations
    
    
    352,743
    
    
    
    1,581
    
    
    
    2,385,800
    
    
    
    55,641
    
    
    
    2,738,543
    
    
    
    57,222Asset-backed securities and corporate bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    States and political subdivisions
    
    
    12,214
    
    
    
    75
    
    
    
    28,892
    
    
    
    527
    
    
    
    41,106
    
    
    
    602Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    578,161
    
    
    $
    2,566
    
    
    $
    2,788,706
    
    
    $
    66,879
    
    
    $
    3,366,867
    
    
    $
    69,445
 -57-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 December 31, 2005Securities in a loss position
    
    
    Securities in a loss positionfor less than 12 months
    
    
    for 12 months or longer
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedFair 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
    
    $
    44,845
    
    
    $
    138
    
    
    $
    55
    
    
    $
    1
    
    
    $
    44,900
    
    
    $
    139Mortgage-backed pass-through securities
    
    
    150,147
    
    
    
    2,312
    
    
    
    276,093
    
    
    
    10,136
    
    
    
    426,240
    
    
    
    12,448Collateralized mortgage obligations
    
    
    902,859
    
    
    
    13,080
    
    
    
    2,644,937
    
    
    
    65,567
    
    
    
    3,547,796
    
    
    
    78,647Asset-backed securities and corporate bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    States and political subdivisions
    
    
    35,369
    
    
    
    758
    
    
    
    
    
    
    
    
    
    
    
    35,369
    
    
    
    758Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    1,133,220
    
    
    $
    16,288
    
    
    $
    2,921,085
    
    
    $
    75,704
    
    
    $
    4,054,305
    
    
    $
    91,992
   2006Carrying
    
    
    FairAmount
    
    
    Value(In Thousands)Investment securities held to maturity:Maturing within one year
    
    $
    8,669
    
    
    $
    8,702Maturing after one but within five years
    
    
    216,321
    
    
    
    209,039Maturing after five but within ten years
    
    
    49,572
    
    
    
    49,711Maturing after ten years
    
    
    31,044
    
    
    
    31,226305,606
    
    
    
    298,678Mortgage-backed securities and
collateralized mortgage obligations
    
    
    1,647,560
    
    
    
    1,616,185Total
    
    $
    1,953,166
    
    
    $
    1,914,863
 Fair
    
    
    AmortizedValue
    
    
    Cost(In Thousands)Investment securities available for sale:Maturing within one year
    
    $
    376,253
    
    
    $
    376,242Maturing after one but within five years
    
    
    71,427
    
    
    
    59,563Maturing after five but within ten years
    
    
    204,519
    
    
    
    202,015Maturing after ten years
    
    
    81,588
    
    
    
    80,376733,787
    
    
    
    718,196Mortgage-backed securities and
collateralized mortgage obligations
    
    
    3,953,995
    
    
    
    4,017,011Total
    
    $
    4,687,782
    
    
    $
    4,735,207
 -58-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  (4) Loans and Allowance for Loan Losses
  2006
    
    
    2005(In Thousands)Commercial loans:Commercial, financial and agricultural
    
    $
    4,376,572
    
    
    $
    3,896,207Real estate  construction
    
    
    6,365,283
    
    
    
    4,233,148Commercial real estate  mortgage
    
    
    4,266,776
    
    
    
    4,080,164Total commercial loans
    
    
    15,008,631
    
    
    
    12,209,519Consumer loans:Residential real estate  mortgage
    
    
    2,454,565
    
    
    
    1,916,951Equity lines of credit
    
    
    1,786,211
    
    
    
    1,614,608Equity loans
    
    
    1,382,779
    
    
    
    1,160,481Credit card
    
    
    505,216
    
    
    
    523,148Consumer  direct
    
    
    409,277
    
    
    
    423,278Consumer  indirect
    
    
    3,118,594
    
    
    
    3,524,230Total consumer loans
    
    
    9,656,642
    
    
    
    9,162,696Total
    
    $
    24,665,273
    
    
    $
    21,372,215
   2006
    
    
    2005
    
    
    2004(In Thousands)Balance at beginning of year
    
    $
    267,173
    
    
    $
    258,339
    
    
    $
    244,882Provision charged to income
    
    
    89,702
    
    
    
    117,818
    
    
    
    105,658Allowance for loans securitized
    
    
    
    
    
    
    
    
    
    
    (591
    )Allowance transferred to other liabilities
    
    
    
    
    
    
    (12,189
    )
    
    
    Allowance acquired
    
    
    11,179
    
    
    
    
    
    
    
    Loans charged off
    
    
    (106,485
    )
    
    
    (125,744
    )
    
    
    (117,597
    )Loan recoveries
    
    
    29,481
    
    
    
    28,949
    
    
    
    25,987Net charge-offs
    
    
    (77,004
    )
    
    
    (96,795
    )
    
    
    (91,610
    )Balance at end of year
    
    $
    291,050
    
    
    $
    267,173
    
    
    $
    258,339
   -59-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  December 312006
    
    
    2005
    
    
    2004(In Thousands)Nonaccrual loans
    
    $
    53,014
    
    
    $
    47,578
    
    
    $
    49,947Renegotiated loans
    
    
    3,258
    
    
    
    698
    
    
    
    734Total nonperforming loans
    
    
    56,272
    
    
    
    48,276
    
    
    
    50,681Other real estate
    
    
    17,105
    
    
    
    11,510
    
    
    
    19,998Total nonperforming assets
    
    $
    73,377
    
    
    $
    59,786
    
    
    $
    70,679
  2006
    
    2005
    
    2004(In Thousands)Principal balance
    
    $
    53,014
    
    
    $
    47,578
    
    
    $
    49,947Interest that would have been recorded under original terms
    
    
    5,105
    
    
    
    4,789
    
    
    
    4,819Interest actually recorded
    
    
    1,655
    
    
    
    2,070
    
    
    
    2,195
 (5) Managed Loans
  -60-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  ResidentialEquity Loan
    
    MortgageI/O Strip
    
    I/O StripCarrying amount/fair value of retained interests
    
    $
    9,674
    
    
    $
    25,168Weighted-average life (in years)
    
    
    0.65
    
    
    
    4.71Prepayment speed assumption (annual rate)
    
    25 CPR
    
    25 CPRImpact on fair value of 10% adverse change
    
    $
    (230
    )
    
    $
    (734
    )Impact on fair value of 20% adverse change
    
    $
    (376
    )
    
    $
    (1,415
    )Expected credit losses (annual rate)
    
    
    1.00
    %
    
    
    0.25
    %Impact on fair value of 10% adverse change
    
    $
    (230
    )
    
    $
    (40
    )Impact on fair value of 20% adverse change
    
    $
    (461
    )
    
    $
    (80
    )Residual cash flows discount rate (annual)
    
    
    10.0
    %
    
    
    10.0
    %Impact on fair value of 10% adverse change
    
    $
    (115
    )
    
    $
    (475
    )Impact on fair value of 20% adverse change
    
    $
    (227
    )
    
    $
    (934
    )
    Inception
    
    
    
    
    
    Projectedto Date
    
    2006
    
    2007
    
    2008
    
    2009Actual and Projected Credit Losses
    
    
    0.56
    %
    
    
    0.11
    %
    
    
    0.12
    %
    
    
    0.08
    %
    
    
    0.00
    %
  Term Securitization Sold
  -61-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 Securitization Cash Flows
  Year Ended December 312006
    
    2005
    
    2004Proceeds from collections
    
    $
    319,073
    
    
    $
    403,520
    
    
    $
    619,600Servicing fees received
    
    
    3,144
    
    
    
    3,324
    
    
    
    4,219
 Managed Loan Portfolio
  PrincipalAmount ofTotal Principal
    
    
    Nonaccrual andAmount
    
    
    90 Days or More
    
    
    Net Creditof Loans
    
    
    Past Due Loans
    
    
    LossesDecember 31, 2006:Loan category:Commercial, financial and agricultural
    
    $
    4,404,634
    
    
    $
    9,982
    
    
    $
    13,886Commercial real estate  mortgage
    
    
    4,382,024
    
    
    
    21,565
    
    
    
    1,998Real estate  construction
    
    
    6,365,283
    
    
    
    9,549
    
    
    
    701Residential real estate
    
    
    6,477,724
    
    
    
    21,015
    
    
    
    5,365Credit card
    
    
    505,216
    
    
    
    10,217
    
    
    
    22,259Consumer
    
    
    3,527,871
    
    
    
    7,138
    
    
    
    33,655Total managed loans
    
    
    25,662,752
    
    
    $
    79,466
    
    
    $
    77,864Loans securitized and sold to third parties
    
    
    (143,641
    )Loans securitized and classified as investment
securities held to maturity
    
    
    (853,838
    )Loans held in portfolio
    
    $
    24,665,273December 31, 2005:Loan category:Commercial, financial and agricultural
    
    $
    3,910,405
    
    
    $
    11,449
    
    
    $
    11,827Commercial real estate  mortgage
    
    
    4,202,966
    
    
    
    15,527
    
    
    
    1,576Real estate  construction
    
    
    4,233,148
    
    
    
    2,239
    
    
    
    647Residential real estate
    
    
    5,783,224
    
    
    
    28,031
    
    
    
    7,087Credit card
    
    
    523,148
    
    
    
    7,278
    
    
    
    36,087Consumer
    
    
    3,947,508
    
    
    
    9,589
    
    
    
    41,810Total managed loans
    
    
    22,600,399
    
    
    $
    74,113
    
    
    $
    99,034Loans securitized and sold to third parties
    
    
    (137,447
    )Loans securitized and classified as investment
securities held to maturity
    
    
    (1,090,737
    )Loans held in portfolio
    
    $
    21,372,215
  -62-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 (6) Premises and equipment
  Year Ended December 312006
    
    
    2005Land
    
    $
    141,916
    
    
    $
    123,323Buildings
    
    
    354,355
    
    
    
    311,582Furniture, fixtures and equipment
    
    
    377,714
    
    
    
    345,477Software
    
    
    144,427
    
    
    
    121,318Leasehold improvements
    
    
    104,267
    
    
    
    94,257Construction / projects in progress
    
    
    25,965
    
    
    
    45,7041,148,644
    
    
    
    1,041,661Less: Accumulated depreciation and amortization
    
    
    559,380
    
    
    
    494,466Total premises and equipment
    
    $
    589,264
    
    
    $
    547,195
  (7) Goodwill and Other Acquired Intangible Assets
    December 31, 2006Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    

    ValueAmortizing intangible assets:Core deposit intangibles
    
    $
    67,832
    
    
    $
    (40,502
    )
    
    $
    27,330Other customer intangibles
    
    
    44,827
    
    
    
    (17,007
    )
    
    
    27,820Total amortizing intangible assets
    
    $
    112,659
    
    
    $
    (57,509
    )
    
    $
    55,150
 December 31, 2005Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    

    ValueAmortizing intangible assets:Core deposit intangibles
    
    $
    63,890
    
    
    $
    (56,762
    )
    
    $
    7,128Other customer intangibles
    
    
    43,334
    
    
    
    (13,328
    )
    
    
    30,006Total amortizing intangible assets
    
    $
    107,224
    
    
    $
    (70,090
    )
    
    $
    37,134
 -63-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  (8) Deposits
  2007
    
    $
    5,654,3022008
    
    
    764,3952009
    
    
    234,9202010
    
    
    367,1702011
    
    
    153,033Thereafter
    
    
    63,843Total
    
    $
    7,237,663
  (9) Short-Term Borrowings
  December 312006
    
    
    2005Average
    
    
    
    
    
    
    AverageInterest
    
    
    
    
    
    
    InterestEnding
    
    
    Rate At
    
    
    Ending
    
    
    Rate AtBalance
    
    
    Year-End
    
    
    Balance
    
    
    Year-End(In Thousands)Federal funds purchased
    
    $
    2,948,855
    
    
    
    5.23
    %
    
    $
    2,802,536
    
    
    
    4.04
    %Securities sold under agreements to repurchase
    
    
    230,496
    
    
    
    4.58
    
    
    
    300,036
    
    
    
    3.82Total
    
    
    3,179,351
    
    
    
    
    
    
    
    3,102,572Short sales
    
    
    4,992
    
    
    
    4.56
    
    
    
    4,861
    
    
    
    3.33Commercial paper
    
    
    67,770
    
    
    
    4.31
    
    
    
    76,764
    
    
    
    3.39Other short-term borrowings
    
    
    1,170,201
    
    
    
    5.24
    
    
    
    571,125
    
    
    
    3.98Total
    
    
    1,242,963
    
    
    
    
    
    
    
    652,750Total short-term borrowings
    
    $
    4,422,314
    
    
    
    
    
    
    $
    3,755,322
  -64-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 (10) Federal Home Loan Bank (FHLB) and Other Borrowings
  Maturity
    
    
    December 31Dates
    
    
    2006
    
    
    2005(In Thousands)FHLB Advances:LIBOR-based floating rate (weighted average rate of 5.54%)
    
    
    2006-2012
    
    
    $
    1,900,000
    
    
    $
    1,625,000CMS-based floating rate (weighted average rate of 5.43%)
    
    
    2006-2009
    
    
    
    100,000
    
    
    
    800,000Fixed rate, callable quarterly (weighted average rate of 4.88%)
    
    
    2006-2016
    
    
    
    222,237
    
    
    
    688,178Unamortized discount
    
    
    
    
    
    
    (8,917
    )
    
    
    (12,142
    )Total FHLB Advances
    
    
    
    
    
    
    2,213,320
    
    
    
    3,101,036Subordinated Debentures:8.10% subordinated debentures
    
    
    2009
    
    
    
    165,000
    
    
    
    165,0006.45% subordinated debentures
    
    
    2009
    
    
    
    96,700
    
    
    
    96,7005.50% subordinated debentures
    
    
    2020
    
    
    
    300,000
    
    
    
    300,0005.90% subordinated debentures
    
    
    2026
    
    
    
    275,000
    
    
    
    Fair value of hedged subordinated debentures
    
    
    
    
    
    
    10,843
    
    
    
    23,517Unamortized discount
    
    
    
    
    
    
    (6,829
    )
    
    
    (3,700
    )Total Subordinated Debentures
    
    
    
    
    
    
    840,714
    
    
    
    581,517Capital Securities and Preferred Stock :8.23% debentures payable to Compass Trust I *
    
    
    2027
    
    
    
    103,093
    
    
    
    103,0937.35% debentures payable to Compass Trust III *
    
    
    2032
    
    
    
    309,279
    
    
    
    309,279LIBOR plus 2.60% floating rate debentures
payable to TexasBanc Capital Trust I *
    
    
    2034
    
    
    
    25,774
    
    
    
    Fair value of and unamortized fees on hedged
capital securities
    
    
    
    
    
    
    1,030
    
    
    
    (1,969
    )Class B Preferred Stock
    
    
    
    
    
    
    18,149
    
    
    
    18,077Total Capital Securities and Preferred Stock
    
    
    
    
    
    
    457,325
    
    
    
    428,4808.25% mortgage payable
    
    
    2008
    
    
    
    242
    
    
    
    429$
    3,511,601
    
    
    $
    4,111,462
 
 *
    
    Majority of amounts qualify for Tier I Capital   CapitalFHLB
    
    
    Subordinated
    
    
    Securities and
    
    
    MortgageAdvances
    
    
    Debentures
    
    
    Preferred Stock
    
    
    Payable(In Thousands)Maturing:2007
    
    $
    105,730
    
    
    $
    
    
    
    $
    
    
    
    $
    2022008
    
    
    10,230
    
    
    
    
    
    
    
    
    
    
    
    402009 *
    
    
    616,083
    
    
    
    273,638
    
    
    
    
    
    
    
    2010
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    2011
    
    
    975,100
    
    
    
    
    
    
    
    
    
    
    
    Thereafter *
    
    
    306,177
    
    
    
    567,076
    
    
    
    457,325
    
    
    
    Total
    
    $
    2,213,320
    
    
    $
    840,714
    
    
    $
    457,325
    
    
    $
    242
 
 *
    
    Includes the fair value of hedged subordinated debentures and the unamortized discounts. -65-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 (11) Capital Securities and Preferred Stock
 Capital Securities
  Consolidation of Variable Interest Entities, an interpretation of
ARB 51
   Class B Preferred Stock
   -66-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 (12) Off-Balance Sheet Activities, Derivatives and Hedging
 Accounting for Derivative Instruments and Hedging Activities
  2006
    
    2005Other
    
    
    
    
    
    OtherThan
    
    
    
    
    
    ThanTrading
    
    Trading
    
    Trading
    
    TradingForward and futures contracts
    
    $
    354,064
    
    
    $
    19,538
    
    
    $
    304,233
    
    
    $
    25,948Interest rate swap agreements:Pay fixed versus receive float
    
    
    1,892,968
    
    
    
    
    
    
    
    1,723,291
    
    
    
    200,000Receive fixed versus pay float
    
    
    1,892,968
    
    
    
    2,160,382
    
    
    
    1,703,799
    
    
    
    1,258,108Pay float versus receive float
    
    
    22,000
    
    
    
    
    
    
    
    22,000
    
    
    
    Written options
    
    
    601,314
    
    
    
    23,274
    (1)
    
    
    401,950
    
    
    
    32,044
    (1)Purchased options
    
    
    581,314
    
    
    
    1,500,000
    
    
    
    381,941
    
    
    
    
 
 (1)
    
    Written options classified as other than trading represent interest rate loan commitments related to the Companys
mortgage banking activities.      -67-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
   December 31, 2006
    
    December 31, 2005Notional
    
    Carrying
    
    Notional
    
    CarryingValue
    
    Value
    
    Value
    
    ValueCash-Flow Hedges:Interest rate swap agreements
    
    $
    850,000
    
    
    $
    (348
    )
    
    $
    400,000
    
    
    $
    (1,110
    )Purchased options
    
    
    1,500,000
    
    
    
    29,213
    
    
    
    
    
    
    
    Fair-Value Hedges:Interest rate swap agreements
    
    
    1,310,382
    
    
    
    9,777
    
    
    
    1,058,108
    
    
    
    22,535Forward contracts (1)
    
    
    19,538
    
    
    
    37
    
    
    
    25,948
    
    
    
    (99
    )
 
 (1)
    
    Derivatives relate to the Companys mortgage banking activities   Interest-Rate Risk
    -68-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
    Fair-Value Hedges
   Cash-Flow Hedges
  -69-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  Off-Balance Sheet Activities
    (13) Commitments, Contingencies and Guarantees
  -70-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  Operating Lease
    
    
    Capital LeaseObligations
    
    
    Obligations2007
    
    $
    22,228
    
    
    $
    3962008
    
    
    21,813
    
    
    
    4082009
    
    
    19,340
    
    
    
    4202010
    
    
    15,990
    
    
    
    4332011
    
    
    13,244
    
    
    
    446Thereafter
    
    
    72,295
    
    
    
    7,424Total
    
    $
    164,910
    
    
    $
    9,527
   2006
    
    2005Commitments to extend credit
    
    $
    12,661,226
    
    
    $
    11,498,497Standby and commercial letters of credit
    
    
    1,136,441
    
    
    
    942,176
      -71-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
       (14) Regulatory Matters and Dividends from Subsidiaries
    -72-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
   Total Qualifying Capital
    
    Tier I Capital
    
    LeverageAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioAs of December 31, 2006:Consolidated
    
    $
    3,513,448
    
    
    
    11.73
    %
    
    $
    2,543,189
    
    
    
    8.49
    %
    
    $
    2,543,189
    
    
    
    7.61
    %Compass Bank
    
    
    3,369,061
    
    
    
    11.27
    
    
    
    2,350,802
    
    
    
    7.87
    
    
    
    2,350,802
    
    
    
    7.05As of December 31, 2005:Consolidated
    
    $
    3,038,507
    
    
    
    11.48
    %
    
    $
    2,313,682
    
    
    
    8.74
    %
    
    $
    2,313,682
    
    
    
    7.70
    %Compass Bank
    
    
    2,867,398
    
    
    
    10.86
    
    
    
    2,090,573
    
    
    
    7.92
    
    
    
    2,090,573
    
    
    
    6.97
    (15) Stock Based Compensation
  -73-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  Accounting for Stock-Based Compensation. Accounting for Stock Issued to Employees Share-Based
Payment
  Twelve MonthsEndedDecember 31, 2006Dividend yield
    
    
    3.54
    %Expected volatility
    
    
    0.2168Risk free interest rate
    
    
    4.99
    %Expected life
    
    5.0 yearsForfeiture rate
    
    
    3.16
    %
   Weighted
    
    
    
    
    
    
    AggregateShares
    
    
    Average
    
    
    Contractual
    
    
    IntrinsicUnderlying
    
    
    Exercise
    
    
    Term
    
    
    ValueOptions
    
    
    Price
    
    
    (Years)
    
    
    (In Thousands)Outstanding, beginning of the period
    
    
    8,011,142
    
    
    $
    31.54Granted
    
    
    596,221
    
    
    
    55.88Exercised
    
    
    (1,570,523
    )
    
    
    28.83Cancelled
    
    
    (24,664
    )
    
    
    42.65Outstanding, end of the period
    
    
    7,012,176
    
    
    $
    34.21
    
    
    
    5.98
    
    
    $
    178,390Exercisable, end of the period
    
    
    5,941,840
    
    
    $
    31.41
    
    
    
    5.48
    
    
    $
    167,798
 -74-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
    Restricted
    
    
    Grant DateStock
    
    
    Fair ValueNonvested, beginning of the period
    
    
    456,744
    
    
    $
    45.53Granted
    
    
    246,152
    
    
    
    55.02Vested
    
    
    (116,841
    )
    
    
    49.10Forfeited
    
    
    (83,230
    )
    
    
    50.08Nonvested, end of the period
    
    
    502,825
    
    
    
    55.35
  (16) Benefit Plans
 Employers
Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB
Statements 87, 88, 106 and 132(R
 -75-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  Prior to
    
    
    
    
    
    
    As ReportedAdopting
    
    
    Impact of
    
    
    DecemberSFAS 158
    
    
    Adoption
    
    
    31, 2006Defined benefit pension plan:Prepaid pension cost
    
    $
    50,863
    
    
    $
    (50,863
    )
    
    $
    Funded pension asset
    
    
    
    
    
    
    21,548
    
    
    
    21,548Deferred tax asset
    
    
    
    
    
    
    11,354
    
    
    
    11,354Impact to total assets
    
    $
    50,863
    
    
    $
    (17,961
    )
    
    $
    32,902Accumulated other comprehensive income, net of tax
    
    $
    
    
    
    $
    (17,961
    )
    
    $
    (17,961
    )Impact to shareholders equity
    
    $
    
    
    
    $
    (17,961
    )
    
    $
    (17,961
    )
  -76-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 Obligations and Funded Status
 For the Year EndedDecember 312006
    
    
    2005(In Thousands)Change in benefit obligationBenefit
obligation, at beginning of year
    
    $
    188,825
    
    
    $
    168,861Service cost
    
    
    7,395
    
    
    
    7,608Interest cost
    
    
    10,097
    
    
    
    9,527Actuarial (gain)/loss
    
    
    (16,913
    )
    
    
    5,933Benefits paid
    
    
    (3,801
    )
    
    
    (3,104
    )Benefit
obligation, at end of year
    
    
    185,603
    
    
    
    188,825Change in plan assetsFair value
of plan assets, at the
beginning of the year
    
    
    178,903
    
    
    
    164,258Actual return on plan assets
    
    
    19,864
    
    
    
    9,749Employer contribution
    
    
    12,185
    
    
    
    8,000Benefits paid
    
    
    (3,801
    )
    
    
    (3,104
    )Fair value
of plan assets, at end of
year
    
    
    207,151
    
    
    
    178,903Funded status
    
    
    21,548
    
    
    
    (9,922
    )Net actuarial loss
    
    
    29,118
    
    
    
    55,177Net prior service cost
    
    
    197
    
    
    
    231Net amount recognized
    
    $
    50,863
    
    
    $
    45,486
  December 312006
    
    
    2005(In Thousands)Prepaid benefit cost
    
    $
    
    
    
    $
    45,486Funded pension asset
    
    
    21,548
    
    
    
    Deferred tax asset
    
    
    11,354
    
    
    
    Accumulated other comprehensive income
    
    
    17,961
    
    
    
    Net amount recognized
    
    $
    50,863
    
    
    $
    45,486
  Components of Net Periodic Benefit Cost
 For the Year EndedDecember 312006
    
    
    2005(In Thousands)Service cost
    
    $
    7,395
    
    
    $
    7,608Interest cost
    
    
    10,097
    
    
    
    9,527Expected return on plan assets
    
    
    (13,773
    )
    
    
    (12,456
    )Amortization of prior service cost
    
    
    34
    
    
    
    34Recognized net actuarial loss
    
    
    3,055
    
    
    
    3,190Net periodic benefit cost
    
    $
    6,808
    
    
    $
    7,903
 -77-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 Additional Information
 For the Year EndedDecember 312006
    
    2005(In Thousands)Increase in minimum liability included in
accumulated other comprehensive income
    
    $
    
    
    
    $
    Weighted average assumptions used to determine
benefit obligation at December 31Discount rate
    
    
    5.92
    %
    
    
    5.50
    %Rate of compensation increase
    
    
    4.00
    
    
    
    4.00Weighted average assumptions used to determine
net cost for year ended December 31Discount rate
    
    
    5.50
    %
    
    
    5.75
    %Expected return on plan assets
    
    
    7.50
    
    
    
    7.50Rate of compensation increase
    
    
    4.00
    
    
    
    4.00
  Future Benefit Payments
  2007
    
    $
    4,4032008
    
    
    5,0392009
    
    
    5,6722010
    
    
    6,3452011
    
    
    7,2502012-2016
    
    
    53,275
  Plan Assets
  Percentage of PlanAssetsDecember 31Asset
Category
    
    2006
    
    2005Cash Securities
    
    
    1.1
    %
    
    
    1.2
    %Equity Securities
    
    
    59.7
    
    
    
    59.8Debt Securities
    
    
    39.2
    
    
    
    39.0Total
    
    
    100.0
    %
    
    
    100.0
    %
 -78-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
   Supplemental Retirement & Deferred Compensation Plans
   Defined Contribution Profit Sharing Plan
  Employee Stock Ownership Plan
  -79-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  Director & Executive Stock Purchase Plan
  (17) Business Combinations and Divestitures
 Business Combinations
    Assets:Cash and due from banks
    
    $
    41,918Federal funds sold and securities
purchased under agreements to resell
    
    
    24,888Investment securities available for sale
    
    
    77,526Investment securities held to maturity
    
    
    63,397Net loans
    
    
    1,387,248Premises and equipment, net
    
    
    38,002Intangible assets
    
    
    385,071Other assets
    
    
    36,500Total assets
    
    $
    2,054,550
 -80-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 Liabilities:Deposits
    
    $
    1,475,862Federal funds purchased and securities
sold under agreements to repurchase
    
    
    20,878Other short-term borrowings
    
    
    2,688FHLB and other borrowings
    
    
    51,722Accrued
expenses and other liabilities
    
    
    17,419Total liabilities
    
    
    1,568,569Net assets acquired
    
    $
    485,981
  Year Ended December 312006
    
    
    2005
    
    
    2004(In Thousands, Except Per Share Data)Interest income
    
    $
    2,071,975
    
    
    $
    1,645,915
    
    
    $
    1,350,157Interest expense
    
    
    937,842
    
    
    
    598,914
    
    
    
    402,394Net interest income
    
    
    1,134,133
    
    
    
    1,047,001
    
    
    
    947,763Provision for loan losses
    
    
    90,218
    
    
    
    121,960
    
    
    
    110,550Net interest income after provision for loan losses
    
    
    1,043,915
    
    
    
    925,041
    
    
    
    837,213Noninterest income
    
    
    716,300
    
    
    
    681,322
    
    
    
    649,801Noninterest expense
    
    
    1,088,689
    
    
    
    964,081
    
    
    
    923,414Net income before income tax expense
    
    
    671,526
    
    
    
    642,282
    
    
    
    563,600Income tax expense
    
    
    222,686
    
    
    
    218,255
    
    
    
    187,728Net income
    
    $
    448,840
    
    
    $
    424,027
    
    
    $
    375,872Basic earnings per share
    
    $
    3.48
    
    
    $
    3.30
    
    
    $
    2.96Diluted earnings per share
    
    $
    3.41
    
    
    $
    3.23
    
    
    $
    2.88
 Other Business Combinations
     -81-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 Divestitures
  (18) Income Taxes
  2006
    
    
    2005
    
    
    2004Current income tax expense:Federal
    
    $
    237,982
    
    
    $
    226,474
    
    
    $
    174,118State
    
    
    11,115
    
    
    
    10,877
    
    
    
    7,772Total
    
    
    249,097
    
    
    
    237,351
    
    
    
    181,890Deferred income tax benefit:Federal
    
    
    (19,396
    )
    
    
    (29,857
    )
    
    
    (1,749
    )State
    
    
    (2,647
    )
    
    
    (1,288
    )
    
    
    (494
    )Total
    
    
    (22,043
    )
    
    
    (31,145
    )
    
    
    (2,243
    )Total income tax expense
    
    $
    227,054
    
    
    $
    206,206
    
    
    $
    179,647
   2006
    
    
    2005
    
    
    2004Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percentof Pretax
    
    
    
    
    
    
    of Pretax
    
    
    
    
    
    
    of PretaxAmount
    
    
    Earnings
    
    
    Amount
    
    
    Earnings
    
    
    Amount
    
    
    EarningsIncome tax expense at federal
statutory rate
    
    $
    240,596
    
    
    
    35.0
    %
    
    $
    212,813
    
    
    
    35.0
    %
    
    $
    188,941
    
    
    
    35.0
    %Increase (decrease) resulting from:Tax-exempt income
    
    
    (12,937
    )
    
    
    (1.9
    )
    
    
    (9,101
    )
    
    
    (1.5
    )
    
    
    (8,631
    )
    
    
    (1.6
    )State income tax expense net of
federal income tax benefit
    
    
    5,504
    
    
    
    0.8
    
    
    
    6,233
    
    
    
    1.0
    
    
    
    4,731
    
    
    
    0.9Other
    
    
    (6,109
    )
    
    
    (0.9
    )
    
    
    (3,739
    )
    
    
    (0.6
    )
    
    
    (5,394
    )
    
    
    (1.0
    )Income tax expense
    
    $
    227,054
    
    
    
    33.0
    %
    
    $
    206,206
    
    
    
    33.9
    %
    
    $
    179,647
    
    
    
    33.3
    %
 Accounting for Uncertainty in
Income Taxes  an interpretation of FASB Statement 109 Accounting for Income Taxes
 -82-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  2006
    
    
    2005(In Thousands)Deferred tax assets:Allowance for loan losses
    
    $
    109,904
    
    
    $
    103,455Accrued expenses
    
    
    16,849
    
    
    
    12,925Deferred compensation
    
    
    15,115
    
    
    
    11,805Net unrealized losses on securities available for sale,
hedging instruments and additional minimum
pension liability
    
    
    31,326
    
    
    
    38,562Other deferred tax assets
    
    
    13,427
    
    
    
    9,220Total assets
    
    
    186,621
    
    
    
    175,967Deferred tax liabilities:Premises and equipment
    
    
    24,940
    
    
    
    34,415Lease financing
    
    
    2,590
    
    
    
    11,441Core deposit and other acquired intangibles
    
    
    29,639
    
    
    
    20,960Prepaid pension benefit cost
    
    
    19,002
    
    
    
    17,292Deferred credit card income
    
    
    16,790
    
    
    
    15,261Loan costs
    
    
    22,791
    
    
    
    20,284Other deferred tax liabilities
    
    
    6,816
    
    
    
    7,068Total liabilities
    
    
    122,568
    
    
    
    126,721Net deferred tax asset
    
    $
    64,053
    
    
    $
    49,246
 (19) Parent Company
  Balance Sheets
 December 312006
    
    
    2005(In Thousands)AssetsCash and due from banks *
    
    $
    206,557
    
    
    $
    232,514Trading account assets
    
    
    1,376
    
    
    
    1,406Investment securities available for sale
    
    
    27,626
    
    
    
    28,040Investment in subsidiaries *
    
    
    3,104,607
    
    
    
    2,460,547Other assets *
    
    
    32,793
    
    
    
    36,900Total assets
    
    $
    3,372,959
    
    
    $
    2,759,407Liabilities and Shareholders EquityCommercial paper
    
    $
    67,770
    
    
    $
    76,764Accrued expenses and other liabilities *
    
    
    41,879
    
    
    
    36,211Junior subordinated debt payable to unconsolidated subsidiary trusts
    
    
    439,176
    
    
    
    410,403Total liabilities
    
    
    548,825
    
    
    
    523,378Shareholders equity
    
    
    2,824,134
    
    
    
    2,236,029Total liabilities and shareholders equity
    
    $
    3,372,959
    
    
    $
    2,759,407
 
 *
    
    Eliminates in consolidation -83-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 Statements of Income
 Year Ended December 312006
    
    
    2005
    
    
    2004(In Thousands)Income:Cash dividends from subsidiaries *
    
    $
    363,163
    
    
    $
    230,000
    
    
    $
    120,000Interest on investments with affiliates *
    
    
    15,718
    
    
    
    11,482
    
    
    
    7,466Other
    
    
    1,417
    
    
    
    2,676
    
    
    
    10,542Total income
    
    
    380,298
    
    
    
    244,158
    
    
    
    138,008Expense:Interest on commercial paper and other borrowings
    
    
    3,476
    
    
    
    2,456
    
    
    
    1,586Other
    
    
    43,047
    
    
    
    42,472
    
    
    
    39,596Total expense
    
    
    46,523
    
    
    
    44,928
    
    
    
    41,182Income before income tax benefit and equity in
undistributed earnings of subsidiaries
    
    
    333,775
    
    
    
    199,230
    
    
    
    96,826Applicable income tax benefit
    
    
    (9,910
    )
    
    
    (11,560
    )
    
    
    (8,765
    )343,685
    
    
    
    210,790
    
    
    
    105,591Equity in undistributed earnings of subsidiaries*
    
    
    116,678
    
    
    
    191,040
    
    
    
    254,594Net income
    
    $
    460,363
    
    
    $
    401,830
    
    
    $
    360,185
 
 *
    
    Eliminates in consolidation -84-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 Statements of Cash Flows
 Year Ended December 312006
    
    
    2005
    
    
    2004(In Thousands)Operating Activities:Net income
    
    $
    460,363
    
    
    $
    401,830
    
    
    $
    360,185Adjustments to reconcile net income to cash provided by operations:Depreciation and amortization
    
    
    9,821
    
    
    
    7,897
    
    
    
    6,034Accretion of discount
    
    
    (1,575
    )
    
    
    (1,575
    )
    
    
    (1,575
    )Decrease in trading assets
    
    
    30
    
    
    
    17,826
    
    
    
    11,678Equity in undistributed earnings
    
    
    (116,678
    )
    
    
    (191,040
    )
    
    
    (254,594
    )Increase in other assets
    
    
    (104
    )
    
    
    (2,952
    )
    
    
    (4,858
    )Increase (decrease) in other liabilities
    
    
    6,998
    
    
    
    10,139
    
    
    
    (5,833
    )Net cash provided by operating activities
    
    
    358,855
    
    
    
    242,125
    
    
    
    111,037Investing Activities:Proceeds from call of investment securities available for sale
    
    
    
    
    
    
    
    
    
    
    4,310Capital receipts from (contributions to) subsidiaries
    
    
    (229,716
    )
    
    
    (5,460
    )
    
    
    683Net cash (used in) provided by investing activities
    
    
    (229,716
    )
    
    
    (5,460
    )
    
    
    4,993Financing Activities:Net increase (decrease) in commercial paper
    
    
    (8,994
    )
    
    
    (20,734
    )
    
    
    23,986Repayment of other borrowings
    
    
    
    
    
    
    
    
    
    
    (50,000
    )Repurchase of junior subordinated debt payable to subsidiary trusts
    
    
    
    
    
    
    
    
    
    
    (23,000
    )Common dividends paid
    
    
    (199,989
    )
    
    
    (208,756
    )
    
    
    (118,533
    )Purchase of treasury stock
    
    
    (2,734
    )
    
    
    (63,247
    )
    
    
    (33,829
    )Issuance of treasury stock for benefit plans and stock options
    
    
    3,099
    
    
    
    9,274
    
    
    
    9,998Repayment of loans to finance stock purchases
    
    
    982
    
    
    
    679
    
    
    
    616Excess tax benefits from share-based payments
    
    
    13,317
    
    
    
    
    
    
    
    Proceeds from exercise of stock options
    
    
    39,223
    
    
    
    24,421
    
    
    
    28,622Net cash used in financing activities
    
    
    (155,096
    )
    
    
    (258,363
    )
    
    
    (162,140
    )Net decrease in cash and due from banks
    
    
    (25,957
    )
    
    
    (21,698
    )
    
    
    (46,110
    )Cash and due from banks at beginning of the year
    
    
    232,514
    
    
    
    254,212
    
    
    
    300,322Cash and due from banks at end of the year
    
    $
    206,557
    
    
    $
    232,514
    
    
    $
    254,212
 (20) Fair Value of Financial Instruments
   Cash and due from banks
 Investment securities held to maturity and investment securities available for sale
 -85-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
  Trading account assets
 Federal funds sold and securities purchased under agreements to resell
 Loans
 Off-balance sheet instruments
 Derivatives
 Deposit liabilities
 Short-term borrowings
 FHLB and other borrowings
 -86-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 At December 31, 2006
    
    At December 31, 2005Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair Value(In Thousands)Financial Instruments:Assets:Cash and due from banks
    
    $
    738,168
    
    
    $
    738,168
    
    
    $
    805,556
    
    
    $
    805,556Investment securities held to maturity
    
    
    1,953,166
    
    
    
    1,914,863
    
    
    
    2,245,942
    
    
    
    2,212,273Investment securities available for sale
    
    
    4,687,782
    
    
    
    4,687,782
    
    
    
    4,704,375
    
    
    
    4,704,375Trading account assets
    
    
    86,706
    
    
    
    86,706
    
    
    
    76,559
    
    
    
    76,559Federal funds sold and securities purchased
under agreements to resell
    
    
    24,423
    
    
    
    24,423
    
    
    
    46,393
    
    
    
    46,393Loans
    
    
    24,665,273
    
    
    
    24,588,605
    
    
    
    21,372,215
    
    
    
    21,086,292Liabilities:Noninterest bearing deposits
    
    $
    6,459,669
    
    
    $
    6,459,669
    
    
    $
    6,097,881
    
    
    $
    6,097,881Interest bearing deposits
    
    
    16,585,860
    
    
    
    16,555,371
    
    
    
    14,286,234
    
    
    
    14,226,374Federal funds purchased and securities
sold under agreements to repurchase
    
    
    3,179,351
    
    
    
    3,179,351
    
    
    
    3,102,572
    
    
    
    3,102,572Other short-term borrowings
    
    
    1,242,963
    
    
    
    1,242,963
    
    
    
    652,750
    
    
    
    652,750FHLB and other borrowings
    
    
    3,511,601
    
    
    
    3,590,746
    
    
    
    4,111,462
    
    
    
    4,068,321
 (21) Segment Information
     -87-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
    For the Year ended December 31, 2006(In Thousands)CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome Statement:Net interest income
    
    $
    473,329
    
    
    $
    482,647
    
    
    $
    62,558
    
    
    $
    41,501
    
    
    $
    55,099
    
    
    $
    1,115,134Noninterest income
    
    
    146,384
    
    
    
    484,568
    
    
    
    44,570
    
    
    
    35,539
    
    
    
    199
    
    
    
    711,260Noninterest expense
    
    
    238,164
    
    
    
    503,321
    
    
    
    53,862
    
    
    
    20,361
    
    
    
    233,567
    
    
    
    1,049,275Segment net income (loss)
    
    $
    381,549
    
    
    $
    463,894
    
    
    $
    53,266
    
    
    $
    56,679
    
    
    $
    (178,269
    )
    
    
    777,119Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,702Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    687,417Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    227,054Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    460,363Balance Sheet:Average assets
    
    $
    13,433,257
    
    
    $
    9,087,540
    
    
    $
    1,559,999
    
    
    $
    7,199,259
    
    
    $
    1,732,295
    
    
    $
    33,012,350Average loans
    
    
    13,381,082
    
    
    
    8,904,934
    
    
    
    1,559,537
    
    
    
    
    
    
    
    (132,515
    )
    
    
    23,713,038Average deposits
    
    
    5,653,523
    
    
    
    12,541,134
    
    
    
    1,325,965
    
    
    
    2,653,066
    
    
    
    (47,101
    )
    
    
    22,126,587Period-end assets
    
    $
    14,312,846
    
    
    $
    9,430,046
    
    
    $
    1,632,551
    
    
    $
    7,292,744
    
    
    $
    1,531,568
    
    
    $
    34,199,755Period-end loans
    
    
    14,069,062
    
    
    
    9,144,519
    
    
    
    1,619,105
    
    
    
    
    
    
    
    (167,413
    )
    
    
    24,665,273Period-end deposits
    
    
    6,146,474
    
    
    
    13,557,244
    
    
    
    1,427,366
    
    
    
    2,030,538
    
    
    
    (116,093
    )
    
    
    23,045,529
 -88-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome Statement:Net interest income
    
    $
    384,253
    
    
    $
    437,599
    
    
    $
    55,158
    
    
    $
    27,279
    
    
    $
    64,690
    
    
    $
    968,979Noninterest income
    
    
    151,531
    
    
    
    449,234
    
    
    
    38,308
    
    
    
    26,145
    
    
    
    (6,540
    )
    
    
    658,678Noninterest expense
    
    
    204,391
    
    
    
    435,656
    
    
    
    47,706
    
    
    
    20,936
    
    
    
    193,114
    
    
    
    901,803Segment net income (loss)
    
    $
    331,393
    
    
    $
    451,177
    
    
    $
    45,760
    
    
    $
    32,488
    
    
    $
    (134,964
    )
    
    
    725,854Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117,818Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    608,036Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    206,206Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    401,830Balance Sheet:Average assets
    
    $
    10,614,482
    
    
    $
    8,550,613
    
    
    $
    1,349,510
    
    
    $
    7,611,929
    
    
    $
    1,317,698
    
    
    $
    29,444,232Average loans
    
    
    10,594,888
    
    
    
    8,362,871
    
    
    
    1,350,630
    
    
    
    
    
    
    
    (258,801
    )
    
    
    20,049,588Average deposits
    
    
    4,773,226
    
    
    
    10,234,133
    
    
    
    1,207,390
    
    
    
    2,292,259
    
    
    
    (39,333
    )
    
    
    18,467,675Period-end assets
    
    $
    11,574,398
    
    
    $
    9,002,235
    
    
    $
    1,489,413
    
    
    $
    7,574,799
    
    
    $
    1,157,387
    
    
    $
    30,798,232Period-end loans
    
    
    11,377,470
    
    
    
    8,722,274
    
    
    
    1,476,937
    
    
    
    
    
    
    
    (204,466
    )
    
    
    21,372,215Period-end deposits
    
    
    4,947,314
    
    
    
    11,200,625
    
    
    
    1,260,697
    
    
    
    3,057,539
    
    
    
    (82,060
    )
    
    
    20,384,115
 
 CorporateCorporate
    
    
    Retail
    
    
    Wealth
    
    
    
    
    
    
    Support andBanking
    
    
    Banking
    
    
    Management
    
    
    Treasury
    
    
    Other
    
    
    ConsolidatedIncome Statement:Net interest income
    
    $
    363,969
    
    
    $
    396,995
    
    
    $
    53,564
    
    
    $
    42,312
    
    
    $
    28,485
    
    
    $
    885,325Noninterest income
    
    
    139,351
    
    
    
    391,601
    
    
    
    29,519
    
    
    
    66,949
    
    
    
    1,223
    
    
    
    628,643Noninterest expense
    
    
    197,773
    
    
    
    397,040
    
    
    
    40,393
    
    
    
    43,006
    
    
    
    190,266
    
    
    
    868,478Segment net income (loss)
    
    $
    305,547
    
    
    $
    391,556
    
    
    $
    42,690
    
    
    $
    66,255
    
    
    $
    (160,558
    )
    
    
    645,490Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    105,658Net income before income
tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    539,832Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    179,647Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    360,185Balance Sheet:Average assets
    
    $
    9,804,164
    
    
    $
    7,571,312
    
    
    $
    1,202,721
    
    
    $
    7,659,417
    
    
    $
    1,423,014
    
    
    $
    27,660,628Average loans
    
    
    9,789,575
    
    
    
    7,394,101
    
    
    
    1,204,768
    
    
    
    
    
    
    
    (389,089
    )
    
    
    17,999,355Average deposits
    
    
    4,609,496
    
    
    
    9,295,751
    
    
    
    1,243,356
    
    
    
    1,285,578
    
    
    
    (20,479
    )
    
    
    16,413,702Period-end assets
    
    $
    10,238,188
    
    
    $
    8,041,224
    
    
    $
    1,294,636
    
    
    $
    7,673,267
    
    
    $
    934,601
    
    
    $
    28,181,916Period-end loans
    
    
    10,101,932
    
    
    
    7,783,359
    
    
    
    1,285,285
    
    
    
    
    
    
    
    (313,654
    )
    
    
    18,856,922Period-end deposits
    
    
    4,826,556
    
    
    
    9,611,292
    
    
    
    1,211,464
    
    
    
    1,424,072
    
    
    
    (30,652
    )
    
    
    17,042,732
 -89-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
   (22) Earnings Per Share
  Year Ended December 312006
    
    
    2005
    
    
    2004(In Thousands, Except Per Share Data)BASIC EARNINGS PER SHARE:Net income
    
    $
    460,363
    
    
    $
    401,830
    
    
    $
    360,185Net income available to common shareholders
    
    $
    460,363
    
    
    $
    401,830
    
    
    $
    360,185Weighted average basic common shares outstanding
    
    
    127,857
    
    
    
    123,550
    
    
    
    122,254Basic earnings per share
    
    $
    3.60
    
    
    $
    3.25
    
    
    $
    2.95DILUTED EARNINGS PER SHARE:Net income
    
    $
    460,363
    
    
    $
    401,830
    
    
    $
    360,185Net income available to common shareholders and assumed
conversions
    
    $
    460,363
    
    
    $
    401,830
    
    
    $
    360,185Weighted average common shares outstanding
    
    
    127,857
    
    
    
    123,550
    
    
    
    122,254Net 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
    
    
    2,601
    
    
    
    2,873
    
    
    
    3,162Weighted average diluted common shares outstanding
    
    
    130,458
    
    
    
    126,423
    
    
    
    125,416Diluted earnings per share
    
    $
    3.53
    
    
    $
    3.18
    
    
    $
    2.87
 -90-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 (23) Comprehensive Income
   Year Ended December 312006
    
    
    2005
    
    
    2004(In Thousands)Other comprehensive income (loss), before income taxes:Unrealized holding gains (losses) on investment securities
available for sale, net
    
    $
    18,543
    
    
    $
    (68,349
    )
    
    $
    (41,152
    )Less reclassification adjustment for gains (losses)
on investment securities available for sale
    
    
    (14,889
    )
    
    
    79
    
    
    
    27,336Net change in additional minimum pension liability
and funded pension asset
    
    
    (29,873
    )
    
    
    1,353
    
    
    
    (3,469
    )Amortization of unrealized net holding losses on
investment securities available for sale transferred to
investment securities held to maturity
    
    
    (355
    )
    
    
    (3,109
    )
    
    
    (10,702
    )Net change in accumulated gains (losses) on cash-flow
hedging instruments
    
    
    13,257
    
    
    
    5,921
    
    
    
    (14,572
    )Other comprehensive income (loss), before income taxes
    
    
    16,461
    
    
    
    (64,263
    )
    
    
    (97,231
    )Income tax expense (benefit) related to other
comprehensive income (loss):Unrealized holding gains(losses) on investment securities
available for sale
    
    
    7,883
    
    
    
    (26,027
    )
    
    
    (15,469
    )Less reclassification adjustment for gains (losses)
on investment securities available for sale
    
    
    (6,329
    )
    
    
    30
    
    
    
    10,276Net change in additional minimum pension liability
and funded pension asset
    
    
    (11,587
    )
    
    
    501
    
    
    
    (1,304
    )Amortization of unrealized net holding losses on
investment securities available for sale transferred to
investment securities held to maturity
    
    
    (151
    )
    
    
    (1,183
    )
    
    
    (4,023
    )Net change in accumulated gains (losses) on cash-flow
hedging instruments
    
    
    4,763
    
    
    
    2,256
    
    
    
    (5,477
    )Total income tax expense (benefit) related
to other comprehensive income (loss)
    
    
    7,237
    
    
    
    (24,483
    )
    
    
    (36,549
    )Other comprehensive income (loss), after income taxes
    
    $
    9,224
    
    
    $
    (39,780
    )
    
    $
    (60,682
    )
  -91-




---



##### Table of Contents



Compass Bancshares, Inc. and Subsidiaries
Notes to Consolidated Financial Statements  (Continued)
December 31, 2006, 2005 and 2004
 (24) Supplemental Disclosure for Statement of Cash Flows
  December 312006
    
    2005
    
    2004(In Thousands)Schedule of noncash investing and financing activities:Transfers of loans to other real estate owned
    
    $
    16,601
    
    
    $
    12,236
    
    
    $
    21,982Loans to facilitate the sale of other real estate owned
    
    
    424
    
    
    
    1,048
    
    
    
    1,006Assets retained in loan securitizations
    
    
    
    
    
    
    
    
    
    
    589,912Loans to finance stock purchases
    
    
    1,897
    
    
    
    885
    
    
    
    863Change in unrealized gain (loss) on available for sale securities
    
    
    33,433
    
    
    
    (68,428
    )
    
    
    (68,488
    )Issuance of restricted stock, net of cancellations
    
    
    12,101
    
    
    
    6,671
    
    
    
    8,571Treasury stock exchanged for acquisition earnout
    
    
    6,269
    
    
    
    5,840
    
    
    
    4,741Treasury stock purchased for deferred compensation plan
    
    
    7,943
    
    
    
    
    
    
    
    Allowance transferred to other liabilities
    
    
    
    
    
    
    12,189
    
    
    
    Business combinations and divestitures:Common stock issued
    
    
    253,992
    
    
    
    7,869
    
    
    
    3,658Assets acquired
    
    
    2,012,632
    
    
    
    8,092
    
    
    
    5,771Liabilities assumed
    
    
    1,568,569
    
    
    
    21
    
    
    
    2,381Assets sold
    
    
    
    
    
    
    2,156
    
    
    
    Liabilities sold
    
    
    
    
    
    
    25,290
    
    
    
    
 -92-




---



##### Table of Contents



ITEM 9  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
         -93-




---



##### Table of Contents



ITEM
9A  CONTROLS AND PROCEDURES
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
   Managements Report on Internal Control Over Financial Reporting
   Changes in Internal Control Over Financial Reporting
  
 ITEM
9B  OTHER INFORMATION
  -94-




---



##### Table of Contents



PART III
 
 ITEM 10  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  
 ITEM 11  EXECUTIVE COMPENSATION
  
 ITEM 12  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  Equity Compensation Plan Information
  Number ofsecurities to be
    
    
    
    
    
    
    Number of securities remainingissued upon exercise
    
    
    Weighted-average
    
    
    available for future issuance underof outstanding
    
    
    exercise price of
    
    
    equity compensation plansoptions, warrants
    
    
    outstanding options,
    
    
    (excluding securities reflected inand rights
    
    
    warrants and rights
    
    
    column (a))Plan category
    
    (a)
    
    
    (b)
    
    
    (c)Equity compensation plans approved by
security holders
    
    
    7,012,176
    (1)
    
    $
    34.21
    
    
    
    5,888,302
    (2)Equity compensation plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    7,012,176
    
    
    $
    34.21
    
    
    
    5,888,302
 
 (1)
    
    Consists of 7,012,176 shares of common stock issuable upon exercise of outstanding stock option awards subject
to vesting requirements granted under the 1996 Long-Term Incentive Plan, the 1999 Omnibus Incentive Compensation
Plan and the 2002 Incentive Compensation Plan. Additionally, amount excludes 502,825 of restricted stock awards,
subject to vesting requirements under the same plans.(2)
    
    Consists of 308,724 shares, 1,079,578 shares and 4,500,000 shares available for future issuance pursuant to stock
option, restricted stock and other awards that may be granted under the 1999 Omnibus Incentive Compensation Plan,
the 2002 Incentive Compensation Plan, and the 2006 Incentive Compensation Plan, respectively. 
 ITEM 13  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
  -95-




---



##### Table of Contents



ITEM 14  PRINCIPAL ACCOUNTANT FEES AND SERVICES
  
 PART IV
 
 ITEM 15  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    Compass Bancshares, Inc. and SubsidiariesFinancial Statements
 PageReports of
Independent Registered Public Accounting Firms
    
    
    41Consolidated Balance Sheets as of December 31, 2006 and 2005
    
    
    44Consolidated Statements of Income for the years ended December 31, 2006, 2005 and 2004
    
    
    45Consolidated Statements of Shareholders Equity for the years ended December 31, 2006,
2005 and 2004
    
    
    46Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004
    
    
    47Notes to Consolidated Financial Statements  December 31, 2006, 2005 and 2004
    
    
    48
 (b)
    
    Exhibits
 (3)
    
    Articles of Incorporation and By-Laws of Compass Bancshares, Inc.
 (a)
    
    Restated Certificate of Incorporation of Compass Bancshares, Inc., as amended,
dated May 17, 1982 (incorporated by reference to Exhibit 3.1 to Compass Bancshares,
Inc.s Registration Statement on Form S-4, Registration No. 333-129940, filed November
23, 2005 with the Commission)(b)
    
    Certificate of Amendment, dated May 20, 1986, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.2 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
333-129940, filed November 23, 2005 with the Commission)(c)
    
    Certificate of Amendment, dated May 15, 1987, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.3 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
333-129940, filed November 23, 2005 with the Commission)(d)
    
    Certificate of Amendment, dated November 3, 1993, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.4 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
333-129940, filed November 23, 2005 with the Commission)(e)
    
    Certificate of Amendment, dated September 16, 1994, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.5 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
333-129940, filed November 23, 2005 with the Commission)(f)
    
    Certificate of Amendment, dated May 15, 1998, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.6 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
333-129940, filed November 23, 2005 with the Commission)(g)
    
    Certificate of Amendment, dated May 1, 2002, to Restated Certificate of
Incorporation of Compass Bancshares, Inc. (incorporated by reference to Exhibit 3.7 to
Compass Bancshares, Inc.s Registration Statement on Form S-4, Registration No.
333-129940, filed November 23, 2005 with the Commission)(h)
    
    Bylaws of Compass Bancshares, Inc. as amended and restated as of March 15, 1982
and amended on February 17, 1986 and February 15, 1988 (incorporated by reference to
Exhibit 3(h) to Compass Bancshares, Inc.s June 30, 2006 Form 10-Q, file number
001-31272, filed August 8, 2006 with the Commission)
 -96-




---



##### Table of Contents



Exhibits  continued
 (4)
    
    Instruments Defining the Rights of Security Holders, Including Indentures
 Instruments defining the rights of the holders of long-term debt of Compass Bancshares,
Inc. and its subsidiaries are not filed herewith pursuant to Item 601(b)(4)(iii) of
Regulation S-K. Compass Bancshares, Inc. hereby agrees to furnish copies of such
instruments to the Commission upon request.
 (10)
    
    Material Contracts
 (a)
    
    Compass Bancshares, Inc., 1996 Long Term Incentive Plan (incorporated by
reference to Exhibit 4(g) to Compass Bancshares, Inc.s Registration Statement on Form
S-8, Registration No. 333-15117, filed October 30, 1996 with the Commission) *(b)
    
    Compass Bancshares, Inc., 1999 Omnibus Incentive Compensation Plan
(incorporated by reference to Exhibit 10(a) to Compass Bancshares, Inc.s Registration
Statement on Form S-8, Registration No. 333-86455, filed September 2, 1999 with the
Commission) *(c)
    
    Form of Amended and Restated Employment Agreement, effective as of January 23,
2007, between Compass Bancshares, Inc. and each executive officer of Compass
Bancshares, Inc. (incorporated by reference to Exhibit 10.8 to Compass Bancshares,
Inc.s Form 8-K, filed number 001-31272, filed January 29, 2007 with the Commission) *(d)
    
    Compass Bancshares, Inc. Supplemental Retirement Plan, as amended and restated
as of January 1, 2005 *(e)
    
    Compass Bancshares, Inc. Special Supplemental Retirement Plan, as amended and
restated as of January 1, 2005 *(f)
    
    Compass Bancshares, Inc. Employee Stock Ownership Benefit Restoration Plan, as
amended and restated as of January 1, 2005 *(g)
    
    Compass Bancshares, Inc. Smartinvestor Retirement Benefit Restoration Plan, as
amended and restated as of January 1, 2005 *(h)
    
    Deferred Compensation Plan for Compass Bancshares, Inc., as amended and
restated as of January 1, 2005 (incorporated by reference to Exhibit 10(r) to Compass
Bancshares, Inc.s June 30, 2006 Form 10-Q, file number 001-31272, filed August 8, 2006
with the Commission) *(i)
    
    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) *(j)
    
    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) *(k)
    
    2005 Form of Performance Contingent Restricted Stock Agreement (incorporated by
reference to Exhibit 10.1 to Compass Bancshares, Inc.s Form 8-K, file number
001-31272, filed February 22, 2005 with the Commission) *(l)
    
    Form of Amendment Number One to the 2005 Performance Contingent Restricted
Stock Award Agreement (incorporated by reference Exhibit 10.1 to Compass Bancshares,
Inc.s Form 8-K, file number 001-31272, filed October 21, 2005 with the Commission) *
 -97-




---



##### Table of Contents



Exhibits  continued
 (m)
    
    2005 Form of Incentive Stock Option Agreement (D. Paul Jones, Jr.)
(incorporated by reference to Exhibit 10.2 to Compass Bancshares, Inc.s Form 8-K, file
number 001-31272, filed February 22, 2005 with the Commission) *
 (n)
    
    2005 Form of Incentive Stock Option Agreement (Garrett R. Hegel, James D.
Barri, George M. Boltwood and William C. Helms) (incorporated by reference to Exhibit
10.4 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed February 22,
2005 with the Commission) *(o)
    
    Compass Bancshares, Inc. 2006 Incentive Compensation Plan (incorporated by
reference to Exhibit 4.9 to Compass Bancshares, Inc.s Registration Statement on Form
S-8, Registration No. 333-135154, filed June 20, 2006 with the Commission) *(p)
    
    2006 Form of Performance Contingent Restricted Stock Agreement (D. Paul Jones,
Jr.) (incorporated by reference to Exhibit 10.1 to Compass Bancshares, Inc.s Form 8-K,
file number 001-31272, filed May 31, 2006 with the Commission) *(q)
    
    2006 Form of Performance Contingent Restricted Stock Agreement (Garrett R.
Hegel, James D. Barri, George M. Boltwood and William C. Helms) (incorporated by
reference to Exhibit 10.3 to Compass Bancshares, Inc.s Form 8-K, file number
001-31272, filed May 31, 2006 with the Commission) *(r)
    
    2006 Form of Incentive Stock Option Agreement (D. Paul Jones, Jr.)
(incorporated by reference to Exhibit 10.4 to Compass Bancshares, Inc.s Form 8-K, file
number 001-31272, filed May 31, 2006 with the Commission) *(s)
    
    2006 Form of Incentive Stock Option Agreement (Garrett R. Hegel, James D.
Barri, George M. Boltwood and William C. Helms) (incorporated by reference to Exhibit
10.6 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed May 31, 2006
with the Commission) *(t)
    
    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) *(u)
    
    Form of Restricted Stock Award Agreement for Non-Employee Directors *(v)
    
    Form of Performance Unit Award Agreement (incorporated by reference to Exhibit
10.1 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed January 29,
2007 with the Commission) *(w)
    
    Form of Performance Contingent Restricted Stock Award Agreement (Jones)
(incorporated by reference Exhibit 10.2 to Compass Bancshares, Inc.s Form 8-K, file
number 001-31272, filed January 29, 2007 with the Commission) *(x)
    
    Form of Performance Contingent Restricted Stock Award
Agreement (Stone) (incorporated by
reference to Exhibit 10.3 to Compass Bancshares, Inc.s Form 8-K, file number
001-31272, filed January 29, 2007 with the Commission) *(y)
    
    Form of Performance Contingent Restricted Stock Award Agreement (executive
officer) (incorporated by reference to Exhibit 10.4 to Compass Bancshares, Inc.s Form
8-K, file number 001-31272, filed January 29, 2007 with the Commission) *(z)
    
    Form of Stock Option Agreement (Jones) (incorporated by reference to Exhibit
10.5 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed January 29,
2007 with the Commission) *(aa)
    
    Form of Stock Option Agreement (Stone) (incorporated by reference to Exhibit
10.6 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed January 29,
2007 with the Commission) *
 -98-




---



##### Table of Contents



Exhibits  continued
 (bb)
    
    Form of Stock Option Agreement (executive officer) (incorporated by reference
to Exhibit 10.7 to Compass Bancshares, Inc.s Form 8-K, file number 001-31272, filed
January 29, 2007 with the Commission) *(cc)
    
    Summary of Compensation Arrangements for Named Executive Officers and Directors
*
 (dd)
    
    Distribution Agreement, dated March 13, 2006, among Compass Bank and Compass
Bancshares, Inc., and Citigroup Global Markets Inc., Keefe, Bruyette & Woods, Inc.
Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Sandler
ONeill & Partners, L.P. as agents (incorporated by reference to Exhibit 10(ae) to
Compass Bancshares, Inc.s March 31, 2006 Form 10-Q, file number 001-31272, filed May
8, 2006 with the Commission)(ee)
    
    Issuing and Paying Agency Agreement, dated March 13, 2006, between Compass
Bank, as issuer, and Compass Bank, as issuing and paying agent (incorporated by
reference to Exhibit 10(af) to Compass Bancshares, Inc.s March 31, 2006 Form 10-Q,
file number 001-31272, filed May 8, 2006 with the Commission)
 (16)
    
    Letter dated March 20, 2006 from PricewaterhouseCoopers LLP to the Securities and
Exchange Commission regarding change in certifying accountant (incorporated by reference to
Exhibit 16 to Compass Bancshares, Inc.s Form 8-K, filed number 001-31272, filed March 20,
2006 with the Commission)(21)
    
    Subsidiaries of the registrant(23)(a)
    
    Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm(23)(b)
    
    Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm(31)(a)
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by D. Paul
Jones, Jr., Chief Executive Officer(31)(b)
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Garrett. R.
Hegel, Chief Financial Officer(32)(a)
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 by D. Paul Jones, Jr., Chief Executive Officer(32)(b)
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 by Garrett R. Hegel, Chief Financial Officer
  
 *
    
    Management contract or compensatory plan or arrangement -99-




---



##### 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.Date: February 19, 2007
    
    By
    
    /s/ D. Paul Jones, Jr.D. Paul Jones, Jr.Chairman and Chief Executive Officer
  Signature
    
    Title
    
    Date/s/ D. Paul Jones, Jr.

D. Paul Jones, Jr.
    
    Chairman and Chief Executive Officer
    
    February 19, 2007/s/ Garrett R. Hegel

Garrett R. Hegel
    
    Chief Financial Officer
    
    February 19, 2007/s/ Kirk P. Pressley
    
    Chief Accounting Officer
    
    February 19, 2007Kirk P. Pressley/s/ James H. Click, Jr.
    
    Director
    
    February 19, 2007James H. Click Jr./s/ Charles W. Daniel
    
    Director
    
    February 19, 2007Charles W. Daniel/s/ W. Eugene Davenport
    
    Director
    
    February 19, 2007W. Eugene Davenport/s/ Tranum Fitzpatrick
    
    Director
    
    February 19, 2007Tranum Fitzpatrick/s/ Carl J. Gessler, Jr.
    
    Director
    
    February 19, 2007Carl J. Gessler, Jr./s/ Charles E. McMahen
    
    Director
    
    February 19, 2007Charles E. McMahen/s/ John S. Stein
    
    Director
    
    February 19, 2007John S. Stein/s/ J. Terry Strange
    
    Director
    
    February 19, 2007J. Terry Strange
 -100-