Compass Bank

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Compass Bank logo.png

Compass Bank (originally the Central Bank and Trust Company) was a publicly-held banking corporation founded in Birmingham in 1964. The company was acquired by the Banco Bilbao Vizcaya Argentaria (BBVA) in 2007 and operated as an independent division, known as BBVA Compass. BBVA's US operations were sold to PNC Bank of Pittsburgh, Pennsylvania in 2020.

History

Central Bank logo.png

The Central Bank and Trust Company was incorporated on December 31, 1963 by Frank Hardy, Wendell Taylor, Schuyler Baker, Stewart Welch, and John Israel with $1.226 million in capital. Other founding directors included Harry Brock Jr, Hugh Daniel, and Frank L. Hardy. The bank opened for business on March 2, 1964. Soon later, Wally Nall, John Evins, Inos Heard, and Tom Jernigan joined the board.

In 1967 the company moved into a new 15-story new headquarters building on 20th Street South. By the following year, aggressive marketing and creative services had propelled the state-chartered bank's assets to $82 million, or 7% of the Birmingham market. The next year, Central made an unprecedented hostile takeover bid for Decatur's State National Bank, the only bank that could open branches across county lines. Central's bid was supported by Hugh Agricola and other shareholders of the First National Bank of Gadsden, which had been bought by State National. It was financed by a $10 million line of credit from the Bank of Virginia, which was pioneering its own statewide banking company. By July, Central was able to assemble a voting trust representing about a third of State National's shares in advance of a public offering of $70 per share. The City National Bank of Birmingham, which had also been planning a merger, countered with $80 per share. Central instructed their brokers to buy as many shares as they could up to $85 and ended with enough shares to control State National's board.

In response, Alabama's other major banks filed several court actions in an attempt to block the merger. One action, brought in Federal Court, did succeed with blocking it, on the technicality that Alabama's banking laws, under which the state-chartered bank operated, were incompatible on a few points with Federal banking laws that governed the national banks in the area of mergers. While this finding was being appealed, banking lobbyists were pushing for new legislation that would prevent the merged company from being able to operate in more than one county. Brock and Central Bank's other officers personally lobbied against the bill, and though it would have passed easily if brought to a vote, was killed off in committee.

Statewide banking

1973 logo for Central Bank of Birmingham

The result of the failed bill was that statewide bank holding companies were recognized as a legal possibility for the first time, and the other major banks moved quickly to organize while Central was waiting for a decision on their appeal. Another group, led by Frank Plummer, Norman Pless, and Bob Lowery even stole Brock's intended name for the holding company, First Alabama Bancshares. Central did win their appeal and formed the Central and State National Corporation, which was soon renamed Central Bancshares of the South. The company moved into the new 20-story Daniel Building at 15 20th Street South in midtown in 1970.

In 1973 this new holding corporation issued a new stock offering to fuel the growth of the statewide network. In 1979 the bank opened a large branch office at 1560 Montgomery Highway in Hoover.

In 1981 Central and a coalition of other bank holding companies successfully lobbied for the Bank Merger Act, allowing statewide bank branching under a single banking company. For the next two years, the combined holdings of Central Bank of the South were the largest single bank in Alabama.

Interstate banking

Quickly, the bank began pursuing interstate banking in the legislature, and was successful, again with the help of other big banks, in passing enabling legislation that took effect in 1986.

Their first acquisition out of state was the failing First National Bank of Crosby, Texas in February 1987. Central was the first out-of-state bank to operate in Texas, and they already had their foothold in Harris County, where Houston is located. After they established another group in the Dallas area, they created a new holding company, Compass Bancshares of Texas, with headquarters in Houston. As other banks were acquired in Texas, Florida and New Mexico, the Compass name was applied to the entire corporation.

Sale

D. Paul Jones took over the CEO position from Brock in 1991. Rumors of sales of Compass to larger banks swirled through the 1990s, with Jones actually blocking a sale to First Union which was being engineered by his predecessor.

On February 16, 2007, Compass announced that it would be acquired for $9.6 billion ($71.82 per share) by the Banco Bilbao Vizcaya Argentaria, Spain's second-largest bank. The new owners kept Compass Bank's management in place as an independent US subsidiary, rebranded as BBVA Compass.

After Jones' retirement in 2008, Gary Hegel became CEO. BBVA Compass was merged with the Laredo National Bank, State National Bank and Texas State Bank and the corporate headquarters moved to Houston, Texas. Significant regional management and technical operations remained in Birmingham, split between the Daniel Building and the Harry B. Brock Administrative Center in Lakeview.

By 2019 the bank had grown to hold $91 billion in assets with 672 full-service banking offices in Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas. The division ranked as one of the United States' 30 largest banks and appeared on the S&P 500 Index and the Dow Jones Select Dividend Index.

BBVA Compass and its siblings (Francés in Argentina, Bancomer in Mexico, and Continental in Peru) were rebranded as BBVA in 2019. BBVA's US operations were sold to PNC Bank of Pittsburgh, Pennsylvania in November 2020.

Major acquisitions

  • First National Bank of Crosby, Texas - February 26, 1987
  • City National Bank of Plano, Texas - November 10, 1989
  • River Oaks Bancshares, Houston, Texas - March 28, 1991
  • Promenade Bancshares, Richardson, Texas - July 31, 1991
  • FWNB Bancshares, Carrollton, Texas - December 22, 1992
  • Cornerstone Bancshares, Dallas, Texas - January 19, 1993
  • First Federal Savings Bank of Northwest Florida, Ft Walton Beach, Florida - October 14, 1993
  • First Performance National Bank, Jacksonville, Florida - January 27, 1994
  • First Heights Bank FSB, Houston, Texas - October 1, 1994
  • Equitable Bankshares, Dallas, Texas - April 11, 1996
  • Post Oak Bank, Houston, Texas - April 19, 1996
  • CFB Bancorp, Jacksonville, Florida - August 23, 1996
  • Enterprise National Bank, Jacksonville, Florida - January 15, 1997
  • Horizon Bancorp, Austin, Texas - March 12, 1997
  • Central Texas Bancorp, Waco, Texas - July 15, 1997
  • GSB Investments, Jacksonville, Florida - January 13, 1998
  • Fidelity Resources Company, Dallas, Texas - February 9, 1998
  • Arizona Bank, Tucson, Arizona - December 15, 1998
  • Norwest/Well Fargo offices, Phoenix, Arizona - April 19, 1999
  • Heartland Bank, Austin, Texas - October 20, 1999
  • Western Bancshares, Albuquerque, New Mexico - January 13, 2000
  • MegaBank Financial Corporation, Denver, Colorado - April 3, 2000
  • Founders Bank of Arizona - July 17, 2000
  • FirsTier Corporation, Colorado - January 4, 2001
  • TexasBanc Holding Company, Fort Worth, Texas - March 24, 2006

Chief executives

References

  • Brock, Harry B. Jr (1991) A Competitive Spirit: How a Little Bank Made a Big Difference. New York: Newcomen Society. Publication No. 1351.
  • Goodman, Sherri C. (February 18, 2007) "Maverick Compass again bucks the system." The Birmingham News
  • "Compass Bancshares" (July 23, 2006) Wikipedia - accessed October 25, 2006
  • Compass Bank. Merger & Acquisition History - accessed February 18, 2007
  • Coker, Angel (April 24, 2019) "BBVA Compass to be rebranded to BBVA." Birmingham Business Journal