Magazine article American Banker

Compass Wins Another 'Outperform' from Piper

Magazine article American Banker

Compass Wins Another 'Outperform' from Piper

Article excerpt

Compass Bancshares Inc. won a favorable review Monday from a Piper Jaffray Inc. analyst, who said he "found the Compass story both compelling and consistent."

After traveling last week with D. Paul Jones Jr., the chairman and chief executive of the Birmingham, Ala., company, and Garrett R. Hegel, its chief financial officer, analyst Andrew Collins reiterated his "outperform" rating on its stock.

Acquisitions and building will increase Compass' branch total by 10% this year, to 423, Mr. Collins wrote in a research note. The $30.8 billion-asset company has announced plans to open 15 branch offices, mostly in high-growth markets including Texas, Arizona, and Colorado.

This quarter it is to complete its first bank acquisition since 2001. It is to pay $464 million in cash and stock for TexasBanc Holding Co. of Fort Worth, the parent company of the 24-branch TexasBank. The deal was announced in September.

Compass is likely to keep looking for ways to increase its concentration in commercial and commercial real estate loans, Mr. Collins wrote. In the third quarter, when it last broke them out, such loans totaled $11.6 billion, or 56% of its loan book, down from 58% a year earlier -- but Mr. Collins wrote that the pipeline of such loans seems "healthy, carrying over from a strong second half."

The company reported fourth-quarter earnings of $102.1 million, up 10.7% from a year earlier; per-share earnings of 81 cents met the average analyst estimate. Total loans increased 13.3%, to $21.4 billion, while deposits rose 19. …

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