BBVA Compass

Compass Bank is a publicly held company and a subsidiary of Compass Bancshares, Inc., a financial holding company with $30.1 billion in assets and 385 full-service banking offices in Alabama, Arizona, Colorado, Florida, New Mexico, and Texas. Compass is one of the nation's 30 largest banks, and is a member of the S&P 500 Index and the Dow Jones Select Dividend Index. Its headquarters are in the Daniel Building at 15 20th Street South in Midtown Birmingham.

History

The company was founded in 1964 as Central Bank and Trust Company by Harry Brock, Jr, Schuyler Baker and Hugh Daniel with $1 million of capital. Other founding directors included Frank L. Hardy, John R. Israel, Wendell H. Taylor and Stewart Welch. Soon later, Wally Nall, John Evins, Inos Heard, and Tom Jernigan joined the board.

By 1968 agressive marketing and creative services propelled the state-chartered bank's assets to $82 million, or 7% of the Birmingham market after four years. The next year, Central made an unprecedented hostile takeover bid for Decatur's State National Bank, one of only a few with the right by charter to open branches across county lines. The 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, died in committee without reaching the floor for a vote.

Statewide banking

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. In 1973 this new holding corporation issued a new stock offering to fuel the growth of the statewide network.

In 1981 Central and a coalition of other bank holding companies successfully lobbied for a bill 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

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 (BBVA), the second-largest bank in Spain.

External links

• Compass Bank website

References

• Brock, Harry B. Jr (1991) A Competitive Spirit: How a Little Bank Made a Big Difference. New York: Newcomen Society. Publication No. 1351.
• "Spanish bank to buy Compass in blockbuster deal." (February 15, 2007) Birmingham News.
• Compass Bancshares. (2006, July 23). In Wikipedia, The Free Encyclopedia. Retrieved 16:53, October 25, 2006 [1]