8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 15, 2003

Commerce Bancshares, Inc.

(Exact name of registrant as specified in its charter)

Missouri	0-2989	43-0889454
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
1000 Walnut, Kansas City, MO		64106
(Address of principal executive offices)		(Zip Code)

(816) 234-2000

(Registrant’s telephone number, including area code)

TABLE OF CONTENTS

	Item 7. Financial Statements and Exhibits
	Item 9. Regulation FD Disclosure and Information Provided Under Item 12 (Disclosure of Results of Operations and Financial Condition)
SIGNATURE
INDEX TO EXHIBITS
EX-99.1 Press Release

The information in this Current Report on Form 8-K, including the exhibit, is furnished pursuant to Items 9 and 12 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, the information in this Current Report on Form 8-K, including the exhibit, shall not be deemed to be incorporated by reference into the filings of Commerce Bancshares, Inc. under the Securities Act of 1933, as amended.

Item 7. Financial Statements and Exhibits

(c) Exhibits.

This exhibit is furnished pursuant to Item 9 and Item 12 hereof and should not be deemed to be “filed” under the Securities Exchange Act of 1934.

Exhibit Number	Description
99.1	Press release dated July 15, 2003

Item 9. Regulation FD Disclosure and Information Provided Under Item 12 (Disclosure of Results of Operations and Financial Condition)

A copy of the press release issued July 15, 2003, by the Registrant announcing Second Quarter 2003 earnings is furnished under Item 12 of this Current Report on Form 8-K as Exhibit 99.1.

All information included in this Current Report on Form 8-K is available on the Company’s Internet site at http://www.commercebank.com/ir.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

COMMERCE BANCSHARES, INC.
By:	/s/ Jeffery D. Aberdeen Jeffery D. Aberdeen Controller (Chief Accounting Officer)

Date: July 16, 2003

INDEX TO EXHIBITS

Exhibit Number	Description
99.1	Press release dated July 15, 2003

EX-99.1 3 c78219exv99w1.htm EX-99.1 PRESS RELEASE

      Exhibit 99.1

FOR IMMEDIATE RELEASE:
Tuesday, July 15, 2003

COMMERCE BANCSHARES, INC. REPORTS SECOND
QUARTER EARNINGS PER SHARE GROWTH OF 6%

     Commerce Bancshares, Inc. announced record earnings of $.75 per share for the three months ended June 30, 2003, an increase of 5.6% compared to $.71 per share in 2002. Net income for the second quarter amounted to $50.5 million compared with $49.5 million in the same period last year. For the quarter, the return on average equity was 14.0% and the return on assets was 1.49%. The efficiency ratio for the second quarter was 58.8%, a decrease compared to the first quarter.

     For the first six months ended June 30, 2003, earnings per share totaled $1.45, an increase of 6.6% compared with $1.36 in 2002. Net income amounted to $97.7 million compared with $95.0 million for 2002, an increase of 2.9%.

     In announcing these results, David W. Kemper, Chairman and CEO, said, “Despite a sluggish economy and continued decline in short-term interest rates, we are pleased that total revenue increased 4.3% compared to the second quarter 2002, and increased 1.8% compared to the first quarter 2003. This growth was driven by increased bank card transaction fees, mortgage banking revenues and modest growth in net interest income due to higher total earning assets. Non-interest expense for the second quarter rose 3.9% compared to the same period last year, but declined 2.1% when compared to the first quarter.”

     Mr. Kemper continued, “Asset quality remains strong with our allowance for loan losses totaling over $132.7 million and 436% of non-performing loans. Net charge-offs for the first half of 2003 were .46% of average loans, slightly higher than .37% in the previous year. Our loan loss reserve amounted to 1.64% of total loans.”

     Total assets at June 30, 2003 were $14.0 billion, total loans were $8.1 billion, and total deposits were $10.2 billion. Total revenue (net interest income and non-interest income) amounted to $401.2 million in the first six months of 2003 compared with $383.8 million in the same period last year.

     Commerce Bancshares, Inc. is a registered bank holding company offering a full line of banking services, including investment management and securities brokerage. The Company currently operates in over 330 banking locations in Missouri, Illinois, and Kansas. The Company also has operating subsidiaries involved in mortgage banking, credit related insurance, venture capital, and real estate activities.

(more)

     Posted to the Company’s web site is management’s discussion of second quarter results. To see this information please visit our web site at www.commercebank.com.

* * * * * * * * * * * * * * *

For additional information, contact
Jeffery Aberdeen, Controller
at PO Box 13686, Kansas City, MO
or by telephone at (816) 234-2081
Web Site: http://www.commercebank.com
Email: mymoney@commercebank.com

(Amounts in thousands)	3/31/03			6/30/03			6/30/02
Non-Accrual Loans	$	32,026		$	30,444		$	27,243
Foreclosed Real Estate	$	1,748		$	1,836		$	1,660
Total Non-Performing Assets	$	33,774		$	32,280		$	28,903
Non-Performing Assets to Loans		.42	%		.40	%		.37	%
Non-Performing Assets to Total Assets		.25	%		.23	%		.23	%
Loans 90 Days & Over Past Due – Still Accruing	$	21,075		$	20,232		$	20,630

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
FINANCIAL HIGHLIGHTS

		For the Three Months Ended									For the Six Months Ended
		March 31			June 30			June 30			June 30			June 30
(Unaudited)		2003			2003			2002			2003			2002
FINANCIAL SUMMARY (In thousands, except per share data)
Net interest income		$	124,210		$	128,687		$	124,566		$	252,897		$	245,254
Taxable equivalent net interest income			124,854			129,331			125,022			254,185			246,216
Non-interest income			74,606			73,701			69,427			148,307			138,525
Provision for loan losses			10,020			9,999			6,668			20,019			14,067
Non-interest expense			120,734			118,215			113,792			238,949			230,131
Net income			47,228			50,487			49,512			97,715			94,994
Cash dividends			10,992			10,873			10,647			21,865			21,306
Net total loan charge-offs			8,976			9,455			6,668			18,431			14,067
	Net business charge-offs		2,268			3,104			1,118			5,372			2,479
	Net credit card charge-offs		4,709			4,641			4,309			9,350			8,601
	Net personal banking charge-offs		2,391			1,549			1,472			3,940			3,141
	Net real estate charge-offs (recov)		(392	)		161			(231	)		(231	)		(154	)
Per share:
	Net income — basic	$	0.71		$	0.76		$	0.72		$	1.47		$	1.38
	Net income — diluted	$	0.70		$	0.75		$	0.71		$	1.45		$	1.36
	Cash dividends	$	0.165		$	0.165		$	0.155		$	0.330		$	0.310
Diluted wtd. average shares o/s			67,573			66,851			69,741			67,210			69,721
RATIOS
Average loans to deposits			80.52	%		80.16	%		78.12	%		80.34	%		78.11	%
Return on total average assets			1.46	%		1.49	%		1.63	%		1.48	%		1.57	%
Return on total average stockholders’ equity			13.30	%		14.02	%		14.81	%		13.66	%		14.48	%
Efficiency ratio*			61.20	%		58.82	%		58.03	%		60.00	%		59.47	%
AT PERIOD END
Book value per share based on total stockholders’ equity		$	21.51		$	22.39		$	20.07
Market value per share		$	36.55		$	38.92		$	42.13
Allowance for loan losses as a percentage of loans			1.65	%		1.64	%		1.68	%
Tier I leverage ratio			9.99	%		9.82	%		10.39	%
Common shares outstanding			66,398,106			65,849,382			68,443,671
Shareholders of record			5,081			5,003			5,161
Number of bank/ATM locations			333			332			342
Number of bank charters			4			4			4
Full-time equivalent employees			5,013			4,982			5,021

	June 30		June 30
OTHER YTD INFORMATION	2003		2002
High market value per share	$	41.50	$	44.62
Low market value per share	$	35.20	$	35.81

* The efficiency ratio is calculated as non-interest expense (excluding intangibles amortization) as a percent of net interest income and non-interest income (excluding gains/losses on securities transactions).

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

			For the Three Months Ended							For the Six Months Ended
(Unaudited)			March 31		June 30		June 30			June 30		June 30
(In thousands, except per share data)			2003		2003		2002			2003		2002
INTEREST INCOME
Interest and fees on loans			$	110,972	$	109,407	$	117,796		$	220,379	$	236,908
Interest on investment securities				44,464		50,034		44,843			94,498		89,026
Interest on federal funds sold and securities purchased under agreements to resell				148		207		411			355		952
		Total interest income		155,584		159,648		163,050			315,232		326,886
INTEREST EXPENSE
Interest on deposits:
	Savings, interest checking and money market			8,081		8,106		12,100			16,187		24,093
	Time open and C.D.’s of less than $100,000			13,857		12,704		17,872			26,561		39,121
	Time open and C.D.’s of $100,000 and over			3,951		3,900		4,743			7,851		9,761
Interest on other borrowings				5,485		6,251		3,769			11,736		8,657
		Total interest expense		31,374		30,961		38,484			62,335		81,632
		Net interest income		124,210		128,687		124,566			252,897		245,254
Provision for loan losses				10,020		9,999		6,668			20,019		14,067
		Net interest income after provision for loan losses		114,190		118,688		117,898			232,878		231,187
NON-INTEREST INCOME
Trust fees				14,524		15,074		15,774			29,598		31,213
Deposit account charges and other fees				22,576		23,420		22,793			45,996		43,886
Bank card transaction fees				14,466		16,057		14,229			30,523		27,112
Trading account profits and commissions				4,394		3,566		3,826			7,960		7,871
Consumer brokerage services				2,193		2,312		2,580			4,505		5,122
Mortgage banking revenue				1,031		1,620		1,066			2,651		1,637
Net gains (losses) on securities transactions				2,272		2,169		(955	)		4,441		(840	)
Other				13,150		9,483		10,114			22,633		22,524
		Total non-interest income		74,606		73,701		69,427			148,307		138,525
NON-INTEREST EXPENSE
Salaries and employee benefits				68,593		66,006		62,073			134,599		128,000
Net occupancy				10,338		9,439		8,207			19,777		16,634
Equipment				5,878		6,209		6,003			12,087		11,114
Supplies and communication				8,538		8,402		8,221			16,940		16,164
Data processing and software				9,876		9,889		12,476			19,765		24,352
Marketing				3,106		3,957		3,628			7,063		6,996
Other intangible assets amortization				450		449		668			899		1,392
Other				13,955		13,864		12,516			27,819		25,479
		Total non-interest expense		120,734		118,215		113,792			238,949		230,131
Income before income taxes				68,062		74,174		73,533			142,236		139,581
Less income taxes				20,834		23,687		24,021			44,521		44,587
NET INCOME			$	47,228	$	50,487	$	49,512		$	97,715	$	94,994
Net income per share — basic			$	0.71	$	0.76	$	0.72		$	1.47	$	1.38
Net income per share — diluted			$	0.70	$	0.75	$	0.71		$	1.45	$	1.36
Cash dividends per common share			$	0.165	$	0.165	$	0.155		$	0.330	$	0.310

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(Unaudited)			March 31			June 30			June 30
(In thousands)			2003			2003			2002
ASSETS
Loans, net of unearned income			$	7,988,171		$	8,113,302		$	7,729,147
Allowance for loan losses				(132,162	)		(132,706	)		(129,973	)
		Net loans		7,856,009			7,980,596			7,599,174
Investment securities:
	Available for sale			4,120,986			4,665,669			3,460,586
	Trading			44,639			26,066			31,517
	Non-marketable			70,605			69,533			64,065
		Total investment securities		4,236,230			4,761,268			3,556,168
Federal funds sold and securities purchased under agreements to resell				47,505			25,660			36,141
Cash and due from banks				759,615			661,335			610,625
Land, buildings and equipment — net				334,685			335,852			330,869
Goodwill				48,522			48,522			43,224
Other intangible assets — net				3,517			3,068			4,893
Other assets				156,319			140,108			128,245
		Total assets	$	13,442,402		$	13,956,409		$	12,309,339
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
	Non-interest bearing demand		$	1,601,303		$	1,662,825		$	1,337,705
	Savings, interest checking and money market			5,977,141			6,003,668			5,774,463
	Time open and C.D.’s of less than $100,000			1,899,008			1,840,229			2,030,683
	Time open and C.D.’s of $100,000 and over			801,199			721,153			690,975
		Total deposits		10,278,651			10,227,875			9,833,826
Federal funds purchased and securities sold under agreements to repurchase				1,218,697			1,684,256			671,369
Long-term debt and other borrowings				362,143			413,134			340,787
Other liabilities				154,599			156,992			89,899
		Total liabilities		12,014,090			12,482,257			10,935,881
Stockholders’ equity:
	Preferred stock			—			—			—
	Common stock			336,940			336,940			328,219
	Capital surplus			295,245			295,391			237,456
	Retained earnings			743,669			783,283			754,952
	Treasury stock			(35,528	)		(56,521	)		(17,518	)
	Other			(2,363	)		(2,234	)		(2,025	)
	Accumulated other comprehensive income			90,349			117,293			72,374
		Total stockholders’ equity		1,428,312			1,474,152			1,373,458
		Total liabilities and stockholders’ equity	$	13,442,402		$	13,956,409		$	12,309,339

COMMERCE BANCSHARES, INC. and SUBSIDIARIES
AVERAGE BALANCES

		For the Three Months Ended									For the Six Months Ended
(Unaudited)		March 31			June 30			June 30			June 30			June 30
(Dollars in thousands)		2003			2003			2002			2003			2002
Loans:
Business		$	2,273,809		$	2,245,245		$	2,433,479		$	2,259,448		$	2,407,878
Real estate — construction			403,090			403,705			477,822			403,399			459,033
Real estate — business			1,771,035			1,831,897			1,452,686			1,801,634			1,463,383
Real estate — personal			1,275,086			1,294,147			1,247,701			1,284,669			1,261,859
Personal banking			1,722,157			1,758,271			1,594,365			1,740,314			1,576,045
Credit card			518,026			518,356			479,981			518,192			483,313
	Total loans		7,963,203			8,051,621			7,686,034			8,007,656			7,651,511
Investment securities (excluding unrealized gains and losses):
Available for sale			3,987,121			4,305,198			3,362,663			4,147,038			3,437,432
Trading			28,714			19,648			13,298			24,156			10,597
Non-marketable			70,201			71,953			65,673			71,082			65,734
	Total investment securities		4,086,036			4,396,799			3,441,634			4,242,276			3,513,763
Federal funds sold and securities purchased under agreements to resell			42,214			59,687			89,793			50,999			107,153
Total interest earning assets			12,091,453			12,508,107			11,217,461			12,300,931			11,272,427
Total assets			13,135,641			13,550,222			12,149,006			13,344,077			12,200,821
Interest bearing deposits:
Savings			362,014			384,002			362,536			373,069			351,112
Interest checking			374,372			389,671			297,484			382,064			296,370
Money market			5,504,250			5,580,366			5,460,045			5,542,518			5,435,284
Time open & C.D.’s of less than $100,000			1,920,874			1,872,368			2,074,133			1,896,487			2,109,880
Time open & C.D.’s of $100,000 and over			733,958			778,928			686,203			756,567			659,843
	Total interest bearing deposits		8,895,468			9,005,335			8,880,401			8,950,705			8,852,489
Borrowings:
Federal funds purchased and securities sold under agreements to repurchase			1,303,652			1,526,936			512,741			1,415,911			601,829
Long-term debt and other borrowings			363,401			387,755			361,193			375,645			376,477
	Total borrowings		1,667,053			1,914,691			873,934			1,791,556			978,306
Total interest bearing liabilities			10,562,521			10,920,026			9,754,335			10,742,261			9,830,795
Non-interest bearing deposits			994,824			1,038,701			958,148			1,016,884			943,540
Total stockholders’ equity			1,439,737			1,444,735			1,341,097			1,442,250			1,323,129
Net yield on interest earning assets (tax-equivalent basis)			4.19	%		4.15	%		4.47	%		4.17	%		4.40	%

COMMERCE BANCSHARES, INC.
Management Discussion of Second Quarter Results
June 30, 2003

For the quarter ended June 30, 2003, net income amounted to $50.5 million, an increase of 2.0% over the second quarter of the previous year. Return on assets was 1.5% and the return on equity totaled 14.0%. For the quarter, the efficiency ratio was 58.8%. The increase in net income over the 2nd quarter of last year was the result of a 3.3% increase in net interest income, coupled with growth in non-interest income of 6.2%. Non-interest expense increased 3.9% compared to the same quarter last year and the provision for loan losses also grew by $3.3 million.

Balance Sheet Review
During the 2nd quarter, average loans grew 1.1% compared to the 1st quarter of 2003, and were up 4.8% compared with the same period last year. Compared to the 1st quarter of this year, average business real estate, personal real estate, consumer and home equity loans grew by $61 million, $19 million, $27 million and $11 million, respectively, while business loans declined by $29 million. Economic uncertainty continues to limit growth in business loans as businesses have refrained from growing inventories and receivables, which drive commercial borrowings. Low interest rates, however, continue to create demand for business real estate loans that are financed using variable rates or shorter maturities. Mortgage loan originations remain at higher than historical levels due to lower rates, and the growth in these loans this quarter is the result of the Company retaining adjustable rate and 15 year fixed rate mortgages on its balance sheet. Consumer (consisting mainly of automobile loans) and home equity loans also showed good growth, as demand for such products remained steady.

Available for sale investment securities, excluding fair value adjustments, increased on average by $318.1 million or 8.0% this quarter compared with the previous quarter. The increase in average securities resulted from purchases of new securities with liquidity obtained from increases in short-term borrowings and deposits. The growth in securities occurred mainly in the categories of U.S. government and agency and asset-backed securities.

Total average deposits increased by $153.7 million during the 2nd quarter compared to the 1st quarter of this year, or an annualized growth rate of 6.2%. The increase was due mainly to increases in money market accounts ($76 million), jumbo certificates of deposit ($45 million), and non-interest bearing demand accounts ($44 million), offset by a decline in retail certificates of deposit ($49 million).

During the quarter, average borrowings increased by $247.6 million primarily due to growth in federal funds purchased and securities sold under agreements to repurchase.

The average loans to deposits ratio for the quarter decreased slightly from the 1st quarter to 80.2%. The decrease in this ratio results from growth in the deposit portfolio, offset with modest growth in the loan portfolio.

Net Interest Income
In the 2nd quarter, net interest income amounted to $128.7 million, an increase of approximately $4.1 million or 3.3% compared to the 2nd quarter of last year, and increased $4.5 million or 3.6% compared with the previous quarter of this year. The net yield on earning assets declined 4 basis points in the current quarter to 4.15%.

The modest increase in net interest income in the 2nd quarter of 2003 was the result of lower rates on deposits and higher earnings on the Company’s inflation indexed treasury securities, partly offset by the continued downward re-pricing of earning assets. Compared to the 1st quarter of 2003, average rates earned on loans declined 20 basis points while rates paid on interest bearing deposits declined 8 basis points. Average rates earned on investment securities increased by 15 basis points mainly a result of a $5.5 million increase in inflation related earnings recognized in the 2nd quarter. An adjustment of $783 thousand, reducing interest income on the Company’s CMO’s and mortgage and asset-backed securities, was made to recognize the result of faster principal payments received on these securities. Growth in the average balance of the investment securities portfolio of $319.8 million added $3.3 million in interest income this quarter; however, new securities purchased were at lower rates, contributing to the lower net yield on earning assets this quarter.

During the quarter, interest income increased $4.1 million over the previous quarter as a result of higher earning asset volumes for both loans and investment securities, the inflation related income noted above, and the effects of a slightly longer quarter (91 days vs 90 days). This increase was partly offset by lower rates earned on all loan products and on mortgage and asset-backed securities. The overall yield of interest earning assets declined 10 basis points to 5.14%. Total interest expense decreased $413 thousand during the current quarter compared with the previous quarter mainly due to lower average rates, but offset by an increase in short-term borrowings costs. The overall cost of interest bearing liabilities decreased 6 basis points during the quarter to 1.14%.

Non-Interest Income
For the 2nd quarter of 2003, total non-interest income amounted to $73.7 million compared with $69.4

COMMERCE BANCSHARES, INC.
Management Discussion of Second Quarter Results
June 30, 2003

million in the same quarter last year, or an increase of 6.2%. This increase resulted from higher net securities gains and growth in bank card, deposit account, and mortgage banking revenue. Bank card fees for the quarter increased 12.8% over the same period last year, primarily resulting from an 11.1% growth in cardholder and merchant revenues and a 13.4% increase in debit card fees. Deposit account fees in the 2nd quarter grew by 2.8% over last year due mainly to higher fees earned on commercial cash management accounts. Bond trading revenues, while still at strong levels, have decreased compared with previous quarters when demand was extremely high. Trust fees for the quarter were down 4.4% from the same quarter last year as a result of lower fees on personal trust accounts and continued lower asset valuations upon which fees are charged. Other income in 2nd quarter 2002 included gains on branch sales of $1.7 million that did not recur in 2003, while 1st quarter 2003 included gains on student loan sales of $4.1 million that were not repeated in the 2nd quarter of 2003. Additionally, operating lease revenues of $1.1 million related to the CBI Leasing subsidiary, which was acquired at the beginning of this year, were not present in the 2nd quarter of 2002.

Net securities gains amounted to $2.2 million for the 2nd quarter of 2003 compared to $2.3 million in the 1st quarter of 2003, and net losses of $955 thousand in the 2nd quarter of last year.

Non-Interest Expense
Non-interest expense for the quarter amounted to $118.2 million, an increase of $4.4 million, or 3.9%, compared with $113.8 million recorded in the 2nd quarter of last year.

Compared with the 2nd quarter last year, salaries and benefits expense increased 6.3% mainly due to normal merit increases, higher costs for incentive payments, and pension plan expense which was up $713 thousand. Full time equivalent employees totaled 4,982 and 5,021 at June 30, 2003 and 2002, respectively. Occupancy costs grew $1.2 million, or 15.0%, mainly as a result of higher depreciation and operating costs resulting from a recently renovated office building. Increased costs were also incurred for marketing, equipment and supplies. Also included in other expense were operating lease depreciation and related costs totaling $909 thousand pertaining to the CBI Leasing subsidiary. Offsetting these increases were lower costs for data processing ($2.6 million) and intangible asset amortization costs.

Income Taxes
The effective tax rate for the Company was 31.9% for the 2nd quarter of 2003, compared with an effective tax rate of 30.6% in the 1st quarter of this year and 32.7% in the 2nd quarter of 2002.

Credit Quality
Net loan charge-offs for the 2nd quarter of 2003 amounted to $9.5 million compared with $9.0 million in the 1st quarter of 2003 and $6.7 million in the 2nd quarter of last year. The ratio of annualized net charge-offs to total average loans this quarter was .47%, compared with .35% in the same quarter last year and .46% in the 1st quarter 2003. The increase in net charge-offs compared with the 2nd quarter last year was mainly the result of the charge down of two lease related loans by a total of $2.0 million, coupled with a charge down of a business loan by $500 thousand.

For the 2nd quarter of 2003, annualized net charge-offs on average credit card loans decreased to 3.59%, compared with 3.60% in the 2nd quarter of last year. Also, personal loan charge-offs decreased this quarter and amounted to .35% of average personal loans compared to .37% in the same period last year. The provision for loan losses for the quarter totaled $10.0 million, consistent with the provision recorded in the 1st quarter of this year, but up from $6.7 million in the 2nd quarter of last year. The allowance for loan losses at June 30, 2003 amounted to $132.7 million or 1.64% of total loans and represents 436% of total non-performing loans.

Total non-performing assets amounted to $32.3 million, a decrease of $1.5 million from the previous quarter, and amounted to .40% of loans. Non-performing assets are comprised of non-accrual loans ($30.5 million) and foreclosed real estate ($1.8 million). Loans past due more than 90 days and still accruing interest totaled $20.2 million at June 30, 2003.

Other
The Company maintains a treasury stock buyback program; and effective January 2003, was authorized by the Board of Directors to repurchase up to 4 million shares of its common stock. During the quarter ended June 30, 2003, the Company purchased 615,000 shares of treasury stock at an average cost of $38.30 per share.

Forward Looking Information
This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions and other statements that are not historical facts. Such statements are based on current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements.

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