Compass Bancshares to Acquire TexasBanc Holding Co. for $464 million

Further enhancing its position in high-growth Texas markets, Compass Bancshares, Inc. yesterday announced the signing of a definitive agreement to acquire Fort Worth-based TexasBanc Holding Co., the parent company of TexasBank. The combination creates a Southwestern powerhouse that will rank as the fifth largest bank in Texas and will rank fourth in the Dallas-Fort Worth-Arlington metropolitan area based on deposit market share.

Upon completion of the transaction, the combined companies will have total deposits of approximately $19.6 billion, of which $8.4 billion, or nearly 43 percent, will be located in Texas. In addition, the combined company will operate 163 banking centers in the Lone Star state including 68 in Dallas/Fort Worth, 42 in Houston, 23 in San Antonio, 22 in Austin and eight in Central Texas. With combined total assets of approximately $31.1 billion and a market capitalization of $6.1 billion, Compass will rank as the 28th largest U.S. bank holding company, with operations in Texas, New Mexico, Florida, Colorado, Arizona and Alabama.

Under terms of the definitive agreement, Compass will exchange approximately 5.0 million shares of its common stock plus $232 million of cash consideration for all of the outstanding shares of TexasBanc Holding Company. Based on Compass’ 10-day average closing stock price through September 15, 2005, and including cash consideration, the total transaction is valued at approximately $464 million. The transaction is subject to all required regulatory approvals, approval by TexasBanc shareholders and other customary conditions.

The combination is expected to be accretive on a GAAP basis to shareholders of the combined company in 2006 and thereafter. In addition, the combined company expects to incur restructuring costs of approximately $36 million pre-tax. The complementary strengths of the two companies are expected to generate significant revenue opportunities, although these opportunities are not included in the financial assumptions for the transaction.

“The acquisition of TexasBanc demonstrates our commitment to build long-term value for our shareholders through continued investment in high-growth markets that further enhance our future growth capabilities and that make financial sense,” said D. Paul Jones, Jr., Compass’ chairman and chief executive officer. “TexasBanc is a well-run company that has experienced outstanding profitable growth and has long been recognized in the Texas market as an organization which provides its customers with a high-level of personal service. The addition of TexasBanc’s distribution network compliments our existing Dallas franchise while enhancing our presence in the Fort Worth market. This combination will enable us to provide customers increased convenience to Compass locations, products and services.”

Jones added, “In addition to the natural synergies that this combination offers, I am especially pleased that Vernon Bryant will be joining our management team as regional president of our Fort Worth franchise with responsibility for running our combined corporate businesses in this market. Vernon is a well-respected leader who shares our passion for providing exceptional customer service, improving our communities, providing employees with a rewarding work environment and building long-term value for shareholders.”

TexasBanc president and chief executive officer Vernon Bryant added, “We are delighted to be joining an outstanding organization that shares our philosophy of personal customer service. The combination created by our two companies will allow us to better serve both our individual and business customers through increased branch convenience as well as access to a broader array of financial products and services. And due to the complimentary nature of our businesses, we expect that there will be minimal disruption for our customers, employees and local communities. The union of our two companies will also mean increased opportunities for employees, who are now part of a much larger, growing and diversified financial organization.”