Compass Bancshares Announces Restatement of Financial Statements Due to a Technical Clarification of Accounting for Certain Derivative Transactions.BIRMINGHAM Birmingham, cities, United States Birmingham (bûr`mĭnghăm') 1 City (1990 pop. 265,968), seat of Jefferson co., N central Ala., in the Jones Valley near the southern end of the Appalachian system; founded and inc. , Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. . -- Company will record a $600 thousand cumulative decrease in retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. Compass Bancshares Compass Bancshares, Inc. is a privately held company based in Birmingham, Alabama. Its subsidiary, Compass Bank, is a Southwestern financial holding company with $47 billion in assets and 417 full-service banking offices in Alabama, Arizona, Colorado, Florida, New Mexico, and Texas. , Inc. (Nasdaq: CBSS CBSS Council of Baltic Sea States CBSS Craft and Boat Support System CBSS Coastal Border Surveillance System (MSSC) CBSS Closed-Breach Scavenging System (compressed air system for removing smoke from tank gun tubes) ) today announced that it will restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its historical financial statements for the years ended December December: see month. 31, 2004, 2003 and 2002 and for the first, second and third quarters of 2005 and 2004. The restatements relate to the Company's accounting under Statement of Financial Accounting Standards 133, Accounting for Derivative Instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. and Hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. Activities (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 133), for interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. entered into in connection with certain brokered certificates of deposit and trust preferred debt transactions. Although the cumulative impact of the adjustments on the Company's financial performance over this period is not significant, the decision to restate prior period financial information resulted primarily from the impact of the adjustments to certain individual quarters. "The issue with respect to these transactions relates to matters of documentation, rather than the purpose for which these transactions were created or their economic substance," said Garrett See also: All pages beginning with Garrett Garrett is a masculine Irish, and Anglo-Saxon first name, or surname meaning "Lord of the spear", "spear brave" or "spear wielder". R. Hegel, Compass' chief financial officer. "These transactions were intended to and have, in fact, created effective economic hedges, and our financial condition and our cumulative results of operations have not been affected in any significant way by the revised accounting for them. The cumulative effect of these changes is a non-cash decrease in retained earnings of $600 thousand from 2001 through December 31, 2005." Since 2001, the Company has entered into interest rate swap agreements to hedge the interest rate risk inherent in certain of its brokered certificates of deposit and trust preferred debt. From inception INCEPTION. The commencement; the beginning. In making a will, for example, the writing is its inception. 3 Co. 31 b; Plowd. 343. Vide Consummation; Progression. , the Company has applied a method of fair value hedge accounting Why is hedge accounting necessary? Many financial institutions and corporate businesses (entities) use derivative financial instruments to hedge their exposure to different risks (eg interest rate risk, foreign exchange risk, commodity risk, etc). under SFAS 133 (the "short-cut" method) that assumed the effectiveness of the hedging transactions. However, after further examination in light of recent developments and discussions with its independent registered public accounting firm, PricewaterhouseCoopers LLP LLP - Lower Layer Protocol , the Company and its Audit Committee concluded that the swap transactions did not qualify for the short-cut method and therefore any fluctuations in the market value of the interest rate swaps should have been recorded through the income statement. There is no effect on cash flows from these revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. . The Company continues to believe that the swaps have been and will continue to be highly effective hedges. However, the swap transactions do not qualify for the "short-cut" method of accounting and cannot be made to qualify for hedge accounting retrospectively ret·ro·spec·tive adj. 1. Looking back on, contemplating, or directed to the past. 2. Looking or directed backward. 3. Applying to or influencing the past; retroactive. 4. due to a lack of contemporaneous con·tem·po·ra·ne·ous adj. Originating, existing, or happening during the same period of time: the contemporaneous reigns of two monarchs. See Synonyms at contemporary. documentation. Therefore the Company has re-designated the interest rate swaps associated with these transactions as fair value hedges under the "long-haul long haul n. 1. A long distance: It is a long haul from New York to Los Angeles. 2. A long period of time: Over the long haul the candidates performed well. " accounting method in order to qualify them going forward for fair value hedge accounting under SFAS 133. The Company determined that brokered certificates of deposit swaps did not qualify for the short-cut method in prior periods because the related certificates of deposit broker placement fee was determined to have caused the swap not to have a fair value of zero at inception (a requirement under SFAS 133 to qualify for the short-cut method). Additionally, the Company determined that the trust preferred debt swaps Debt swap A set of transactions in which a firm buys a country's dollar bank debt at a discount and swaps this debt with the central bank for local currency that it can use to acquire local equity. Also called a debt-equity swap. did not qualify for the short-cut method in prior periods because of an interest deferral deferral - Waiting for quiet on the Ethernet. feature that permits interest payments to be deferred for a period up to five years without creating an event of default or acceleration acceleration, change in the velocity of a body with respect to time. Since velocity is a vector quantity, involving both magnitude and direction, acceleration is also a vector. In order to produce an acceleration, a force must be applied to the body. . Hegel added, "It is important to understand that the revised accounting treatment for these transactions does not impact our top-line revenue growth trends, our underlying loan and deposit growth and any of our key performance ratios in a significant manner. Accordingly, we believe from a comparability standpoint The Standpoint is a newspaper published in the British Virgin Islands. It was originally published under the name Pennysaver, largely as a shopping-coupon promotional newspaper, but since emerged as one of the most influential sources of journalism in the future periods may be evaluated in relation to our originally reported results since the hedging transactions were economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: effective. In such light, our business plan for 2006 is consistent within a range of the current mean street estimate." Attached on the following pages is a summary of the primary changes from previous financial statements as a result of the restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. for the years ended December 31, 2004, 2003, 2002 and for the first, second and third quarters of 2005 and 2004. In addition, financial information concerning the restatement is also available in a presentation on the investor relations Investor relations The process by which the corporation communicates with its investors. section of Compass' web site at www.compassbank.com. Compass Bancshares, Inc. is a $30.1 billion Southwestern south·west n. 1. Abbr. SW The direction or point on the mariner's compass halfway between due south and due west, or 135° west of due north. 2. An area or region lying in the southwest. 3. financial holding company which operates 385 full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. banking centers including 139 in Texas, 89 in Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). , 73 in Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). , 42 in Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and , 32 in Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. and 10 in New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). . Compass is among the top 30 U.S. bank holding companies by asset size and ranks among the top earners of its size based on return on equity. Shares of Compass' common stock are traded through the Nasdaq stock market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol CBSS. Additional information about Compass, a member of the S&P 500 Index and Dow Jones Dow Jones the best known of several U.S. indexes of movements in price on Wall Street. [Am. Hist.: Payton, 202] See : Finance Select Dividend Index, can be found at www.compassbank.com. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Compass Bancshares, Inc. notes that any statements in this press release, and elsewhere, that are not historical facts are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " that involve risks and uncertainties that may cause the Company's actual results of operations to differ materially from expected results. For a discussion of such risks and uncertainties, see the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the most recently ended fiscal year as well as its other filings with the U.S. Securities and Exchange Commission.
COMPASS BANCSHARES, INC.
(Unaudited)
(In thousands, except per share data)
For the Nine Months Ended September 30,
-----------------------------------------------
2005 2004
---------------------- ------------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- ----------- ----------- -----------
EARNINGS SUMMARY
Net interest income -
as originally
reported $ 726,402 $ 726,402 $ 676,131 $ 676,131
Restatement to
noninterest income - (11,248) - (20,922)
----------- ----------- ----------- -----------
Net interest income 726,402 715,154 676,131 655,209
Noninterest income (a) 491,144 491,144 436,908 436,908
----------- ----------- ----------- -----------
Total revenue (a) 1,217,546 1,206,298 1,113,039 1,092,117
Investment securities
gains, net 79 79 27,336 27,336
Trading gains (losses)
and settlements on
economic hedge swaps - 669 - 15,067
Provision for loan
losses 82,268 82,268 78,140 78,140
Loss on prepayment of
FHLB advances - - 25,136 25,136
Noninterest expense (b) 671,863 671,863 628,693 628,693
----------- ----------- ----------- -----------
Pretax income 463,494 452,915 408,406 402,551
Income tax expense 157,236 153,223 136,812 134,595
----------- ----------- ----------- -----------
Net income $ 306,258 $ 299,692 $ 271,594 $ 267,956
=========== =========== =========== ===========
Diluted earnings per
share $ 2.42 $ 2.37 $ 2.17 $ 2.14
% Change
----------------------
As
Originally As
Reported Restated
----------- --------
EARNINGS SUMMARY
Net interest income - as originally reported 7 % 7 %
Restatement to noninterest income - (46)
Net interest income 7 9
Noninterest income (a) 12 12
Total revenue (a) 9 10
Investment securities gains, net (100) (100)
Trading gains (losses) and settlements on
economic hedge swaps - (96)
Provision for loan losses 5 5
Loss on prepayment of FHLB advances (100) (100)
Noninterest expense (b) 7 7
Pretax income 13 13
Income tax expense 15 14
Net income 13 12
Diluted earnings per share 12 11
For the Years Ended December 31,
-----------------------------------------------
2004 2003
---------------------- ------------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- ----------- ----------- -----------
EARNINGS SUMMARY
Net interest income -
as originally
reported $ 911,828 $ 911,828 $ 909,530 $ 909,530
Restatement to
noninterest income - (26,503) - (30,400)
----------- ----------- ----------- -----------
Net interest income 911,828 885,325 909,530 879,130
Noninterest income (a) 590,254 590,254 524,099 524,099
----------- ----------- ----------- -----------
Total revenue (a) 1,502,082 1,475,579 1,433,629 1,403,229
Investment securities
gains, net 27,336 27,336 (43) (43)
Gain on sale of
branches - - 2,128 2,128
Trading gains (losses)
and settlements on
economic hedge swaps - 11,053 - 9,320
Provision for loan
losses 105,658 105,658 119,681 119,681
Loss on prepayment of
FHLB advances 25,136 25,136 - -
Noninterest expense (b) 843,342 843,342 797,883 797,883
----------- ----------- ----------- -----------
Pretax income 555,282 539,832 518,150 497,070
Income tax expense 185,498 179,647 176,282 168,392
----------- ----------- ----------- -----------
Net income $ 369,784 $ 360,185 $ 341,868 $ 328,678
=========== =========== =========== ===========
Diluted earnings per
share $ 2.95 $ 2.87 $ 2.69 $ 2.58
% Change
----------------------
As
Originally As
Reported Restated
----------- --------
EARNINGS SUMMARY
Net interest income - as originally reported - % - %
Restatement to noninterest income - (13)
Net interest income - 1
Noninterest income (a) 13 13
Total revenue (a) 5 5
Investment securities gains, net NM NM
Gain on sale of branches (100) (100)
Trading gains (losses) and settlements on
economic hedge swaps - 19
Provision for loan losses (12) (12)
Loss on prepayment of FHLB advances NM NM
Noninterest expense (b) 6 6
Pretax income 7 9
Income tax expense 5 7
Net income 8 10
Diluted earnings per share 10 11
(a) Excludes gains on sales of investment securities, gain on sale of
branches and trading gains (losses) and settlements on economic
hedge swaps.
(b) Excludes loss on prepayment of FHLB advances.
NM - Not meaningful
COMPASS BANCSHARES, INC.
(Unaudited)
(In thousands, except per share data)
For the Years Ended December 31,
-----------------------------------------------
2003 2002
---------------------- ----------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- ----------- ----------- -----------
EARNINGS SUMMARY
Net interest income -
as originally
reported $ 909,530 $ 909,530 $ 924,855 $ 924,855
Restatement to
noninterest income - (30,400) - (23,146)
----------- ----------- ----------- -----------
Net interest income 909,530 879,130 924,855 901,709
Noninterest income (a) 524,099 524,099 436,830 436,830
----------- ----------- ----------- -----------
Total revenue (a) 1,433,629 1,403,229 1,361,685 1,338,539
Investment securities
gains, net (43) (43) 4,233 4,233
Gain on sale of
branches 2,128 2,128 - -
Trading gains (losses)
and settlements on
economic hedge swaps - 9,320 - 71,006
Provision for loan
losses 119,681 119,681 136,331 136,331
Noninterest expense 797,883 797,883 752,429 752,429
----------- ----------- ----------- -----------
Pretax income 518,150 497,070 477,158 525,018
Income tax expense 176,282 168,392 162,759 180,673
----------- ----------- ----------- -----------
Net income $ 341,868 $ 328,678 $ 314,399 $ 344,345
=========== =========== =========== ===========
Diluted earnings per
share $ 2.69 $ 2.58 $ 2.42 $ 2.65
% Change
----------------------
As
Originally As
Reported Restated
----------- --------
EARNINGS SUMMARY
Net interest income - as originally reported (2)% (2)%
Restatement to noninterest income - 31
Net interest income (2) (3)
Noninterest income (a) 20 20
Total revenue (a) 5 5
Investment securities gains, net NM NM
Gain on sale of branches NM NM
Trading gains (losses) and settlements on
economic hedge swaps - (87)
Provision for loan losses (12) (12)
Noninterest expense 6 6
Pretax income 9 (5)
Income tax expense 8 (7)
Net income 9 (5)
Diluted earnings per share 11 (3)
For the Years Ended December 31,
-----------------------------------------------
2002 2001
---------------------- ------------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- ----------- ----------- -----------
EARNINGS SUMMARY
Net interest income -
as originally
reported $ 924,855 $ 924,855 $ 825,859 $ 825,859
Restatement to
noninterest income - (23,146) - (3,368)
----------- ----------- ----------- -----------
Net interest income 924,855 901,709 825,859 822,491
Noninterest income (a) 436,830 436,830 368,795 368,795
----------- ----------- ----------- -----------
Total revenue (a) 1,361,685 1,338,539 1,194,654 1,191,286
Investment securities
gains, net 4,233 4,233 7,583 7,583
Trading gains (losses)
and settlements on
economic hedge swaps - 71,006 - 9,657
Provision for loan
losses 136,331 136,331 106,241 106,241
Noninterest expense 752,429 752,429 685,770 685,770
----------- ----------- ----------- -----------
Pretax income 477,158 525,018 410,226 416,515
Income tax expense 162,759 180,673 139,829 142,183
----------- ----------- ----------- -----------
Net income $ 314,399 $ 344,345 $ 270,397 $ 274,332
=========== =========== =========== ===========
Diluted earnings per
share $ 2.42 $ 2.65 $ 2.11 $ 2.14
% Change
----------------------
As
Originally As
Reported Restated
----------- --------
EARNINGS SUMMARY
Net interest income - as originally reported 12 % 12 %
Restatement to noninterest income - 587
Net interest income 12 10
Noninterest income (a) 18 18
Total revenue (a) 14 12
Investment securities gains, net (44) (44)
Trading gains (losses) and settlements on
economic hedge swaps - 635
Provision for loan losses 28 28
Noninterest expense 10 10
Pretax income 16 26
Income tax expense 16 27
Net income 16 26
Diluted earnings per share 15 24
(a) Excludes gains on sales of investment securities, gain on sale of
branches and trading gains (losses) and settlements on economic
hedge swaps.
NM - Not meaningful
COMPASS BANCSHARES, INC.
(Unaudited)
(In thousands except per share data)
2005
-------------------------------------------
Third Quarter Second Quarter
--------------------- ---------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- --------- ----------- ---------
EARNINGS SUMMARY
Net interest income - as
originally reported $ 249,940 $249,940 $ 240,186 $240,186
Restatement to noninterest
income - (2,829) - (3,716)
----------- --------- ----------- ---------
Net interest income 249,940 247,111 240,186 236,470
Noninterest income (a) 170,645 170,645 165,938 165,938
----------- --------- ----------- ---------
Total revenue (a) 420,585 417,756 406,124 402,408
Investment securities
gains, net - - 79 79
Trading gains (losses) and
settlements on
economic hedge swaps - (4,149) - 9,414
Provision for loan losses 34,195 34,195 27,800 27,800
Noninterest expense 227,396 227,396 222,595 222,595
----------- --------- ----------- ---------
Pretax income 158,994 152,016 155,808 161,506
Income tax expense 53,943 51,296 53,357 55,518
----------- --------- ----------- ---------
Net income $ 105,051 $100,720 $ 102,451 $105,988
=========== ========= =========== =========
Diluted earnings per share $ 0.83 $ 0.80 $ 0.81 $ 0.83
2005
---------------------
First Quarter
---------------------
As
Originally As
Reported Restated
----------- ---------
EARNINGS SUMMARY
Net interest income - as originally reported $ 236,276 $236,276
Restatement to noninterest income - (4,703)
----------- ---------
Net interest income 236,276 231,573
Noninterest income (a) 154,561 154,561
----------- ---------
Total revenue (a) 390,837 386,134
Investment securities gains, net - -
Trading gains (losses) and settlements on
economic hedge swaps - (4,596)
Provision for loan losses 20,273 20,273
Noninterest expense 221,872 221,872
----------- ---------
Pretax income 148,692 139,393
Income tax expense 49,936 46,409
----------- ---------
Net income $ 98,756 $ 92,984
=========== =========
Diluted earnings per share $ 0.78 $ 0.74
2004
-------------------------------------------
Fourth Quarter Third Quarter
--------------------- ---------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- --------- ----------- ---------
EARNINGS SUMMARY
Net interest income - as
originally reported $ 235,697 $235,697 $ 226,531 $226,531
Restatement to noninterest
income - (5,581) - (6,646)
----------- --------- ----------- ---------
Net interest income 235,697 230,116 226,531 219,885
Noninterest income (a) 153,346 153,346 147,185 147,185
----------- --------- ----------- ---------
Total revenue (a) 389,043 383,462 373,716 367,070
Investment securities
gains, net - - 25,129 25,129
Trading gains (losses) and
settlements on
economic hedge swaps - (4,014) - 14,873
Provision for loan losses 27,518 27,518 25,617 25,617
Loss on prepayment of FHLB
advances - - 25,136 25,136
Noninterest expense (b) 214,649 214,649 207,365 207,365
----------- --------- ----------- ---------
Pretax income 146,876 137,281 140,727 148,954
Income tax expense 48,686 45,052 47,125 50,241
----------- --------- ----------- ---------
Net income $ 98,190 $ 92,229 $ 93,602 $ 98,713
=========== ========= =========== =========
Diluted earnings per share $ 0.78 $ 0.73 $ 0.75 $ 0.79
2004
-------------------------------------------
Second Quarter First Quarter
--------------------- ---------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- ---------- ----------- ---------
EARNINGS SUMMARY
Net interest income - as
originally reported $ 226,739 $226,739 $ 222,861 $222,861
Restatement to
noninterest income - (7,161) - (7,115)
----------- ---------- ----------- ---------
Net interest income 226,739 219,578 222,861 215,746
Noninterest income (a) 150,019 150,019 139,704 139,704
----------- ---------- ----------- ---------
Total revenue (a) 376,758 369,597 362,565 355,450
Investment securities
gains, net - - 2,207 2,207
Trading gains (losses)
and settlements on
economic hedge swaps - (12,360) - 12,554
Provision for loan losses 28,178 28,178 24,345 24,345
Loss on prepayment of
FHLB advances - - - -
Noninterest expense (b) 211,181 211,181 210,147 210,147
----------- ---------- ----------- ---------
Pretax income 137,399 117,878 130,280 135,719
Income tax expense 45,654 38,261 44,033 46,093
----------- ---------- ----------- ---------
Net income $ 91,745 $ 79,617 $ 86,247 $ 89,626
=========== ========== =========== =========
Diluted earnings per
share $ 0.73 $ 0.63 $ 0.69 $ 0.72
(a) Excludes gains on sales of investment securities and trading gains
(losses) and settlements on economic hedge swaps.
(b) Excludes loss on prepayment of FHLB advances.
COMPASS BANCSHARES, INC.
(Unaudited)
(In thousands except per share data)
2003
-------------------------------------------
Fourth Quarter Third Quarter
--------------------- ---------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- --------- ----------- ---------
EARNINGS SUMMARY
Net interest income - as
originally reported $ 228,698 $228,698 $ 230,258 $230,258
Restatement to noninterest
income - (7,042) - (7,288)
----------- --------- ----------- ---------
Net interest income 228,698 221,656 230,258 222,970
Noninterest income (a) 137,138 137,138 134,009 134,009
----------- --------- ----------- ---------
Total revenue (a) 365,836 358,794 364,267 356,979
Investment securities
gains, net (46) (46) 3 3
Gain on sale of branches - - - -
Trading gains (losses) and
settlements on
economic hedge swaps - (1,256) - (5,326)
Provision for loan losses 31,639 31,639 30,354 30,354
Noninterest expense 203,573 203,573 202,680 202,680
----------- --------- ----------- ---------
Pretax income 130,578 122,280 131,236 118,622
Income tax expense 44,400 41,294 44,679 39,958
----------- --------- ----------- ---------
Net income $ 86,178 $ 80,986 $ 86,557 $ 78,664
=========== ========= =========== =========
Diluted earnings per share $ 0.69 $ 0.64 $ 0.68 $ 0.62
2003
-------------------------------------------
Second Quarter First Quarter
--------------------- ---------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- --------- ----------- ---------
EARNINGS SUMMARY
Net interest income - as
originally reported $ 223,329 $223,329 $ 227,245 $227,245
Restatement to noninterest
income - (8,202) - (7,868)
----------- --------- ----------- ---------
Net interest income 223,329 215,127 227,245 219,377
Noninterest income (a) 129,845 129,845 123,107 123,107
----------- --------- ----------- ---------
Total revenue (a) 353,174 344,972 350,352 342,484
Investment securities
gains, net - - - -
Gain on sale of branches 2,128 2,128 - -
Trading gains (losses) and
settlements on
economic hedge swaps - 13,978 - 1,924
Provision for loan losses 27,909 27,909 29,779 29,779
Noninterest expense 195,497 195,497 196,133 196,133
----------- --------- ----------- ---------
Pretax income 131,896 137,672 124,440 118,496
Income tax expense 44,848 47,010 42,355 40,130
----------- --------- ----------- ---------
Net income $ 87,048 $ 90,662 $ 82,085 $ 78,366
=========== ========= =========== =========
Diluted earnings per share $ 0.68 $ 0.71 $ 0.64 $ 0.61
2002
-------------------------------------------
Fourth Quarter Third Quarter
--------------------- ---------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- --------- ----------- ---------
EARNINGS SUMMARY
Net interest income - as
originally reported $ 231,722 $231,722 $ 230,805 $230,805
Restatement to noninterest
income - (7,479) - (7,194)
----------- --------- ----------- ---------
Net interest income 231,722 224,243 230,805 223,611
Noninterest income (a) 120,614 120,614 115,305 115,305
----------- --------- ----------- ---------
Total revenue (a) 352,336 344,857 346,110 338,916
Investment securities
gains, net 342 342 (81) (81)
Gain on sale of branches - - - -
Trading gains (losses) and
settlements on
economic hedge swaps - 10,234 - 33,341
Provision for loan losses 36,626 36,626 34,606 34,606
Noninterest expense 194,632 194,632 189,549 189,549
----------- --------- ----------- ---------
Pretax income 121,420 124,175 121,874 148,021
Income tax expense 41,691 42,722 41,865 51,651
----------- --------- ----------- ---------
Net income $ 79,729 $ 81,453 $ 80,009 $ 96,370
=========== ========= =========== =========
Diluted earnings per share $ 0.62 $ 0.63 $ 0.61 $ 0.74
2002
-------------------------------------------
Second Quarter First Quarter
--------------------- ---------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- --------- ----------- ---------
EARNINGS SUMMARY
Net interest income - as
originally reported $ 228,556 $228,556 $ 233,772 $233,772
Restatement to noninterest
income - (5,980) - (2,493)
----------- --------- ----------- ---------
Net interest income 228,556 222,576 233,772 231,279
Noninterest income (a) 106,461 106,461 94,450 94,450
----------- --------- ----------- ---------
Total revenue (a) 335,017 329,037 328,222 325,729
Investment securities
gains, net 3,452 3,452 520 520
Gain on sale of branches - - - -
Trading gains (losses) and
settlements on
economic hedge swaps - 23,301 - 4,130
Provision for loan losses 34,779 34,779 30,320 30,320
Noninterest expense 185,324 185,324 182,924 182,924
----------- --------- ----------- ---------
Pretax income 118,366 135,687 115,498 117,135
Income tax expense 39,913 46,397 39,290 39,903
----------- --------- ----------- ---------
Net income $ 78,453 $ 89,290 $ 76,208 $ 77,232
=========== ========= =========== =========
Diluted earnings per share $ 0.60 $ 0.68 $ 0.59 $ 0.60
(a) Excludes gains on sales of investment securities, gain on sale of
branches and trading gains (losses) and settlements on economic
hedge swaps.
COMPASS BANCSHARES, INC.
(Unaudited)
(In thousands, except per share data)
For the Nine Months Ended September 30,
---------------------------------------------
2005 2004
---------------------- ----------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- -------- ----------- --------
SELECTED RATIOS
Average common equity to
average assets 7.36 % 7.39 % 7.01 % 7.08 %
Return on average assets 1.41 1.38 1.32 1.30
Return on average equity 19.09 18.61 18.82 18.40
Net interest margin (TE) 3.63 3.57 3.58 3.47
Efficiency ratio (a) 55.19 55.67 56.28 56.58
Book value per common
share $17.91 $17.95 $16.17 $16.31
For the Years Ended December 31,
---------------------------------------------
2004 2003
---------------------- ----------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- -------- ----------- --------
SELECTED RATIOS
Average common equity to
average assets 7.06 % 7.12 % 7.71 % 7.82 %
Return on average assets 1.34 1.30 1.36 1.31
Return on average equity 18.94 18.29 17.65 16.72
Net interest margin (TE) 3.60 3.49 3.98 3.85
Efficiency ratio (a) 55.93 56.51 55.38 56.21
Book value per common
share $16.59 $16.68 $15.33 $15.50
For the Years Ended
December 31,
----------------------
2002
----------------------
As
Originally As
Reported Restated
----------- --------
SELECTED RATIOS
Average common equity to average assets 8.11 % 8.18 %
Return on average assets 1.35 1.47
Return on average equity 16.60 18.03
Net interest margin (TE) 4.37 4.26
Efficiency ratio (a) 54.87 53.01
Book value per common share $15.32 $15.58
2005
---------------------------------------------
Third Quarter Second Quarter
---------------------- ----------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- -------- ----------- --------
SELECTED RATIOS
Average common equity to
average assets 7.43 % 7.45 % 7.34 % 7.37 %
Return on average assets 1.40 1.34 1.41 1.46
Return on average equity 18.85 18.02 19.23 19.82
Net interest margin (TE) 3.62 3.58 3.60 3.55
Efficiency ratio (a) 53.80 54.71 54.63 53.88
Book value per common
share $17.91 $17.95 $17.54 $17.61
2005
----------------------
First Quarter
----------------------
As
Originally As
Reported Restated
----------- --------
SELECTED RATIOS
Average common equity to average assets 7.31 % 7.35 %
Return on average assets 1.40 1.32
Return on average equity 19.22 18.00
Net interest margin (TE) 3.66 3.59
Efficiency ratio (a) 57.28 58.69
Book value per common share $16.82 $16.86
2004
---------------------------------------------
Fourth Quarter Third Quarter
---------------------- ----------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- -------- ----------- --------
SELECTED RATIOS
Average common equity to
average assets 7.19 % 7.24 % 7.04 % 7.09 %
Return on average assets 1.39 1.30 1.34 1.42
Return on average equity 19.29 17.98 19.06 19.97
Net interest margin (TE) 3.63 3.54 3.54 3.44
Efficiency ratio (a) 54.92 56.30 55.29 54.11
Book value per common
share $16.59 $16.68 $16.17 $16.31
2004
---------------------------------------------
Second Quarter First Quarter
---------------------- ----------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- -------- ----------- --------
SELECTED RATIOS
Average common equity to
average assets 6.93 % 6.99 % 7.07 % 7.15 %
Return on average assets 1.33 1.15 1.29 1.34
Return on average equity 19.17 16.50 18.20 18.70
Net interest margin (TE) 3.58 3.46 3.64 3.52
Efficiency ratio (a) 55.84 58.88 57.75 56.90
Book value per common
share $15.63 $15.72 $15.77 $15.97
TE - Taxable Equivalent
(a) Ratio is calculated by dividing noninterest expense less merger
and integration expense and loss on prepayment of FHLB advances by
taxable equivalent net interest income plus noninterest income
less gains on sales of investment securities and branches.
COMPASS BANCSHARES, INC.
(Unaudited)
(In thousands, except per share data)
2003
---------------------------------------------
Fourth Quarter Third Quarter
---------------------- ----------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- -------- ----------- --------
SELECTED RATIOS
Average common equity to
average assets 7.01 % 7.09 % 7.63 % 7.73 %
Return on average assets 1.29 1.21 1.34 1.22
Return on average equity 18.40 17.09 17.58 15.78
Net interest margin (TE) 3.74 3.63 3.92 3.79
Efficiency ratio (a) 55.35 56.63 55.41 57.39
Book value per common
share $15.33 $15.50 $15.41 $15.61
2003
---------------------------------------------
Second Quarter First Quarter
---------------------- ----------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- -------- ----------- --------
SELECTED RATIOS
Average common equity to
average assets 8.04 % 8.18 % 8.23 % 8.37 %
Return on average assets 1.42 1.48 1.40 1.34
Return on average equity 17.64 18.07 16.98 15.94
Net interest margin (TE) 4.02 3.87 4.29 4.14
Efficiency ratio (a) 55.08 54.20 55.69 56.65
Book value per common
share $15.69 $15.96 $15.58 $15.81
2002
---------------------------------------------
Fourth Quarter Third Quarter
--------------------- ----------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- -------- ----------- --------
SELECTED RATIOS
Average common equity to
average assets 8.36 % 8.49 % 8.38 % 8.46 %
Return on average assets 1.34 1.37 1.35 1.62
Return on average equity 16.01 16.11 16.10 19.20
Net interest margin (TE) 4.31 4.17 4.30 4.17
Efficiency ratio (a) 54.91 54.49 54.38 50.57
Book value per common
share $15.32 $15.58 $15.39 $15.64
2002
---------------------------------------------
Second Quarter First Quarter
---------------------- ----------------------
As As
Originally As Originally As
Reported Restated Reported Restated
----------- -------- ----------- --------
SELECTED RATIOS
Average common equity to
average assets 7.97 % 8.02 % 7.70 % 7.73 %
Return on average assets 1.36 1.55 1.34 1.35
Return on average equity 17.07 19.33 17.35 17.52
Net interest margin (TE) 4.37 4.25 4.50 4.46
Efficiency ratio (a) 54.91 52.22 55.30 55.03
Book value per common
share $14.87 $14.99 $13.96 $14.00
For the Nine
Months Ended For the Years Ended
September 30, December 31,
-------------- --------------------
PRO FORMA HEDGE INEFFECTIVENESS
(b) 2005 2004 2003 2002
-------------- --------------------
Certificates of deposit
ineffectiveness $(77) $(51) $(115) $ 57
Trust preferred securities
ineffectiveness 275 296 (183) 984
-------------- --------------------
Pre-tax impact $198 $245 $(298) $1,041
============== ====================
TE - Taxable Equivalent
(a) Ratio is calculated by dividing noninterest expense less merger
and integration expense and loss on prepayment of FHLB advances by
taxable equivalent net interest income plus noninterest income
less gains on sales of investment securities and branches.
(b) The following table illustrates the hedge ineffectiveness that
would have been recognized through earnings, on a pre-tax basis,
if the swaps that have been disallowed as hedges were accounted
for under the "long-haul" method and effectiveness calculations
were performed each quarter.
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