<PAGE>
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


(Mark One)
             [X] Quarterly report under Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                 For Quarter Ended June 30, 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 0-18261

                            TOWER PROPERTIES COMPANY
                            ------------------------
             (Exact name of registrant as specified in its charter)

        Missouri                                            (43-1529759)
        --------                                            ------------
(State of incorporation)                       (IRS Employer Identification No.)

Suite 100,  911 Main Street,      Kansas City, Missouri                  64105
--------------------------------------------------------------------------------
(Address of principal executive offices)                                Zip Code

                                 (816) 421-8255
                                 --------------
              (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 the
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 Exchange Act)
Yes   [X]    No  [ ].

         176,868 shares of common stock, $1.00 par value per share, outstanding
at July 31, 2003

<PAGE>
PART I - FINANCIAL INFORMATION
 ITEM 1. - FINANCIAL STATEMENTS

                            TOWER PROPERTIES COMPANY
                                 BALANCE SHEETS
                       JUNE 30, 2003 AND DECEMBER 31, 2002

<Table>
<Caption>
                                                             (UNAUDITED)
                                                                 2003                  2002
                                                            -------------         -------------
<S>                                                         <C>                   <C>
ASSETS
 Investment in Commercial Properties:
     Rental Property, Net                                   $  71,226,277         $  71,657,174
     Tenant Leasehold Improvements, Net                         3,895,659             4,199,945
     Equipment and Furniture, Net                               3,903,798             4,076,940
     Construction in Progress                                  18,971,681             7,133,934
                                                            -------------         -------------
        Commercial Properties, Net                             97,997,415            87,067,993

 Real Estate Held for Sale                                        156,717               472,658

 Cash and Cash Equivalents (Related Party)                        721,804               282,696
 Investment Securities at Fair Value (Related Party)            5,066,995             5,115,165
 Receivables                                                    1,528,667             2,059,774
 Income Taxes Recoverable                                         215,277               143,408
 Prepaid Expenses and Other Assets                              1,207,552               977,275
                                                            -------------         -------------

           TOTAL ASSETS                                     $ 106,894,427         $  96,118,969
                                                            =============         =============

LIABILITIES AND STOCKHOLDERS' INVESTMENT
 Liabilities:
     Mortgage Notes Payable                                 $  47,443,932         $  48,637,659
     Construction Loan (Related Party)                         12,084,621                    --
     Real Estate Bond Issue                                     6,400,000             6,400,000
     Line of Credit (Related Party)                             1,300,000               800,000
     Accounts Payable and Other Liabilities                     3,136,598             4,279,150
     Deferred Income Taxes                                      3,099,958             3,118,744
                                                            -------------         -------------

           Total Liabilities                                   73,465,109            63,235,553

 Commitments and Contingencies

 Stockholders' Investment:
 Preferred Stock, No Par Value

   Authorized 60,000 Shares, None Issued                               --                    --
    Common Stock, Par Value $1.00
      Authorized 1,000,000 Shares, Issued
         183,430 Shares                                           183,430               183,430
   Paid-In Capital                                             18,481,102            18,480,404
   Retained Earnings                                           13,263,458            12,469,002
   Accumulated Other Comprehensive Income                       2,564,109             2,593,493
                                                            -------------         -------------
                                                               34,492,099            33,726,329
   Less Treasury Stock, At Cost (6,562 and
      5,297 shares in 2003 and 2002, respectively)             (1,062,781)             (842,913)
                                                            -------------         -------------
     Total Stockholders' Investment                            33,429,318            32,883,416
                                                            -------------         -------------

 TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT             $ 106,894,427         $  96,118,969
                                                            =============         =============
</Table>

               See accompanying notes to the financial statements.


                                       2
<PAGE>

                            TOWER PROPERTIES COMPANY
                              STATEMENTS OF INCOME
            FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND JUNE 30, 2002
                                   (UNAUDITED)

<Table>
<Caption>
                                                            2003               2002
                                                        -----------        -----------
<S>                                                     <C>                <C>
REVENUES
Non-Related Party Revenues:
  Rent                                                  $ 8,963,969        $10,840,209
  Gain on Sale of Real Estate                               493,935                 --
  Interest and Other Income                                  56,426            119,516
                                                        -----------        -----------
     Total Non-Related Party Revenues                     9,514,330         10,959,725

Related Party Revenues:
  Rent                                                    1,412,561            966,919
  Management and Service Fee                                363,185            480,988
  Interest and Dividend Income                               48,953             90,167
                                                        -----------        -----------
     Total Related Party Revenues                         1,824,699          1,538,074
                                                        -----------        -----------

          Total Revenues                                 11,339,029         12,497,799
                                                        -----------        -----------

OPERATING EXPENSES
  Operating Expenses                                      1,910,637          1,800,615
  Maintenance and Repairs                                 2,283,493          2,271,063
  Depreciation and Amortization                           2,107,190          2,062,218
  Taxes Other than Income                                   929,338            903,937
  General, Administrative and Other                         924,107            735,694
                                                        -----------        -----------
        Total Operating Expenses                          8,154,765          7,773,527

OTHER EXPENSE
  Interest (Including Related Party)                      1,881,878          2,021,514
                                                        -----------        -----------

        Income Before Provision for Income Taxes          1,302,386          2,702,758

PROVISION FOR INCOME TAXES                                  507,931          1,054,072
                                                        -----------        -----------

NET INCOME                                              $   794,455        $ 1,648,686
                                                        ===========        ===========

Earnings Per Share:
  Basic                                                 $      4.47        $      9.22
                                                        ===========        ===========
  Diluted                                               $      4.47        $      9.20
                                                        ===========        ===========
Weighted Average Common Shares Outstanding:
  Basic                                                     177,590            178,857
                                                        ===========        ===========
  Diluted                                                   177,823            179,160
                                                        ===========        ===========
</Table>


                 See accompanying notes to financial statements.


                                       3
<PAGE>
                            TOWER PROPERTIES COMPANY
                       STATEMENTS OF COMPREHENSIVE INCOME
       FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2003 AND JUNE 30, 2002
                                    UNAUDITED

<Table>
<Caption>
                                                            Six Months Ended                      Three Months Ended
                                                     6/30/2003           6/30/2002            6/30/2003          6/30/2002
                                                    -----------         -----------         -----------         -----------
<S>                                                 <C>                 <C>                 <C>                 <C>
NET INCOME (LOSS)                                   $   794,455         $ 1,648,686         $   (86,770)        $   323,607

Unrealized holding (loss) gain on marketable
equity securities arising during the period             (48,170)            650,953             308,551               2,480


Deferred income tax benefit (expense)                    18,786            (253,872)           (120,335)               (967)
                                                    -----------         -----------         -----------         -----------

Comprehensive income                                $   765,071         $ 2,045,767         $   101,446         $   325,120
                                                    ===========         ===========         ===========         ===========
</Table>


               See accompanying notes to the financial statements.


                                       4
<PAGE>

                            TOWER PROPERTIES COMPANY
                              STATEMENTS OF INCOME
           FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND JUNE 30, 2002
                                   (UNAUDITED)

<Table>
<Caption>
                                                                  2003                2002
                                                               -----------         -----------
<S>                                                            <C>                 <C>
REVENUES
Non-Related Party Revenues:
  Rent                                                         $ 4,342,476         $ 4,681,699
  Interest and Other Income                                         30,634              62,401
                                                               -----------         -----------
     Total Non-Related Party Revenues                            4,373,110           4,744,100

Related Party Revenues:
  Rent                                                             462,978             469,738
  Management and Service Fee                                       185,999             265,864
  Interest and Dividend Income                                      24,381              45,862
                                                               -----------         -----------
     Total Related Party Revenues                                  673,358             781,464
                                                               -----------         -----------

          Total Revenues                                         5,046,468           5,525,564
                                                               -----------         -----------

OPERATING EXPENSES
  Operating Expenses                                               937,569             902,961
  Maintenance and Repairs                                        1,299,302           1,236,515
  Depreciation and Amortization                                  1,035,678           1,030,878
  Taxes Other than Income                                          464,669             443,578
  General, Administrative and Other                                516,325             373,425
                                                               -----------         -----------
        Total Operating Expenses                                 4,253,543           3,987,357

OTHER EXPENSE
  Interest (Including Related Party)                               935,170           1,007,709
                                                               -----------         -----------

        Income (loss) Before Provision for Income Taxes           (142,245)            530,498

PROVISION FOR INCOME TAXES                                         (55,475)            206,891
                                                               -----------         -----------

NET INCOME (LOSS)                                              $   (86,770)        $   323,607
                                                               ===========         ===========

Earnings (loss) Per Share:
  Basic                                                        $     (0.49)        $      1.81
                                                               ===========         ===========
  Diluted                                                      $     (0.49)        $      1.81
                                                               ===========         ===========
Weighted Average Common Shares Outstanding:
  Basic                                                            177,469             178,784
                                                               ===========         ===========
  Diluted                                                          177,469             179,129
                                                               ===========         ===========
</Table>

                 See accompanying notes to financial statements.


                                       5
<PAGE>
                            TOWER PROPERTIES COMPANY
                             STATEMENTS OF CASH FLOW
            FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND JUNE 30, 2002
                                   (UNAUDITED)

<Table>
<Caption>
                                                                              2003                 2002
                                                                          ------------         ------------
<S>                                                                       <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income                                                              $    794,455         $  1,648,686
  Adjustments to Reconcile Net Income to Net Cash
    Provided by Operating Activities:
      Depreciation                                                           1,482,770            1,512,919
      Amortization                                                             624,420              549,299
      Gain on Sale of Real Estate and Commercial Property                     (493,935)                  --
      Treasury Shares Issued to Directors                                       10,092                9,800
    Change in Balance Sheet Accounts, Net:
      Accounts Receivable                                                      531,107               49,855
      Prepaid Expenses and Other Assets                                       (232,743)             110,870
      Accounts Payable and Other Liabilities                                (1,142,551)             555,253
      Current Income Taxes                                                     (71,869)            (211,428)
                                                                          ------------         ------------

          Net Cash Provided by Operating Activities                          1,509,746            4,225,254
                                                                          ------------         ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net Change in Construction in Progress                                  $(11,837,747)          (1,418,381)
  Proceeds from Sale of Real Estate and Commercial Properties, Net             733,785                   --
  Additions to Equipment & Furniture, Net                                     (229,176)            (506,366)
  Additions to Rental Income Property, Net                                    (573,465)            (128,937)
  Additions to Leasehold Improvements, Net                                    (287,299)            (227,637)
                                                                          ------------         ------------
          Net Cash Used in Investing Activities                            (12,193,902)          (2,281,320)
                                                                          ------------         ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal Payments on Mortgage Notes                                    $ (1,193,727)          (1,099,345)
  Proceeds from Long Term Borrowings                                        12,084,621                   --
  Net Change in Short Term Borrowings                                          500,000                   --
  Purchase of Treasury Stock                                                  (229,261)             (93,821)
  Deferred Loan Costs                                                          (30,369)                  --
                                                                          ------------         ------------
          Net Cash Provided by (Used in) Financing Activities               11,131,264           (1,193,166)
                                                                          ------------         ------------


NET INCREASE IN CASH                                                           439,108              750,768


CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                 282,696            3,827,520
                                                                          ------------         ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                  $    721,804         $  4,578,288
                                                                          ============         ============
</Table>

               See accompanying notes to the financial statements.

                                       6
<PAGE>

                            TOWER PROPERTIES COMPANY
                          NOTES TO FINANCIAL STATEMENTS

                                   (UNAUDITED)

1. The financial statements included herein have been prepared by Tower
Properties Company (the Company) and reflect all adjustments (consisting only of
normal recurring adjustments) which are, in the opinion of management, necessary
for a fair statement of the results for the interim periods. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America ("GAAP") have been condensed or omitted, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. These condensed financial statements should be read in conjunction
with the financial statements and the notes thereto included in the Company's
latest annual report on Form 10-K as of and for the year ended December 31, 2002
to provide a description of the accounting policies which have been continued
without change, and for additional information about the Company's financial
condition.

         The Company is primarily engaged in owning, developing, leasing and
managing real property located in Johnson County, Kansas and Clay, Jackson and
St. Louis County, Missouri. Substantially all of the improved real estate owned
by the Company consists of office buildings, apartment complexes, a warehouse
and a warehouse/office facility, parking facilities and land held for future
sale or development.

         The Company follows the provisions of Statement of Financial Accounting
Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets". The Company assesses the carrying value of its long-lived
assets whenever events or changes in circumstances indicate that the carrying
amount of the underlying asset may not be recoverable. Certain factors that may
occur and indicate that an impairment exists include, but are not limited to:
significant underperformance relative to expected projected future operating
results; significant changes in the manner of the use of the assets; and
significant adverse industry or market economic trends. Recoverability of assets
to be held and used is measured by a comparison of the carrying amount of an
asset to estimated undiscounted future cash flows expected to be generated by
the asset. If the carrying amount of an asset exceeds its estimated future cash
flows, an impairment charge is recognized by the amount by which the carrying
amount of the asset exceeds the fair value of the asset. Assets to be disposed
of would be separately presented in the balance sheet and reported at the lower
of the carrying amount or fair value less costs to sell, and are no longer
depreciated. The assets and liabilities of a disposed group classified as held
for sale would be presented separately in the appropriate asset and liability
sections of the balance sheet.

2. Interest of $152,650 and $0 was capitalized during the first six months of
2003 and 2002, respectively. Interest of $97,783 and $0 was capitalized during
the three months ended June 30, 2003 and 2002, respectively.

3. Interest paid during the six months of 2003 and 2002 for long-term mortgages
amounted to $1,868,960 and $1,963,985, respectively. Interest paid to related
party was


                                       7
<PAGE>

$126,692 and $8,834 for the first six months of 2003 and 2002, respectively.
Income taxes paid during the first six months of 2003 and 2002 amounted to
$579,800 and $1,265,500, respectively.

4. Under SFAS No. 115, the investment in Commerce Bancshares, Inc. common stock
is classified as "available for sale", and is recorded at fair value. The
unrealized gain at June 30, 2003 of $4,203,457 net of tax effects of $1,639,348
is reflected as a separate component of equity. There was a decrease in the net
unrealized holding gain for the six months from January 1, 2003 to June 30,
2003, net of deferred taxes, was $29,384, and an increase in the net unrealized
holding gain of $188,215, net of deferred taxes, for the three months from April
1, 2003 to June 30, 2003.

5. COMMITMENTS AND CONTINGENCIES:

         The Company has outstanding construction commitments of $17,000,000 for
construction of Phase V New Mark apartments and construction commitments of
$7,000,000 for the expansion of the 811 Garage as of June 30, 2003. Through June
30, 2003 disbursements on those projects aggregated $11,163,000 and $5,453,000,
respectively. The projects began in the third quarter of 2002 and will be
completed in the 4th quarter of 2003. The Company has loan commitments from
Commerce Bank, N.A. for these projects of $10,250,000 for New Mark Phase V and
$2,400,000 for the 811 Garage Expansion, totaling $12,650,000 of which
$9,685,000 and $2,400,000, respectively, has been drawn to date leaving funds
available for draw of $565,000. The remaining $6,819,000 cash required for these
projects will be met from cash from operations and the remaining line of credit
availability. The Company has negotiated an increase to the line of credit with
Commerce Bank, N.A. from $11,472,000 to $15,500,000. The availability of
$7,749,000 will give the Company adequate resources to complete the projects.
The Company has adequate resources to collateralize any additional financing
that may be necessary to meet the Company's liquidity needs. The Company has
cash on hand of $722,000 at June 30, 2003. The Company's revenues are primarily
based on lease contracts, none of which are deemed to be materially at risk. The
funds borrowed under the construction loans are secured by related properties
and require monthly interest payments at LIBOR + 1.75% and mature in 2006.

              Congress passed the Americans With Disabilities Act (the Act) of
1990 which became effective January 26, 1992. The Act contains provisions for
building owners to provide persons with disabilities with accommodations and
access equal to, or similar to, that available to the general public. Management
cannot estimate the eventual impact of the Act on the financial condition or
results of operations of the Company since certain provisions of the Act are
open to interpretation. The Company is implementing the requirements of the Act
that are readily achievable and will not constitute an undue burden on the
Company.

              Due to governmental regulations regarding asbestos and the
uncertainty surrounding the advantages and disadvantages of asbestos removal,
the Company will continue to monitor the status of asbestos in its commercial
office buildings and will take appropriate action when required. The cost to
remove all asbestos from properties owned by


                                       8
<PAGE>
the Company cannot be determined; however, these removal costs could have a
significant adverse impact on the future operations and liquidity of the
Company.

         A former tenant of the Commerce Tower Building has dismissed his civil
action against the Company and re-filed it in amended form. The suit alleges
that asbestos fibers were released in the course of repairs after a July 22,
2000 fire in a suite in the building. The suit seeks damages for alleged
property damage, medical monitoring and relocation on theories of negligence,
fraudulent concealment, nuisance and breach of contract. There is also a claim
for punitive damages. Plaintiff originally filed suit in 2001. He dismissed his
first suit voluntarily on May 30, 2003 and immediately re-filed. Plaintiff
alleges that he brings the suit on behalf of a class of all tenants. There have
been no proceedings on the class issue. Monitoring performed during the repair
process indicated that fibers were properly contained. The Company will
vigorously defend its position and believes the suit is without merit.

6. EARNINGS PER SHARE

         Basic earnings per share is based upon the weighted average common
shares outstanding during each year. Diluted earnings per share is based upon
the weighted average common and common equivalent shares outstanding during each
year. Basic and diluted weighted average common shares are the same for the
three months ended June 30, 2003 as a result of the net loss incurred for that
period. Stock options are the Company's only common stock equivalent.

         The following table presents information necessary to calculate basic
and diluted earnings per share for the periods indicated:

<Table>
<Caption>
                                                      Six Months Ended June 30             Three Months Ended June 30
                                                     --------------------------            --------------------------
                                                      2003               2002               2003               2002
                                                     -------            -------            -------            -------
<S>                                                  <C>                <C>                <C>                <C>
Weighted average common shares - basic               177,590            178,857            177,469            178,784

Dilutive stock options                                   233                303                 --                345
                                                     -------            -------            -------            -------

Weighted average common shares - dilutive            177,823            179,160            177,469            179,129
                                                     =======            =======            =======            =======
</Table>


                                       9
<PAGE>

7. STOCK BASED COMPENSATION

         The Company accounts for stock options under the recognition and
measurement principles of APB Opinion NO. 25, Accounting for Stock Issued to
Employees, and related Interpretations. No stock-based employee compensation
cost is reflected in net income, as all options grated under the plan had an
exercise price equal to the market value of the underlying common stock on the
date of grant. The following table illustrates the effect on net income and
earnings per share if the Company had applied the fair value recognition
provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation,
to stock-based employee compensation:

<Table>
<Caption>
                                                           Six Months Ended June 30,                Three Months Ended June 30
                                                      ----------------------------------      -----------------------------------
                                                          2003                   2002             2003                    2002
                                                      -----------            -----------      -----------             -----------
<S>                                                   <C>                    <C>              <C>                     <C>
Net income (loss) as reported                             794,455              1,648,686          (86,770)                323,608
Deduct:  Total stock-based employee
     compensation expense determined
     under fair value based method for all
     awards, net of related tax effects                    (7,848)                (7,342)          (3,924)                 (3,671)
                                                      -----------            -----------      -----------             -----------
Pro forma net income (loss)                               786,607              1,641,344          (90,694)                319,937
                                                      ===========            ===========      ===========             ===========

Earnings per share:
     Basic - as reported                              $      4.47            $      9.22      $     (0.49)            $      1.81
                                                      ===========            ===========      ===========             ===========

     Basic - pro forma                                $      4.43            $      9.18      $     (0.51)            $      1.79
                                                      ===========            ===========      ===========             ===========

     Diluted - as reported                            $      4.47            $      9.20      $     (0.49)            $      1.81
                                                      ===========            ===========      ===========             ===========

     Diluted - pro forma                              $      4.42            $      9.16      $     (0.51)            $      1.79
                                                      ===========            ===========      ===========             ===========
</Table>


                                       10
<PAGE>

8. BUSINESS SEGMENTS

The Company groups its operations into three business segments, commercial
office, apartments, and parking. The Company's business segments are separate
business units that offer different real estate services. The accounting
policies for each segment are the same as those described in the summary of
significant accounting policies.

Following is information for each segment for six months ended June 30, 2003 and
2002:

<Table>
<Caption>
                                                                            June 30, 2003
                                        -----------------------------------------------------------------------------------
                                        COMMERCIAL                                             CORPORATE
                                          OFFICE          APARTMENTS           PARKING          AND OTHER         TOTAL
                                        ----------        ----------          ---------        ----------       -----------
<S>                                     <C>               <C>                 <C>              <C>              <C>
REVENUE FROM EXTERNAL CUSTOMERS          4,607,090         2,911,297            587,272         1,408,671         9,514,330

REVENUE FROM RELATED PARTY/MAJOR
CUSTOMER                                 1,824,699                --                 --                --         1,824,699

INTEREST EXPENSE                         1,008,391           767,669             12,164            93,654         1,881,878

DEPRECIATION AND AMORTIZATION            1,101,552           636,681             54,542           314,415         2,107,190

SEGMENT INCOME BEFORE TAX                  644,897          (342,548)           100,595           899,442         1,302,386

CAPITAL EXPENDITURES BY SEGMENT            492,136           197,271            332,500            75,308         1,097,215

IDENTIFIABLE SEGMENT ASSETS             49,631,608        32,575,797          5,567,853        19,119,169       106,894,427
</Table>

<Table>
<Caption>
                                                                          June 30, 2002
                                        -----------------------------------------------------------------------------------
                                        COMMERCIAL                                             CORPORATE
                                          OFFICE          APARTMENTS           PARKING         AND OTHER           TOTAL
                                        ----------        ----------          ---------        ----------        ----------
<S>                                     <C>               <C>                 <C>              <C>               <C>
REVENUE FROM EXTERNAL CUSTOMERS          6,264,809         2,992,125            587,657         1,115,134        10,959,725

REVENUE FROM RELATED PARTY/MAJOR
CUSTOMER                                 1,538,074                --                 --                --         1,538,074

INTEREST EXPENSE                         1,056,767           726,098                 --           238,649         2,021,514

DEPRECIATION AND AMORTIZATION            1,124,119           631,608             65,919           240,572         2,062,218

SEGMENT INCOME (LOSS) BEFORE TAX         2,103,722           (20,112)           182,275           436,873         2,702,758

CAPITAL EXPENDITURES BY SEGMENT            673,356           144,147             10,515            34,922           862,940

IDENTIFIABLE SEGMENT ASSETS             49,041,442        25,001,413          2,337,030        18,167,680        94,547,565
</Table>


                                       11
<PAGE>

Following is information for each segment for the three months ended June 30,
2003 and 2002:

<Table>
<Caption>
                                                                                 June 30, 2003
                                            ---------------------------------------------------------------------------------------
                                            COMMERCIAL                                                CORPORATE
                                              OFFICE           APARTMENTS            PARKING          AND OTHER            TOTAL
                                            ----------         ----------           ---------         ----------        -----------
<S>                                         <C>                <C>                  <C>               <C>               <C>
REVENUE FROM EXTERNAL CUSTOMERS              2,299,913          1,439,268             299,158            334,771          4,373,110

REVENUE FROM RELATED PARTY/MAJOR CUSTOMER      673,358                 --                  --                 --            673,358

INTEREST EXPENSE                               498,848            403,778              12,164             20,380            935,170

DEPRECIATION AND AMORTIZATION                  556,974            321,945              27,608            129,151          1,035,678

SEGMENT INCOME (LOSS) BEFORE TAX                37,886           (267,371)             34,899             52,341           (142,245)

CAPITAL EXPENDITURES BY SEGMENT                397,815            147,262             332,500             71,880            949,457

IDENTIFIABLE SEGMENT ASSETS                 49,631,608         32,575,797           5,567,853         19,119,169        106,894,427
</Table>


<Table>
<Caption>
                                                                                 June 30, 2002
                                              -----------------------------------------------------------------------------------
                                              COMMERCIAL                                             CORPORATE
                                                OFFICE          APARTMENTS           PARKING         AND OTHER            TOTAL
                                              ----------        ----------          ---------        ----------        ----------
<S>                                           <C>               <C>                 <C>              <C>               <C>
REVENUE FROM EXTERNAL CUSTOMERS                2,418,906         1,443,878            290,572           591,044         4,744,400

REVENUE FROM RELATED PARTY/MAJOR CUSTOMER        781,164                --                 --                --           781,164

INTEREST EXPENSE                                 526,079           360,845                 --           120,784         1,007,708

DEPRECIATION AND AMORTIZATION                    559,051           317,742             32,874           121,211         1,030,878

SEGMENT INCOME BEFORE TAX                        345,370          (105,633)            54,428           236,333           530,498

CAPITAL EXPENDITURES BY SEGMENT                  482,094           106,816             10,515             6,808           606,233

IDENTIFIABLE SEGMENT ASSETS                   49,041,442        25,001,413          2,337,030        18,167,680        94,547,565
</Table>


                                       12
<PAGE>

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

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal assets consist of real estate holdings which are not
liquid assets. Real estate holdings include office buildings, apartment
complexes, a warehouse and a warehouse/office facility, parking facilities and
land held for future sale. The principal source of funds generated internally is
income from operations. The principal source of external funds is long-term debt
and a $11,472,000 line of credit with Commerce Bank, N.A. The Line of Credit is
collateralized by 130,190 shares of Commerce Bancshares, Inc. common stock and
land owned in Downtown Kansas City, MO. The line of credit has been utilized by
issuing a $6,656,000 letter of credit to back a low rate Industrial Revenue Bond
and a $65,000 letter of credit required by the Company's mortgage on the
Hillsborough apartment complex. At June 30, 2003, the Company had $1,300,000
outstanding borrowings on the line of credit. The Company has $3,451,000
available under the line at June 30, 2003. (The Company has negotiated an
increase to the line of credit with Commerce Bank, N.A. from $11,472,000 to
$15,500,000. The additional collateral for this increase is a negative pledge
and assignment of rents on the Commerce Tower Building.) This line of credit has
been extended at market rates and terms and management believes the Company
could obtain similar financing arrangements if the Company's relationship with
Commerce Bank, N.A. did not exist. The Company does not utilize off-balance
sheet financing or leasing transactions. Management believes that the Company's
current combination of liquidity, capital resources and borrowing capabilities
will be adequate for its existing operations during fiscal 2003.

CASH PROVIDED BY OPERATIONS FOR THE SIX MONTHS ENDED AT JUNE 30, 2003 WAS
$1,509,000, $2,716,000 lower than for the quarter ended June 30, 2002 primarily
due to a decrease in accounts payable and other liabilities of $1,143,000 and a
decrease in net income (net of Gain on Sale of Real Estate of $487,000) of
$854,000 offset in part by a decrease in accounts receivable of $531,000. The
large decrease in Accounts Payable reflects payment of construction invoices for
New Mark Phase V and the 811 Garage Expansion that were accrued at year-end. The
Gain on Sale of Real Estate was a sale of New Mark Land. Overall revenues
decreased $1,159,000 primarily due to a 2002 Kaiser Permanente lease buy-out of
$1,200,000 offset by 2003 gains from sales of real estate in the amount of
$487,000. 2003 revenues also include lease buy-outs for Valentine Radford
(Commerce Tower Building), Commerce Bank, N.A. (Commerce Tower Building), Ford
Motor Company (9909 Lakeview) and CitiGroup and City of Overland Park (Barkley
Building). The 2003 buy-outs totaling $1,020,000 were partially offset by the
write off of the Valentine Radford straight line rent receivable of $327,000 and
decreases in revenues at the Company's apartment complexes, 9221 Quivira and the
UMB Building. Increases in operating expenses were offset by a decrease in
interest expense. Insurance expense increased by $175,000 reflecting market
conditions. INVESTING ACTIVITIES UTILIZED $12,201,000 of cash, primarily from a
$11,838,000 increase in construction in progress associated with New Mark Phase
V and the 811 Garage Expansion offset by proceeds from the New Mark Land sale of
$734,000. FINANCING


                                       13
<PAGE>

ACTIVITIES GENERATED $11,131,000 primarily due to draws on the loans from
Commerce Bank, N.A. on New Mark Phase V totaling $9,685,000 and the 811 Garage
expansion totaling $2,400,000 to date and the borrowing against the credit line
of $500,000, offset by mortgage debt reduction of $1,194,000 and stock buy-backs
of $229,000. The Company does not anticipate any liquidity problems in the near
future. The Company has not experienced liquidity problems during the quarter
ended June 30, 2003. The Company does not anticipate any deficiencies in meeting
its liquidity needs currently or in the future. The Company anticipates cash
requirements for continuing construction on New Mark Phase V and the 811 Garage
Expansion to be $7,384,000 for 2003. Construction is ahead of schedule on New
Mark Phase V and costs originally expected to be incurred in 2004 have been
accelerated into 2003. The Company has loan commitments from Commerce Bank, N.A.
for these projects of $10,250,000 for New Mark Phase V and $2,400,000 for the
811 Garage Expansion, totaling $12,650,000 of which $9,685,000 and $2,400,000,
respectively, has been drawn to date leaving funds available for draw of
$565,000. The remaining $6,819,000 cash required for these projects will be met
from cash from operations and the remaining line of credit availability. The
Company has negotiated an increase to the line of credit with Commerce Bank,
N.A. from $11,472,000 to $15,500,000. The availability of $7,749,000 will give
the Company adequate resources to complete the projects. The Company has
adequate resources to collateralize any additional financing that may be
necessary to meet the Company's liquidity needs. The Company has cash on hand of
$722,000 at June 30, 2003. The Company's revenues are primarily based on lease
contracts, none of which are deemed to be materially at risk.

CRITICAL ACCOUNTING POLICIES

Revenue Recognition

The Company derives its revenue primarily from two sources: 1) rent from leases
of real property, and 2) management and services fees from real property leased
and managed. Rental revenue is recognized on a straight-line basis over the term
of individual non-cancellable operating leases. The recognition of scheduled
rent increases on a straight-line basis results in the recognition of a
receivable from tenants. Such receivables were $1,030,474 and $1,367,288 at June
30, 2003 and 2002, respectively. Lease agreements generally do not provide for
contingent rents. Management and service fees are recognized as a percentage of
revenues on managed properties as earned over the terms of the related
management agreements.

Impairment of Long-Lived Assets

The Company follows the provisions of Statement of Financial Accounting
Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets". The Company assesses the carrying value of its long-lived
assets whenever events or changes in circumstances indicate that the carrying
amount of the underlying asset may not be recoverable. Certain factors that may
occur and indicate that an impairment exists include, but are not limited to:
significant underperformance relative to expected projected future operating
results; significant changes in the manner of the use of the assets; and
significant


                                       14
<PAGE>

adverse industry or market economic trends. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount of an asset to
estimated undiscounted future cash flows expected to be generated by the asset.
If the carrying amount of an asset exceeds its estimated future cash flows, an
impairment charge is recognized by the amount by which the carrying amount of
the asset exceeds the fair value of the asset. Assets to be disposed of would be
separately presented in the balance sheet and reported at the lower of the
carrying amount or fair value less costs to sell, and are no longer depreciated.
The assets and liabilities of a disposed group classified as held for sale would
be presented separately in the appropriate asset and liability sections of the
balance sheet.

Cost Capitalization

The Company evaluates major expenditures for capitalization. Those which improve
or extend the useful life of the property are capitalized. Depreciation is based
upon the expected useful lives, generally forty years for buildings, fifteen
years for land improvements, seven years for furniture and fixtures, five years
for equipment and three years for software.

RELATED PARTY TRANSACTIONS:

The Company has a variety of related party transactions with Commerce
Bancshares, Inc. and its subsidiaries (Commerce). In addition to the borrowing
arrangement described above, the Company has the following transactions with
Commerce:

         o        Rentals - The Company leases space to Commerce Bank and its
                  affiliates. Total rental income derived from these leases for
                  the six months ended June 30, 2003 and June 30, 2002 was
                  $1,412,561 and $966,919. Total rental income for the three
                  months ended June 30, 2003 and June 30, 2002 was $462,978 and
                  $469,738. Such leases contain lease rates and other provisions
                  similar to those of other leases with unrelated parties. The
                  six months ended June 30, 2003 includes the Commerce Tower
                  Building Banking Center Lobby lease buyout of $415,000 and
                  Suite 618 lease buyout of $50,000.

         o        Management and Service fees - The Company manages certain
                  properties owned by Commerce under property management
                  agreements. In addition, the Company is overseeing the
                  construction of an office building in Wichita, Kansas in 2003
                  and oversaw the rehabilitation of the Commerce Trust Building
                  in 2002. Total fees earned under these arrangements were
                  $354,854 and $461,578 for the six months ended June 30, 2003
                  and June 30, 2002, respectively. Total fees earned were
                  $183,824 and $261,365 for the three months ended June 30, 2003
                  and June 30, 2002, respectively. The Company may earn lease
                  commissions on property owned by or rented by Commerce under a
                  listing agreement. Total fees earned under these arrangements
                  were $6,156 and $19,410 for the six months ended June 30, 2003
                  and June 30, 2002, respectively. Total fees earned for the
                  three months ended June 30, 2003 and 2002 were $0 and $4,500,
                  respectively. The Company may also earn consulting fee
                  services. Total fees earned for the six months and the three
                  months ended June 30, 2003 and June 30, 2002 were $2,175 and
                  $0, respectively. The Company provides similar services to
                  unrelated parties and revenues earned under these arrangements
                  are similar to those earned from other unrelated parties.


                                       15
<PAGE>

         o        Interest and other income - The Company owns 130,190 shares of
                  Commerce Bancshares, Inc. common stock and received dividend
                  income of $42,962 on such shares for the six months ended June
                  30, 2003 and $21,481 for the three months from April 1, 2003
                  to June 30, 2003. The Company owned 123,991 shares at June 30,
                  2002 and received dividend income of $40,297 and $20,149 for
                  the six months and three months ended June 30, 2002,
                  respectively. In addition, excess funds are deposited in
                  Commerce Bank, N.A. Interest earned on such deposits
                  aggregated approximately $5,991 and $49,870 for the six months
                  ended June 30, 2003 and June 30, 2002 respectively, and $2,900
                  and $25,714 for the three months ended June 30, 2003 and June
                  30, 2002. The Company provides similar services to unrelated
                  parties and revenues earned under these arrangements are
                  similar to those earned from other unrelated parties.

         o        The Company had a $11,472,000 line of credit with a variable
                  interest rate equal to one and one half percent (1 1/2%) in
                  excess of the Fed Funds rate, with Commerce Bank, N.A. At June
                  30, 2003, $3,451,000 was available under this line of credit,
                  and the average interest rate for the month of June was 2.46%.
                  The line requires monthly interest payments and expires June
                  01, 2004. The Company intends to renew this line of credit
                  with Commerce upon expiration. Interest expense paid to
                  Commerce Bank, N.A. was $33,501 and $8,834 for the six months
                  ended June 30, 2003 and 2002, respectively. Interest expense
                  for the three months ended June 30, 2003 and 2002 was $14,097
                  and $329, respectively. The Company pledged the shares of
                  Commerce common stock and real estate as collateral for the
                  line of credit. The weighted average short term borrowing rate
                  was 2.69% for the six months ended June 30, 2003. The Company
                  has a $10,250,000 construction loan for the development of
                  Phase V New Mark with a variable interest rate equal to the
                  London Interbank Offered Rate (LIBOR) plus 1.75, with Commerce
                  Bank, N.A. At June 30, 2003, $565,000 was available under this
                  construction loan, and the average interest rate for the month
                  of June was 3.07%. The line requires monthly interest payments
                  and expires February 18, 2006. Interest expense paid to
                  Commerce Bank, N.A. was $81,027 for the six months ended June
                  30, 2003 and $62,859 for the three months ended June 30, 2003,
                  respectively. The Company also has a $2,400,000 construction
                  loan for the expansion of the 811 Garage with a variable
                  interest rate equal to the London Interbank Offered Rate
                  (LIBOR) plus 1.75, with Commerce Bank, N.A. At June 30, 2003,
                  no funds were available under this construction loan, and the
                  average interest rate for the month of June was 3.07%. The
                  line requires monthly interest payments and expires May 1,
                  2006. Interest expense paid to Commerce Bank, N.A. was $12,164
                  for the three months ended June 30, 2003. A total $152,650 was
                  capitalized as part of the Company's investment in commercial
                  properties for the six months ended June 30, 2003.

         o        Included in receivables at June 30, 2003 and 2002 is $319,017
                  and $373,703 of amounts due from Commerce, respectively.



                                       16
<PAGE>

                         SIX MONTHS ENDED JUNE 30, 2003
                COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2002

RESULTS OF OPERATIONS

TOTAL REVENUE decreased $1,159,000. RENTAL INCOME decreased $1,431,000 offset by
the $494,000 GAIN ON SALE OF REAL ESTATE realized on the sale of 60.04 acres of
New Mark Land to the Catholic Diocese of Kansas City, Missouri. MANAGEMENT AND
SERVICE FEES along with OTHER INCOME will fluctuate from month to month and year
to year and compared to the previous year decreased $222,000. Factors affecting
RENTAL INCOME were the March 2002 lease buy-out from Kaiser Permanente in the
amount of $1,200,000, offset by the April 2003 lease buy-out of CitiGroup in the
amount of $40,000 and the May 2003 lease buy-out of City of Overland Park in the
amount of $100,000 at the Barkley Building, the February 2003 buy-out in the
Commerce Tower Building from Commerce Bank, N.A. in the amount of $465,000 for
the Tower Banking Center area and Suite 618, the March 2003 buy-out from
Valentine Radford in the amount of $282,000 for the 8th, 9th and 11th floors of
the Commerce Tower Building offset by the $327,000 write off of their
accumulated straight-line rent, and lower rental income on the 29th and 30th
floors of the Commerce Tower Building due to the November 2002 buy-out of Aquila
and the resulting new lease with Foland and Wickens which created a vacancy on
the 30th floor during the tenant improvement build-out. Other factors affecting
rental income included the March 2003 lease buy-out from Ford Motor in the
amount of $133,000 for the 9909 Lakeview Warehouse, the May 2002 vacancy of the
9921 Quivira Building and the November 2002 vacancy of the DEA at the UMB
Building and the decrease in occupancy at our apartment complexes.

OPERATING EXPENSES increased $110,000 primarily due to an increase in salaries
and benefits and utilities as compared to 2002. Utility rates fluctuate along
with the weather. In addition, due to the lease buy-outs in our commercial
properties and the increase in vacancies at our apartment complexes, the Company
has absorbed additional utility expense that would otherwise be paid by the
tenant. MAINTENANCE AND REPAIRS increased $12,000 primarily due to the 2003 duct
cleaning at the 811 Main commercial office building and the caulking of the
north and south elevation of the Commerce Tower, offset by the 2002 duct
cleaning, heating and cooling supplies, elevator and escalator repairs and
environmental monitoring of the Commerce Tower commercial office building.

GENERAL, ADMINISTRATIVE AND OTHER EXPENSE increased $188,000 primarily due the
increase in property insurance offset by a decrease in lease expense. Mortgage
interest expense decreased and related party interest increased due to the
borrowing on the line of credit and the New Mark Phase V and 811 Garage
expansion construction loans. In addition, due to the construction of New Mark
Phase V and the 811 Garage expansion, $153,000 in interest was capitalized as
compared to $-0- in 2002. This combination resulted in a $140,000 decrease in
INTEREST EXPENSE.


                                       17
<PAGE>

                        THREE MONTHS ENDED JUNE 30, 2003
               COMPARED WITH THE THREE MONTHS ENDED JUNE 30, 2002

RESULTS OF OPERATIONS

TOTAL REVENUE decreased $479,000. RENTAL INCOME decreased $346,000. MANAGEMENT
AND SERVICE FEES along with OTHER INCOME will fluctuate from month to month and
year to year and compared to the previous year decreased $133,000. Factors
affecting RENTAL INCOME were the April 2003 lease buy-out from CitiGroup in the
amount of $40,000 and City of Overland Park in the amount of $100,000 at the
Barkley Building offset by the loss of rents due to the vacancy from the 1st
quarter 2003 lease buy-outs in the Commerce Tower Building from Commerce Bank,
N.A. for the Tower Banking Center area and its re-leasing at a lower rental
rate, the 1st quarter 2003 lease buy-out of Valentine Radford for the 8th, 9th
and 11th floors of the Commerce Tower Building, the 4th quarter 2002 buy-out of
Aquila on the 29th and 30th floors and the resulting new lease with Foland and
Wickens which created a vacancy on the 30th floor during the tenant improvement
build-out. Other factors affecting rental income is the vacancy which resulted
from the 1st quarter 2003 buy-out from Ford Motor for the 9909 Lakeview
Warehouse, the May 2002 vacancy of the 9921 Quivira Building and the November
2002 vacancy of the DEA at the UMB Building and the decrease in occupancy at our
apartment complexes.

OPERATING EXPENSES increased $35,000 primarily due to an increase in salaries
and benefits and in utilities as compared to the same period in 2002. Utility
rates fluctuate along with the weather. In addition, due to the lease buy-outs
in our commercial properties and the increase in vacancies at our apartment
complexes, the Company has absorbed additional utility expense that would
otherwise by paid by the tenant. MAINTENANCE AND REPAIRS increased $63,000
primarily due to the 2003 heating and cooling expense of the 811 Main commercial
office building, the caulking of the north and south elevation of the Commerce
Tower commercial office building, additional engineering expense at the 811 Main
commercial office building, additional security expense at the 811 Main and
Commerce Tower commercial office buildings, electrical repair at the UMB
commercial office building, a water line repair to the Barkley Place commercial
office building and grounds expense at all the apartment complexes for the three
month period as compared to 2002, offset by the 2002 duct cleaning, heating and
cooling supplies, elevator and escalator repairs and environmental monitoring of
the Commerce Tower commercial office building.

GENERAL, ADMINISTRATIVE AND OTHER EXPENSE increased $143,000 primarily due the
increase in property insurance offset by a decrease in lease expense. Mortgage
interest expense decreased and related party interest increased due to the
borrowing on the line of credit and the New Mark Phase V and 811 Garage
expansion construction loans. In addition, due to the construction of New Mark
Phase V and the 811 Garage expansion, $98,000 in interest was capitalized as
compared to $-0- in 2002. This combination resulted in a $73,000 decrease in
INTEREST EXPENSE.


                                       18
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company is exposed to various market risks, including equity investment
prices and interest rates.

The Company has a significant amount of fixed rate debt and believes that the
fair value risk is best quantified by considering prepayment penalties
associated with the debt. Most prepayment penalties are based upon the
difference between the debt's fixed rate and the Treasury note rate that most
closely corresponds with the remaining life of the mortgage. The estimated
aggregate prepayment penalty on such debt was $9,203,558 at June 30, 2003.

The Company has 130,190 shares of common stock of Commerce Bancshares, Inc. with
a fair value of $5,066,995 as of June 30, 2003. This investment is not hedged
and is exposed to the risk of changing market prices. The Company classifies
these securities as "available-for-sale" for accounting purposes and marks them
to market on the balance sheet at the end of each period. Management estimates
that its investments will generally be consistent with trends and movements of
the overall stock market excluding any unusual situations. An immediate 10%
change in the market price of the securities would have a $309,087 effect on
comprehensive income.

The Company has $19,784,621 of variable rate debt as of June 30, 2003. A 100
basis point change in each debt series benchmark would impact net income on an
annual basis by approximately $121,000. This debt is not hedged.

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision and with the participation of the Company's Chief
Executive Officer and Vice President-Controller, the Company has evaluated the
effectiveness of the design and operation of the Company's disclosure controls
and procedures as of June 30, 2003 (the "Evaluation Date"). Based on such
evaluation, the Company's Chief Executive Officer and Vice President-Controller
have concluded that, as of the Evaluation Date, these controls and procedures
are effective. There have been no significant changes in the Company's internal
control over financial reporting during the Company's quarter ended June 30,
2003, that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.

                                       19
<PAGE>
PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

                  A former tenant of the Commerce Tower Building has dismissed
his civil action against the Company and re-filed it in amended form. The suit
alleges that asbestos fibers were released in the course of repairs after a July
22, 2000 fire in a suite in the building. The suit seeks damages for alleged
property damage, medical monitoring and relocation on theories of negligence,
fraudulent concealment, nuisance and breach of contract. There is also a claim
for punitive damages.

                  Plaintiff originally filed suit in 2001. He dismissed his
first suit voluntarily on May 30, 2003, immediately re-filed and the Company was
served on July 8, 2003. Plaintiff alleges that he brings the suit on behalf of a
class of all tenants. There have been no proceedings on the class issue.

                  Monitoring performed during the repair process indicated that
fibers were properly contained. The Company will vigorously defend its position
and believes the suit is without merit.


ITEM 2. CHANGES IN SECURITIES

                  None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

                  None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  On April 9, 2003, the Company held its annual meeting of
stockholders to elect two directors of the Company to serve until the annual
stockholders meeting in 2006 and to transact such other business as may properly
come before the meeting or any adjournment thereof. The results of the meeting
were as follows:

                  David W. Kemper, Jr. was elected to serve as a director of the
Company with 166,577 votes for and 696 votes withheld.

                  Brian D. Everist was elected to serve as a director of the
Company with 167,261 votes for and 12 votes withheld.


ITEM 5. OTHER INFORMATION

                  None


                                       20
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

     Exhibit 31 -- Certifications pursuant to Rule 13a-14 under the Securities
     Exchange Act of 1934

     Exhibit 32 -- Certifications pursuant to 18 U.S.C. Section 1350

     (b) Reports on Form 8-K

No reports on Form 8-K were filed during the quarter for which this report is
filed.



                                       21
<PAGE>

SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

TOWER PROPERTIES COMPANY




/s/ Thomas R. Willard
-------------------------------------
Thomas R. Willard
President and Chief Executive Officer




/s/ Margaret V. Allinder
-------------------------------------
Margaret V. Allinder
Vice President-Controller




Date:  August 14, 2003


                                       22