Compass signs agreement to expand Texas franchise into Austin.

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Dec. 5, 1996--Compass Bancshares, Inc. moved a step closer to expanding its Texas operations into the thriving Austin market with the announcement that it signed a definitive agreement to acquire Horizon Bancorp, Inc. and its subsidiary, Horizon Bank & Trust, SSB.

The acquisition will add $143 million in assets and $129 million in deposits to Compass in Texas.

It also gives Compass eight bank offices in the capital city, home to the University of Texas and a booming high-technology manufacturing center. Earlier this year, Compass purchased Peoples Bancshares, Inc. in Belton, Temple and Salado strategically located just north of Austin along the I-35 corridor.

"We've made no secret of wanting to be in Austin because of its strong diversified and growing economy," said Compass chairman and chief executive officer D. Paul Jones, Jr. "The acquisition will add value to our franchise and allow us to compete in another important Texas market."

"Entering the city with eight locations initially will give us a strong base from which we can introduce Compass' outstanding service and products to our new customers," Jones said.

Terms of the agreement call for Compass to exchange 888,889 shares of its common stock for all of the 1,388,757 shares of outstanding common stock and options to acquire 190,408 shares common stock of Horizon Bancorp, Inc. Assuming all options are exercised, each Horizon shareholder will receive 0.5629 shares of Compass Bancshares, Inc. common stock for each share of Horizon Bancorp, Inc. common stock. Shares of Horizon's common stock are traded through the NASDAQ national market system under the symbol LOAN.

The transaction is subject to shareholder and regulatory approval, and is expected to be finalized in the first quarter of 1997.

Upon completion of this acquisition and the pending purchase of Greater Brazos Valley Bancorp, Inc. in Bryan/College Station and locations under construction, Compass will exceed $5.0 billion in Texas assets and operate 101 offices throughout the state.

Compass Bancshares, Inc. is an $11.6 billion bank holding company headquartered in Birmingham, Alabama with 208 bank offices and 4,300 employees in Alabama, Florida and Texas.

The company reported record earnings of $94.5 million for the first nine months of 1996, and has a capital base of $777 million. Shares of Compass' common stock are traded through the NASDAQ national market system under the symbol CBSS.

CONTACT: Dan D'Armond, 713/623-2666