Compass Bancshares Reports Record Third Quarter Earnings up 18%.

BIRMINGHAM, Ala. -- Compass Bancshares, Inc. (Nasdaq: CBSS):

* Quarterly earnings reach all-time high of $118.8 million, up 18% from year ago

* Record earnings per share of $0.90, up 13% from prior year levels

* Total revenue up 11%; net interest income up 16%

* Focused earning asset growth continues; average loans increase 20% from year ago

* Average deposits increase 22%; transaction account deposits increase 17% from year ago

* NPA ratio declines to 0.28%; NCO ratio decreases to 0.35% from 0.55% for prior year

Compass Bancshares, Inc. (Nasdaq: CBSS) today reported record earnings of $118.8 million for the third quarter of 2006, an 18 percent increase over the $100.7 million earned in the third quarter of 2005. For the same time period, earnings per share increased 13 percent to $0.90 from $0.80 in the prior year. Included in third quarter 2006 results are merger and integration expenses that amounted to approximately $0.01 per share. Return on average assets and return on average shareholders' equity for the third quarter of 2006 were 1.39 percent and 17.49 percent, respectively.

Earnings for the first nine months of 2006 increased 14 percent to $342 million compared to $299.7 million earned during the first nine months of 2005. Earnings per share for the first nine months of 2006 increased 11 percent to $2.63 from $2.37 in the prior year. Return on average assets and return on average shareholders' equity for the first nine months of 2006 were 1.40 percent and 18.04 percent, respectively.

D. Paul Jones, Jr., Compass chairman and chief executive officer, stated, "Overall we are pleased with Compass' financial performance during the first nine months of 2006 despite a less than favorable interest rate environment. While we are encouraged by our ability to deliver strong growth to our shareholders in a difficult operating environment, we recognize the challenges facing the financial services industry given an inverted yield curve, continued deposit pricing pressures and the uncertainty over economic conditions. We continue to believe that Compass' diversified business mix, expanding distribution network and sales and service culture will enable us to manage through this challenging period. Given these strengths, we are cautiously optimistic that 2006 will represent another year of double-digit earnings per share growth."

Jones added, "Compass' record financial performance was fueled by an 11 percent increase in revenue, driven by a 16 percent increase in net interest income. Noninterest income increased a modest five percent from prior year levels as increases in most of our major fee-based businesses were partially offset by a decline in some of our more interest rate sensitive businesses. While noninterest expense increased from prior year levels, expenses for the third quarter were slightly less than second quarter 2006 levels."

"Compass experienced solid balance sheet growth with average earning assets increasing 13 percent over prior year levels. More importantly, the growth in earning assets was driven by a 20 percent increase in average loans, offset in part by a seven percent decrease in our investment securities portfolio. Average deposits increased 22 percent, led by double digit increases in interest bearing transaction accounts and time deposits," Jones stated.

"Solid balance sheet growth, coupled with a higher base of low-cost transaction accounts resulted in our percent net interest margin increasing to 3.68 percent from 3.58 percent a year ago. However, the impact of an inverted yield curve and continued pressure from rising funding costs resulted in a decline from the prior quarter to a level more consistent with our first quarter percent net interest margin. Given the uncertainty over interest rates, our focus remains on generating high-quality loans and growing our base of low-cost transaction account deposits. Accordingly, during the third quarter we registered a $39.5 million increase in net interest income compared to a year ago."

"Nonperforming assets as a percentage of loans and other real estate were unchanged from second quarter levels at 0.28 percent, and down compared to 0.31 percent in the third quarter of 2005. Net charge-offs as a percentage of average loans increased slightly from second quarter levels to 0.35 percent, but were down compared to 0.55 percent in the third quarter a year ago. Both of these credit quality measures continue to perform near historical lows. At the same time, loan loss provision expense exceeded net charge-offs by $2.9 million during the quarter and our allowance for loan losses as a percentage of loans remained stable with second quarter levels at 1.19 percent," Jones said.

Compass operates 412 full-service banking centers including 162 in Texas, 89 in Alabama, 74 in Arizona, 44 in Florida, 33 in Colorado, and 10 in New Mexico. Compass will host a live conference call and webcast at 1:00 p.m. Central Time on October 18. Additional material information, including forward-looking information such as considerations regarding future results, may be discussed during the presentation. To participate by telephone dial 1-888-543-2107, passcode Compass, or by webcast at www.compassbank.com. A copy of the presentation will be made available on our web site prior to the call. A replay of the conference call and webcast will be made available until midnight on October 25, 2006. To access a replay of the conference call dial 1-800-642-1687, conference ID 8292087. Additional information about Compass, a member of the S&P 500 Index and Dow Jones Select Dividend Index, can be found at www.compassbank.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

In accordance 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" 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 for the most recently ended fiscal year as well as its other filings with the U.S. Securities and Exchange Commission.

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