Compass Reports Quarterly Earnings Up 21%.Business Editors 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. .--(BUSINESS WIRE)--April 15, 2002 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) ): -- Quarterly earnings reach all-time high of $75.8 million -- Record EPS of $0.59, up 18% from prior year levels -- Total revenue increases 21%; noninterest income up 13% from year ago -- Noninterest bearing deposits increase 13% from prior year levels -- Strong internal loan growth continues, managed loans up 12% from year ago Compass Bancshares, Inc. (Nasdaq:CBSS) today reported record earnings of $75.8 million for the first quarter of 2002, a 21 percent increase over the $62.6 million earned during the first quarter of 2001. For the same time period, earnings per share increased 18 percent to $0.59 from $0.50 in the prior year. Return on average assets and return on average shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. for the first quarter of 2002 were 1.33 percent and 17.26 percent, respectively. D. Paul Jones Paul Jones can refer to:
tr.v. max·i·mized, max·i·miz·ing, max·i·miz·es 1. To increase or make as great as possible: the value of our newer markets in Sunbelt Sunbelt Region, south and southwestern U.S. It is characterized by a warm climate, rapid population growth since 1970, and relatively conservative voting patterns. Comprising 15 states, it extends from Virginia and Florida in the southeast through Nevada in the southwest, states, we remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the remainder of 2002." Jones added, "Compass' record financial performance was fueled by a 21 percent increase in revenue as both net interest income and noninterest income posted double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. gains. Net interest income increased 24 percent from year ago levels as continued growth in loans and noninterest bearing deposits, as well as a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. interest rate environment, expanded our net interest margin to 4.50 percent compared to 3.97 percent in 2001. At the same time, most of our major fee-based businesses generated solid results as noninterest income, excluding securities gains, increased 13 percent. "In addition, Compass continued to experience solid balance sheet growth. Through growth in our markets, managed loans increased 12 percent over prior year levels. Equally important was our ability to continue to grow low-cost deposits. Transaction accounts increased 11 percent over prior year levels, primarily as a result of a 13 percent increase in noninterest bearing deposits. Transaction accounts now represent 75 percent of total deposits while noninterest bearing deposits represent more than 25 percent of total deposits. Additionally, during the first quarter of 2002 Compass further strengthened its capital position through the issuance of $300 million of retail trust preferred capital securities," Jones stated. "Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , in this time of economic uncertainty the overall quality of our loan portfolio remains strong. Nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. as a percentage of loans and other real estate was unchanged from fourth quarter 2001 levels, and net charge-offs as a percentage of average loans for the first quarter of 2002 declined to 0.61 percent compared with 0.66 percent for the fourth quarter of 2001. In response to the strong loan growth we have experienced, provision expense exceeded net charge-offs by $9.3 million and we maintained our allowance for loan losses as a percentage of loans at 1.40 percent," Jones said. Compass operates 340 full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. banking offices including 117 in Texas, 87 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). , 60 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). , 41 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 , 24 in Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. , nine 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). and two in Nebraska Nebraska (nəbrăs`kə), Great Plains state of the central United States. It is bordered by Iowa and Missouri, across the Missouri R. (E), Kansas (S), Colorado (SW), Wyoming (NW), and South Dakota (N). . Compass will host a live conference call and webcast at 3:00 p.m. Central Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time today. Additional material information, including forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information such as considerations regarding future results, may be discussed during the presentation. To participate by telephone dial 888/913-9969, passcode Compass, or by webcast at www.compassweb.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 April 22, 2002. To access a replay of the conference call dial 800/839-1176. "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 Statements in this press release regarding Compass Bancshares, Inc.'s business which 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. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see the Company's Annual Report or 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.
COMPASS BANCSHARES, INC.
(Unaudited)
(In thousands except per share data)
Three Months
Ended March 31
----------------------
%
2002 2001 Change
---------- ----------- -------
EARNINGS SUMMARY
Net interest income $ 233,772 $ 187,895 24
Noninterest income - operating 94,450 83,733 13
---------- ----------
Total revenue - operating 328,222 271,628 21
Investment securities gains, net 520 4,986 (90)
Provision for loan losses 30,320 12,881 135
Noninterest expense 183,549 167,921 9
---------- ----------
Pretax income 114,873 95,812 20
Income tax expense 39,056 33,249 17
---------- ----------
Net income $ 75,817 $ 62,563 21
========== ==========
Net income available to
common shareholders $ 75,817 $ 64,329 18
========== ==========
Diluted earnings per share $ 0.59 $ 0.50 18
Diluted weighted average
shares outstanding 129,155 128,901 -
Three Months
Ended March 31
----------------------
2002 2001
---------- ----------
SELECTED RATIOS
Average common equity to
average assets 7.70 % 7.30 %
Average loans to average
total deposits 102.94 86.85
Return on average assets 1.33 1.20
Return on average equity 17.26 16.39
Efficiency ratio (a) 55.49 59.78
Efficiency ratio (b) 54.62 57.50
Return on average tangible equity (c) 21.06 21.95
Book value per common share $13.96 $12.55
Average for Three Months
Ended March 31
------------------------
%
2002 2001 Change
------------ ------------ -------
BALANCE SHEET HIGHLIGHTS
Total loans $14,011,800 $12,433,051 13
Total loans - managed 16,135,007 14,489,705 11
Total investment securities (d) 7,186,403 6,864,655 5
Earning assets (d) 21,241,343 19,347,608 10
Total assets 23,130,282 21,222,653 9
Noninterest bearing deposits 3,374,151 2,994,296 13
Interest bearing transaction
accounts 6,827,411 6,245,721 9
Total transaction accounts 10,201,562 9,240,017 10
Total deposits 13,611,305 14,315,297 (5)
Shareholders' equity 1,780,990 1,548,326 15
Ending Balance
March 31
-----------------------------------
%
2002 2001 Change
------------ -------------- -------
BALANCE SHEET HIGHLIGHTS
Total loans $14,374,342 $12,687,947 13
Total loans - managed 16,404,725 14,660,935 12
Total investment securities (d) 6,610,919 6,922,631 (5)
Earning assets (d) 21,027,143 19,666,478 7
Total assets 22,869,937 21,527,093 6
Noninterest bearing deposits 3,577,292 3,157,983 13
Interest bearing transaction
accounts 6,975,606 6,372,214 9
Total transaction accounts 10,552,898 9,530,197 11
Total deposits 14,078,094 14,275,370 (1)
Shareholders' equity 1,782,210 1,606,357 11
Period-end shares outstanding 127,649 128,039 -
(a) Ratio is calculated by dividing noninterest expense by taxable
equivalent net interest income plus noninterest income less
securities gains.
(b) Ratio is calculated by dividing noninterest expense excluding
intangible amortization by taxable equivalent net interest
income plus noninterest income less securities gains.
(c) Excludes after-tax intangible amortization.
(d) Includes adjustment for market valuation.
COMPASS BANCSHARES, INC.
(Unaudited)
(In thousands except per share data)
Three Months Ended
----------------------------------
2002 2001
---------- -----------------------
Mar 31 Dec 31 Sep 30
---------- ----------- ----------
EARNINGS SUMMARY
Net interest income $ 233,772 $ 227,679 $ 209,151
Noninterest income - operating 94,450 99,208 97,327
---------- ----------- ----------
Total revenue - operating 328,222 326,887 306,478
Investment securities
gains (losses), net 520 5 (13)
Provision for loan losses 30,320 39,092 32,317
Noninterest expense 183,549 179,500 170,506
---------- ----------- ----------
Pretax income 114,873 108,300 103,642
Income tax expense 39,056 36,148 34,932
---------- ----------- ----------
Net income $ 75,817 $ 72,152 $ 68,710
========== =========== ==========
Net income available to
common shareholders $ 75,817 $ 72,152 $ 68,710
========== =========== ==========
Diluted earnings per share $ 0.59 $ 0.56 $ 0.53
Diluted weighted average
shares outstanding 129,155 128,895 129,962
Three Months Ended
----------------------
2001
----------------------
Jun 30 Mar 31
---------- ----------
EARNINGS SUMMARY
Net interest income $ 201,134 $ 187,895
Noninterest income - operating 88,527 83,733
---------- ----------
Total revenue - operating 289,661 271,628
Investment securities
gains (losses), net 2,605 4,986
Provision for loan losses 21,951 12,881
Noninterest expense 167,843 167,921
---------- ----------
Pretax income 102,472 95,812
Income tax expense 35,500 33,249
---------- ----------
Net income $ 66,972 $ 62,563
========== ==========
Net income available to
common shareholders $ 66,972 $ 64,329
========== ==========
Diluted earnings per share $ 0.52 $ 0.50
Diluted weighted average
shares outstanding 129,323 128,901
Three Months Ended
--------------------------------
2002 2001
---------- --------------------
Mar 31 Dec 31 Sep 30
---------- ---------- --------
SELECTED RATIOS
Average common equity to
average assets 7.70 % 7.77 % 7.70 %
Average loans to average
total deposits 102.94 100.19 97.34
Return on average assets 1.33 1.26 1.24
Return on average equity 17.26 16.18 16.11
Efficiency ratio (a) 55.49 54.44 55.12
Efficiency ratio (b) 54.62 52.57 53.12
Return on average tangible
equity (c) 21.06 20.57 20.81
Book value per common share $ 13.96 $ 13.53 $ 13.74
Three Months Ended
--------------------
2001
---------------------
Jun 30 Mar 31
--------- -----------
SELECTED RATIOS
Average common equity to
average assets 7.34 % 7.30 %
Average loans to average
total deposits 94.07 86.85
Return on average assets 1.22 1.20
Return on average equity 16.65 16.39
Efficiency ratio (a) 57.48 59.78
Efficiency ratio (b) 55.35 57.50
Return on average tangible
equity (c) 21.87 21.95
Book value per common share $ 12.81 $ 12.55
(a) Ratio is calculated by dividing noninterest expense by taxable
equivalent net interest income plus noninterest income less
securities gains.
(b) Ratio is calculated by dividing noninterest expense excluding
intangible amortization by taxable equivalent net interest
income plus noninterest income less securities gains.
(c) Excludes after-tax intangible amortization.
COMPASS BANCSHARES, INC.
(Unaudited)
(In thousands)
2002 2001
------------ -----------------------
Mar 31 Dec 31 Sep 30
---------- ---------- ----------
NONPERFORMING ASSETS
Nonaccrual loans $ 74,658 $ 65,470 $ 63,284
Renegotiated loans 327 327 2,008
Other real estate, net 20,829 26,478 31,061
---------- ---------- ----------
Total nonperforming assets $ 95,814 $ 92,275 $ 96,353
========== ========== ==========
Loans ninety days or more
past due $ 20,417 $ 17,577 $ 18,484
Other repossessed assets 243 806 727
Total nonperforming assets as
a percentage of loans and ORE 0.67 % 0.67 % 0.72 %
2001
------------------------
Jun 30 Mar 31
--------- ---------
NONPERFORMING ASSETS
Nonaccrual loans $ 95,283 $ 94,859
Renegotiated loans 2,036 78
Other real estate, net 18,746 17,550
--------- ---------
Total nonperforming assets $116,065 $112,487
========= =========
Loans ninety days or more
past due $ 17,547 $ 20,840
Other repossessed assets 641 1,217
Total nonperforming assets as
a percentage of loans and ORE 0.90 % 0.89 %
Three Months Ended
------------------------------------
2002 2001
---------- -----------------------
Mar 31 Dec 31 Sep 30
---------- --------- -----------
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period $191,393 $174,809 $172,986
Net charge-offs - excluding
credit cards 15,115 17,503 25,409
Net charge-offs - credit cards 5,943 5,005 5,085
--------- ---------- ---------
Net charge-offs (NCO) 21,058 22,508 30,494
Allowance for loans sold - - -
Provision for loan losses 30,320 39,092 32,317
--------- ---------- ---------
Balance at end of period $200,655 $191,393 $174,809
========= ========== =========
Allowance for loan losses as
a % of total loans 1.40 % 1.40 % 1.32 %
Allowance for loan losses as
a % of nonperforming loans 267.59 290.88 267.73
Allowance for loan losses as
a % of nonperforming assets 209.42 207.42 181.43
Annualized as a % of average loans:
NCO - QTD 0.61 0.66 0.93
NCO, excluding credit cards - QTD 0.45 0.53 0.80
NCO - YTD 0.61 0.62 0.61
NCO, excluding credit cards - YTD 0.45 0.48 0.46
Three Months Ended
------------------------
2001
------------------------
Jun 30 Mar 31
---------- ----------
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period $167,501 $167,288
Net charge-offs - excluding
credit cards 8,813 8,072
Net charge-offs - credit cards 6,603 4,596
---------- ----------
Net charge-offs (NCO) 15,416 12,668
Allowance for loans sold (1,050) -
Provision for loan losses 21,951 12,881
---------- ----------
Balance at end of period $172,986 $167,501
========== ==========
Allowance for loan losses as
a % of total loans 1.35 % 1.32 %
Allowance for loan losses as
a % of nonperforming loans 177.75 176.43
Allowance for loan losses as
a % of nonperforming assets 149.04 148.91
Annualized as a % of average loans:
NCO - QTD 0.47 0.41
NCO, excluding credit cards - QTD 0.28 0.27
NCO - YTD 0.44 0.41
NCO, excluding credit cards - YTD 0.28 0.27
COMPASS BANCSHARES, INC.
(Unaudited)
(In thousands)
Three Months Ended March 31
------------------------------
2002
------------------------------
YIELD/RATE ANALYSIS Average Income/ Yield/
(Taxable Equivalent Basis) Balance Expense Rate
------------ --------- ------
Assets
Earning assets:
Loans $14,011,800 $250,564 7.25 %
Investment securities 809,898 13,205 6.61
Investment securities available
for sale (a) 6,292,520 89,239 5.75
Other earning assets 39,750 363 3.70
------------ ---------
Total earning assets 21,153,968 353,371 6.77
Allowance for loan losses (194,798)
Unrealized gain (loss) on
securities available for sale 83,985
Cash and other assets 2,087,127
------------
$23,130,282
============
Liabilities and Shareholders' Equity
Interest bearing liabilities:
Interest bearing demand deposits $ 70,712 278 1.59
Savings deposits 6,756,699 25,046 1.50
Time deposits 2,264,105 26,487 4.74
Certificates of deposit of
$100,000 or more (a) 1,145,847 10,759 3.81
Federal funds purchased and
securities sold under agreement
to repurchase 3,248,919 13,644 1.70
Other short-term borrowings 241,576 1,232 2.07
FHLB and other borrowings (a) 3,932,316 40,988 4.23
------------ ---------
Total interest bearing liabilities 17,660,174 118,434 2.72
--------- -----
Net interest spread 234,937 4.05 %
=====
Noninterest bearing demand deposits 3,374,151
Accrued expenses and other liabilities 314,967
Shareholders' equity 1,780,990
------------
$23,130,282
============
Net yield on earning assets 4.50 %
=====
Taxable equivalent adjustment:
Loans 112
Investment securities 484
Investment securities available
for sale 552
Other earning assets 17
---------
Total taxable equivalent adjustment 1,165
---------
Net interest income $233,772
=========
(a) Excludes adjustment for market valuation.
Three Months Ended March 31
-------------------------------
2001
-------------------------------
YIELD/RATE ANALYSIS Average Income/ Yield/
(Taxable Equivalent Basis) Balance Expense Rate
-------------- --------- ------
Assets
Earning assets:
Loans $12,433,051 $276,273 9.01 %
Investment securities 950,078 16,399 7.00
Investment securities available
for sale (a) 5,919,500 100,734 6.90
Other earning assets 49,902 867 7.05
-------------- ---------
Total earning assets 19,352,531 394,273 8.26
Allowance for loan losses (167,389)
Unrealized gain (loss) on
securities available for sale (4,923)
Cash and other assets 2,042,434
--------------
$21,222,653
==============
Liabilities and Shareholders' Equity
Interest bearing liabilities:
Interest bearing demand deposits $ 144,548 824 2.31
Savings deposits 6,101,173 54,164 3.60
Time deposits 3,353,156 51,191 6.19
Certificates of deposit of
$100,000 or more (a) 1,722,124 26,510 6.24
Federal funds purchased and
securities sold under agreement
to repurchase 1,974,866 26,932 5.53
Other short-term borrowings 199,832 2,804 5.69
FHLB and other borrowings (a) 2,927,353 42,602 5.90
-------------- ---------
Total interest bearing liabilities 16,423,052 205,027 5.06
--------- -----
Net interest spread 189,246 3.20 %
=====
Noninterest bearing demand deposits 2,994,296
Accrued expenses and other liabilities 256,979
Shareholders' equity 1,548,326
--------------
$21,222,653
==============
Net yield on earning assets 3.97 %
=====
Taxable equivalent adjustment:
Loans 182
Investment securities 611
Investment securities available
for sale 541
Other earning assets 17
---------
Total taxable equivalent adjustment 1,351
---------
Net interest income $187,895
=========
(a) Excludes adjustment for market valuation.
COMPASS BANCSHARES, INC.
(Unaudited)
(In thousands)
Three Months
Ended March 31
---------------------------------
%
2002 2001 Change
--------- --------- -------
NONINTEREST INCOME
Service charges on deposit accounts $ 40,877 $ 34,527 18
Asset management fees 5,202 5,093 2
Credit card service charges and fees 9,740 6,606 47
Retail investment sales 6,279 4,945 27
Trading account profits
and commissions 4,796 5,316 (10)
Other income 27,556 27,246 1
--------- ---------
Total noninterest income -
operating 94,450 83,733 13
Investment securities
gains (losses), net 520 4,986 (90)
--------- ---------
Total $ 94,970 $ 88,719 7
========= =========
NONINTEREST EXPENSE
Salaries and benefits $ 94,625 $ 83,813 13
Net occupancy expense 13,849 12,779 8
Equipment expense 15,639 14,740 6
Professional services 11,643 10,461 11
Marketing expense 7,399 3,940 88
Amortization of intangibles 2,859 6,220 (54)
Merger and integration
expenses 768 4,744 (84)
Other expense 36,767 31,224 18
--------- ---------
Total $183,549 $167,921 9
========= =========
Three Months Ended
--------------------------------
2002 2001
--------- ---------------------
Mar 31 Dec 31 Sep 30
--------- --------- ----------
NONINTEREST INCOME
Service charges on deposit accounts $ 40,877 $ 42,593 $ 39,180
Asset management fees 5,202 5,220 5,136
Credit card service charges and fees 9,740 9,228 9,385
Retail investment sales 6,279 5,897 7,763
Trading account profits
and commissions 4,796 5,963 5,397
Other income 27,556 30,307 30,466
--------- --------- ----------
Total noninterest income -
operating 94,450 99,208 97,327
Investment securities
gains (losses), net 520 5 (13)
--------- --------- ----------
Total $ 94,970 $ 99,213 $ 97,314
========= ========= ==========
NONINTEREST EXPENSE
Salaries and benefits $ 94,625 $ 89,959 $ 88,073
Net occupancy expense 13,849 14,067 13,088
Equipment expense 15,639 15,203 15,408
Professional services 11,643 12,761 11,152
Marketing expense 7,399 4,583 5,093
Amortization of intangibles 2,859 6,133 6,151
Merger and integration
expenses 768 882 901
Other expense 36,767 35,912 30,640
--------- --------- ----------
Total $183,549 $179,500 $ 170,506
========= ========= ==========
Three Months Ended
----------------------
2001
----------------------
Jun 30 Mar 31
---------- ----------
NONINTEREST INCOME
Service charges on deposit accounts $ 38,708 $ 34,527
Asset management fees 5,165 5,093
Credit card service charges and fees 8,276 6,606
Retail investment sales 4,792 4,945
Trading account profits
and commissions 5,587 5,316
Other income 25,999 27,246
---------- ----------
Total noninterest income -
operating 88,527 83,733
Investment securities
gains (losses), net 2,605 4,986
---------- ----------
Total $ 91,132 $ 88,719
========== ==========
NONINTEREST EXPENSE
Salaries and benefits $ 84,430 $ 83,813
Net occupancy expense 13,360 12,779
Equipment expense 14,786 14,740
Professional services 11,721 10,461
Marketing expense 6,018 3,940
Amortization of intangibles 6,205 6,220
Merger and integration
expenses 604 4,744
Other expense 30,719 31,224
---------- ----------
Total $167,843 $167,921
========== ==========
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