Compass Bancshares Continues Sunbelt Expansion Drive With Agreement to Acquire New Mexico Bank.

BIRMINGHAM, Ala.--(BUSINESS WIRE)--July 26, 1999--

With thriving franchises in the adjacent states of Texas and Arizona, Sunbelt-based Compass Bancshares, Inc. (NASDAQ: CBSS) today announced that it signed a definitive agreement to acquire Western Bancshares, Inc. and its nine full-service Western Bank offices located in Albuquerque, New Mexico.

The largest locally-owned bank in Albuquerque, Western will bring $285 million in assets, $234 million in deposits and $34 million in equity to Compass.

Under terms of the agreement, Compass will exchange shares of its common stock for all of the outstanding common stock of Western Bancshares. Based on Compass' closing stock price on July 23, the acquisition is valued at approximately $88 million. The transaction is expected to be completed early in 2000, pending shareholder and regulatory approval.

Albuquerque, with a population of more than 675,000, is growing at twice the national average while New Mexico is projected by the U.S. Census Bureau to be among the five fastest-growing states over the next five years. Albuquerque recently was ranked by Entrepreneur magazine as the best western U.S. city in which to start a business. Its diverse economy is based on high-tech manufacturing, education, healthcare, government and agriculture.

Called by Forbes magazine "the city of the future," Albuquerque is home to the University of New Mexico and Kirtland Air Force Base as well as the Department of Energy's Sandia National Laboratories. Albuquerque is a magnet for high-technology companies including Intel, Motorola Ceramics Products, Honeywell Defense Avionics, General Electric and Philips Semiconductors.

"Compass enters New Mexico with the acquisition of a high-performing, well managed bank strategically located between our key markets in the Southwest," D. Paul Jones, Jr., chairman and chief executive officer said today. "It is a logical expansion into another attractive Sunbelt state with a market that has experienced continued growth over the past decade.

"In addition, Western Bank has been one of the most profitable banks of its size, earning over 1.85 percent on assets in each of the past five years," Jones stated. "It has a strong capital base and excellent operating ratios."

William T. Fietz, chairman and chief executive officer of Western Bancshares said, "The merger with Compass will provide long-term benefits to our customers, employees and shareholders. Compass is an outstanding organization with the resources and technology to offer our customers expanded products and services to meet their total banking needs.

"We did not anticipate that we would be joining another bank at this time," Fietz added, "but after visiting with Compass, we want to be a part of what we believe is a very bright future."

Fietz, Western president David Wintermute and the management team will remain with Compass to serve their customers after the merger is completed.

Both Compass Bancshares and Western Bancshares have tested and certified their computer systems as Year 2000 ready.

Compass Bancshares, Inc. is a $17.7 billion Sunbelt-based bank holding company with 293 full-service banking offices and more than 6,600 employees in Texas, Florida, Arizona and Alabama. When the pending acquisitions of Hartland Bank in Austin, Texas and Western Bancshares are completed, Compass will have assets of more than $18.3 billion in the five states.

Ranked in the top 45 U.S. bank holding companies by asset size, Compass is among the top earners of its size based on return on equity. The company's earnings per share have increased for 11 consecutive years and dividends per share have increased for 18 consecutive years.

Compass Bancshares recently was added to Standard and Poor's Midcap 400 Index, an elite group of mid-size companies. Also this year, Keefe, Bruyette and Woods, Inc. recognized Compass as one of the 10 best performing banks over the past 10 years and named it to KBW's prestigious 1999 Honor Roll.

Compass' acquisition strategy focuses on high-growth markets with diverse economies. Compass was the first out-of-state bank to enter Texas in 1987 when it purchased a Houston-area bank. Since that time, its Texas operations have flourished and Compass operates 125 banking offices in all of the state's major markets and along the I-35 corridor.

In 1991, Compass crossed state lines into Florida and has continued to expand there as well. Compass now operates 41 banking offices in the Sunshine State including 21 in the prospering Jacksonville area where it ranks third among banks in deposit market share.

Compass entered the nation's second fastest growing state with the acquisition of Arizona Bank in December, 1998. In April of this year, 15 additional banking offices were purchased from Norwest and Wells Fargo. Compass currently operates 45 Arizona Bank offices throughout the state including 17 in greater Tucson and 14 in greater Phoenix.

Compass reported record earnings of $107 million for the first six months of 1999 and has a capital base of $1.2 billion. Shares of Compass common stock are traded through the Nasdaq stock market under the symbol CBSS.