FIRST STATE BANCORPORATION - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 2003.
or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from ______________________________ to
_______________________________

COMMISSION FILE NUMBER 22-25144

FIRST STATE BANCORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

NEW MEXICO 85-0366665
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

7900 JEFFERSON NE
ALBUQUERQUE, NEW MEXICO 87109
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

(505) 241-7500
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes [X] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 7,416,346 shares of common
stock, no par value, outstanding as of May 12, 2003.

FIRST STATE BANCORPORATION AND SUBSIDIARY

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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Balance Sheets
(unaudited)
(Dollars in thousands, except per share amount)

See accompanying notes to unaudited consolidated condensed financial statements.

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FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Statements of
Operations For the three months ended March 31, 2003 and 2002
(unaudited)
(Dollars in thousands, except per share amount)

See accompanying notes to unaudited consolidated condensed financial statements.

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FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Statements of Comprehensive
Income For the three months ended March 31, 2003 and 2002
(unaudited)
(Dollars in thousands, except per share amount)

See accompanying notes to unaudited consolidated condensed financial statements

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FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Statements of Cash
Flows For the three months ended March 31, 2003 and 2002
(unaudited)
(Dollars in thousands, except per share amount)

See accompanying notes to unaudited consolidated condensed financial statements

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FIRST STATE BANCORPORATION AND SUBSIDIARY
Notes to Consolidated Condensed Financial Statements
(unaudited)

1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

The accompanying consolidated condensed financial statements are unaudited and
include our accounts and those of our subsidiary, First State Bank N.M. (the
"Bank") (100% owned). All significant intercompany accounts and transactions
have been eliminated. Information contained in our consolidated condensed
financial statements and notes thereto should be read in conjunction with our
consolidated financial statements and notes thereto contained in our Annual
Report on Form 10-K for the year ended December 31, 2002.

The consolidated condensed financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and instructions to Form 10-Q. Accordingly,
they do not include all of the information and notes required by accounting
principles generally accepted in the United States of America for complete
financial statements. In our opinion, all adjustments (consisting only of
normally recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period ended March 31,
2003, are not necessarily indicative of the results that may be expected for the
year ending December 31, 2003.

2. STOCK BASED COMPENSATION

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure". This statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition for a voluntary change to the fair value-based method of accounting
for stock-based employee compensation. In addition, this statement amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The adoption of this statement as of December 31, 2002 had no effect on
our consolidated financial position or results of operations.

We apply the intrinsic value-based method of accounting prescribed by Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees and related interpretations in accounting for its fixed plan stock
options." As such, compensation expense is recorded on the date of grant only if
the current market price of the underlying stock exceeds the exercise price.
SFAS No. 123, "Accounting for Stock-Based Compensation," established accounting
and disclosure requirements using a fair value-based method of accounting for
stock-based employee compensation plans. As allowed by SFAS No. 123, we have
elected to continue to apply the intrinsic value-based method and have included
the disclosure required by SFAS No. 148.

Compensation expense of $0 and $3,444 was recognized in the first quarter of
2003 and 2002, respectively, pursuant to the grant of options. Had compensation
costs been determined consistent with the fair value method of SFAS No. 123 at
the grant dates for awards, net income and earnings per common share would have
changed to the pro forma amounts indicated below.

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3. EARNINGS PER COMMON SHARE

Basic earnings per share are computed by dividing net income (the numerator) by
the weighted-average number of common shares outstanding during the period (the
denominator). Diluted earnings per share are calculated by increasing the basic
earnings per share denominator by the number of additional common shares that
would have been outstanding if dilutive potential common shares for options had
been issued.

The following is a reconciliation of the numerators and denominators of basic
and diluted earnings per share for the quarters ended March 31:

4. TREASURY STOCK

Our Board of Directors has authorized us to purchase up to 525,000 shares of our
common stock. As of March 31, 2003, we have purchased 392,050 shares, including
15,000 shares totaling $330,644 during the first three months of 2003. We may
purchase additional shares, the amount of which will be determined by market
conditions.

5. ACQUISITION OF FIRST COMMUNITY INDUSTRIAL BANK

We completed our acquisition of First Community Industrial Bank ("First
Community") on October 1, 2002 for approximately $67 million. We financed this
acquisition through a public offering of our common stock in August 2002, which
netted approximately $51.0 million and through the issuance of approximately
$25.0 million in trust preferred securities in June of 2002. The acquisition was
accounted for using the purchase method of accounting, and accordingly, the
assets and liabilities of First Community were recorded at their respective fair
values on October 1, 2002. We acquired approximately $343 million in loans and
approximately $242 million in deposits and recognized goodwill of approximately
$43 million related to the transaction. The First Community account balances
acquired on October 1, 2002 and the results of operations since October 1, 2002
are included in the results of First State.

During the first quarter of 2003, we completed the sale of certain mortgage
loans available for sale obtained in the acquisition of First Community in 2002.
The sale to unrelated third parties included 227 loans with a carrying value of
approximately $8.5 million. The sale of the mortgage loans, which had been
recorded at their fair value on the date of acquisition, resulted in a discount
of approximately $277,000 which was recorded as a reduction of goodwill. This
reduction of goodwill was partially offset by $22,000 of additional items
related to the acquisition.

The pro forma financial information below presents the condensed consolidated
financial results assuming that First Community, acquired October 1, 2002, had
been acquired at the beginning of 2002 and includes the effect of amortization
of other acquired identifiable intangible assets from that date. This pro forma
information is presented for informational purposes only and is not necessarily
indicative of the results of future operations that would have been achieved had
the acquisition taken place at the beginning of 2002. Pro forma information
follows:

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

CONSOLIDATED CONDENSED BALANCE SHEETS

Our total assets decreased by $3.2 million from $1.387 billion as of December
31, 2002, to $1.384 billion as of March 31, 2003. The decrease was primarily
made up of a $29.9 million decrease in cash and cash equivalents, a $10.8
million decrease in investment securities, and a $37.3 million increase in net
loans. The decreases in cash and cash equivalents and investments securities
were a result of a $25.9 million seasonal decrease in securities sold under
agreements to repurchase.

The following table presents the amounts of our loans, by category, at the dates
indicated.

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Deposits, which are our main source of funds for loans and investments,
increased by $19.1 million from $1.080 billion as of December 31, 2002, to
$1.099 billion as of March 31, 2003. Securities sold under agreements to
repurchase decreased $25.9 million from $70.8 million at December 31, 2002 to
$44.9 million at March 31, 2003. This decrease appears to be a seasonal decrease
as businesses' made annual income tax payments for the year ended December 31,
2002. The following table represents customer deposits, by category, at the
dates indicated.

CONSOLIDATED RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2003

Our net income for the three months ended March 31, 2003, was $3.5 million, an
increase of $1.4 million or 66.1% from $2.1 million for the same period of 2002.
The increase in net income resulted from an increase in net interest income
before provision for loan losses of $5.4 million and an increase in non-interest
income of $708,000, partially offset by increases in non-interest expenses of
$3.6 million and income taxes of $800,000. Our annualized return on average
assets was 1.01% for the three months ended March 31, 2003, compared to 1.03%
for the same period of 2002.

The net interest income before the provision for loan losses increased $5.4
million to $14.9 million for the first quarter of 2003 compared to $9.4 million
for the first quarter of 2002. This increase was composed of a $7.4 million
increase in total interest income and a $2.0 million increase in total interest
expense. The increase in interest income was composed of an increase of $9.4
million due to increased average interest earning assets of $493.6 million,
offset by a $2.0 million decrease due to a 0.39% decrease in the yield on
average interest earning assets. The increase in average interest-earning assets
occurred in loans and investment securities, and was made possible by the
acquisition of First Community in the fourth quarter of 2002 and our successful
efforts to increase market share in New Mexico. The increase in total interest
expense was composed of an increase of $5.0 million due to increased average
interest-bearing liabilities of $450.6 million, offset by a decrease of $3.0
million due to a .033% decrease in the cost of interest-bearing liabilities. The
increase in average interest-bearing liabilities was due to an increase in
average interest-bearing deposits of $353.6 million, an increase in average
borrowings of $79.0 million, and an increase in average trust preferred
securities of $25.0 million. The increase in interest-bearing deposits is a
result of the acquisition of First Community and our success in increasing
market share in New Mexico. The increase in borrowings is due to outstanding
FHLB advances of First Community. The additional trust preferred securities were
issued in June 2002 to help fund the First Community acquisition.

The decrease in yield on interest earning assets reflects the impact of the
Federal Reserve Bank's additional reduction of the discount rate in 2002. The
reduction in the discount rate contributed to a corresponding reduction in the
prime rate. A substantial portion of our loan portfolio consists of adjustable
rate loans whose rates are adjusted based upon the then prevailing prime rate.
The decrease in the prime rate has led to a corresponding reduction in the yield
on our loan portfolio. We aim to keep the maturity of our investment securities
relatively short. As a result of the current low rate environment, our policy of
investing in securities with short maturities has caused us to experience
reduced yields on our securities as they mature and are reinvested.

The decrease in our cost of interest bearing liabilities is a result of lower
interest payments made to our deposit and repurchase agreement customers. The
interest rate that we pay to our deposit and repurchase agreement customers is
influenced by the level of the discount rate. As a result of the reduction in
the discount rate made by the Federal Reserve Bank in 2002, we reduced the
interest rates that we pay on our customers' deposits and repurchase agreements
and reduced the corresponding interest payments to these customers. This
decrease was partially offset by the issuance of trust-preferred securities that
bear a higher interest rate than customer deposits or repurchase agreements.

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We believe that the competitive environment for deposits will significantly
determine the impact on the net interest margin of changes in interest rates. We
also believe that additional decreases in rates would cause further compression
of our net interest margin, while increases would cause an increase in our net
interest margin.

Our provision for loan losses was $1.047 million for the first quarter of 2003,
compared to $669,000 for the first quarter of 2002. Net charge-offs for the
first quarter of 2003 were $681,000 compared to $498,000 for the first quarter
of 2002. The allowance for loan losses to total loans was 1.16% and the
allowance for loan losses to non-performing loans was 123% at March 31, 2003,
compared to the allowance for loan losses to total loans of 1.31% and the
allowance for loan losses to non-performing loans of 533% at March 31, 2002.
Total non-performing assets to total assets were 0.74% at March 31, 2003,
compared to 0.27% at March 31, 2002. The increase in charge-offs and the
decrease in the percentage of the allowance for loan losses to total loans and
non-performing loans as of and for the quarter ended March 31, 2003 were
directly related to the higher level of non-performing loans at First Community.
We provide for loan losses based upon our judgments concerning the adequacy of
the allowance for loan losses considering such factors as loan growth,
delinquency trends, previous charge-off experience, and local and national
economic conditions.

Our total non-interest income increased by $708,000 to $3.6 million for the
three months ended March 31, 2003, compared to $2.9 million for the same period
of 2002. The increase was primarily composed of a $321,000 increase in gains on
sales of mortgage loans, caused by greater new home construction and refinancing
resulting from the lower interest rate environment, a $59,000 increase in credit
and debit card transaction fees resulting from increased transaction volume due
to increased market share, a $128,000 increase in service charges on deposits,
and other non-interest income which increased $140,000 resulting from increased
customer accounts and deposit activity.

We believe that if interest rates remain at current levels or begin to increase,
the demand for mortgage loans to refinance existing mortgage loans or for new
home construction will decrease and we will see a decrease in gains on sales of
mortgage loans and other loan fees associated with our mortgage lending
operations.

Our total non-interest expenses increased by $3.6 million to $11.8 million for
the first quarter of 2003, compared to $8.3 million for the same period of 2002.
This increase was due partially to a $2.0 million increase in salaries and
employee benefits, a $321,000 increase in occupancy expense, and a $223,000
increase in equipment expense. The increases in salary, occupancy, and equipment
expense are due primarily to the acquisition and merger of First Community and
increased commissions for the production of mortgage loans sold. The increase in
occupancy expense was also impacted by an additional branch office opened during
the quarter in Santa Fe, N.M. We anticipate that salaries and employee benefits,
occupancy, and equipment expenses will continue to increase modestly during the
remainder of fiscal 2003 as management continues to make strategic hires and
reposition branch locations in Colorado and Utah and open two additional
branches and a new support services facility in New Mexico.

ALLOWANCE FOR LOAN LOSSES

We use a systematic methodology, which is applied monthly, to determine the
amount of allowance for loan losses and the resultant provisions for loan losses
we consider adequate to provide for anticipated loan losses. The allowance is
increased by provisions charged to operations, and reduced by loan charge-offs,
net of recoveries. The following table sets forth information regarding changes
in our allowance for loan losses for the periods indicated. The principal factor
affecting the amount of the provision in each of the periods presented was
growth in the loan portfolio.

-10-

Potential problem loans are loans not included in non-performing loans that we
have doubts as to the ability of the borrowers to comply with present loan
repayment terms.

During the first quarter of 2003, we completed the sale of certain mortgage
loans available for sale obtained in the acquisition of First Community in 2002.
The sale to unrelated third parties included 227 loans with a carrying value of
approximately $8.5 million. Included in the sale were approximately $3 million
in face value of loans that were non-performing as of December 31, 2002. The
sale of the mortgage loans, which had been recorded at their fair value on the
date of acquisition, resulted in a discount of approximately $277,000 which was
recorded as a reduction of goodwill. This reduction of goodwill was partially
offset by $22,000 of additional items related to the acquisition.

LIQUIDITY AND CAPITAL EXPENDITURES

Our primary sources of funds are customer deposits, loan repayments, and
maturities of investment securities. We have additional sources of liquidity in
the form of borrowings. Borrowings include federal funds purchased, securities
sold under repurchase agreements, and borrowings from the Federal Home Loan
Bank.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The following tables set forth, for the periods indicated, information with
respect to average balances of assets and liabilities, as well as the total
dollar amounts of interest income from interest-earning assets and interest
expense from interest-bearing liabilities, resultant yields or costs, net
interest income, net interest spread, net interest margin, and our ratio of
average interest-earning assets to average interest-bearing liabilities. No tax
equivalent adjustments were made and all average balances are daily average
balance. Non-accruing loans have been included in the table as loans carrying a
zero yield.

-11-

To effectively measure and manage interest rate risk, we use gap analysis and
simulation analysis to determine the impact on net interest income under various
interest rate scenarios, balance sheet trends, and strategies. From these
analyses, we quantify interest rate risk and we develop and implement
appropriate strategies. Additionally, we utilize duration and market value
sensitivity measures when these measures provide added value to the overall
interest rate risk management process. The overall interest rate risk position
and strategies are reviewed by management and the Board of Directors of First
State Bank N.M. on an ongoing basis.

-12-

Rising and falling interest rate environments can have various impacts on a
bank's net interest income, depending on the short-term interest rate gap that
the bank maintains, the relative changes in interest rates that occur when the
bank's various assets and liabilities reprice, unscheduled repayments of loans,
early withdrawals of deposits and other factors. As of March 31, 2003, our
cumulative interest rate gap for the period up to three months was a positive
$174.3 million and for the period up to one year was a positive $231.4 million.
Based solely on our interest rate gap of twelve months or less, our net income
could be unfavorably impacted by decreases in interest rates or favorably
impacted by increases in interest rates.

The following table sets forth our estimate of maturity or repricing, and the
resulting interest rate gap of our interest-earning assets and interest-bearing
liabilities at March 31, 2003. The amounts are based upon regulatory reporting
formats and, therefore, may not be consistent with financial information
appearing elsewhere in this report that has been prepared in accordance with
accounting principles generally accepted in the United States of America. The
amounts could be significantly affected by external factors such as changes in
prepayment assumptions, early withdrawals of deposits, and competition.

FORWARD-LOOKING STATEMENTS

This document includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Forward-looking statements can be identified by the use of
forward-looking words such as "believe," "expect," "may," "will," "should,"
"seek," "approximately," "intend," "plan," "estimate," or "anticipate" or the
negative of those words or other comparable terminology. Forward-looking
statements involve inherent risks and uncertainties. A number of important
factors could cause actual results to differ materially from those in the
forward-looking statement. Some factors include fluctuations in interest rates,
inflation, government regulations, loss of key personnel, faster or slower than
anticipated growth, economic conditions, competition's responses to our
marketing strategy, and competition in the geographic and business areas in
which we conduct our operations.

ITEM 4. CONTROLS AND PROCEDURES.

Our principal executive officer and principal financial officer have, within 90
days of the filing date of this quarterly report, evaluated the effectiveness of
our disclosure controls and procedures (as defined in Rules 13a-14(c) and
15d-14(c) under the Securities Exchange Act of 1934, as amended) and have
determined that such disclosure controls and procedures are adequate. There have
been no significant changes in our internal controls or in other factors that
could significantly affect our internal controls since the date of evaluation.
We do not believe any significant deficiencies or material weaknesses exist in
our internal controls. Accordingly, no corrective actions have been taken.

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PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

Exhibit
No. Description
- ------- -----------

Exhibit 3.1 Amended Bylaws.

Exhibit 10.1 Code of Ethics for Executives.

Exhibit 10.2 Deferred Compensation Agreement.

Exhibit 99.1 Certification of CEO Pursuant to 18 U.S.C. Section 1350, As
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

Exhibit 99.2 Certification of CFO Pursuant to 18. U.S.C. Section 1350, As
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

SIGNATURES

In accordance with 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, thereunto duly authorized.

FIRST STATE BANCORPORATION

Date: May 15, 2003 By: /s/ Michael R. Stanford
------------------------------------------
Michael R. Stanford, President & Chief
Executive Officer

Date: May 15, 2003 By: /s/ Christopher C. Spencer
------------------------------------------
Christopher C. Spencer, Senior Vice President
and Chief Financial Officer

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CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Michael R. Stanford, certify that:

1. I have reviewed this quarterly report on Form 10-Q of First State
Bancorporation;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:

a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and

c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):

a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: May 15, 2003
/s/ Michael R. Stanford
------------------------------------------
Michael R. Stanford
President and Chief Executive Officer

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CHIEF FINANCIAL OFFICER CERTIFICATION

I, Christopher C. Spencer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of First State
Bancorporation;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:

a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and

c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):

a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: May 15, 2003
/s/ Christopher C. Spencer
------------------------------
Christopher C. Spencer
Senior Vice President and
Chief Financial Officer, and
Principal Accounting Officer

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PART II - OTHER INFORMATION

EXHIBIT INDEX