U. S. SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-QSB

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

Commission file number 01-17377

COMMONWEALTH BANKSHARES, INC.

(Exact name of small business issuer as specified in its charter)

VIRGINIA
(State or other jurisdiction of
incorporation or organization)

54-1460991
(I.R.S. Employer Identification No.)

403 Boush Street
Norfolk, Virginia
(Address of principal executive offices)

23510
(Zip Code)

(757) 446-6900
Issuer’s telephone number

Not Applicable
(Former name, former address and former fiscal year, if changed since last report.)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter periods 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 o

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

Common Stock, $2.50 Par Value – 1,723,937 shares as of May 9, 2003

1

INDEX

COMMONWEALTH BANKSHARES, INC. AND SUBSIDIARIES
NORFOLK, VIRGINIA

PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements	5
		Report of Certified Public Accountants.	4
		Condensed consolidated balance sheets — March 31, 2003, December 31, 2002 and March 31, 2002	5-6
		Condensed consolidated statements of income — Three months ended March 31, 2003 and 2002	7
		Condensed consolidated statements of comprehensive income — Three months ended March 31, 2003 and 2002.	8
		Condensed consolidated statements of cash flows — Three months ended March 31, 2003 and 2002.	9
		Notes to condensed consolidated financial statements — March 31, 2003.	10
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
	Item 3.	Controls and Procedures	15
PART II.	OTHER INFORMATION

2

Item 6. Exhibits and Reports on 8-K 15

SIGNATURES 16

3

Board of Directors
Commonwealth Bankshares, Inc.
Norfolk, Virginia

We have reviewed the accompanying condensed consolidated balance sheet of Commonwealth Bankshares, Inc. and its subsidiaries as of March 31, 2003 and the related condensed consolidated statements of income, comprehensive income and cash flows for the three month period ended March 31 2003. These financial statements are the responsibility of the Company’s management. The condensed consolidated financial statements of Commonwealth Bankshares, Inc. and subsidiaries as of March 31, 2002, were reviewed by other accountants who have ceased operations and whose report dated April 29, 2002, stated that they were not aware of any material modifications that should be made to those statements in order them to be in conformity with generally accepted accounting principles.

We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the 2003 condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of Commonwealth Bankshares, Inc. and its subsidiaries as of December 31, 2002, and the related consolidated statements of income, stockholders’ equity and cash flows for the year then ended (not presented herein) and in our report dated January 17, 2003, expressed an unqualified opinion on those statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2002, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ WITT, MARES & COMPANY, PLC

Norfolk, Virginia
May 6, 2003

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PART I.

ITEM 1.

FINANCIAL STATEMENTS

COMMONWEALTH BANKSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

	March 31, 2003 (Unaudited)			December 31, 2002 (Audited)			March 31, 2002 (Unaudited)
	(Dollars in thousands)
Cash and cash equivalents:
Cash and due from banks	$	7,545		$	7,370		$	6,048
Federal funds sold		—			59			5,926
Total cash and cash equivalents		7,545			7,429			11,974
Interest-bearing deposits in bank		199			97			18,119
Investment securities:
Available for sale		14,132			14,973			14,095
Held to maturity		997			1,047			2,248
Equity securities, restricted, at cost		1,350			1,181			931
Loans held for sale		43,706			27,792			—
Loans receivable:
Commercial		157,718			151,840			131,105
Residential mortgage		33,285			33,995			35,409
Installment loans to individuals		9,025			9,186			10,411
Other		1,915			2,033			2,067
Gross loans		201,943			197,054			178,992
Unearned income		(771	)		(731	)		(612	)
Allowance for loan losses		(2,225	)		(2,335	)		(2,090	)
Loans, net		198,947			193,988			176,290
Premises and equipment, net		5,702			5,813			5,799
Foreclosed real estate		—			—			79
Other assets		4,093			4,194			4,159
	$	276,671		$	256,514		$	233,694

5

LIABILITIES AND SHAREHOLDERS’ EQUITY

	March 31, 2003 (Unaudited)		December 31, 2002 (Audited)		March 31, 2002 (Unaudited)
	(Dollars in thousands)
Liabilities:
Deposits:
Non-interest bearing	$	27,740	$	25,528	$	25,664
Interest-bearing		205,522		202,559		181,765
Total deposits		233,262		228,087		207,429
Short-term borrowings		15,962		1,888		1,144
Long-term debt		426		453		453
Other liabilities		3,777		3,356		3,720
Total liabilities		253,427		233,784		212,746
Convertible preferred securities		7,285		7,285		7,285
Shareholders’ equity:
Common stock, par value $2.50, 5,000,000 shares authorized; 1,723,939, 1,721,621 and 1,706,673 shares issued and outstanding March 31, 2003, December 31, 2002 and March 31, 2002, respectively		4,310		4,304		4,267
Additional paid-in capital		5,586		5,560		5,495
Retained earnings		5,728		5,271		3,875
Accumulated other comprehensive income		335		310		26
Total stockholders’ equity		15,959		15,445		13,663
	$	276,671	$	256,514	$	233,694

See notes to condensed consolidated financial statements.

6

COMMONWEALTH BANKSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three months ended
	March 31, 2003			March 31, 2002
	(Dollars in thousands)
Interest income:
Loans, including fees	$	4,461		$	3,812
Investment securities		208			202
Other		2			105
Total interest income		4,671			4,119
Interest expense:
Deposits		1,929			2,252
Other		169			148
Total interest expense		2,098			2,400
Net interest income		2,573			1,719
Provision for loan losses		120			96
Net interest income after provision for loan losses		2,453			1,623
Other income:
Service charges on deposit accounts		215			200
Other service charges and fees		124			131
Loss on sale of foreclosed real estate		(2	)		(34	)
Other income		62			27
		399			324
Other expenses:
Salaries and employee benefits		1,000			892
Net occupancy		235			172
Furniture and equipment expenses		348			201
Other expenses		488			475
		2,071			1,740
Income before income taxes		781			207
Applicable income taxes		254			48
Net income	$	527		$	159
Per share data:
Basic	$	0.31		$	0.09
Diluted	$	0.28		$	0.08
Dividends per share	$	0.040		$	0.035
Average shares outstanding:
Basic		1,722,468			1,703,152
Diluted		1,910,595			1,905,039

See notes to condensed consolidated financial statements.

7

COMMONWEALTH BANKSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)

	Three months ended
	March 31, 2003		March 31, 2002
	(Dollars in thousands)
Net income	$	527	$	159
Other comprehensive income, net of income tax:
Net change in unrealized gain on securities available for sale		25		(36	)
Comprehensive income	$	552	$	123

See notes to condensed consolidated financial statements.

8

COMMONWEALTH BANKSHARES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three months ended
	March 31, 2003			March 31, 2002
	(Dollars in thousands)
Operating activities:
Net income	$	527		$	159
Adjustments to reconcile net income to net cash from operating activities:
Provision for loan losses		120			96
Depreciation and amortization		220			165
Write down of foreclosed real estate		—			13
Increase in interest receivable		(13	)		(45	)
Loans held for sale		(15,914	)		—
Decrease in interest payable		(19	)		(36	)
Other		544			2,289
Net cash from (used in) operating activities		(14,535	)		2,641
Investing activities:
Net increase in interest-bearing deposits in bank		(102	)		(4,142	)
Purchase of investment securities:
Available for sale		(1,617	)		(1,113	)
Restricted		(169	)		(14	)
Proceeds from:
Sales and maturities of securities available for sale		2,495			514
Maturities of securities held to maturity		50			640
Sale of foreclosed real estate		242			240
Net expenditures on foreclosed real estate		(93	)		(25	)
Net change in loans		(5,230	)		(305	)
Purchases of premises and equipment		(109	)		(397	)
Net cash used in investing activities		(4,533	)		(4,602	)
Financing activities:
Net change in:
Demand deposits and savings deposits		4,383			5,442
Other time deposits		792			(2,922	)
Short-term borrowing		14,074			(280	)
Principal payments on long-term debt		(27	)		(26	)
Proceeds from sale of stock		30			27
Cash paid for dividends		(68	)		(60	)
Net cash from financing activities		19,184			2,181
Net increase in cash and cash equivalents		116			220
Cash and cash equivalents at January 1		7,429			11,754
Cash and cash equivalents at March 31	$	7,545		$	11,974

See notes to condensed consolidated financial statements.

9

COMMONWEALTH BANKSHARES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARCH 31, 2003

NOTE A — BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-KSB for the year ended December 31, 2002.

NOTE B — EARNINGS PER SHARE

Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average of common and potential dilutive common equivalent shares outstanding during the period.

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PART I.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

GENERAL

The sole business of Commonwealth Bankshares, Inc. (the “Corporation”) is to serve as a holding company for Bank of the Commonwealth (the “Bank”). The Corporation was incorporated as a Virginia corporation on June 6, 1988, and on November 7, 1988 it acquired the Bank.

Bank of the Commonwealth was formed on August 28, 1970 under the laws of Virginia. Since the Bank opened for business on April 14, 1971, its main banking and administrative office has been located in Norfolk, Virginia. The Bank currently operates three branches in Norfolk, four branches in Virginia Beach, one branch in Chesapeake, and one branch in Portsmouth.

The Bank concentrates its marketing efforts in the cities of Norfolk, Virginia Beach, Portsmouth and Chesapeake, Virginia. The Corporation’s present intention is to continue concentrating its banking activities in its current market, which the Corporation believes, is an attractive area in which to operate.

In addition to historical information, the following discussion contains forward looking statements that are subject to risks and uncertainties that could cause the Corporation’s actual results to differ materially from those anticipated, including risks associated with general economic conditions and interest rate trends. These forward looking statements include, but are not limited to, statements regarding management’s expectations that the Bank will continue to experience growth in core operating earnings, improved credit quality and increased service fee income, and that the Corporation may pay cash dividends in the future. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof.

EARNINGS SUMMARY

Net income for the quarter ended March 31, 2003 totaled $527,000, an increase of 231.4% over the $159,000 reported in the first quarter of 2002. On a per share basis, diluted earnings rose 250.0% to 28 cents in the first quarter of 2003 from 8 cents in the first quarter of 2002. First quarter basic income equaled 31 cents for the three months ended March 31, 2003 compared to 9 cents for same period of 2002.

NET INTEREST INCOME

A fundamental source of the Corporation’s earnings, net interest income, is defined as the difference between income on earning assets and the cost of funds supporting those assets. Significant categories of earning assets are loans and securities, while deposits and short-term borrowings represent the major portion of interest-bearing liabilities. The level of net interest

11

income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates when compared to previous periods of operations.

Net interest income was $2,573,000 for the quarter ended March 31, 2003, an increase of $854,000 or 49.7% over the comparable period in 2002. A decrease in the in the rates being paid on deposits during the first quarter compared to the same quarter of 2002 increased net interest income by $323,000. Net interest income was also positively impacted $318,000 by an agreement the Bank entered into with Gateway Bank in the second half of 2002 to purchase 90% participations in loans secured by first deeds of trust on residential 1 to 4 family dwellings.

INTEREST INCOME

Total interest income was $4,671,000 for the quarter ended March 31, 2003, an increase of $552,000 over the same period of 2002. Interest income was positively effected by an increase in the Corporation’s loan to deposit ratio. This ratio was 105.3% as of March 31, 2003 as compared to 86.3% as of March 31, 2002. The increase in the Corporation’s loan to deposit ratio was brought about by continued strong loan demand and the purchase of loan participations. In August 2002, the Bank entered into an agreement with Gateway Bank to purchase 90% participations in loans secured by first deeds of trust on residential 1 to 4 family dwellings. These loans are pre-committed for sale prior to their funding. As of March 31, 2003, the Bank held 169 of these participation loans totaling of $43,706,000. For the three months ended March 31, 2003, the loan participations have produced $318,000 additional interest income.

INTEREST EXPENSE

Interest expense of $2,098,000 for the quarter ended March 31, 2003 represented a $302,000 decrease from the comparable period in 2002. This decrease was attributable to the substantial overall decrease in the rates being paid on deposits during the first three months of 2003, as compared to the same period of 2002.

PROVISION FOR LOAN LOSSES

The provision for loan losses is the annual cost of maintaining an allowance for inherent credit losses. The amount of the provision each year and the level of the allowance are matters of judgment and are impacted by many factors, including actual credit losses during the period, the prospective view of credit losses, loan performance measures and trends (such as delinquencies and charge-offs), and other factors, both internal and external that may affect the quality and future loss experience of the credit portfolio.

The provision for loan losses was $120,000 for the first three months of 2003 compared to $96,000 for the same period of 2002. Loan charge-offs for the three months ended March 31, 2003 totaled $230,000 and there were no recoveries for the same period.

At March 31, 2003, the Corporation had a total allowance for loan losses of $2,225,000 or 0.9% of total loans. The table on the following page provides an analysis of the activity in the Corporation’s non-performing assets. Based on current expectations relative to portfolio characteristics and performance measures including loss projections, management considers the level of the allowance to be adequate.

12

OTHER INCOME

Other income for the quarter ended March 31, 2003 equaled $399,000, an increase of $75,000 over the $324,000 reported for the three months ended March 31, 2002. The increase in other income is attributable in part to a decrease in the loss on sale of foreclosed real estate, a decrease in losses on fixed assets, and an increase in referral fees.

OTHER EXPENSES

Other expenses for the quarter ended March 31, 2003 totaled $2,071,000, an increase of $331,000 over the $1,740,000 recorded during the quarter ended March 31, 2002. The increase in the three month period is mainly a result of increased depreciation expense from the purchase of a new mainframe that was put into service March 2002 and an increase on maintenance fees for other equipment.

INTEREST SENSITIVITY AND LIQUIDITY

Management attempts to match rate sensitive assets to rate sensitive liabilities, by planning and controlling the mix and maturities of these assets and liabilities. The purpose of this asset/liability management is to create and maintain a proper relationship between rate sensitive assets and liabilities and also to provide adequate liquidity.

The Corporation’s Asset/Liability Management Committee (ALCO) is responsible for formulating liquidity strategies, monitoring performance based on established objectives and approving new liquidity initiatives. ALCO’s overall objective is to optimize net interest income within the constraints of prudent capital adequacy, liquidity needs, the interest rate and economic outlook, market opportunities, and customer requirements. General strategies to accomplish this objective include maintaining a strong balance sheet, achieving solid core deposit growth, taking on manageable interest rate risk, adhering to conservative financial management on a daily basis, monitored regularly by ALCO and reviewed periodically with the Board of Directors.

NONPERFORMING ASSETS

The Corporation’s non-performing assets consisted of the following:

	March 31, 2003		December 31, 2002
Loans past due 90 days or more and still accruing	$	109,000	$	18,000
Non-accrual loans		1,456,000		1,711,000
Foreclosed real estate		0		0
Total non-performing	$	1,565,000	$	1,729,000

13

Non-performing loans continue to be centered in a relatively small number of loans with large balances. Most of the loans are fully secured and, in management’s opinion, represent minimal risk.

LOAN PORTFOLIO

As of March 31, 2003, 64.2% of the Corporation’s loan portfolio consisted of commercial loans, which are considered to provide higher yields, but also generally carry a greater risk. It should be noted that 74.6% of these commercial loans are collateralized with real estate, and accordingly do not represent an unfavorable risk. At March 31, 2003, 79.2% of the Bank’s total loan portfolio consisted of loans collateralized with real estate.

CAPITAL POSITION

Shareholders’ equity for the Corporation increased to $15,959,000 from $15,445,000 or 3.3% from December 31, 2002 to March 31, 2003. Shareholders’ equity for March 31, 2003 reflects a $335,000 net unrealized gain on securities available for sale in accordance with FASB 115, as compared to a $310,000 net unrealized gain as of December 31, 2002.

The Federal Reserve Board, the Office of Controller of the Currency, and the FDIC has issued risk-based capital guidelines for U.S. banking organizations. These guidelines provide a capital framework that is sensitive to differences in risk profiles among banking companies.

Risk-based capital ratios are another measure of capital adequacy. At March 31, 2003, the Bank’s risk-adjusted capital ratios were 9.31% for Tier 1 and 10.32% for total capital, well above the required minimums of 4.0% and 8.0% respectively. These ratios are calculated using regulatory capital (either Tier 1 or total capital) as the numerator and both on and off-balance sheet risk-weighted assets as the denominator. Tier 1 capital consists primarily of common equity less goodwill and certain other intangible assets. Total capital adds certain qualifying debt instruments and a portion of the allowance for loan losses to Tier 1 capital. One of four risk weights, primarily based on credit risk, is applied to both on and off-balance sheet assets to determine the asset denominator. Under Federal Deposit Insurance Corporation (FDIC) rules, the Corporation was considered well capitalized.

In order to maintain a strong equity capital position and to protect against the risks of loss in the investment and loan portfolios and on other assets, management will continue to monitor the Corporation’s capital position. Several measures have been or will be employed to maintain the strong capital position, including but not limited to continuing its efforts to return all non-performing assets to performing status, monitoring the Bank’s growth, and continued utilization of its formal asset/liability policy.

Once again, it should be noted that the Bank’s capital position has always exceeded and continues to exceed the minimum standards established by the regulatory authorities. Under Federal Deposit Insurance Corporation (FDIC) rules, the Bank was considered well capitalized.

14

CASH DIVIDEND

At the February 18, 2003 meeting, the Board of Directors declared a 4 cent cash dividend per share, payable February 28, 2003 on the Corporation’s common shares for shareholders of record as of February 25, 2003.

ITEM 3. CONTROLS AND PROCEDURES

(a)

Within the 90-day period prior to the date of this report, the Corporation carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Corporation’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Corporation (including its consolidated subsidiaries) required to be included in the Corporation’s Exchange Act filings.

(b)

There have been no significant changes in the Corporation’s internal controls or in other factors which could significantly affect its internal controls subsequent to the date the Corporation carried out its evaluation.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)        Exhibits

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

15

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	Commonwealth Bankshares, Inc. (Registrant)
Date:     May 9, 2003	by:	/s/ E. J. WOODARD,JR., CLBB
		E. J. Woodard, Jr., CLBB Chairman of the Board, President and Chief Executive Officer

by:	/s/ JOHN H. GAYLE
	John H. Gayle Executive Vice President & Cashier (Principal Financial Officer)

16

CERTIFICATION

I, Edward J. Woodard, Jr., CLBB, Chairman, President, and Chief Executive Officer certify that:

1.

I have reviewed this quarterly report on Form 10-QSB of Commonwealth Bankshares, Inc.;

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 officer 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 the registrant’s board of directors (or persons performing 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 9, 2003	/s/ E. J. WOODARD, Jr. CLBB
	E. J. Woodard, Jr. CLBB, Chairman of the Board, President & CEO

I, John H. Gayle, Executive Vice President and Cashier, certify that:

1.

I have reviewed this quarterly report on Form 10-QSB of Commonwealth Bankshares, Inc.;

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 officer 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 the registrant’s board of directors (or persons performing 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 9, 2003	/s/ JOHN H. GAYLE
	John H. Gayle, Executive Vice President & Cashier