SECURITIES AND EXCHANGE
COMMISSIONWASHINGTON, D.C.  20549Annual Report Under
Section 13 or 15(d) of the Securities Exchange Act of 1934For the fiscal
year ended December 31, 2002 commission file number
0-11242FIRST COMMONWEALTH FINANCIAL
CORPORATION(Exact name of registrant as
specified in its
charter)        
PENNSYLVANIA                                                         
25-1428528(State or other
jurisdiction             
(I.R.S. Employerof incorporation or
organization         Identification
No.)    22 NORTH SIXTH STREET INDIANA,
PA          
15701(Address of principal executive
offices)      (Zip Code)Registrant's telephone
number, including area code: (724)349-7220Securities registered
pursuant to Section 12(b) of the Act:   TITLE OF EACH
CLASS                          
NAME OF EACH EXCHANGE ONWHICH REGISTEREDCOMMON STOCK, $1 PAR
VALUE          NEW YORK STOCK
EXCHANGEIndicate by checkmark 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 report(s), and (2) has been subject to such
filing requirements for the past 90 days.  Yes XX
No__.Indicate the number of shares outstanding of each of the issuer's
classes of common stock.     TITLE OF
CLASS            
                       
    OUTSTANDING AT March 14, 2003Common Stock, $1 Par
Value       
          
    58,986,772 SharesThe aggregate market value of
the voting common stock, par value $1 per share, held by non-affiliates of the
registrant (Based upon the closing sale price on March 14, 2003), was
approximately $633,513,562.DOCUMENTS INCORPORATED BY
REFERENCEPortions of the definitive Proxy Statement
related to the annual meeting of security holders to be held April 21, 2003 are
incorporated by reference into Part III.FIRST COMMONWEALTH
FINANCIAL CORPORATIONFirst Commonwealth Financial CorporationFORM
10-KINDEX

|PART 1   |                                                                                            | PAGE
|-------- | ------------------------------------------------------------------------------------------ | ----
|         |                                                                                            |     
|ITEM 1.  | Business                                                                                   | 2   
|         |                                                                                            |     
|         | Description of Business                                                                    | 2   
|         | Competition                                                                                | 4   
|         | Supervision and Regulation                                                                 | 5   
|         |                                                                                            |     
|ITEM 2.  | Properties                                                                                 | 9   
|         |                                                                                            |     
|ITEM 3.  | Legal Proceedings                                                                          | 9   
|         |                                                                                            |     
|ITEM 4.  | Submission of Matters to a Vote of Security
      Holders                                  | 10  
|         |                                                                                            |     
|PART II  |                                                                                            |     
|         |                                                                                            |     
|ITEM 5.  | Market for Registrant's Common Stock And
      Related Security Holder Matters             | 10  
|         |                                                                                            |     
|ITEM 6.  | Selected Financial Data                                                                    | 11  
|         |                                                                                            |     
|ITEM 7.  | Management's Discussion and Analysis of
      Financial Condition and Results of Operation | 12  
|         |                                                                                            |     
|ITEM 7A. | Quantitative and Qualitative Disclosures
      About Market Risk                           | 37  
|         |                                                                                            |     
|ITEM 8.  | Financial Statements and Supplementary
      Data                                          | 38  
|         |                                                                                            |     
|ITEM 9.  | Disagreements on Accounting and Financial
      Disclosures                                | 86  
|         |                                                                                            |     
|PART III |                                                                                            |     
|         |                                                                                            |     
|ITEM 10. | Directors and Executive Officers of the
      Registrant                                   | 86  
|         |                                                                                            |     
|ITEM 11. | Management Renumeration and
      Transactions                                             | 88  
|         |                                                                                            |     
|ITEM 12. | Security Ownership of Certain Beneficial
      Owners and Management                       | 88  
|         |                                                                                            |     
|ITEM 13. | Certain Relationships and Related
      Transactions                                       | 88  
|         |                                                                                            |     
|ITEM 14. | Controls and Procedures                                                                    | 88  
|         |                                                                                            |     
|PART IV  |                                                                                            |     
|         |                                                                                            |     
|ITEM 15. | Exhibits, Financial Statement Schedules and
      Reports on Form 8-K                      | 89  
|         |                                                                                            |     
|         | Signatures                                                                                 | 91  
|         |                                                                                            |     
|         | Certification of Chief Executive
      Officer                                             | 92  
|         |                                                                                            |     
|         | Certification of Chief Financial
      Officer                                             | 94  

FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIESITEM 1.    
BusinessDescription of BusinessFirst Commonwealth
Financial Corporation (the "Corporation") was incorporated as a Pennsylvania
business corporation on November 15, 1982 and is registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended.  The
Corporation has one chartered bank affiliate which operates under the First
Commonwealth Bank name.  Personal financial planning and other financial
services and insurance products are also provided through First Commonwealth
Trust Company and First Commonwealth Insurance Agency.  The Corporation
enhanced its financial services and products during the first quarter of 2002
through the addition of First Commonwealth Financial Advisors.  The
Corporation also operates through First Commonwealth Systems Corporation, a data
processing subsidiary and First Commonwealth Professional Resources Inc.,
("FCPRI") a subsidiary providing professional services to affiliated
organizations.In October 2002, the Corporation brought all 90 of our
community bank offices and our other affiliates under a common brand, First
Commonwealth.  We unveiled a new logo, colors, and signage through an
aggressive marketing strategy to reintroduce ourselves to the marketplace. 
A unified brand yields important benefits for our clients.  All of First
Commonwealth Bank's community offices have the same identity, products, and
professional service that provide a consistent experience throughout the office
network.  The insurance, trust, and financial planning affiliates are now
clearly linked with First Commonwealth Bank to provide integrated solutions to
meet any client need.First Commonwealth Bank ("FCB"), a
Pennsylvania-chartered banking corporation headquartered in Indiana,
Pennsylvania operated through divisions doing business under the following
names:  NBOC Bank, Deposit Bank, Cenwest Bank, First Bank of Leechburg,
Peoples Bank, Central Bank, Peoples Bank of Western Pennsylvania, Unitas Bank
and Reliable Bank.  In October 2002, these banking divisions as
well as the Corporation's other chartered bank (Southwest Bank) were merged
under the First Commonwealth name.  This enhancement will provide our
clients with greater flexibility, efficiency and seamless service throughout our
market footprint.Through FCB, the Corporation traces its banking origins
to 1866.  FCB conducts business through 89 community banking offices in the
counties of Allegheny (4), Armstrong (3), Beaver (1), Bedford (4), Blair (8),
Butler (1), Cambria (11), Centre (1), Clearfield (5), Elk (3), Franklin (2),
Huntingdon (5), Indiana (9), Jefferson (4), Lawrence (5), Somerset (5),
Washington (1), and Westmoreland (17).  FCB engages in general banking
business and offers a full range of financial services including such general
retail banking services as demand, savings and time deposits and mortgage,
consumer installment and commercial loans.FCB operates a network of 84
automated teller machines ("ATMs") which permit customers to conduct routine
banking transactions 24 hours a day.  Of the ATMs, 62 are located on the
premises of branch offices and 22 are in remote locations.  All the ATMS's
are part of the STAR network which consists of over 180,000 ATMs owned by
numerous banks, savings and loan associations and credit unions located
throughout 31 states.  STAR serves more than 124 million ATM/debit
cardholders and more than 6,500 financial2FIRST
COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
1.     Business (Continued)Description of
Business (Continued)institution members.  The ATMs operated by
FCB are also part of the global MasterCard/Cirrus network which is comprised of
more than 300,000 ATMs located in the United States, Canada and 58 other
countries and territories, which services over 365 million card holders. 
Such networks allow FCB clients to withdraw cash and in certain cases conduct
other banking transactions from ATMs of all participating financial
institutions.In addition to funds access through the use of ATMs, the
STAR debit card offered to FCB's deposit clients may be used at nearly 720,000
point-of-sale retail locations on the STAR system as well as being used on the
global MasterCard system for the purchase of goods and services.  The STAR
debit card provides clients with almost universal acceptability of a credit card
combined with the convenience of direct debit to the clients' checking
account.First Commonwealth Systems Corporation ("FCSC") was incorporated
as a Pennsylvania business corporation in 1984 by the Corporation to function as
its data processing subsidiary and it has its principal place of business in
Indiana, Pennsylvania.  Before August 1984, it had operated as the data
processing department.  FCSC provides on-line general ledger accounting
services and bookkeeping services for deposit and loan accounts to the
Corporation, FCB and its other nonbank subsidiaries.  FCSC also acts as a
centralized purchasing agent for the purchase of computer hardware and software
products by the Corporation and subsidiaries as well as providing technical
support for the installation and use of these products.  It competes,
principally with data processing subsidiaries of other, mostly larger, banks, on
the basis of the price and quality of its services and the speed with which such
services are delivered.  In October 2002, the name was changed to First
Commonwealth Systems Corporation from Commonwealth Systems
Corporation.First Commonwealth Trust Company ("FCTC") was incorporated
on January 18, 1991 as a Pennsylvania chartered trust company to render general
trust services.  The trust departments of the former subsidiary banks were
combined to form FCTC, and the corporate headquarters are located in Indiana,
Pennsylvania.  FCTC has seven branch offices in the service areas of FCB
and offers personal and corporate trust services, including administration of
estates and trusts, individual and corporate investment management and custody
services and employee benefit trust services.First Commonwealth
Insurance Agency ("FCIA") was incorporated as a Pennsylvania business
corporation with its principal place of business in Indiana, Pennsylvania. 
FCIA began operations in January 1998 as a wholly-owned subsidiary of FCB and
provides a full range of insurance and annuity products to retail and commercial
clients.The Corporation acquired all of the outstanding shares of
Strategic Capital Concepts, Inc. ("SCC") and Strategic Financial Advisors, Inc.
("SFA"), effective March 1, 2002.  As a registered investment advisor, SCC
provided financial planning, asset management and consulting services to
individuals, businesses, retirement plans, trusts3FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
1.     Business (Continued)Description of
Business (Continued)and estates.  SFA
offered investment and insurance products as well as employee benefit
services.  In October 2002, SFA was merged into SCC and the name was
changed to First Commonwealth Financial Advisors, Inc. ("FCFA"), which also
offers insurance products through FCIA, an affiliate.  This acquisition
will expand the Corporation's product offerings and positively impact fee based
revenue, which continues to be a priority. On June 1, 1989, Commonwealth
Trust Credit Life Insurance Company ("Commonwealth Trust") began
operations.  The Corporation owns 50% of the voting common stock of
Commonwealth Trust.  Commonwealth Trust providesreinsurance for credit
life and credit accident and health insurance sold by the subsidiaries of the
two unrelated holding company owners under a joint venture arrangement whereby
the net income derived from such reinsurance inures proportionally to the
benefit of the holding company selling the underlying insurance to its banks'
customers.First Commonwealth Capital Trust I, a business trust created
under the laws of the State of Delaware, is included in the consolidated
financial statements of the Corporation.  The trust was formed during
September 1999 for the exclusive purposes of issuing and selling trust preferred
securities, using the proceeds from the sale of the trust preferred securities
to acquire subordinated debentures issued by the Corporation and engaging in
only those other activities necessary or incidental thereto.The
Corporation and its subsidiaries employed approximately 1,450 (full-time
equivalents) at December 31, 2002.  The Corporation does not engage in any
significant business activities other than holding the stock of its
subsidiaries.  The Corporation does not at present have any plans to expand
or modify its business or that of its subsidiaries, other than as described
herein.  Nevertheless, it will be receptive to and may actively seek out
mergers and acquisitions in the event opportunities which management considers
advantageous to the development of the Corporation's business arise, and may
otherwise expand or modify its business as management deems necessary to respond
to changing market conditions or the laws and regulations affecting the business
of banking.CompetitionFCB,
FCTC, FCFA and FCIA face intense competition, both from within and out of their
service areas, in all aspects of business.  FCB competes for deposits, in
such forms as checking, savings and NOW (negotiable order of withdrawal)
accounts, MMDA (money market deposit accounts) and certificates of deposit, and
in making consumer loans and loans to smaller businesses, with numerous other
commercial banks and savings banks doing business within its service area with
respect to loans to larger businesses.  FCB also completes, primarily in
making consumer loans and for deposits, with state and federally chartered
savings and loan associations and with credit unions.  In recent years, FCB
has encountered significant competition for deposits from money market funds,
mutual funds and institutions that offer annuities located throughout the United
States.  Money market funds pay dividends to their shareholders (which are
the equivalent of the interest4FIRST
COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
1.     Business (Continued)Competition
(Continued)paid by banks on deposits) and they
are able to offer services and conveniences similar to those offered by
FCB.  Annuities accumulate interest on the amounts deposited over a
predetermined time period.  The depositor is then entitled to withdraw
their funds for a fixed period of time or until death.  The effect of such
competition has been to increase the costs of the rest of deposits, which
provide the funds with which loans are made.  In addition to savings and
loan associations and credit unions, FCB also competes for consumer loans with
local offices of national finance companies and finance subsidiaries of
automobile manufacturers and with national credit card companies such as
MasterCard and VISA, whose cards, issued through financial institutions, are
held by consumers throughout its service area.  FCB believes that the
principal means by which it may compete for deposits and consumer and smaller
commercial loans are the number and desirability of the locations of its offices
and ATMs, the sophistication and quality of its services and the prices
(primarily interest rates) of its services.  Additionally, FCB intends to
remain competitive by offering financial services that target specific client
needs.  Development of an integrated advisory sales model to integrate
products between our bank, insurance agency, trust company and financial
advisory affiliates as well as utilization of an employee team to deliver
products and services to our commercial clients through our "Total Solutions
Financial Management" approach have been positively received by our
customers.  Specific client needs are also met through an enhanced client
delivery system that includes telephone banking, which provides convenient
access to financial services and hours of operation that extend past those of
the FCB branch offices.  The Corporation introduced "WebBank" early in
2002, providing clients with access to their bank account information via the
internet 24 hours a day - 7 days a week.  Features of WebBank include the
ability to monitor account balances, view account history, perform account
balance transfers and issue stop payments.  A loan production office was
opened in downtown Pittsburgh in 2002 with significant new client
acquisitions.   Supervision and
RegulationThe Corporation is a bank
holding company within the meaning of the Bank Holding Company Act of 1956, as
amended ("the Bank Holding Company Act") and is registered as such with the
Federal Reserve Board.  As a registered bank holding company ("BHC"), it is
required to file with the Federal Reserve Board an annual report and other
information.  The Federal Reserve Board is also empowered to make
examinations and inspections of the Corporation and its subsidiaries.The
Bank Holding Company Act and Regulation Y of the Federal Reserve Board require
every bank holding company to obtain the prior approval of the Federal Reserve
Board before it may acquire direct or indirect ownership or control of more than
5% of the outstanding voting shares or substantially all of the assets of a bank
or merge or consolidate with another bank holding company.  The Federal
Reserve Board may not approve acquisitions by the Corporation of such percentage
of voting shares or substantially all the assets of any bank located in any
state other than Pennsylvania unless the laws of such state specifically
authorize such an acquisition.5FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 1.    
Business (Continued)Supervision and Regulation
(Continued)The Bank Holding Company Act
generally prohibits a bank holding company from engaging in a non-banking
business or acquiring direct or indirect ownership or control of more than 5% of
the outstanding voting shares of any non-banking corporation subject to certain
exceptions, the principal exception being where the business activity in
question is determined by the Federal Reserve Board to be closely related to
banking or to managing or controlling banks to be a proper incident
thereto.  The Bank Holding Company Act does not place territorial
restrictions on the activities of such banking related subsidiaries of bank
holding companies.Under the Federal Reserve Act, subsidiary banks of a
bank holding company are subject to certain restrictions on extensions of credit
to the bank holding company or any of its subsidiaries, investments in the stock
or other securities thereof, or acceptance of such stock or securities as
collateral for loans to any one borrower.  Under the Pennsylvania Banking
Code, there is no limit on the number of Pennsylvania banks that may be owned or
controlled by a Pennsylvania bank holding company. Sarbanes-Oxley Act
of 2002On July 30, 2002, President George W. Bush signed into law
the Sarbanes-Oxley Act of 2002, which generally establishes a comprehensive
framework to modernize and reform the oversight of public company auditing,
improve the quality and transparency of financial reporting by those companies
and strengthen the independence of auditors.  Certain of the new
legislation's more significant reforms are noted
below:*    The new legislation creates a public company
accounting oversight     board which is empowered to set
auditing, quality control and ethics     
standards, to inspect registered public accounting firms, to
conduct      investigations and to take
disciplinary actions, subject to SEC      oversight
and review.  The new board will be funded by mandatory
fees     paid by all public companies.  The new
legislation also improves the      Financial
Accounting Standards Board, giving it full
financial      independence from the accounting
industry.*    The new legislation strengthens auditor
independence from corporate      management by,
among other things, limiting the scope of
consulting      services that auditors can offer
their public company audit clients.*    The new
legislation heightens the responsibility of public
company      directors and senior managers for the
quality of the financial      reporting and
disclosure made by their companies.   Among
other      things, the new legislation provides for
a strong public company audit      committee that
will be directly responsible for the
appointment,      compensation and oversight of the
work of the public company auditors.*    The new
legislation imposes a range of new corporate
disclosure      requirements.  Among other
things, the new legislation requires public     
companies to report all off-balance-sheet transactions and
conflicts,     as well as to present any pro forma
disclosures in a way that is not      misleading
and in accordance with requirements to be established
by     the SEC. 6FIRST
COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
1.     Business (Continued)Supervision and
Regulation (Continued)Sarbanes-Oxley
Act of 2002(Continued)*    The new legislation also accelerated the
required reporting of      insider transactions,
which now generally must be reported by the end     of
the second business day following a covered
transaction.*    The new legislation requires the
Corporation's Chief Executive Officer     and Chief
Financial Officer to each certify that the
Corporation's      Quarterly and Annual Reports do
not contain any untrue statements of a     
material fact.  The rules contain several requirements,
including      having these officers certify
that:  they are responsible for     
establishing, maintaining and regularly evaluating the
effectiveness     of the Corporation's internal
controls; they have made certain      disclosures
to the Corporation's auditors and the Audit Committee
of     the Board of Directors about the Corporation's
internal controls; and     they have included
information in the Corporation's Quarterly and     
Annual Reports about their evaluation and whether there have
been      significant changes in the Corporation's
internal controls or in other      factors that
could significantly affect internal controls
subsequent     to the
evaluation.*    The new legislation imposes a range of
new criminal penalties for     fraud and other wrongful
acts, as well as extends the period during     which
certain types of lawsuits can be brought against a company
or     its insiders.The Corporation has adopted
a series of actions to strengthen and improve its already strong corporate
governance practices.  Included in those actions was the adoption of a new
Code of Conduct and Ethics by the Corporation and formation of a Financial
Disclosure Committee.  This committee includes as members the Chief
Executive Officer, Chief Financial Officer and other key members of the
Corporation's management team.  The Corporation also requires signed
certifications from managers who are responsible for internal controls
throughout the Company as to the integrity of the information they
prepare.The Gramm-Leach-Bliley Act ("GBLA") of 1999 revolutionizes the
regulation of financial services companies.  GBLA amends the Bank Holding
Company Act of 1956 to create a new type of bank holding company, a financial
holding company ("FHC"), which is permitted to engage in all activities
permitted by a bank holding company as well as securities, merchant banking and
insurance activities that were prohibited to BHCs.  GLBA also repeals
Section 20 and 32 of the Glass-Steagall Act, which prohibited affiliations
between a member bank and a company principally engaged in securities
activities.  The activities of a BHC that does not qualify to become a FHC
will be limited to those the Federal Reserve Board had, prior to enactment of
GBLA, deemed closely related to banking.  In order to qualify as a FHC,
each depository institution subsidiary of a BHC must be well capitalized, well
managed and if insured have a satisfactory or better rating under the Community
Reinvestment Act of 1977 ("CRA") as of its most recent examination and the BHC
must file an election with the Federal Reserve Board certifying that it meets
the requirements of a FHC.  GBLA expands the range of business
opportunities for commercial banking organizations and7FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
1.     Business (Continued)Supervision and
Regulation (Continued)enables banking companies and other types of
financial companies such as securities, insurance and financial technology
companies to combine more readily.  A FHC does not need to obtain prior
Federal Reserve Board approval in order to engage in, or acquire a nonbank
company that engages in financial activities.  The FHC only needs to
provide notice to the Federal Reserve Board, describing the activity commenced
or conducted by the acquired company, within 30 days after commencing the
activity or consummating the acquisition. Subsidiary
BankFCB is a Pennsylvania-chartered bank and is subject to the
supervision of and regularly examined by the Pennsylvania Department of Banking
and the Federal Deposit Insurance Corporation ("FDIC"), and subject to certain
regulations of the Federal Reserve Board.  The areas of operation subject
to regulation by Federal and Pennsylvania laws, regulations and regulatory
agencies include reserves against deposits, maximum interest rates for specific
classes of loans, truth-in-lending disclosures, permissible types of loans and
investments, trust operations, mergers and acquisitions, issuance of securities,
payment of dividends, Community Reinvestment Act evaluations, mandatory external
audits, establishment of branches and other aspects of operations.  Under
the Pennsylvania Banking Code, a state bank located in Pennsylvania may
establish branches anywhere in the state.Reciprocal Regional
Interstate BankingAs already noted, a bank
holding company located in one state cannot acquire a bank or a bank holding
company located in another state unless the law of such other state specifically
permits such acquisitions.  On June 25, 1986, Pennsylvania passed a law
(Act No. 1986-69) which provides that a bank holding company located in any
state or the District of Columbia can acquire a Pennsylvania bank or bank
holding company if the jurisdiction where the acquiring bank holding company is
located has passed an enabling law that permits a Pennsylvania bank holding
company to acquirea bank or a bank holding company in such
jurisdiction.  As of December 31, 2001, enabling laws have been passed so
that the required reciprocity presently exits with approximately 34 states,
including New York, New Jersey, Ohio, Delaware, Maryland and West
Virginia.  A similar law is applicable to savings associations and savings
and loan holding companies.  It is difficult to determine
the precise effects that reciprocal regional interstate banking will have on the
Corporation in the future, but the law has increased, and as reciprocity becomes
effective for additional states will increase further, the number of potential
buyers for Pennsylvania banks and bank holding companies.  The law also
permits Pennsylvania bank holding companies and Pennsylvania savings and loan
holding companies that desire to expand outside Pennsylvania to acquire banks,
savings institutions and bank holding companies located in jurisdictions with
which Pennsylvania has reciprocity.8FIRST COMMONWEALTH FINANCIAL CORPORATION AND
SUBSIDIARIESITEM 1.     Business
(Continued)Effects of Governmental PoliciesThe business
and earnings of the Corporation are affected not only by general economic
conditions, but also by the monetary and fiscal policies of the United States
Government and its agencies, including the Federal Reserve Board.  An
important function of the Federal Reserve Board is to regulate the national
supply of bank credit.  Among the instruments of monetary policy used by
the Federal Reserve Board to implement these objectives are open market
operations in United States government securities, changes in the discount rate
on borrowings by member banks and savings institutions from the Federal Reserve
System and changes in reserve requirements against bank and savings institution
deposits.  These instruments, together with fiscal and economic policies of
various governmental entities, influence overall growth of bank loans,
investments and deposits and may also affect interest rates charged on loans,
received on investments or paid for deposits.The monetary policies of
the Federal Reserve Board have had a significant effect on the operating results
of bank holding companies and their subsidiary banks in the past and are
expected to continue to do so in the future.  In view of changing
conditions in the national and Pennsylvania economies and in the money markets,
as well as the effect of actions by monetary and fiscal authorities, including
the Federal Reserve Board, no prediction can be made as to possible future
changes in interest rates, deposit levels and loan demand or the effect of such
changes on the business and earnings of the Corporation or its
subsidiaries.Changes in RegulationsProposals to change the laws and regulations governing the
banking industry are frequently introduced in Congress, in the state
legislatures and before the various bank regulatory agencies.  The
likelihood and timing of any proposals or legislation and the impact they might
have on the Corporation and its subsidiaries cannot be determined at this
time.ITEM 2.  PropertiesThe Corporation's principal
office is located in the old Indiana County Courthouse complex.  This
certified Pennsylvania and national historic landmark was built in 1870 and
restored by the Corporation in the early 1970's.  The Corporation occupies
this building, which provides 32,000 square feet of floor space, under a 25-year
restoration lease agreement with Indiana County, which the Corporation entered
into in 1973 and renewed during 1998 for an additional 25 years.  In order
to support future expansion needs and centralization of various functional areas
such as loan processing, marketing, and accounting, the Corporation also owns
two additional structures.  FCB has 89 banking facilities of which 23 are
leased and 66 are owned.  Management presently expects that such facilities
will be adequate to meet the anticipated needs of the Corporation and its
subsidiaries for the immediate future.ITEM 3.  Legal
ProceedingsInformation appearing in Note 23 to the Consolidated
Financial Statements on page 76 is incorporated herein by reference in response
to this item.9FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIESITEM 4.  Submission of Matters to
Vote of Security HoldersThere were no matters submitted to vote by
security holders in the fourth quarter of 2002.Part
IIITEM 5.  Market for Registrant's
Common Stock and Related Security
Holder         MattersFirst Commonwealth Financial Corporation (the
"Corporation") is listed on the New York Stock Exchange under the symbol
"FCF".  The approximate number of holders of record of the Corporation's
common stock is 13,500.  The table below sets forth the high and low sales
prices per share and cash dividends declared per share for common stock of the
Corporation.

|Period                                                                    | High Sale | Low Sale | CashDividendsPer
      Share
|------------------------------------------------------------------------- | --------- | -------- | ----------------------------
|_________________________________________________________________________
|2002                                                                      |           |          |                             
|First Quarter                                                             | $14.00    | $11.51   | $0.150                      
|Second Quarter                                                            | $14.12    | $12.53   | $0.150                      
|Third Quarter                                                             | $13.37    | $11.62   | $0.150                      
|Fourth Quarter                                                            | $12.35    | $10.84   | $0.155                      



|Period                                                                    | High Sale | Low Sale | CashDividendsPer
      Share
|------------------------------------------------------------------------- | --------- | -------- | ----------------------------
|_________________________________________________________________________
|2001                                                                      |           |          |                             
|First Quarter                                                             | $11.45    | $ 9.50   | $0.145                      
|Second Quarter                                                            | $15.00    | $10.30   | $0.145                      
|Third Quarter                                                             | $14.35    | $10.80   | $0.145                      
|Fourth Quarter                                                            | $13.00    | $11.10   | $0.150                      

10FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
6.  Selected Financial Data (Dollar Amounts in Thousands,
except         per share
data)The following selected financial
data is not covered by the auditor's report and should be read in conjunction
with Management's Discussion and Analysis of Financial Condition and Results of
Operations, which follows, and with the consolidated financial statements and
related notes.  All amounts have been restated to reflect the pooling of
interests.  Financial statement amounts for prior periods have also been
reclassified to conform to the presentation format used in 2002.  The
reclassifications had no effect on the Corporation's financial condition or
results of operations.

|                                                                                               | Years Ended December
      31,
|---------------------------------------------------------------------------------------------- | ------------------------------
|                                                                                               | 2002                          
|                                                                                               |                               
|Interest income.......................                                                         | $  275,568                    
|Interest expense......................                                                         | 122,673                       
|                                                                                               |                               
|Net interest income.................                                                           | 152,895                       
|Provision for credit losses...........                                                         | 12,223                        
|Net interest income after provision
      for credit    losses............................     | 140,672                       
|Securities gains .....................                                                         | 642                           
|Other operating income................                                                         | 36,564                        
|Litigation settlement.................                                                         | 8,000                         
|Restructuring charges.................                                                         | 6,140                         
|Merger and related charges............                                                         | -0-                           
|Other operating expenses..............                                                         | 111,301                       
|                                                                                               |                               
|Income before taxes and extraordinary
      items.................................             | 52,437                        
|Applicable income taxes...............                                                         | 8,911                         
|                                                                                               |                               
|Net income before extraordinary
      items......................................              | 43,526                        
|Extraordinary items (less applicable income
      taxes  of $336)............................  | -0-                           
|Net income............................                                                         | $   43,526                    
|                                                                                               |                               
|Per Share Data (a)                                                                             |                               
|Net income before extraordinary
      items......................................              | $     0.75                    
|Extraordinary items.................                                                           | 0.00                          
|Net income..........................                                                           | $    
      0.75              
|                                                                                               |                               
|Dividends declared..................                                                           | 0.605                         
|                                                                                               |                               
|Average shares outstanding..........                                                           | 58,409,614                    
|                                                                                               |                               
|Per Share Data Assuming
      Dilution(a)                                                      |                               
|Net income before extraordinary
      items                                                    | $     0.74                    
|Extraordinary items                                                                            | 0.00                          
|Net
      income                                                                               | $    
      0.74              
|                                                                                               |                               
|Dividends declared                                                                             | 0.605                         
|                                                                                               |                               
|Average shares outstanding                                                                     | 58,742,018                    
|                                                                                               |                               
|At End of Period                                                                               |                               
|Total assets                                                                                   | $4,524,743                    
|Investment securities                                                                          | 1,680,609                     
|Loans and leases, net of unearned
      income                                                 | 2,608,634                     
|Allowance for credit
    losses                                                                | 34,496                        
|Deposits                                                                                       | 3,044,124                     
|Company obligated mandatorily
      redeemable capital    securities of subsidiary
      trust | 35,000                        
|Other long-term debt                                                                           | 544,934                       
|Shareholders' equity                                                                           | 401,390                       
|                                                                                               |                               
|Key Ratios                                                                                     |                               
|Return average assets                                                                          | 0.96%                         
|Return on average
      equity                                                                 | 11.09%                        
|Net loans to deposits
    ratio                                                                | 84.56%                        
|Dividends per share as a percent of
      net income    per share                              | 80.67%                        
|Average equity to average assets
      ratio......................................             | 8.64%                         

(a) Where
applicable, per share amounts have been restated to reflect the two-for-one
stock split effected in the form of a 100% stock dividend declared on October
19, 1999.11FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
OperationsIntroductionThis discussion and the related
financial data are presented to assist in the understanding and evaluation of
the consolidated financial condition and the results of operations of First
Commonwealth Financial Corporation including its subsidiaries (the
"Corporation") for the years ended December 31, 2002, 2001 and 2000 and are
intended to supplement, and should be read in conjunction with, the consolidated
financial statements and related footnotes.Sections of this financial
review, as well as the notes to the consolidated financial statements, contain
forward-looking statements (as defined in the Private Securities Litigation
Reform Act of 1995), which reflect management's beliefs and expectations based
on information currently available and may contain the words "expect,"
"estimate," "project," "anticipate," "should," "intend," "probability," "risk,"
"target," "objective," and similar expressions or variations on such
expressions.  These forward-looking statements are inherently subject to
significant risks and uncertainties, including but not limited to:  changes
in general economic and financial market conditions, the Corporation's ability
to effectively carry out its business plans, changes in regulatory or
legislative requirements, changes in competitive conditions and continuing
consolidation of the financial services industry.  Although management
believes the expectations reflected in such forward-looking statements are
reasonable, actual results could differ materially.  Readers are cautioned
not to place undue reliance on these forward-looking statements, which reflect
management's analysis only as of the date hereof.  The Corporation
undertakes no obligation to publicly revise or update these forward-looking
statements to reflect events or circumstances that arise after the date hereof.
The Corporation acquired all of the outstanding shares of Strategic
Capital Concepts, Inc. ("SCC") and Strategic Financial Advisors, Inc. ("SFA"),
effective March 1, 2002.  As required under the purchase method of
accounting, the results of SCC and SFA from the date of acquisition were
included in the Corporation's financial statements for 2002.  As a
registered investment advisor, Strategic Capital Concepts provided financial
planning, asset management and consulting services to individuals, businesses,
retirement plans, trusts and estates.  Strategic Financial Advisors offered
investment and insurance products as well as employee benefit services.  In
October 2002, SFA was merged into SCC and the name was changed to First
Commonwealth Financial Advisors, Inc., which also offers insurance products
through First Commonwealth Insurance Agency, an affiliate.  This
acquisition will expand the Corporation's product offerings and positively
impact fee based revenue, which continues to be a priority. Financial
statement amounts in prior periods have been reclassified to conform to the
presentation format used in 2002.  The reclassifications had no effect on
the Corporation's financial condition or results of
operations.12FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)Results of OperationsNet income
was $43.5 million in 2002, a decline of $6.7 million from 2001 results of $50.2
million and compared to $47.2 million registered in 2000.Net income for
2002 was negatively impacted by the effects of $6.1 million of restructuring
costs and an $8.0 million litigation settlement.  The restructuring charges
consisted principally of severance amounts paid to employees as part of the plan
to consolidate the multiple bank charters and develop the First Commonwealth
brand and identity for all of the financial services subsidiaries. 
Payments to retiring directors as part of the realignment for the Corporation's
new vision on corporate governance also were included in restructuring
charges.  The litigation settlement related to a lender liability action
filed in 1994 against one of the Corporation's subsidiary banks and followed an
adverse pre-trial judgment by the trial judge on procedural grounds.  Net
of tax, these nonrecurring charges reduced net income by $9.2 million in
2002.  Also impacting 2002 results were expenses of $1.8 million ($1.2
million after tax) related to development of the First Commonwealth brand. 
The merger of banking operations as well as the establishment of the First
Commonwealth branding will help provide our clients with greater flexibility,
efficiency and seamless service throughout our market footprint. 
The increase in net income for 2001 resulted primarily from increases in
net interest income, gains on sale of assets and insurance commissions of $4.4
million, $1.8 million and $1.2 million, respectively.  Gains on sale of
assets included securities gains of $3.3 million and $1.7 million in 2001 and
2000, respectively as well as a $999 thousand gain on the sale of a branch and
block of mortgages in 2001.  Diluted earnings per share was $0.74
for 2002 compared to $0.86 and $0.82 for 2001 and 2000, respectively. 
Return on average assets was 0.96% and return on equity was 11.09% during 2002
compared to 1.11% and 13.85%, respectively for 2001.  Return on average
assets was 1.10% during 2000 as return on average equity reached 15.65%. 
13FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
7.     Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)Results of
Operations (Continued)The following is an analysis of the impact of
changes in net income on diluted earnings per share:

|                                            | 2002 vs.2001 | 2001 vs.2000
|------------------------------------------- | ------------ | ------------
|                                            |              |             
|Net income per share, prior
year            | $0.86        | $0.82       
|                                            |              |             
|Increase (decrease) from change
    in:     |              |             
|                                            |              |             
|Net interest
      income                   | 0.16         | 0.05        
|Provision for credit
      losses           | (0.01)       | (0.02)      
|Security
      transactions                 | (0.05)       | 0.03        
|Insurance
      commissions                 | 0.01         | 0.02        
|Income from bank
      owned life insurance | 0.00         | 0.02        
|Other
      income                          | (0.02)       | 0.04        
|Salaries and
      employee benefits        | (0.05)       | (0.03)      
|Occupancy and
      equipment costs         | (0.01)       | (0.01)      
|Data processing
      expense               | 0.02         | 0.00        
|Pennsylvania shares
      tax expense       | 0.00         | (0.01)      
|Goodwill
      amortization                 | 0.02         | 0.00        
|Litigation
      settlement                 | (0.14)       | 0.00        
|Restructuring
      charges                 | (0.10)       | 0.00        
|Rebranding
      costs                      | (0.03)       | 0.00        
|Other operating
      expenses              | (0.03)       | (0.04)      
|Applicable income
      taxes               | 0.11         | (0.01)      
|                                            |              |             
|Net income per share                        | $0.74        | $0.86       

Core net income excluding
nonrecurring charges as well as securities gains and any nonrecurring gains for
2002 was $52.3 million, an increase of $4.9 million or 10.4% over core net
income of $47.4 million for 2001. Core diluted earnings per share was $0.89 per
share, a rise of $0.07 or 8.5% compared to the $0.82 achieved in 2001. 
Core return on average assets for 2002 advanced to 1.15% compared to 1.05% for
2001 as core return on shareholders' equity for 2002 also improved on a year to
year
basis.14FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
7.     Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)Results of
Operations (Continued)

|Reconciliation of Core
      Earnings                      |                                      |        
|---------------------------------------------------------- | ------------------------------------ | -------
|(Dollar Amounts in Thousands, except
      per share data) |                                      |        
|                                                           | For the Year EndedDecember
      31,
|                                                           | 2002                                 | 2001   
|                                                           |                                      |        
|Net income as reported                                     | $43,526                              | $50,189
|Non-core items (net of tax):                               |                                      |        
|Gains on sale of assets                                    | (417)                                | (2,807)
|Restructuring charges                                      | 3,991                                | -0-    
|Litigation settlement                                      | 5,200                                | -0-    
|Core net income                                            | $52,300                              | $47,382
|                                                           |                                      |        
|Core basic earnings per share                              | $  0.90                              | $  0.82
|Core diluted earnings per share                            | $  0.89                              | $  0.82
|Core return on average assets                              | 1.15%                                | 1.05%  
|Core return on average equity                              | 13.33%                               | 13.07% 

Net interest income, the engine that powers
revenue growth for the Corporation, is defined as the difference between income
on earning assets and the cost of funds supporting those assets.  Net
interest income rose to $152.9 million in 2002 compared to $141.7 million in
2001 and $137.3 million in 2000.  The following is an analysis of the
average balance sheets and net interest income for each of the three years in
the period ended December 31,
2002.15

FIRST COMMONWEALTH FINANCIAL CORPORATION AND
SUBSIDIARIESITEM 7.     Management's Discussion
and Analysis of Financial Condition and Results of
Operations         
(Continued)Results of Operations (Continued)

|Average
        Balance Sheets and Net Interest Analysis       
        
                                                               
        (Dollar Amounts in Thousands)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                              
|                                                                                                                                                                              
|Assets                                                                                                                                                                        
|Interest-earning assets:                                                                                                                                                      
|Time deposits with 
            banks                                                                                                                                         
|Investment securities                                                                                                                                                         
|Federal funds sold                                                                                                                                                            
|Loans, net of 
           unearned 
           income (b) (c)                                                                                                                 
|Total interest-
              earning assets                                                                                                                                  
|                                                                                                                                                                              
|Noninterest-earning 
          assets:                                                                                                                                        
|Cash                                                                                                                                                                          
|Allowance for credit
            losses                                                                                                                                       
|Other assets                                                                                                                                                                  
|Total noninterest-
              earning assets                                                                                                                               
|Total Assets                                                                                                                                                                  
|                                                                                                                                                                              
|Liabilities and Shareholders' Equity                                                                                                                                          
|Interest-bearing   liabilities:                                                                                                                                               
|Interest-bearing 
           demand deposits (d)                                                                                                                              
|Savings deposits (d)                                                                                                                                                          
|Time deposits                                                                                                                                                                 
|Short-term borrowings                                                                                                                                                         
|Long-term debt                                                                                                                                                                
|Total interest-
             bearing 
             liabilities                                                                                                                
|                                                                                                                                                                              
|Noninterest-bearing                                                                                                                                                           
|liabilities and 
            capital:                                                                                                                                         
|Noninterest-bearing 
            demand deposits (d)                                                                                                                          
|Other liabilities                                                                                                                                                             
|Shareholders' equity                                                                                                                                                          
|Total noninterest-
             bearing funding
             sources                                                                                                          
|Total Liabilities
        
               and 
               Shareholders' 
               Equity                                                                            
|                                                                                                                                                                              
|Net Interest Income and 
          Net Yield on 
          Interest-Earning 
          Assets                                                                                 
|                                                                                                                                                                              

(a) Yields on interest-earning assets have
  been computed on a tax equivalent basis using the 35%
      Federal income tax statutory rate.
  (b) Income on nonaccrual loans is accounted for on the cash basis, and the loan
  balances are 
      included in interest-earning assets.
  (c) Loan income includes net loan fees.
  (d) Average balances do not include reallocations from noninterest-bearing demand
  deposits and 
      interest-bearing demand deposits into savings deposits which
  were made for regulatory 
      purposes.16

FIRST COMMONWEALTH FINANCIAL CORPORATION AND
SUBSIDIARIESITEM 7.     Management's Discussion
and Analysis of Financial Condition and Results of Operations
(Continued)Both interest income and interest expense fell compared to
2001 levels primarily as the result of the dramatic decrease in interest rates
that began in 2001 and continued into 2002.  Earning asset yields, on a
tax-equivalent basis, declined 77 basis points (0.77%) during 2002 to 6.66% from
7.43% registered in 2001, after decreasing from 7.87% in 2000.  The cost of
funds for 2002 dropped 117 basis points (1.17%) below 2001 costs of 4.44%, after
decreasing 37 basis points (0.37%) from 2000 costs of 4.81%.  Average
earning assets were $4,294.5 million and average interest-bearing liabilities
were $3,746.9 million for 2002, basically flat when compared to 2001 averages in
both components.Interest and fees on loans declined $22.3 million for
2002 compared to 2001 levels primarily as yields declined in the lower interest
rate environment.  Loan yields fell 98 basis points (0.98%) during 2002 to
7.13% from 8.11% for 2001 after a decline of 39 basis points (0.39%) from the
2000 level.  Time and demand loan yields fell 149 basis points (1.49%) and
the yields on home equity and personal lines of credit declined 163 basis points
(1.63%) and 234 basis points (2.34%), respectively compared to the prior
year.The increase in average loan volumes was not enough to offset the
reduced interest income caused by declining yields.  During 2002, the
Corporation took advantage of the lower interest rate cycle and continued to
change the mix of the loan portfolio.  Average mortgage loans declined as
consumers refinanced their loans at near record levels.  The Corporation
continued to offer competitive mortgage loans but generally sold them
immediately after origination along with the related servicing rights. 
Average commercial and municipal loans offset the decline in 1-4 family mortgage
loans and grew $159.7 million, primarily in shorter term and variable rate
lending.  The Corporation has continued to capitalize on lending
opportunities with small to mid-sized commercial borrowers, including loans
generated through its preferred Small Business Administration ("SBA") lender
status.  The Corporation was one of the top small business lenders in
Pennsylvania during 2002 and 2001.Interest income on investments
declined $10.5 million for 2002 compared to 2001 primarily due to interest rate
decreases.  Yields on investments for 2002 continued to decline, falling to
5.95% compared to 6.45% for 2001 and 6.88% for 2000.  All categories of
interest income on investments were negatively impacted by interest rate changes
with the largest decline registered in the U.S. Government Agency category,
declining $8.3 million or 54 basis points (0.54%) for 2002 compared to
2001.  Prepayment speeds of mortgage backed securities ("MBS") continued to
accelerate in 2002 as interest rates continued to decline.  Interest rate
changes have a direct impact on prepayment speeds.  As interest rates
increase, prepayments tend to decline and average lives of MBS increase. 
As interest rates decrease, prepayment speeds tend to increase and average lives
of MBS decline and accelerates the amount of premium amortization that is
realized, further reducing the yields in current periods.  Using computer
simulation modeling, the Corporation tests the average life and yield
volatility17FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)of all MBS under various interest rate
scenarios on a continuing basis to insure that volatility falls within
acceptable limits.  The Corporation holds no "high risk" securities nor
does the Corporation own any securities of a single issuer exceeding 10% of
shareholders' equity other than U.S. government and agency
securities.Interest on deposits dropped $39.6 million for 2002 compared
to 2001 primarily due to decreases due to interest rates of $33.7 million. 
The rate on savings deposits fell 106 basis points (1.06%) resulting in a
decrease to interest expense of $7.7 million for 2002 compared to 2001, while
the rate on time deposits for 2002 also declined, down 137 basis points (1.37%),
compared to 2001 resulting in a decrease to interest expense of $21.8
million.  Although average deposits declined compared to 2001, the deposit
mix changed as clients registered a preference for savings products which jumped
$43.7 million or 6.4%, while time deposits dropped $135.5 million or 7.8% due to
the continuing economic uncertainties.  Average demand deposit balances for
2002 also advanced, up $11.9 million over 2001 balances and represents the
highest level in the Corporation's history.  This rise is due principally
to the success of the Corporation's "High Performance Checking" product which
was rolled out in 2002 and focuses on growing low cost deposits.Interest
expense on short-term borrowings decreased $5.2 million during 2002 primarily as
a result of rate decreases of $6.7 million offset in part by volume increases of
$1.5 million.  Average short-term borrowings rose by $39.7 million for 2002
compared to 2001 while the cost of short-term borrowings fell by 197 basis
points (1.97%) compared to the prior year.  All categories of short-term
borrowing costs declined year to year.Interest expense on long-term debt
increased $294 thousand for 2002 compared to the 2001 period as increases due to
volume of $410 thousand were partially offset by decreases due to rate of $116
thousand.  Average long-term debt for 2002 rose by $7.2 million compared to
2001 as maturities were extended for short-term borrowings from the Federal Home
Loan Bank to take advantage of the lower interest rate environment. 
Long-term debt includes capital securities borrowings in the amount of $35
million, which were issued during 1999, bearing an interest rate of 9.50% and
maturing in thirty years.  The proceeds were used by the Corporation in
connection with the repurchase of common shares.  (See Note 15 to the
financial statements for a description of the company obligated mandatorily
redeemable capital securities of subsidiary trust.)Net interest margin
(net interest income, on a tax-equivalent basis as a percentage of average
earning assets) improved to 3.80% for 2002, a rise of 27 basis points (0.27%)
compared to 2001.  The year to year increase in the margin was due to the
cost of funds declining more quickly than asset yields as interest rates fell to
historic lows.  Continued pressure on net18FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
7.     Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)interest income is
anticipated by the Corporation despite active management of interest rate
risk.  The Corporation's use of computer simiulation to manage interest
rate risk is described in the "Interest Sensitivity" section of this
discussion.The following table shows the effect of changes in volumes
and rates on interest income and interest expense:

|                               | Analysis of Year-to-Year
      Changes in Net Interest Income
|------------------------------ | -------------------------------------------------------------
|                               | (Dollar Amounts in
      Thousands)                          
|                               | 2002 Change from
      2001                                  
|                               | TotalChange                                                  
|Interest-earning assets:       |                                                              
|Time deposits with
      banks | $   (39)                                                     
|Securities                     | (10,526)                                                     
|Federal funds sold             | (486)                                                        
|Loans                          | (22,272)                                                     
|Total interest
      income    | (33,323)                                                     
|Interest-bearing liabilities:  |                                                              
|Deposits                       | (39,593)                                                     
|Short-term
    borrowings      | (5,198)                                                      
|Long-term debt                 | 294                                                          
|Total interest
      expense   | (44,497)                                                     
|Net
      interest income      | $11,174                                                      

The provision for credit losses is an amount
added to the allowance against which credit losses are charged.  The amount
of the provision is determined by management based upon its assessment of the
size and quality of the loan portfolio and the adequacy of the allowance in
relation to the risks inherent within the loan portfolio.  The provision
for credit losses was $12.2 million in 2002 compared to $11.5 million in 2001
and $10.0 million in 2000.  The allowance for credit losses was $34.5
million at December 31, 2002, which represents a ratio of 1.33% of average loans
outstanding, down slightly from the 1.34% reported at December 31, 2001. 
Net charge-offs for 2002 rose $945 thousand over 2001 levels.  The most
significant components of this year to year change were increases in the
following categories:  commercial loans not secured by real estate (up $1.0
million), secured by 1-4 family real estate (up $661 thousand) and other loans
(up $925 thousand).  These increases were partially offset by decreases in
commercial real estate loans of $985 thousand and revolving credit loans secured
by 1-4 family real estate of $411 thousand.  Net charge-offs as a percent
of average loans outstanding at December 31, 2002 were 0.46% compared to 0.43%
and 0.40% at December 31, 2001 and 2000, respectively.  For an analysis of
credit quality, see the "Credit Review" section of this
discussion.19FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)The following table presents an analysis of
the consolidated allowance for credit losses for the five years ended December
31, 2002 (Dollar Amounts in Thousands):

|                                                                                 | Summary of Loan Loss
      Experience
|-------------------------------------------------------------------------------- | -------------------------------------
|                                                                                 |                                      
|                                                                                 | 2002                                 
|                                                                                 |                                      
|Loans outstanding at end of
year                                                 | $2,608,634                           
|                                                                                 |                                      
|Average loans outstanding                                                        | $2,597,862                           
|                                                                                 |                                      
|Allowance for credit losses:                                                     |                                      
|Balance, beginning of year                                                       | $   34,157                           
|                                                                                 |                                      
|Loans charged off:                                                               |                                      
|Commercial, financial and
      agricultural                                     | 6,085                                
|Loans to individuals                                                             | 4,040                                
|Real estate-construction                                                         | 3                                    
|Real estate-commercial                                                           | 1,315                                
|Real estate-residential                                                          | 2,065                                
|Lease financing
    receivables                                                  | 424                                  
|Total loans charged
      off                                                    | 13,932                               
|                                                                                 |                                      
|Recoveries of loans previously charged
      off:                                |                                      
|Commercial, financial and
      agricultural                                     | 1,287                                
|Loans to individuals                                                             | 710                                  
|Real estate-construction                                                         | -0-                                  
|Real estate-commercial                                                           | -0-                                  
|Real estate-residential                                                          | 46                                   
|Lease financing
    receivables                                                  | 5                                    
|Total recoveries                                                                 | 2,048                                
|Net loans charged
      off                                                      | 11,884                               
|Provision charged to expense                                                     | 12,223                               
|                                                                                 |                                      
|Balance, end of year                                                             | $   34,496                           
|                                                                                 |                                      
|Ratios:                                                                          |                                      
|Net charge-offs as a percentage of
      average   loans outstanding             | 0.46%                                
|Allowance for credit losses as a
      percentage of   average loans outstanding | 1.33%                                

20FIRST
COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
7.     Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)Net securities gains
declined $2.7 million during 2002 from the $3.3 million reported in 2001 and
compared to $1.7 million in 2000.  The securities gains during 2002
resulted primarily from the sales of Pennsylvania bank stocks, U.S. Treasury
securities and fixed rate corporate bonds classified as securities "available
for sale" with book values of $1.1 million, $1.5 million and $3.0 million,
respectively.  The securities gains during 2001 resulted primarily from the
sale of fixed rate corporate bonds classified as "available for sale" and
Pennsylvania bank stocks with book values of $37.4 million and $12.7 million
respectively.  The securities gains recognized during 2000 were principally
related to the sale of Pennsylvania bank stocks with a book value of $19.9
million.Trust income of $5.0 million for 2002 was flat compared to 2001
following a $560 thousand decline from 2000.  Although fee revenue
continues to be negatively impacted due to low market values, the enhanced
referral programs and integrated growth plans for financial affiliates that have
been initiated have helped to offset this trend.  The Corporation's
continued success in building relationships with commercial clients provides fee
based affiliates with additional sales opportunities through the Total Solutions
Financial Management ("TSFM") process.  This strategy combines products,
services and professional staff from the Corporation's trust, insurance,
financial advisory and banking affiliates and partners them in providing
comprehensive financial services offerings.Service charges on deposits
are the most significant component of non-interest income and increased $378
thousand for 2002 compared to 2001.  Increases in insufficient funds fees
"NSF", bank club and account analysis   fees helped pace the year to
year rise.  Standardization of service fee routines accomplished during
conversion of the Corporation's deposit system during 2001, and added emphasis
on collection of fees had a positive effect on fee revenue for 2002. 
Service charges on deposits increased $598 thousand for 2001 compared to 2000
primarily as the result of increases in NSF and bank club fees.  Management
strives to implement reasonable fees for services and closely monitors
collection of those fees. Insurance commissions grew $439 thousand for
2002 after increasing $1.2 million for 2001 from 2000 commissions of $2.0
million.  Insurance commissions for 2002 included increases in personal
lines, annuities and employee benefit plans compared to 2001.  As part of
the previously discussed TSFM process the Corporation's insurance subsidiary
will continue to have expanded opportunities to meet the insurance needs of
commercial clients.  In addition, the Corporation has developed "FOCUS", a
financial planning tool designed to help clients prioritize and assess their
financial needs.  The "FOCUS" concept results in a systematic approach
covering a wide range of personal financial goals including appropriate
insurance coverage.  This category should also be favorably impacted by the
integration of First Commonwealth Financial Advisors into these advisory models.
21FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)Income from bank owned life insurance was $4.7
million for 2002 compared to $4.6 million for 2001 which compared to $3.4
million for 2000.  The 2002 period included an additional investment in
bank owned life insurance of $5.0 million compared to 2001 levels.  The
2001 period included an increase in income from bank owned life insurance of
$1.2 million compared to 2000, resulting primarily from claim income and the
impact of an additional $15.0 million investment during 2001.Other
income for 2002 was $11.7 million, representing a $1.2 million decrease compared
to 2001 which followed a $2.4 million rise over the $10.5 million achieved in
2000.  The decline in other income for 2002 resulted from the sale of one
of the Corporation's branches during 2001 which generated a gain of $767
thousand based on the premium on the sale of $10.4 million of deposits. 
The 2001 period included $1.3 million of gains related to the sale of a branch
and a block of 30 year mortgages as well as a gain from the termination of a
subsidiary's defined benefit pension plan.  Other income for 2002 also
included increases in merchant discount of $119 thousand and interchange income
of $164 thousand.  Other income for the 2000 period included a gain on the
sale of fixed assets of $515 thousand and increases in merchant discount of $401
thousand as well as a rise in MAC interchange fees of $628
thousand.Total other operating expense for 2002 grew $20.4 million or
19.5% to $125.4 million compared to $105.0 million and $99.5 million for 2001
and 2000 respectively.  The increase in other operating expense for 2002
was primarily the result of nonrecurring charges for the previously described
litigation settlement and corporate restructuring of $8.0 million and $6.1
million, respectively.  These restructuring charges resulted from the
merger of the Corporation's banking subsidiaries, Southwest Bank and First
Commonwealth Bank, which occurred in October, 2002.  Because of this
merger, there was a consolidation of support functions with some staff positions
being eliminated.  The personnel within the branches and relationship
managers in corporate services continued to serve in the same capacity in order
to ensure a smooth transition.  Employees whose positions were being
eliminated were notified and continued to work in their positions for at least
60 days.  Notified employees had the opportunity to seek other positions
within the Corporation or to receive a separation package based on years of
service.  Also, related to the merger, the structure of all of the Boards
of Directors and Board committees for the Corporation was realigned.  As a
result of these activities, restructuring charges of $6.1 million are reported
on the income statement for the 2002 period.  Ongoing savings from the
restructuring are anticipated to be $4.1 million per year.  Other charges
included during 2002 as a part of the restructuring related principally to
writing off obsolete signs and supplies due to the name change under one charter
and amounted to $420 thousand.  Also impacting other operating expense for
the period were $1.8 million of costs incurred principally in the fourth quarter
of 2002 associated with development of the First Commonwealth brand.  Total
noninterest expense as a percent of average assets was 2.76% for 2002 compared
to 2.32% for 2001.  Excluding the nonrecurring items (legal settlement and
restructuring charges) as well as rebranding costs, this ratio would be 2.41%
for 2002.22FIRST COMMONWEALTH FINANCIAL CORPORATION
AND SUBSIDIARIESITEM 7.     Management's
Discussion and Analysis of Financial Condition and Results of Operations
(Continued)Employee costs were $58.1 million in 2002, representing 1.28%
of average assets compared to $54.5 million and 1.21% of average assets for
2001.  Employee costs for 2000 were $52.5 million and 1.22% of average
assets.  Salary costs for the 2002 period increased $2.2 million or 5.1%
compared to 2001 levels of $43.1 million.  Employee benefit costs rose $1.4
million or 12.4% for 2002 compared to 2001 with the largest increase being
hospitalization costs (up $943 thousand or 24.7%).  Employee benefit costs
increased $331 thousand for 2001 compared to the 2000 period and included
increases in 401(k) plan expenses and employee stock ownership plan "ESOP"
expenses which were partially offset by decreases of hospitalization
costs.  The Corporation strives to provide quality employee benefits while
effectively managing costs.Net occupancy expense increased $230 thousand
or 3.5% to $6.8 million during 2002 compared to $6.5 million for 2001 and $6.6
million for 2000.  Increases in building insurance, building rental costs
and building repairs and maintenance in 2002 were only partially offset by
declines in most other building expense categories.  Furniture and
equipment expenses of $10.0 million for 2002 reflected increases of $920
thousand over 2001 levels resulting primarily from increases in depreciation on
computer software and software maintenance offset in part by reduced equipment
lease expense.  The 2001 period also included increases in depreciation on
computer software and software maintenance compared to 2000.  Computer
software depreciation and maintenance increases were principally related to the
replacement of software utilized by the Corporation's data processing subsidiary
to process loan and deposit accounts.  The 2002 period was also impacted,
as a full year of depreciation as well as maintenance was incurred for systems
placed in service during the later part of 2001.  The new application
software has enabled the Corporation's banking subsidiary to provide enhanced
products and services, including internet banking.  Technology advances
continue to drive the ability of financial services companies to provide
expanded services through traditional channels as well as non traditional and
emerging delivery systems to meet the changing needs of our
clients.Outside data processing expense fell $1.2 million for the 2002
period to $2.1 million compared to $3.3 million for 2001 and 2000.  This
category was positively impacted by the conversion of Southwest Bank from
outsourced processing to that provided by a subsidiary of the Corporation. 
Outside data processing costs are managed by the Corporation's data processing
subsidiary along with management of internal data processing costs. 
Outsourced data processing needs are evaluated based on technology, efficiency
and cost considerations.  Adoption of FAS No. 142 resulted in no
goodwill amortization for 2002 compared to $920 thousand for 2001 and $865
thousand for 2000.  Under the new pronouncement, goodwill amortization was
discontinued January 1, 2002.  Goodwill is now subject to evaluation for
impairment on an annual basis.Other operating expenses for 2002
increased $3.8 million or 14.3% to $30.2 million for 2002 compared to $26.4
million for 2001 and the $24.0 million reported for 2000.  The 2002 period
includes increased loss on sale of assets of $472 thousand, due primarily to the
loss on sale of vehicles23FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)previously leased, compared to 2001. 
Other professional fees rose by $822 thousand over 2001 and included consulting
fees related to implementation  of the Corporation's "Balanced Scorecard"
performance measurement system, enhancements to product and customer
profitability systems, corporate restructuring and common branding and
identity.  Consultants are also being utilized to assist in the ongoing
efforts to develop a world class sales culture and to generate new deposit
dollars and relationships.  Corporate restructuring and movement towards a
sales culture also impacted the decision to have employee benefit plans reviewed
by outside specialists during 2002.  Advertising and promotions expenses
rose a combined $2.3 million for the 2002 period due partially to expenditures
related to the $1.8 million launch of the new Corporate brand and
identity.  This exciting campaign is designed to educate and build
enthusiasm among current as well as potential clients and the communities we
serve.  Also impacting these categories were expenses incurred in the
successful marketing campaign for free checking products introduced during
2002.  These products are expected to have a favorable impact on deposit
growth, interest expense and service charge revenue in future periods as well as
providing potential add-on sales of other financial products and services. 
Expenditures for the branding efforts and marketing campaigns are expected to
continue in 2003.Included in other operating expense increases for 2001
compared to 2000 were increases in filing and recording fees, legal fees, other
professional fees and telephone expense of $165 thousand, $216 thousand, $666
thousand and $352 thousand, respectively.  The 2001 period also included
increases in losses on sale of leased vehicles and increased postage and
printing costs related to privacy legislation and changes due to standardization
during 2001 system conversions.  The 2001 period included decreases in
insurance expense, Pennsylvania use tax, promotions and deferred loan
origination costs compared to 2000 levels.Other operating expense for
the 2000 period included increases in collection and repossession
expenses.  FDIC expense rose $180 thousand during 2000 due to
standardization of insurance fund rates.  Other operating expenses for 2000
also included increases in advertising and promotions, express freight charges,
charge card interchange and checkbook printing expenses which were partially
offset by decreases in other professional fees, postage and printing
costs.Income tax expense was $8.9 million during 2002 representing a
decrease of $6.4 million below the 2001 amount of $15.3 million and compared to
$14.3 million in 2000.  The Corporation's effective tax rate was 17.0% for
2002 compared to 23.3% for 2001 and 23.2% for 2000.  Excluding the
nonrecurring charges (litigation settlement and corporate restructuring) and
rebranding costs, the Corporation's effective tax rate would have been 21.2% in
2002.  The Corporation's effective tax rate continues to be favorably
impacted by tax-free income from securities and bank owned life
insurance.LiquidityLiquidity is a measure of the
Corporation's ability to efficiently meet normal cash flow requirements of both
borrowers and depositors.  In the ordinary course of business, funds are
generated from deposits (primary source) and the maturity or repayment of
earning assets, such as securities 24FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)Liquidity (Continued)and
loans.  As an additional secondary source, short-term liquidity
needsmay be provided through the use of overnight Federal funds purchased,
borrowings through the use of lines available for repurchase agreements, and
borrowings from the Federal Reserve Bank.  Additionally, the Corporation's
banking subsidiary is a member of the Federal Home Loan Bank and may borrow
under overnight and term borrowing arrangements.  The sale of earning
assets may also provide an additional source of liquidity.  In addition to
the previously described funding sources, the Corporation also has the ability
to access the capital markets.Liquidity risk stems from the possibility
that the Corporation may not be able to meet current or future financial
obligations, or the Corporation may become overly reliant on alternative funding
sources.  The Corporation maintains a liquidity risk management policy to
manage this risk.  This policy identifies the primary sources of liquidity,
establishes procedures for monitoring and measuring liquidity and quantifies
minimum liquidity requirements which comply with regulatory requirements. 
The policy also includes a liquidity contingency plan to address funding needs
to maintain liquidity under a variety of business conditions.  The
Corporation's liquidity position is monitored by the "Asset/Liability Management
Committee ("ALCO").The Corporation's long-term liquidity source is a
large core deposit base and a strong capital position.  Core deposits are
the most stable source of liquidity a bank can have due to the long-term
relationship with a deposit customer.  Deposits decreased $49.0 million in
2002 and included decreases in noninterest-bearing deposits and time deposits
which were partially offset by increases in savings deposits.  Non-core
deposits which are time deposits in denominations of $100 thousand or more
represented 16.1% of total deposits at December 31, 2002.  Non-core
deposits decreased by $7.6 million in 2002 and rose $41.9 million in 2001 due in
part to changes in public funds balances.  The increase in non-core
deposits during 2001 also included the issuance of brokered time deposits in the
amount of $5.0 million. Although the Corporation's primary source of
funds remains traditional deposits from within the communities served by its
banking subsidiary, future sources of deposits utilized could include the use of
brokered time deposits offered outside the Corporation's traditional market
area.  Time deposits of $100 thousand or more at December 31, 2002, 2001
and 2000 had remaining maturities as follows:

|                                      | Maturity Distribution of
      Large Certificates of Deposit(Dollar Amounts in Thousands)
|------------------------------------- | -----------------------------------------------------------------------------------------
|                                      | 2002                                                                                     
|                                      | Amount                                                                                   
|Remaining Maturity:                   |                                                                                          
|3 months or less                      | $ 97,862                                                                                 
|Over 3 months through 6
      months  | 54,758                                                                                   
|Over 6 months through 12
      months | 114,596                                                                                  
|Over 12 months                        | 222,486                                                                                  
|Total                                 | $489,702                                                                                 

25FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)Liquidity (Continued)Net loans
increased $40.4 million during 2002 as commercial loans increased by $74.9
million and loans to individuals increased by $31.6 million compared to year-end
2001.  The 2002 period reflected decreases of $110.8 million in residential
real estate loans, due in part to the continued runoff of the existing portfolio
and sale of new loan production as the Corporation continued to change the mix
of its loans.Below is a schedule of loans by classification for the five
years ended December 31, 2002:

|                                                   | Loans by
      Classification(Dollar Amounts in
      Thousands)
|-------------------------------------------------- | ----------------------------------------------------------------
|                                                   | 2002                                                            
|                                                   | Amount                                                          
|Commercial,financial, agricultural
      and other | $  633,955                                                      
|Real estate-construction                           | 20,998                                                          
|Real estate-commercial                             | 663,220                                                         
|Real estate-residential                            | 739,018                                                         
|Loans to individuals                               | 505,139                                                         
|Net leases                                         | 47,110                                                          
|                                                   |                                                                 
|Gross loans and leases                             | 2,609,440                                                       
|Unearned income                                    | (806)                                                           
|Total loans, and leases                            |                                                                 
|net of unearned income                             | $2,608,634                                                      

An additional source of liquidity is marketable
securities that the Corporation holds in its investment portfolio.  These
securities are classified as "securities available for sale".  While the
Corporation does not have specific intentions to sell these securities, they
have been designated as "available for sale" because they may be sold for the
purpose of obtaining future liquidity, for management of interest rate risk or
as part of the implementation of tax management strategies.  As of December
31, 2002, securities available for sale had an amortized cost of $1,443 million
and an approximate fair value of $1,483 million.  Gross unrealized gains
were $41.8 million and gross unrealized losses were $2.0 million.Based
upon the Corporation's historical ability to fund liquidity needs from other
sources, the current available for sale portfolio is deemed more than adequate,
as the Corporation does not anticipate a need to liquidate the investments until
maturity.  Below is a schedule of the contractual maturity distribution of
securities held to maturity and securities available for sale at December 31,
2002:

|                            | Maturity Distribution of
      Securities Held to Maturity(Dollar Amounts in Thousands)
|--------------------------- | ---------------------------------------------------------------------------------------
|                            | U.S. Government
      Agenciesand Corporations                                         
|Within 1 year               | $
      5,056                                                                          
|After 1 but within 5 years  | 15,031                                                                                 
|After 5 but within 10 years | 17,231                                                                                 
|After 10 years              | 41,217                                                                                 
|Total                       | $78,535                                                                                

26FIRST COMMONWEALTH FINANCIAL CORPORATION AND
SUBSIDIARIESITEM 7.     Management's Discussion
and Analysis of Financial Condition and Results of Operations
(Continued)Liquidity (Continued)

|                            | Maturity Distribution of
      Securities Available for SaleAt Amortized Cost(Dollar Amounts in Thousands)
|--------------------------- | ----------------------------------------------------------------------------------------------------------
|                            | U.S. Treasury, and
      otherU.S. Government Agenciesand Corporations                                    
|Within 1 year               | $    499                                                                                                  
|After 1 but within 5 years  | 177,755                                                                                                   
|After 5 but within 10 years | 133,075                                                                                                   
|Over 10 years               | 664,421                                                                                                   
|Total                       | $975,750                                                                                                  

* Yields are
calculated on a tax-equivalent basis.Interest SensitivityMarket
risk is the risk of loss arising from adverse changes in the fair value of
financial instruments due to changes in interest rates, currency exchange rates
or equity prices.  The Corporation's market risk is composed primarily of
interest rate risk.  Interest rate risk results principally from timing
differences in the repricing of assets and liabilities, changes in the
relationship of rate indices and the potential exercise of free standing or
embedded options. The objective of interest rate sensitivity management
is to maintain an appropriate balance between the stable growth of income and
the risks associated with maximizing income through interest sensitivity
imbalances.  While no single number can accurately described the impact of
changes in interest rates on net interest income, interest rate sensitivity
positions, or "gaps", when measured over a variety of time periods, can be
informative.An asset or liability is considered to be interest-sensitive
if the rate it yields or bears is subject to change within a predetermined time
period.  If interest-sensitive assets ("ISA") exceed interest-sensitive
liabilities ("ISL") during a prescribed time period, a positive gap
results.  Conversely, when ISL exceeds ISA during a time period, a negative
gap results.The cumulative gap at the 365 day repricing period was
negative in the amount of $300 million or 6.63% of total assets at December 31,
2002.  A positive gap tends to indicate that earnings will be impacted
favorably if interest rates rise during the period and negatively when interest
rates fall during the time period.  A negative gap tends to indicate that
earnings will be affected inversely to interest rate changes.  In other
words, as interest rates fall, a negative gap should tend to produce a positive
effect on earnings and when interest rates rise, a negative gap should tend to
affect earnings negatively.27FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)Interest Sensitivity
(Continued)The primary components of ISA include adjustable rate loans
and investments, loan repayments, investment maturities and money market
investments.  The primary components of ISL include maturing certificates
of deposit, money market deposits, savings deposits, NOW accounts and short-term
borrowings.The following table lists the amounts and ratios of assets
and liabilities with rates or yields subject to change within the periods
indicated as of December 31, 2002 and 2001 (Dollar Amounts in
Thousands):

|                                                                                | 2002       
|------------------------------------------------------------------------------- | -----------
|                                                                                | 0-90Days   
|Loans...............................
      .................................... | $  962,398 
|Investments.........................                                            | 292,206    
|Other interest-earning assets.......                                            | 1,973      
|                                                                                |            
|Total interest-sensitive assets....                                             | 1,256,577  
|                                                                                |            
|Certificates of deposits............                                            | 354,625    
|Other deposits......................                                            | 1,172,538  
|Borrowings..........................                                            | 469,735    
|Total
      interest-sensitive   liabilities......................              | 1,996,898  
|Gap..............................                                               | $ (740,321)
|                                                                                |            
|ISA/ISL.............................                                            | 0.63       
|Gap/Total assets....................                                            | (16.36%)   
|                                                                                |            



|                                                                   | 2001       
|------------------------------------------------------------------ | -----------
|                                                                   | 0-90Days   
|Loans...............................                               | $  839,279 
|Investments.........................                               | 154,327    
|Other interest-earning assets.......                               | 4,250      
|                                                                   |            
|Total interest-sensitive assets....                                | 997,856    
|                                                                   |            
|Certificates of deposits............                               | 329,825    
|Other deposits......................                               | 1,090,160  
|Borrowings..........................                               | 430,189    
|Total
      interest-sensitive   liabilities...................... | 1,850,174  
|Gap..............................                                  | $ (852,318)
|                                                                   |            
|ISA/ISL.............................                               | 0.54       
|Gap/Total assets....................                               | (18.60%)   

28FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)Interest Sensitivity
(Continued)Although the periodic gap analysis provides management with a
method of measuring current interest rate risk, it only measures rate
sensitivity at a specific point in time, and as a result may not accurately
predict the impact of changes in general levels of interest rates or net
interest income.  This is exemplified as the gap analysis shows the
Corporation's earnings to be negatively impacted by rising rates, but computer
modeling indicates that rising rates would have a favorable impact on
earnings.  Therefore, to more precisely measure the impact of interest rate
changes on the Corporation's net interest income, management simulates the
potential effects of changing interest rates through computer modeling. 
The income simulation model used by the Corporation captures all assets,
liabilities, and off-balance sheet financial instruments, accounting for
significant variables that are believed to be affected by interest rates. 
These variables include prepayment speeds on mortgage loans and mortgage backed
securities, cash flows from loans, deposits and investments and balance sheet
growth assumptions.  The model also captures embedded options, such as
interest rate caps/floors or call options, and accounts for changes in rate
relationships as various rate indices lead or lag changes in market rates. 
The Corporation is then better able to implement strategies which would include
an acceleration of a deposit rate reduction or lag in a deposit rate
increase.  The repricing strategies for loans would be inversely
related.The Corporation's asset/liability management policy guidelines
limit interest rate risk exposure for the succeeding twelve month period. 
Simulations are prepared under the base case where interest rates remain flat,
and most likely case where interest rates are defined using projections of
economic factors.  Additional simulations are produced estimating the
impact on net interest income of a 300 basis point (3.00%) movement upward or a
100 basis point movement downward which cannot result in more than a 7.5% change
or 5.0% change, respectively, in net interest income when compared to the base
case, without Board approval and a strategy in place to reduce interest rate
risk below the established maximum level.  These policy guidelines were
changed from simulating a 300 basis point (3.00%) rise and a 300 basis point
(3.00%) decline from the base case which could not result in more than a 7.5%
change in net interest income, either up or down because the probability of
interest rates declining by 300 basis points over the next 12 months is not
likely.  The analysis at December 31, 2002 indicated that a 300 basis point
(3.00%) increase in interest rates would increase net interest income 208 basis
points (2.08%) above the base case scenario and a 100 basis point (1.00%)
decline in interest rates would decrease net interest income by 276 basis points
(2.76%) below the base case scenario, over the next twelve months, both within
policy limits.The Corporation's "Asset/Liability Management Committee"
("ALCO") is responsible for the identification, assessment and management of
interest rate risk exposure, liquidity, capital adequacy and investment
portfolio position.  The primary objective of the ALCO process is to ensure
that the Corporation's balance sheet structure maintains prudent levels of
risk29FIRST COMMONWEALTH FINANCIAL CORPORATION AND
SUBSIDIARIESITEM 7.     Management's Discussion
and Analysis of Financial Condition and Results of Operations
(Continued)Interest Sensitivity(Continued)within the
context of currently known and forecasted economic conditions and to establish
strategies which provide the Corporation with appropriate compensation for the
assumption of those risks.  The ALCO attempts to mitigate interest rate
risk through the use of strategies such as asset sales, asset and liability
pricing and matched maturity funding.  The ALCO strategies are established
by the Corporation's senior management.  The ALCO continues to evaluate the
use of derivative instruments to protect against the risk of adverse price or
interest rate movements on the values of certain assets and liabilities,
although none are being utilized currently.Final loan maturities and
rate sensitivities of the loan portfolio excluding consumer installment and
mortgage loans and before unearned income at December 31, 2002, were as follows
(Dollar Amounts in Thousands):

|                                 | Within OneYear | One to5 Years | After5 Years | Total     
|-------------------------------- | -------------- | ------------- | ------------ | ----------
|Commercial and industrial        | $198,444       | $ 98,978      | $ 99,897     | $  397,319
|Financial institutions           | -0-            | 175           | 300          | 475       
|Real estate-construction         | 7,309          | 3,495         | 10,194       | 20,998    
|Real estate-commercial           | 44,317         | 114,224       | 504,679      | 663,220   
|Other                            | 22,222         | 29,069        | 184,870      | 236,161   
|Totals                           | $272,292       | $245,941      | $799,940     | $1,318,173
|                                 |                |               |              |           
|Loans at fixed interest rates    |                | $116,744      | $205,679     |           
|Loans at variable interest
rates |                | 129,197       | 594,261      |           
|Totals                           |                | $245,941      | $799,940     |           

Credit ReviewMaintaining a high
quality loan portfolio is of great importance to the Corporation.  The
Corporation manages the risk characteristics of the loan portfolio through the
use of prudent lending policies and procedures and monitors risk through a
periodic review process provided by internal auditors, regulatory authorities
and our loan review staff.  These reviews include the analysis of credit
quality, diversification of industry, compliance to policies and procedures, and
an analysis of current economic conditions.In the management of its
credit portfolio, the Corporation emphasizes the importance of the
collectibility of loans and leases as well as asset and earnings
diversification.  The Corporation immediately recognizes as a loss all
credits judged to be uncollectible and has established an allowance for credit
losses that may exist in the portfolio at a point in time, but have not been
specifically identified.The Corporation's written lending policy
requires certain underwriting standards to be met prior to funding any loan,
including requirements for credit analysis, collateral value coverage,
documentation and terms.  The30FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)Credit
Review(Continued)principal factor used to
determine potential borrowers' creditworthiness is business cash flows or
consumer income available to service debt payments.  Secondary sources of
repayment, including collateral or guarantees, are frequently
obtained.The lending policy provides limits for individual and bank
committees lending authorities.  In addition to the bank loan approval
process, requests for borrowing relationships which will exceed one million
dollars must also be approved by the Corporation's Credit Committee.  This
Committee consists of a minimum of three members of the Corporation's Board of
Directors.  The Corporation has an additional level of approval for credit
relationships between $500 thousand and $1.0 million.  This procedure
requires approval of those credits by a committee consisting of senior lenders
of the Corporation.Commercial and industrial loans are generally granted
to small and middle market customers for operating, expansion or asset
acquisition purposes.  Operating cash flows of the business enterprise are
identified as the principal source of repayment, with business assets held as
collateral.  Collateral margins and loan terms are based upon the purpose
and structure of the transaction as set forth in loan policy.Commercial
real estate loans are granted for the acquisition or improvement of real
property.  Generally, commercial real estate loans do not exceed 75% of the
appraised value of property pledged to secure the transaction.  Repayment
of such loans are expected from the operations of the subject real estate and
are carefully analyzed prior to approval.Real estate construction loans
are granted for the purposes of constructing improvements to real property, both
commercial and residential.  On-site inspections are conducted by qualified
individuals prior to periodic permanent project financing, which is generally
committed prior to the commencement of construction financing.Real
estate loans secured by 1-4 family residential housing properties are granted
subject to statutory limits in effect for each bank regarding the maximum
percentage of appraised value of the mortgaged property.  Residential loan
terms are normally established in compliance with secondary market
requirements.  Residential mortgage portfolio interest rate risk is
controlled by secondary market sales, variable interest rate loans and balloon
maturities.Loans to individuals represent financing extended to
consumers for personal or household purposes, including automobile financing,
education, home improvement and personal expenditures.  These loans are
granted in the form of installment, credit card or revolving credit
transactions.  Consumer creditworthiness is evaluated on the basis of
ability to repay, stability of income sources and past credit
history.31FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)Credit Review(Continued)The Corporation maintains an
allowance for credit losses at a level deemed sufficient to absorb losses which
are inherent in the loan and lease portfolios at each balance sheet date. 
Management reviews the adequacy of the allowance on a quarterly basis to ensure
that the provision for credit losses has been charged against earnings in an
amount necessary to maintain the allowance at a level that is appropriate based
on management's assessment of probable estimated losses.  The Corporation's
methodology for assessing the appropriateness of the allowance for credit losses
consists of several key elements.  These elements include a specific
allowance forprimary watch list classified loans, a formula allowance based
on historical trends, an additional allowance for special circumstances and an
unallocated allowance.  While the Corporation consistently applies
the following comprehensive methodology and procedure described in Note 1
"Accounting Policies," allowance for credit loss methodologies incorporate
management's current judgments about the credit quality of the loan portfolio as
well as collection probabilities for problem credits.  Although management
considers the allowance for credit losses to be adequate based on information
currently available, additional allowance for credit loss provisions may be
necessary due to changes in management estimates and assumptions about asset
impairment, information about borrowers that indicate changes in the expected
future cash flows or changes in economic conditions.  The allowance for
credit losses and the provision for credit losses are significant elements of
the Corporation's financial statements, therefore management periodically
reviews the processes and procedures utilized in determining the allowance for
credit losses to identify potential enhancements to these processes including
development of additional management information systems to ensure that all
relevant factors are appropriately considered in the allowance analysis. 
In addition, the Corporation maintains a system of internal controls which are
independently monitored and tested by internal audit and loan review staff to
ensure that the loss estimation model is maintained in accordance with internal
policies and procedures as well as generally accepted accounting
principals.32FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
7.     Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)Credit Review(Continued)Since all identified losses are immediately charged off, no
portion of the allowance for credit losses is restricted to any individual
credit or groups of credits, and the entire allowance is available to absorb any
and all credit losses.  For analytical purposes, the following table sets
forth an allocation of the allowance for credit losses at December 31 according
to the categories indicated.  Management feels the unallocated portion of
the reserve is necessary due to the uncertain economic and geo-political
environment and its impact on a variety of sectors such as health care, lodging
and energy.

|                                                                 | Allocation of the Allowance for
      Credit Losses(Dollar Amounts in
      Thousands)
|---------------------------------------------------------------- | --------------------------------------------------------------------------------------
|                                                                
|                                                                 | 2002                                                                                  
|Commercial, industrial, financial,
      agricultural  and other | $ 7,856                                                                               
|Real estate-construction                                         | 600                                                                                   
|Real estate-commercial                                           | 7,201                                                                                 
|Real estate-residential                                          | 5,294                                                                                 
|Loans to individuals                                             | 3,035                                                                                 
|Lease financing receivables                                      | 259                                                                                   
|Unallocated                                                      | 10,251                                                                                
|Total                                                            | $34,496                                                                               
|                                                                 |                                                                                       
|Allowance as percentage of average total
      loans             | 1.33%                                                                                 

Other than those described below, there are no
material credits that management has serious doubts as to the borrower's ability
to comply with the present loan repayment terms.  The following table
identifies nonperforming loans at December 31.  A loan is placed in a
nonaccrual status at the time when ultimate collectibility of principal or
interest, wholly or partially, is in doubt.  Past due loans are those loans
which were contractually past due 90 days or more as to interest or principal
payments but are well secured and in the process of collection. 
Renegotiated loans are those loans which terms have been renegotiated to provide
a reduction or deferral of principal or interest as a result of the
deteriorating financial position of the borrower.

|                                                                   | Nonperforming and Impaired
      Assets and Effecton Interest Income Due to Nonaccrual(Dollar
      Amounts in Thousands)
|------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------
|                                                                   |                                                                                                                          
|                                                                   | 2002                                                                                                                     
|Loans on nonaccrual basis                                          | $23,450                                                                                                                  
|Past due loans                                                     | 14,774                                                                                                                   
|Renegotiated loans                                                 | 207                                                                                                                      
|Total nonperforming loans                                          | $38,431                                                                                                                  
|                                                                   |                                                                                                                          
|Nonperforming loans as a percentage of total
      loans           | 1.47%                                                                                                                    
|                                                                   |                                                                                                                          
|Allowance as percentage of nonperforming
      loans               | 89.76%                                                                                                                   
|                                                                   |                                                                                                                          
|Other real estate owned                                            | $ 1,651                                                                                                                  
|                                                                   |                                                                                                                          
|Gross income that would have been recorded at
      original rates | $ 1,542                                                                                                                  
|                                                                   |                                                                                                                          
|Interest that was reflected in
      income                        | 286                                                                                                                      
|                                                                   |                                                                                                                          
|Net reduction to interest income due to
      nonaccrual           | $ 1,256                                                                                                                  

33FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 7.    
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)Credit
Review(Continued)The reduction of income
due to renegotiated loans was less than $50 thousand in any year
presented.Nonperforming loan levels at December 31, 2002 decreased $3.1
million compared to 2001 levels as decreases in past due loans and renegotiated
loans were slightly offset by an increase in nonaccrual loans.  Nonaccrual
loans include two significant credits in both periods.  The largest credit
($6.2 million) carries an 80% guaranty of U.S. government agency.  While
approximately $2.9 million is expected to be collected in the second quarter of
2003 as a sale of the underlying assets is pending, the remaining balance should
be resolved early in the third quarter of 2003.  The second credit, which
was $5.9 million at year-end 2001, continues to be resolved through the
liquidation of collateral and exercising other remedies.  The balance
outstanding at December 31, 2002 for this credit was $3.2 million.  While
the final resolution of this credit is uncertain, management's estimate of the
potential loss on this credit is reserved.Past due loans for the 2002
period decreased $3.0 million compared to the corresponding period of 2001 and
included decreases in all major categories including loans secured by
residential real estate (down $814 thousand),commercial real estate (down
$999 thousand) and other loans (down $865 thousand).  Renegotiated loans
also fell, decreasing by $625 thousand for the 2002 period.  Nonperforming
loans as a percentage of total loans was 1.47% at December 31, 2002, down from
the 1.62% reported at December 31, 2001. The Corporation's loan
portfolio continues to be monitored by senior management to identify potential
portfolio risks and detect potential credit deterioration in the early
stages.  The Corporation has a "Watchlist Committee" which includes credit
workout officers of the bank and meets bi-weekly to review watchlist credits for
workout progress or deterioration.  Loan loss adequacy and the status of
significant nonperforming credits are monitored on a quarterly basis by a
committee made up of senior officers of the bank and parent company.  These
committees were established to provide additional internal monitoring and
analysis in addition to that provided by the Credit Committees of the bank and
parent company.  Credit risk is mitigated during the loan origination
process through the use of sound underwriting policies and collateral
requirements and its previously described committee structure.  Management
also attempts to minimize loan losses by analyzing and modifying collection
techniques on a periodic basis.  Management believes that the allowance for
credit losses and nonperforming loans remained safely within acceptable
levels.Capital ResourcesEquity capital stood at $401.4
million at December 31, 2002, a $31.3 million rise compared to December 31,
2001.  Dividends declared reduced equity by $35.6 million during 2002 as
dividends were increased over 200134FIRST
COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
7.     Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)Capital Resources(Continued)levels.  The retained net income of $7.9 million
remained in permanent capital to fund future growth and expansion. 
Long-term debt payments and fair value adjustments to unearned ESOP shares
increased equity by $1.2 million.  The market value adjustment to
securities available for sale increased equity by $17.1 million in 2002. 
Amounts paid to fund the discount on reinvested dividends reduced equity by $637
thousand.  Proceeds from the issuance of treasury shares to provide for
stock options exercised increased equity by $5.5 million during 2002, while the
tax benefit related to the stock options, increased equity by $224
thousand.A capital base can be considered adequate when it enables the
Corporation to intermediate funds responsibly and provide related services while
protecting against future uncertainties.  The evaluation of capital
adequacy depends on a variety of factors, including asset quality, liquidity,
earnings history and prospects, internal controls and
managementcaliber.  In consideration of these factors, management's
primary emphasis with respect to the Corporation's capital position is to
maintain an adequate and stable ratio of equity to assets.  See Note 25 to
the Consolidated Financial Statements for an analysis of regulatory capital
guidelines and the Corporation's capital ratios relative to these measurement
standards.Risk ManagementIn the normal course of business
the Corporation assumes various types of risk.  The Corporation has
identified twenty-six standard risks which have been summarized into seven major
risk categories.  The seven major risk categories include credit risk,
market risk, liquidity risk, compliance/legal risk, operational risk, reputation
risk and strategic risk.  Credit risk, market risk and liquidity risk are
discussed in this Management's Discussion and Analysis of Financial Condition
and Results of Operations section.  The remaining major risk categories are
defined as follows:  compliance/legal risk - arises from violations of, or
non-compliance with laws, rules, regulations, prescribed practices, or ethical
standards; operational risk - threat created by inadequate information systems,
operational problems, weak internal control systems, fraud, or any other
unforeseen catastrophes; reputation risk - the risk to earnings or capital
arising from negative public opinion; and strategic risk - this risk arises from
adverse business decisions or improper implementation of those decisions. 
These factors and others could impact the Corporation's business, financial
condition and results of operation.Corporate management has taken strong
and wide-ranging actions to enhance the awareness of and proactively manage risk
within the Corporation.  In addition to establishing a comprehensive policy
and procedure manual that is updated and regularly communicated throughout the
Corporation, the Senior Vice President, Risk Management, an executive officer
level position, oversees all aspects of the risk process.  Our committee
structure embraces a risk management culture, which begins with the Risk
Committee that provides oversight and monitoring of key risk areas. 
The35FIRST COMMONWEALTH FINANCIAL CORPORATION AND
SUBSIDIARIESITEM 7.     Management's Discussion
and Analysis of Financial Condition and Results of Operations
(Continued)Risk Management(Continued)Risk
Committee, which is chaired by the Senior Vice President, Risk Management, and
has representation from all of the disciplines across the organization, meets to
discuss and assess current risks and emerging risks as well as to identify
solutions and mitigants.  Credit quality and loan loss adequacy issues are
addressed by the Credit Quality, Watch List and Loan Loss Reserve
committees.  Additional committees include Security which is responsible
for coordinating the security program, Privacy which focuses on safeguarding
client information, ALCO which monitors interest rate and liquidity risks and
Disclosure which evaluates internal controls regarding information utilized in
certain regulatory reports as well as reviewing those reports and the disclosure
process to ensure that disclosures are timely, complete and accurate.The
Risk Department has specific procedures to analyze and quantify risks in the
seven major risk categories.  Gaps between inherent risks and mitigants are
quantified and reviewed by the Risk Committee, while management continually
reviews the mitigants and controls to ensure their continuity with internal
audit validating their existence and effectiveness.  Risk gaps are compiled
to develop a risk rating, which is incorporated into the balanced scorecard
measure and is reported to the Board of Directors.  An analytical review of
key indicators, both monetary and non-monetary, as well as other current
information that may become available through discussions with management serves
as an early warning system to detect potential deteriorating internal
controls.  All new initiatives and products are subject to a risk
assessment prior to being presented for implementation.  An annual
assessment of risk is also performed to identify potential threat areas to our
computer systems.  Our Internal Audit staff performs routine and consistent
information technology reviews of identified risk areas, security measures, and
control processes.  In addition, the Corporation annually retains outside
experts to test potential high-risk areas such as Internet based
processes.With these processes in place the Corporation believes that
its objective of establishing a risk culture that identifies, measures, controls
and monitors events or actions that may adversely affect our organization has
been achieved.  Our goal is not to eliminate risk but to understand fully
the risk the Corporation is assuming and appropriately manage those
risks.   Inflation and Changing
PricesManagement is aware of the impact inflation has on interest
rates and therefore the impact it can have on a bank's performance.  The
ability of a financial institution to cope with inflation can only be determined
by analyzing and monitoring its asset and liability structure.  The
Corporation monitors its asset and liability position with particular emphasis
on the mix of interest-sensitive assets and liabilities in order to reduce the
effect of inflation upon its performance.  However, it must be remembered
that the asset and liability structure of a financial36FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
7.     Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)Inflation and
Changing Prices (Continued)institution is
substantially different from an industrial corporation in that virtually all
assets and liabilities are monetary in nature, meaning that they have been or
will be converted into a fixed number of dollars regardless of changes in
general price levels.  Examples of monetary items include cash, loans and
deposits.  Nonmonetary items are those assets and liabilities which do not
gain or lose purchasing power solely as a result of general price level
changes.  Examples of nonmonetary items are premises and
equipment.Inflation can have a more direct impact on categories of
noninterest expenses such as salaries and wages, supplies and employee benefit
costs.  These expenses are very closely monitored by management for both
the effects of inflation and increases relating to such items as staffing
levels, usage of supplies and occupancy costs.ITEM 7A. 
Quantitative and Qualitative Disclosures About Market
RiskInformation appearing in Item 7 of this report under the
caption "Interest Sensitivity" is incorporated herein by reference in response
to this
item.37FIRST COMMONWEALTH FINANCIAL CORPORATION AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Dollar Amounts in
Thousands)

|                                                                                                                                                                                                                       | December 31,
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------
|                                                                                                                                                                                                                       | 2002        
|ASSETS                                                                                                                                                                                                                 |             
|Cash and due from
      banks........................................                                                                                                                                                  | $   81,114  
|Interest-bearing bank
      deposits.................................                                                                                                                                                  | 1,973       
|Securities available for sale, at
      market.......................                                                                                                                                                  | 1,482,771   
|Securities held to maturity, at
      amortized cost,    (Market value $204,887 in 2002 and
      $298,643 in 2001).........                                                                                           | 197,838     
|                                                                                                                                                                                                                       |             
|Loans..........................................................                                                                                                                                                        | 2,609,440   
|Unearned
      income.............................................                                                                                                                                                     | (806)       
|Allowance for credit
      losses.................................                                                                                                                                                     | (34,496)    
|Net
      loans.............................................                                                                                                                                                           | 2,574,138   
|                                                                                                                                                                                                                       |             
|Premises and
      equipment.........................................                                                                                                                                                  | 45,730      
|Other real estate
      owned........................................                                                                                                                                                  | 1,651       
|Goodwill.......................................................                                                                                                                                                        | 8,131       
|Amortizing intangibles,
      net....................................                                                                                                                                                  | 29          
|Other
      assets...................................................                                                                                                                                                  | 131,368     
|                                                                                                                                                                                                                       |             
|Total assets...................................                                                                                                                                                                        | $4,524,743  
|                                                                                                                                                                                                                       |             
|LIABILITIES                                                                                                                                                                                                            |             
|Deposits (all domestic):                                                                                                                                                                                               |             
|Noninterest-bearing.........................................                                                                                                                                                           | $  377,466  
|Interest-bearing............................................                                                                                                                                                           | 2,666,658   
|Total
      deposits........................................                                                                                                                                                           | 3,044,124   
|                                                                                                                                                                                                                       |             
|Short-term
      borrowings..........................................                                                                                                                                                  | 469,065     
|Other
      liabilities..............................................                                                                                                                                                  | 30,230      
|                                                                                                                                                                                                                       |             
|Company obligated mandatorily
      redeemable     capital securities of subsidiary
      trust......................                                                                                                  | 35,000      
|Other long-term
      debt...........................................                                                                                                                                                  | 544,934     
|                                                                                                                                                                                                                       |             
|Total
      long-term debt..................................                                                                                                                                                           | 579,934     
|Total liabilities..............................                                                                                                                                                                        | 4,123,353   
|                                                                                                                                                                                                                       |             
|SHAREHOLDERS' EQUITY                                                                                                                                                                                                   |             
|Preferred stock, $1 par value per
      share, 3,000,000 shares    authorized, none
      issued......................................                                                                                 | -0-         
|Common stock $1 par value per share,
      100,000,000 shared authorized;    62,525,412 shares
      issued in 2002 and 2001; 58,962,543 shares   
      outstanding in 2002 and 58,451,624 shares outstanding in
2001 | 62,525      
|Additional paid-in
      capital.....................................                                                                                                                                                  | 64,885      
|Retained
      earnings..............................................                                                                                                                                                  | 296,165     
|Accumulated other comprehensive
      income.........................                                                                                                                                                  | 25,851      
|Treasury stock (3,562,869 and
      4,073,788 shares at December 31, 2002 and    2001,
      respectively at cost)..................................                                                                   | (44,981)    
|Unearned ESOP
      shares...........................................                                                                                                                                                  | (3,055)     
|Total
      shareholders' equity............................                                                                                                                                                           | 401,390     
|Total liabilities and shareholders' equity.....                                                                                                                                                                        | $4,524,743  

The
accompanying notes are an integral part of these consolidated financial
statements.38FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIRIESCONSOLIDATED STATEMENTS OF
INCOME(Dollar Amounts in Thousands, except per share
data)

|                                                                                                                           |                               
|-------------------------------------------------------------------------------------------------------------------------- | ------------------------------
|                                                                                                                           | Years Ended December
      31,
|                                                                                                                           | 2002                          
|Interest Income                                                                                                            |                               
|Interest and fees on
      loans.........................                                                                  | $  179,901                    
|Interest and dividends on
      investments:                                                                               |                               
|Taxable
      interest.................................                                                                    | 84,137                        
|Interest exempt from
      Federal income taxes........                                                                    | 9,520                         
|Dividends........................................                                                                          | 1,973                         
|Interest on Federal funds
      sold.....................                                                                  | 6                             
|Interest on bank
      deposits..........................                                                                  | 31                            
|Total interest
      income............................                                                                    | 275,568                       
|                                                                                                                           |                               
|Interest Expense                                                                                                           |                               
|Interest on
      deposits...............................                                                                  | 78,572                        
|Interest on short-term
      borrowings..................                                                                  | 6,029                         
|Interest on mandatorily redeemable
      capital securities of     subsidiary
      trust................................. | 3,325                         
|Interest on other long-term
      debt...................                                                                  | 34,747                        
|Total interest on
      long-term debt.................                                                                    | 38,072                        
|Total interest
      expense.........................                                                                      | 122,673                       
|                                                                                                                           |                               
|Net interest
      income............................                                                                      | 152,895                       
|Provision for credit
      losses........................                                                                  | 12,223                        
|                                                                                                                           |                               
|Net interest income after provision for
      credit losses..............................................                  | 140,672                       
|                                                                                                                           |                               
|Other Income                                                                                                               |                               
|Securities
      gains...................................                                                                  | 642                           
|Trust
      income.......................................                                                                  | 5,008                         
|Service charges on
      deposits........................                                                                  | 11,538                        
|Insurance
      commissions..............................                                                                  | 3,631                         
|Income from bank owned life
      insurance..............                                                                  | 4,711                         
|Other
      income.......................................                                                                  | 11,676                        
|Total other
      income...............................                                                                    | 37,206                        
|                                                                                                                           |                               
|Other Expenses                                                                                                             |                               
|Salaries and employee benefits.....................                                                                        | 58,149                        
|Net occupancy expense..............................                                                                        | 6,750                         
|Furniture and equipment expense....................                                                                        | 9,970                         
|Data processing expense............................                                                                        | 2,124                         
|Pennsylvania shares tax expense....................                                                                        | 3,937                         
|Goodwill
      amortization..............................                                                                  | -0-                           
|Intangible
      amortization............................                                                                  | 203                           
|Litigation
      settlement..............................                                                                  | 8,000                         
|Restructuring
      charges..............................                                                                  | 6,140                         
|Other operating
      expenses...........................                                                                  | 30,168                        
|Total other
      expenses.............................                                                                    | 125,441                       
|                                                                                                                           |                               
|Income before income
      taxes.....................                                                                      | 52,437                        
|Applicable income
      taxes............................                                                                  | 8,911                         
|Net
      Income.....................................                                                                      | $   43,526                    
|                                                                                                                           |                               
|Average Shares
      Outstanding...........................                                                                | 58,409,614                    
|Average Shares Outstanding Assuming
      Dilution.........                                                                | 58,742,018                    
|                                                                                                                           |                               
|Per Share Data:                                                                                                            |                               
|Basic Earnings Per Share...........................                                                                        | $0.75                         
|Diluted Earnings Per Share.........................                                                                        | $0.74                         

The
accompanying notes are an integral part of these consolidated financial
statements.39FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIRIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY(Dollar Amounts in Thousands)

|                                                                                                                                                                                               | Common
        Stock | Additional
        Paid-in
        Capital | Retained
        Earnings | Accumulated
        Other
        ComprehensiveIncome(Loss) | Treasury
        Stock | Unearned
        ESOP
        Shares | Total
        Shareholders'
        Equity
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ------------------------------------------ | ------------------------- | ----------------------------------------------------------- | ---------------------- | ------------------------------------ | ------------------------------------------
|Balance at December 31, 1999..                                                                                                                                                                 | $62,525              | $ 68,330                                   | $257,773                  | $(40,304)                                                   | $(55,448)              | $(6,193)                             | $ 286,683                                 
|                                                                                                                                                                                               |                      |                                            |                           |                                                             |                        |                                      |                                           
|Comprehensive income                                                                                                                                                                           |                      |                                            |                           |                                                             |                        |                                      |                                           
|Net income..............                                                                                                                                                                       | -0-                  | -0-                                        | 47,246                    | -0-                                                         | -0-                    | -0-                                  | 47,246                                    
|Other comprehensive income, 
           net of tax:
           Unrealized holding 
             gains(losses) on 
             securities arising during 
             the period............. | -0-                  | -0-                                        | -0-                       | 33,630                                                      | -0-                    | -0-                                  | 33,630                                    
|Less: reclassification 
            adjustment for gains on 
            securities included in net
            income................                                                         | -0-                  | -0-                                        | -0-                       | (1,134)                                                     | -0-                    | -0-                                  | (1,134)                                   
|Total other comprehensive 
            income...............                                                                                                                                   | -0-                  | -0-                                        | -0-                       | 32,496                                                      | -0-                    | -0-                                  | 32,496                                    
|Total comprehensive 
             income....................                                                                                                                                   | -0-                  | -0-                                        | 47,246                    | 32,496                                                      | -0-                    | -0-                                  | 79,742                                    
|Cash dividends declared..                                                                                                                                                                      | -0-                  | -0-                                        | (32,850)                  | -0-                                                         | -0-                    | -0-                                  | (32,850)                                  
|Decrease in unearned ESOP shares...                                                                                                                                                            | -0-                  | (113)                                      | -0-                       | -0-                                                         | -0-                    | 906                                  | 793                                       
|Discount on dividend reinvestment
          plan purchases..........                                                                                                                           | -0-                  | (593)                                      | -0-                       | -0-                                                         | -0-                    | -0-                                  | (593)                                     
|Treasury stock acquired..                                                                                                                                                                      | -0-                  | -0-                                        | -0-                       | -0-                                                         | (873)                  | -0-                                  | (873)                                     
|Treasury stock reissued..                                                                                                                                                                      | -0-                  | (476)                                      | -0-                       | -0-                                                         | 1,655                  | -0-                                  | 1,179                                     
|Tax benefit of stock options.........                                                                                                                                                          | -0-                  | 75                                         | -0-                       | -0-                                                         | -0-                    | -0-                                  | 75                                        
|Balance at December 31, 2000.....                                                                                                                                                              | 62,525               | 67,223                                     | 272,169                   | (7,808)                                                     | (54,666)               | (5,287)                              | 334,156                                   
|                                                                                                                                                                                               |                      |                                            |                           |                                                             |                        |                                      |                                           
|Comprehensive income
          Net income..............                                                                                                                                        | -0-                  | -0-                                        | 50,189                    | -0-                                                         | -0-                    | -0-                                  | 50,189                                    
|Other comprehensive income, net of
           tax:
           Unrealized holding gains(losses)
            on securities arising during the 
             period...............                | -0-                  | -0-                                        | -0-                       | 18,639                                                      | -0-                    | -0-                                  | 18,639                                    
|Less: reclassification adjustment
            for gains on securities included
            in net income...........                                                                            | -0-                  | -0-                                        | -0-                       | (2,128)                                                     | -0-                    | -0-                                  | (2,128)                                   
|Total other comprehensive 
            income....................                                                                                                                              | -0-                  | -0-                                        | -0-                       | 16,511                                                      | -0-                    | -0-                                  | 16,511                                    
|Total comprehensive 
            income....................                                                                                                                                    | -0-                  | -0-                                        | 50,189                    | 16,511                                                      | -0-                    | -0-                                  | 66,700                                    
|Cash dividends declared..                                                                                                                                                                      | -0-                  | -0-                                        | (34,139)                  | -0-                                                         | -0-                    | -0-                                  | (34,139)                                  
|Decrease in unearned ESOP 
          shares....................                                                                                                                                | -0-                  | 31                                         | -0-                       | -0-                                                         | -0-                    | 1,161                                | 1,192                                     
|Discount on dividend reinvestment 
          plan purchases...............                                                                                                                     | -0-                  | (612)                                      | -0-                       | -0-                                                         | -0-                    | -0-                                  | (612)                                     
|Treasury stock reissued..                                                                                                                                                                      | -0-                  | (735)                                      | -0-                       | -0-                                                         | 3,235                  | -0-                                  | 2,500                                     
|Tax benefit of stock 
          options...................                                                                                                                                     | -0-                  | 269                                        | -0-                       | -0-                                                         | -0-                    | -0-                                  | 269                                       
|Balance at December 31, 2001                                                                                                                                                                   | 62,525               | 66,176                                     | 288,219                   | 8,703                                                       | (51,431)               | (4,126)                              | 370,066                                   
|                                                                                                                                                                                               |                      |                                            |                           |                                                             |                        |                                      |                                           
|Comprehensive income
          Net income..............                                                                                                                                        | -0-                  | -0-                                        | 43,526                    | -0-                                                         | -0-                    | -0-                                  | 43,526                                    
|Other comprehensive income, net of
           tax:
           Unrealized holding gains(losses)
            on securities arising during the 
            period................                | -0-                  | -0-                                        | -0-                       | 17,542                                                      | -0-                    | -0-                                  | 17,542                                    
|Less: reclassification adjustment
            for gains on securities included
            in net income............                                                                           | -0-                  | -0-                                        | -0-                       | (394)                                                       | -0-                    | -0-                                  | (394)                                     
|Total other comprehensive 
          income....................                                                                                                                                | -0-                  | -0-                                        | -0-                       | 17,148                                                      | -0-                    | -0-                                  | 17,148                                    
|Total comprehensive 
             income....................                                                                                                                                   | -0-                  | -0-                                        | 43,526                    | 17,148                                                      | -0-                    | -0-                                  | 60,674                                    
|Cash dividends declared..                                                                                                                                                                      | -0-                  | -0-                                        | (35,580)                  | -0-                                                         | -0-                    | -0-                                  | (35,580)                                  
|Decrease in unearned ESOP 
          shares....................                                                                                                                                | -0-                  | 86                                         | -0-                       | -0-                                                         | -0-                    | 1,071                                | 1,157                                     
|Discount on dividend reinvestment
          plan purchases...............                                                                                                                      | -0-                  | (637)                                      | -0-                       | -0-                                                         | -0-                    | -0-                                  | (637)                                     
|Treasury stock reissued..                                                                                                                                                                      | -0-                  | (964)                                      | -0-                       | -0-                                                         | 6,450                  | -0-                                  | 5,486                                     
|Tax benefit of stock 
          options...................                                                                                                                                     | -0-                  | 224                                        | -0-                       | -0-                                                         | -0-                    | -0-                                  | 224                                       
|Balance at December 31, 2002                                                                                                                                                                   | $62,525              | $ 64,885                                   | $296,165                  | $ 25,851                                                    | $(44,981)              | $(3,055)                             | $ 401,390                                 

The
accompanying notes are an integral part of these consolidated financial
statements.40FIRST COMMONWEALTH FINANCIAL CORPORATION AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Dollar Amounts
in Thousands)

|                                                                                                                                   | Years Ended December
      31,
|---------------------------------------------------------------------------------------------------------------------------------- | ------------------------------
|                                                                                                                                   | 2002                          
|Operating Activities                                                                                                               |                               
|Net
      income...........................................                                                                        | $ 43,526                      
|Adjustments to reconcile net income to
      net cash provided by    Operating
    activities:                                     |                               
|Provision for credit
      losses........................                                                                          | 12,223                        
|Depreciation and
      amortization......................                                                                          | 7,360                         
|Net gains on sales of
      assets.......................                                                                          | (498)                         
|Income from increase in
      cash surrender value of bank owned life     
      insurance........................................ | (4,711)                       
|Decrease (increase) in
      interest receivable.........                                                                          | 2,860                         
|Increase (decrease) in
      interest payable............                                                                          | (2,280)                       
|Increase (decrease) in
      income taxes payable........                                                                          | (2,754)                       
|Change in deferred
      taxes...........................                                                                          | (594)                         
|Other-net..........................................                                                                                | 2,408                         
|Net cash
      provided by operating activities........                                                                            | 57,540                        
|                                                                                                                                   |                               
|Investing Activities                                                                                                               |                               
|Transactions with securities held to
      maturity:                                                                               |                               
|Sales..............................................                                                                                | -0-                           
|Maturities and
      redemptions.........................                                                                          | 110,769                       
|Purchases of investment
      securities.................                                                                          | (15,266)                      
|Transactions with securities available
      for sale:                                                                             |                               
|Sales..............................................                                                                                | 15,328                        
|Maturities and
      redemptions.........................                                                                          | 545,791                       
|Purchases of investment
      securities.................                                                                          | (547,799)                     
|Proceeds from sales of loans and other
      assets........                                                                        | 102,225                       
|Investment in bank owned life
      insurance..............                                                                        | (5,000)                       
|Net decrease (increase) in
      interest-bearing bank
      deposits...............................................               | 2,278                         
|Net increase in
      loans................................                                                                        | (154,614)                     
|Purchases of premises and
      equipment..................                                                                        | (6,382)                       
|Net cash provided (used)
      by investing activities...                                                                          | 47,330                        
|                                                                                                                                   |                               
|Financing Activities                                                                                                               |                               
|Proceeds from issuance of other
      long-term debt.......                                                                        | 18,200                        
|Repayments of other long-term
      debt...................                                                                        | (101,425)                     
|Discount on dividend reinvestment plan
      purchases.....                                                                        | (637)                         
|Dividends
      paid.......................................                                                                        | (35,208)                      
|Net increase (decrease) in Federal
      funds purchased...                                                                        | (56,650)                      
|Net increase (decrease) in other
      short-term borrowings.............................................                          | 97,980                        
|Sale of branch and deposits, net of
      cash received....                                                                        | -0-                           
|Stock option tax
      benefit.............................                                                                        | 224                           
|Acquisition of treasury
      stock........................                                                                        | -0-                           
|Reissuance of treasury
      stock.........................                                                                        | 4,656                         
|Net increase (decrease) in
      deposits..................                                                                        | (49,026)                      
|Net cash provided (used)
      by financing activities...                                                                          | (121,886)                     
|Net increase (decrease) in
      cash and cash equivalents............................................                             | (17,016)                      
|                                                                                                                                   |                               
|Cash and cash equivalents at January
      1............... .......................................................                | 98,130                        
|Cash and cash equivalents at December
      31.............                                                                        | $ 81,114                      

The
accompanying notes are an integral part of these consolidated financial
statements.41FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
8.  Financial Statements and Supplementary DataNotes to
Consolidated Financial StatementsYears Ended December 31, 2002, 2001 and
2000NOTE 1--Statement of Accounting
PoliciesGENERALThe following summary of accounting and
reporting policies is presented to aid the reader in obtaining a better
understanding of the financial statements and related financial data of First
Commonwealth Financial Corporation and its subsidiaries (the "Corporation")
contained in this report.The financial information is presented in
accordance with generally accepted accounting principles and general practice
for financial institutions in the United States of America.  In preparing
financial statements, management is required to make estimates and assumptions
that affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements. 
In addition, these estimates and assumptions affect revenues and expenses in the
financial statements and as such, actual results could differ from those
estimates.Through its subsidiaries which include one commercial bank, a
nondepository trust company, insurance agency and financial advisor, the
Corporation provides a full range of loan, deposit, trust, insurance and
financial advisory services primarily to individuals and small to middle-market
businesses in eighteen counties in central and western Pennsylvania.  Under
current conditions, the Corporation is reporting one business
segment.The Corporation is subject to regulations of certain state and
federal agencies.  These regulatory agencies periodically examine the
Corporation for adherence to laws and regulations.  As a consequence, the
cost of doing business may be affected.Basis of
PresentationThe accompanying consolidated financial statements
include the accounts of the Corporation and its wholly-owned subsidiaries. 
All material intercompany transactions have been eliminated in
consolidation.Investments of 20 to 50 percent of the outstanding common
stock of investees are accounted for using the equity method of
accounting.ReclassificationsFinancial statement amounts in prior periods have been
reclassified to conform to the presentation format used in 2002.  The
reclassifications had no effect on the Corporation's financial condition or
results of operations.42FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 8.  Financial
Statements and Supplementary DataNotes to Consolidated Financial
StatementsYears Ended December 31, 2002, 2001 and 2000NOTE
1--Statement of Accounting Policies
(Continued)SecuritiesDebt securities that the Corporation has the positive intent
and ability to hold to maturity are classified as securities
held-to-maturity and are reported at amortized cost.  Debt and equity
securities that are bought and held principally for the purpose of selling them
in the near term are to be classified as trading securities and reported
at fair value, with unrealized gains and losses included in earnings.  Debt
and equity securities not classified as either held-to-maturity securities or
trading securities are classified as securities available-for-sale and
are reported at fair value, with unrealized gains and losses excluded from
earnings and reported as a separate component of shareholders' equity, net of
deferred taxes.The Corporation has securities classified as either
held-to-maturity or available-for-sale.  The Corporation does not engage in
trading activities.  Net gain or loss on the sale of securities is
determined by using the specific identification
method.LoansLoans are carried at the principal amount
outstanding.  Unearned income on installment loans and leases is taken into
income on a declining basis which results in an approximately level rate of
return over the life of the loan or lease.  Interest is accrued as earned
on nondiscounted loans.The Corporation considers a loan to be impaired
when, based on current information and events, it is probable that a creditor
will be unable to collect principal or interest due according to the contractual
terms of the loan.  Loan impairment is measured based on the present value
of expected cash flows discounted at the loan's effective interest rate or, as a
practical expedient, at the loan's observable market price or the fair value of
the collateral if the loan is collateral dependent.Payments received on
impaired loans are applied against the recorded investment in the loan. 
For loans other than those that the Corporation expects repayment through
liquidation of the collateral, when the remaining recorded investment in the
impaired loan is less than or equal to the present value of the expected cash
flows, income is recorded on a cash basis.Mortgage Servicing
RightsWhen the Corporation purchases or originates mortgage loans
with a definitive plan to sell or securitize those loans and retain the mortgage
servicing rights, the Corporation measures the mortgage servicing rights at cost
by allocating the cost of the mortgage loans between the mortgage
43FIRST COMMONWEALTH FINANCIAL CORPORATION AND
SUBSIDIARIESITEM 8.  Financial Statements and Supplementary
DataNotes to Consolidated Financial StatementsYears Ended
December 31, 2002, 2001 and 2000NOTE 1--Statement of Accounting Policies
(Continued)Mortgage Servicing Rights(Continued)servicing
rights and the mortgage loans (without the mortgage servicing rights) based on
their relative fair values at the date of purchase or origination. 
When the Corporation does not have a definitive plan at the purchase or
origination date and later sells or securitizes the mortgage loans and retains
the mortgage servicing rights, the Corporation allocates the amortized cost of
the mortgage loans between the mortgage servicing rights and the mortgage loans
(without mortgage servicing rights) based on their relative fair values at the
date of sale.  The amount capitalized as the right to service mortgage
loans is recognized as a separate asset and amortized in proportion to, and over
the period of, estimated net servicing income (servicing revenue in excess of
servicing cost).  Mortgage servicing rights are periodically evaluated for
impairment based on fair values.Loan FeesLoan origination and commitment fees, net of associated direct
costs, are deferred and the net amount is amortized as an adjustment to the
related loan yield on the interest method, generally over the contractual life
of the related loans or commitments.Other Real Estate
OwnedReal estate, other than bank premises, is recorded at the lower
of cost or fair value less selling costs at the time of acquisition. 
Expenses related to holding the property, net of rental income, are generally
charged against earnings in the current period.Allowance for Credit
LossesThe Corporation maintains an allowance for credit losses at a
level deemed sufficient to absorb losses which are inherent in the loan and
lease portfolios at each balance sheet date.  Management and the
Corporation's Board of Directors review the adequacy of the allowance on a
quarterly basis to ensure that the provision for credit losses has been charged
against earnings in an amount necessary to maintain the allowance at a level
that is appropriate based on management's assessment of probable estimated
losses.  The Corporation's methodology for assessing the appropriateness of
the allowance for credit losses consists of several key elements.  These
elements include a specific allowance for primary watch list classified loans, a
formula allowance based on historical trends, an additional allowance for
special circumstances and an unallocated allowance.  The Corporation
consistently applies the following comprehensive methodology and procedure at
the subsidiary bank level.44FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 8.  Financial
Statements and Supplementary DataNotes to Consolidated Financial
StatementsYears Ended December 31, 2002, 2001 and 2000NOTE
1--Statement of Accounting Policies (Continued)Allowance for Credit
Losses(Continued)The allowance for primary watch list
classified loans addresses those loans maintained on the Corporation's primary
watch list which are assigned a rating of substandard, doubtful or loss. 
Substandard loans are those with a well-defined weakness or a weakness which
jeopardizes the repayment of the debt.  A loan may be classified as
substandard as a result of impairment of the borrower's financial condition
and repayment capacity.  Loans for which repayment plans have not been met
or collateral equity margins do not protect the Corporation may also be
classified as substandard.  Doubtful loans have the characteristics of
substandard loans with the added characteristic that collection or liquidation
in full, on the basis of presently existing facts and conditions, is highly
improbable.  Although the possibility of loss is extremely high for
doubtful loans, the classification of loss is deferred until pending factors,
which might improve the loan, have been determined.  Loans rated as
doubtful in whole or in part are placed in nonaccrual status.  Loans which
are classified as loss are considered uncollectible and are charged to the
allowance for credit losses at the next meeting of the Corporation's Credit
Committee after placement in this category.  There were no loans classified
as loss on the primary watch list as of December 31, 2002.Loans on the
primary watch list may also be impaired loans, which are defined as nonaccrual
loans or troubled debt restructurings.  Each of the classified loans on the
primary watch list are individually analyzed to determine the level of the
potential loss in the credit under the current circumstances.  The specific
reserve established for these criticized and impaired loans is based on careful
analysis of the loan's performance, the related collateral value, cash flow
considerations and the financial capability of any guarantor.  The
allowance for primary watch list classified loans is equal to the total amount
of potential unconfirmed losses for the individual classified loans on the watch
list.  Primary watch list loans are managed and monitored by assigned
account officers within the Corporation in conjunction with senior
management.The allowance based on historical trends uses charge-off
experience of the Corporation to estimate potential unconfirmed losses in the
balances of the loan and lease portfolios.  The historical loss experience
percentage is based on the charge-off history for the greater of the eight most
recent quarters or the twenty most recent quarters.  Historical loss
experience percentages are applied to non-classified loans from the primary
watch list, as well as all other loans and leases which are not on the watch
list, to obtain the portion of the allowance for credit losses which is based on
historical trends.  Before applying the historical loss experience
percentages, loan balances are reduced by the portion of the loan balances which
are subject to guarantee by a government agency.  Loan balances are also
adjusted for unearned discount on installment loans.45FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
8.  Financial Statements and Supplementary DataNotes to
Consolidated Financial StatementsYears Ended December 31, 2002, 2001 and
2000(Dollar Amounts in Thousands)NOTE 1--Statement of Accounting
Policies (Continued)Allowance for Credit Losses(Continued)The additional allowance for special circumstances
provides management with the opportunity to estimate additional potential
allowance amounts which may be needed to cover specific factors.  The
specific factors that management currently evaluates consist of portfolio risk
or concentrations of credit, off balance sheet risk, economic conditions and
management or staff considerations.  Portfolio risks include unusual
changes or recent trends in specific portfolios such as unexpected changes in
the trends or levels of delinquency, unusual repossession activities or large
levels of unsecured loans in a portfolio.  The Corporation also
maintains an unallocated allowance.  The unallocated allowance is used to
cover any factors or conditions which may cause a potential credit loss but are
not specifically identifiable.  It is prudent to maintain an unallocated
portion of the allowance because no matter how detailed an analysis of potential
credit losses is performed these estimates by definition lack precision. 
Management must make estimates using assumptions and information which is often
subjective and changing rapidly.Bank-Owned
Life InsuranceThe Corporation purchased
insurance on the lives of certain groups of employees.  The policies
accumulate asset values to meet future liabilities including the payment of
employee benefits such as health care.  Increases in the cash surrender
value are recorded as other income in the Consolidated Statements of
Income.  The cash surrender value of bank-owned life insurance is reflected
in "other assets" on the Consolidated Balance Sheets in the amount of $92,644
and $84,788 at December 31, 2002 and 2001, respectively.Premises and
EquipmentPremises and equipment are
carried at cost less accumulated depreciation and amortization. 
Depreciation is computed on the straight-line and accelerated methods over the
estimated useful life of the asset.  Charges for maintenance and repairs
are expensed as incurred.  Where a lease is involved, amortization is
charged over the term of the lease or the estimated useful life of the
improvement, whichever is shorter.  The Corporation records computer
software in accordance with the American Institute of Certified Public
Accountants' Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1").  The
statement identifies the following three stages of software development: 
the preliminary project stage, the application development stage and the
post-implementation stage.  In46FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 8.  Financial
Statements and Supplementary DataNotes to Consolidated Financial
StatementsYears Ended December 31, 2002, 2001 and 2000NOTE
1--Statement of Accounting Policies (Continued)Premises and Equipment(Continued)compliance with SOP 98-1, the Corporation expenses
costs incurred during the preliminary project stage and capitalizes certain
costs incurred during the application development stage.  Once software is
in operation, maintenance costs are expensed over the maintenance period while
upgrades which result in additional functionality or enhancement are
capitalized.  Training and data conversion costs are expensed as
incurred.  Capitalized costs are amortized on a straight-line basis over a
period of 3-7 years, depending on the life of the software
license.Business CombinationsIn July 2001, the Financial
Accounting Standards Board ("FASB") issued Statement No. 141, "Business
Combinations" ("FAS No. 141") which required the purchase method of accounting
for business combinations initiated after June 30, 2001.  Under the
purchase method, net assets of the business acquired are recorded at their
estimated fair value as of the date of acquisition with any excess of the cost
of the acquisition over the fair value of the net tangible and intangible assets
acquired recorded as goodwill.   Results of the acquired business are
included in the income statement from the date of the
acquisition.Goodwill and Other Intangible AssetsThe
Corporation adopted FASB Statement No. 142, "Goodwill and Other Intangible
Assets" ("FAS No. 142"), effective January 1, 2001.  FAS No. 142 requires
that goodwill and other intangible assets with indefinite useful lives,
including goodwill recorded in past business combinations, no longer be
amortized, but instead be tested for impairment at least annually and written
down and charged to results of operations only in periods in which the recorded
value is more than the estimated fair value.  Intangible assets that have
finite useful lives will continue to be amortized over their useful lives. 
(For additional information regarding the impact of the adoption of FAS No. 142
see Note 4.)Accounting for the Impairment of Long-Lived
AssetsThe Corporation reviews long-lived
assets, such as premises and equipment and intangibles for impairment whenever
events or changes in circumstances, such as a significant decrease in the market
value of an asset or the extent or manner in which an asset is used indicate
that the carrying amount of an asset may not be recoverable.  If there is
an indication that the carrying amount of an asset may not be recoverable,
future discounted cash flows expected to result from the use of the asset are
estimated.  If the sum of the expected cash flows is less than the carrying
value of the asset, a loss is recognized for the difference between the carrying
value and fair market value of the asset.47FIRST
COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM 8. 
Financial Statements and Supplementary DataNotes to Consolidated
Financial StatementsYears Ended December 31, 2002, 2001 and 2000NOTE
1--Statement of Accounting Policies (Continued)Income TaxesThe Corporation
records taxes in accordance with the asset and liability method utilized by FASB
Statement No. 109 ("FAS No. 109"), whereby deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amount of existing assets and
liabilities and their respective tax bases given the provisions of the enacted
tax laws.  Deferred tax assets are reduced, if necessary, by the amount of
such benefits that are not expected to be realized based upon available
evidence.Comprehensive Income DisclosuresFor all periods
presented, "other comprehensive income" (comprehensive income excluding net
income) includes only one component, which is the change in unrealized holding
gains and losses on available for sale securities, net of related tax
effects.Cash and Cash EquivalentsFor purposes of reporting cash flows, cash and cash equivalents
include cash on hand, amounts due from banks and Federal funds sold. 
Generally, Federal funds are sold for one-day periods.Employee Stock
Ownership PlanAccounting treatment for the Corporation's Employee
Stock Ownership Plan ("ESOP") described in Note 21 follows Statement of Position
93-6 ("SOP 93-6") "Employers Accounting for Employee Stock Ownership Plans" for
ESOP shares acquired after December 31, 1992 ("new shares").  The
Corporation has elected, as permitted under SOP 93-6, not to adopt this
statement for ESOP shares acquired on or before December 31, 1992 ("old
shares").ESOP shares purchased subject to debt guaranteed by the
Corporation are recorded as a reduction of common shareholders' equity by
charging unearned ESOP shares.  As shares are committed to be released to
the ESOP trust for allocation to plan participants, unearned ESOP shares is
credited for the average cost of the shares to the ESOP.  Compensation cost
recognized for new shares in accordance with the provisions of SOP 93-6 is based
upon the fair market value of the shares committed to be released. 
Additional paid-in capital is charged or credited for the difference between the
fair value of the shares committed to be released and the cost of those shares
to the ESOP.  Compensation cost recognized for old shares committed to be
released is recorded at the cost of those shares to the
ESOP.48FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIESITEM 8.  Financial Statements and
Supplementary DataNotes to Consolidated Financial
StatementsYears Ended December 31, 2002, 2001 and 2000NOTE
1--Statement of Accounting Policies (Continued)Employee Stock
Ownership Plan (Continued)Dividends on both old and new unallocated
ESOP shares are used for debt service and are reported as a reduction of debt
and accrued interest payable.  Dividends on allocated ESOP shares are
charged to retained earnings and allocated or paid to the plan
participants.  The average number of common shares outstanding used in
calculating earnings per share excludes all unallocated ESOP
shares.Employee Stock Option PlanIn December 2002, the FASB issued Statement No. 148,
"Accounting for Stock-Based Compensation-Transition and Disclosure" ("FAS No.
148").  FAS No. 148 amends FASB Statement No. 123 "Accounting for
Stock-Based Compensation" ("FAS No. 123") to provide alternative methods of a
voluntary transition to FAS No. 123's fair value method of accounting for
stock-based employee compensation.  FAS No. 148 also amends the disclosure
provisions of FAS No. 148 and APB Opinion No. 28, "Interim Financial Reporting"
("APB 28"), to require disclosure in the summary of significant accounting
policies of the effects of an entity's accounting policy with respect to
stock-based employee compensation on reported net income and earnings per share
in annual and interim financial statements.  FAS No. 148 does not amend FAS
No. 123 to require companies to account for employee stock options using the
fair value method, the disclosure provisions of the statement apply to all
companies with stock-based compensation, regardless of whether they account for
that compensation using the fair value method of FAS No. 123 or the intrinsic
value method of APB Opinion No. 25 "Accounting for Stock Issued to Employees"
("APB 25").  FAS No. 148 amendments of the transition and annual disclosure
requirements of FAS No. 123 are effective for fiscal years ending after December
15, 2002, with earlier application permitted in certain circumstances.  The
interim disclosure provisions are effective for financial reports containing
financial statements for interim periods beginning after December 15,
2002.  Implementation of FAS No. 148 did not have a material impact on the
Corporation's financial condition or results of operations.FAS No. 123
defines a method of measuring stock-based compensation, such as stock options
granted, at an estimated fair value.  FAS No. 123 also permits the
continued measurement of stock based compensation under provisions of APB
25.  As permitted under FAS No. 123, the Corporation has elected to use the
intrinsic value method to measure stock based compensation under APB 25 and to
disclose in a footnote to the financial statements, net income and earnings per
share determined as if the fair value methodology of FAS No. 123 was
implemented.49FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 8.  Financial
Statements and Supplementary DataNotes to Consolidated Financial
StatementsYears Ended December 31, 2002, 2001 and 2000(Dollar Amounts in
Thousands except per share data)NOTE 1--Statement of Accounting Policies
(Continued)Employee Stock Option Plan
(Continued)Generally expenses are
easily measured as of the date they are incurred.  At some point the
Corporation must pay cash to cover these expenses.  This is not the case
with the methodology for expensing stock options.  The amount expensed for
the purposes of this disclosure is equivalent to a theoretic value calculated on
the date the option was granted.  Calculating a value of the option at the
grant date requires a variety of assumptions which may have little to do with
the actual realization of value by the option holder.  In fact, many of the
options are forfeited or expire for a variety of reasons without ever being
exercised.Additionally, valuation models operate under the assumption
that the options are similar to those that are actively traded.  In reality
they are not marketable.  Also there exists times where executives are
unable to exercise their options due to trading restrictions.  This limits
the ability of certain option holders to benefit from some periods of
volatility.  Changes in the assumptions used could affect the estimated
impact of the stock options and this disclosure.  The variety of
methodologies and assumptions permitted to be used by each reporting company
gives rise to a high degree of subjectivity in estimating the impact of the
options.  Management is concerned that due to the lack of uniformity and
variations in assumptions, there may not be reasonable comparability between
institutions.Had compensation cost for the Corporation's stock option
plan been determined based upon the fair value at the grant dates for awards
under the plan consistent with the method of FAS No. 123, the Corporation's net
income would have been reduced on a pro forma basis by $2,278, $1,978 and $116
for 2002, 2001 and 2000, respectively.  Basic earnings per share on a pro
forma basis would have declined $0.04 per share for 2002 and 2001 and $0.00 per
share for 2000 while diluted earnings per share would have declined over the
same periods by $0.04 per share, $0.03 per share and $0.00 per share.  See
Note 22 for additional information.  Pro forma amounts are shown
below:

|                           | 2002        | 2001      | 2000       
|-------------------------- | ----------- | --------- | -----------
|                           |             |           |            
|                           | As Reported | Pro Forma | As Reported
|                           |             |           |            
|Net Income                 | $43,526     | $41,248   | $50,189    
|Basic earnings per share   | $  0.75     | $  0.71   | $  0.87    
|Diluted earnings per share | $  0.74     | $  0.70   | $  0.86    

Derivative Instruments and Hedging
ActivitiesFASB Statement No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("FASB No. 133"), as amended, established
accounting and 50FIRST COMMONWEALTH FINANCIAL CORPORATION
AND SUBSIDIARIESITEM 8.  Financial Statements and Supplementary
DataNotes to Consolidated Financial StatementsYears Ended
December 31, 2002, 2001 and 2000NOTE 1--Statement of Accounting Policies
(Continued)Derivative Instruments and Hedging Activities
(Continued)reporting standards for derivative instruments and for
hedging activities which requires that an entity recognize all derivatives as
either assets or liabilities on the balance sheet and measure those instruments
at fair value.  Changes in the fair value of derivatives must be recognized
in earnings when they occur unless the derivative qualifies as a hedge.  If
a derivative qualifies as a hedge, a company can elect to use hedge accounting
to eliminate or reduce income statement volatility that would arise from
reporting changes in a derivative's fair value in income. The
Corporation currently has no freestanding derivative or hedging
instruments.  Management reviews contracts from various functional areas of
the Corporation to identify potential derivatives embedded within selected
contracts.  Management has identified potential embedded derivatives in
certain loan commitments for residential mortgages where the Corporation has
intent to sell to an outside investor.  Due to the short-term nature of
these loan commitments (30 days or less) and the minimal historical dollar
amount of commitments outstanding, the corresponding impact on the Corporation's
financial condition and results of operation has not been
material.Earnings Per Common ShareBasic earnings per share excludes dilution and is computed by
dividing income available to common shareholders less unallocated ESOP shares by
the weighted-average number of common shares outstanding for the period. 
Diluted earnings per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the entity.  For all periods presented the dilutive
effect on average shares outstanding is the result of compensatory stock options
outstanding.New Accounting PronouncementsIn June 2001, the FASB issued Statement No. 143, "Accounting
for Asset Retirement Obligations" ("FAS No. 143").  The statement addresses
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and associated asset retirement
costs.  FAS No. 143 requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is incurred
if a reasonable estimate of fair value can be made.  The associated asset
retirement costs are capitalized as part of the carrying amount of the
long-lived asset and subsequently allocated to expense over the asset's useful
life.  The standard is effective for fiscal years beginning after June 15,
2002 and implementation is not expected to have a material impact on the
Corporation's financial condition or results of operations.51FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
8.  Financial Statements and Supplementary DataNotes to
Consolidated Financial StatementsYears Ended December 31, 2002, 2001 and
2000NOTE 1--Statement of Accounting Policies (Continued)New
Accounting Pronouncements (Continued)Effective January 1, 2002, the
Corporation adopted FASB Statement No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" ("FAS No. 144") which requires that long-lived
assets be reviewed for impairment whenever events or changes in circumstances,
such as a significant decrease in the market value of an asset or the extent or
manner in which an asset is used indicate that the carrying amount of an asset
may not be recoverable.  If there is an indication that the carrying amount
of anasset may not be recoverable, future undiscounted cash flows expected
to result from the use and disposition of the asset are estimated.  If the
sum of the expected cash flows is less than the carrying value of the asset, a
loss is recognized for the difference between the carrying value and the market
value of the asset.  This statement also requires measurement of long-lived
assets classified as held for sale at the lower of their carrying amount or fair
value less cost to sell and to cease depreciation or amortization on these
assets.  Implementation of FAS No. 144 did not have a material impact on
the Corporation's financial condition or results of operations.In April
2002, the FASB issued Statement No. 145, "Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections" ("FAS
No. 145").  FAS No. 145 rescinds Statement 4, which required all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an extraordinary item, net of related income tax effect.  As a result,
the criteria in Opinion 30 will now be used to classify those gains and
losses.  This statement also amends FASB Statement No. 13 to require that
certain lease modifications that have economic effects similar to sale-leaseback
transactions.  This statement also makes technical corrections to existing
pronouncements, which are not substantive but in some cases may change
accounting practice.  FAS No.145 was effective for transactions occurring
after May 15, 2002.  Implementation of FAS No. 145 did not have a material
impact on the Corporation's financial condition or results of
operations.In July 2002, the FASB issued Statement No. 146, "Accounting
for Costs Associated with Exit or Disposal Activities" ("FAS No. 146"). 
FAS No. 146 replaced EITF Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)".  The standard requires
companies to recognize costs associated with exit or disposal activities when
they are incurred rather than at the date of a commitment to an exit or disposal
plan.  FAS No. 146 is to be applied prospectively to exit or disposal
activities initiated after December 31, 2002.  Upon adoption, FAS No. 146
is not expected to have a material impact on the Corporation's financial
condition or results of operations.52FIRST
COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM 8. 
Financial Statements and Supplementary DataNotes to Consolidated
Financial StatementsYears Ended December 31, 2002, 2001 and 2000NOTE
1--Statement of Accounting Policies (Continued)New Accounting
Pronouncements(Continued)In October 2002, the FASB issued Statement
No. 147, "Acquisitions of Certain Financial Institutions, an amendment of FASB
Statements No. 72 and 144 and FASB No. 9" ("FAS No. 147").  FAS No. 147
removes acquisitions of financial institutions, except for transactions between
two or more mutual enterprises, from the scope of both FASB Statement No. 72 and
Interpretation 9 and requires that those transactions be accounted for in
accordance with FASB Statements No. 141 and No. 142.  As a result, the
requirement in FASB Statement No. 72 to recognize, and subsequently amortize,
any excess of the fair value of liabilities assumed over the fair value of
tangible and identifiable assets acquired as an unidentifiable asset no longer
applies to acquisitions within the scope of this statement.  In addition,
this statement amends FASB Statement No. 144 to include in its scope long-term
customer relationship intangible assets of financial institutions such as
depositor and borrower-relationship intangible assets and credit cardholder
assets.  Consequently, those intangible assets are subject to the same
undiscounted cash flow recoverability test and impairment loss recognition and
measurement provisions that FASB Statement No. 144 requires for other long-lived
assets that are held and used.  The provisions of FAS No. 147 were
effective October 1, 2002.  Implementation of FAS No. 147 did not have any
impact on the Corporation's financial condition or results of
operations.In November 2002, the FASB issued FASB Interpretation No. 45
("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees
of Indebtedness of Others."  The disclosure requirements of FIN 45 are
effective for financial statements of interim or annual periods ending after
December 15, 2002, and requires disclosure of the nature of the guarantee, the
maximum potential of future payments the guarantor could be required to make
under the guarantee, and the current amount of the liability, if any, for the
guarantor's obligation under the guarantee.  The recognition requirements
of FIN 45 are to be applied prospectively to guarantees issued or modified after
December 31, 2002.  This interpretation expands the disclosures to be made
by a guarantor in its financial statements about its obligations under certain
guarantees and requires the guarantor to recognize a liability for the fair
value of an obligation assumed under a guarantee.  FIN 45 clarifies the
requirements of FASB Statement No. 5 ("FAS No. 5") "Accounting for
Contingencies", relating to guarantees.  In general, FIN 45 applies to
contracts or indemnification agreements that contingently require the guarantor
to make payments to the guaranteed party based on changes in an underlying that
is related to an asset, liability, or equity security of the guaranteed
party.  Certain guarantee contracts are excluded from both the disclosure
and recognition requirements of this interpretation, including, but not limited
to,53FIRST COMMONWEALTH FINANCIAL
CORPORATION AND SUBSIDIARIESITEM 8.  Financial Statements and
Supplementary DataNotes to Consolidated Financial
StatementsYears Ended December 31, 2002, 2001 and 2000(Dollar Amounts in
Thousands)NOTE 1--Statement of Accounting Policies
(Continued)New Accounting Pronouncements(Continued)      guarantees related to
employee compensation, residual value guarantees under capital lease
arrangements, commercial letters of credit, loan commitments, subordinated
interests in Special Purpose Entities and guarantees of a company's own future
performance.  Other guarantees are subject to the disclosure requirements
of FIN 45 but not the recognition provisions and include, among others, a
guarantee accounted for as a derivative instrument under FAS No. 133, a parent's
guarantee of debt owed to a third party by its subsidiary or vice versa and a
guarantee which is based on performance not price.  Guarantees that have
been entered into by the Corporation are disclosed in Note 11.  The
Corporation does not expect the requirements of FIN 45 to have a material impact
on its financial condition or results of operations.In January 2003, the
FASB issued FASB Interpretation No. 46 ("FIN 46"), "Consolidation of Variable
Interest Entities", the provisions of which became effective upon
issuance.  This interpretation provides guidance on identification of
variable interest entities ("VIE") and the determination of when the assets,
liabilities, noncontrolling interest and results of operations of a VIE should
be included in a company's consolidated financial statements.  Companies
that hold variable interests in an entity will need to consolidate that entity
if the company's interest in the VIE is such that the company will absorb a
majority of the entity's expected residual returns, should they occur.  The
Corporation is currently assessing the impact, if any, the interpretation will
have on the Corporation's financial condition or results of
operations.      NOTE 2--Supplemental
Comprehensive Income DisclosuresThe following table identifies the
related tax effects allocated to each component of other comprehensive income in
the Statements of Changes in Shareholders' Equity:

|                                                                                                                                                   | December 31, 2002 | December 31, 2001   | December 31,
  2000  
|-------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | ------------------- | ---------------------
|                                                                                                                                                   | Pre-taxAmount     | Tax(Expense)Benefit | Net
      ofTaxAmount
|Unrealized gains (losses) on securities:
          Unrealized holding 
           gains (losses) 
           arising during the 
           period | $26,987           | $(9,445)            | $17,542              
|Less:reclassification
            adjustment for gains
            realized in net 
            income                                             | (606)             | 212                 | (394)                
|Net unrealized
        
               gains (losses)                                                                                              | 26,381            | (9,233)             | 17,148               
|Other comprehensive 
          income                                                                                                              | $26,381           | $(9,233)            | $17,148              
|                                                                                                                                                   |                   |                     |                      

54FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 8.  Financial
Statements and Supplementary DataNotes to Consolidated Financial
StatementsYears Ended December 31, 2002, 2001 and 2000(Dollar Amounts in
Thousands, except per share data)NOTE 3--Supplemental Cash Flow
Disclosures

|                                                                                 | 2002     | 2001     | 2000        
|-------------------------------------------------------------------------------- | -------- | -------- | ------------
|Cash paid during the year
      for: Interest                                    | $124,953 | $186,558 | $166,919    
|Income taxes                                                                     | $ 12,010 | $ 11,890 | $ 12,842    
|                                                                                 |          |          |             
|Noncash investing and financing
      activities:                                |          |          |             
|ESOP loan reductions                                                             | $ 1,071  | $  1,161 | $   
906    
|                                                                                 |          |          |             
|Loans transferred to other real
      estate owned and repossessed assets        | $ 5,029  | $  5,246 | $  6,405    
|                                                                                 |          |          |             
|Gross increase in market value adjustment
      to securities available for sale | $26,381  | $ 25,402 | $ 49,994    
|                                                                                 |          |          |             
|Treasury stock reissued for insurance
      agency interest acquired             | $  -0-   | $    -0- | $   
    852
|                                                                                 |          |          |             
|Treasury stock reissued for
      business combination                           | $  830   | $    -0- | $   
    -0-

NOTE 4--Goodwill and Other Intangible
AssetsOn January 1, 2002, the Corporation adopted FASB Statement No.
142, "Goodwill and Other Intangible Assets" ("FAS No. 142"), which addresses the
accounting and reporting for acquired goodwill and other intangible assets which
supersedes APB Opinion No. 17, "Intangible Assets".  FAS No. 142 includes
requirements to test goodwill and indefinite-lived intangible assets for
impairment rather than amortize them.  As of January 1, 2002, the
Corporation had goodwill, net of accumulated amortization, of approximately
$5,800 subject to the transitional testing provisions of FAS No. 142. 
Also, management reclassified an intangible asset previously recorded by an
insurance subsidiary when acquiring the expiring list of policy holders from
their joint-venture partner to goodwill with a net carrying amount of
$718.As of January 1, 2002, the Corporation discontinued the
amortization of goodwill which reduced other operating expense by $920 in
2002.  Goodwill amortization expense was $920 and $865 for 2001 and 2000,
respectively.  Goodwill represented basic and diluted earnings per share of
$0.016 and $0.015 for 2001 and 2000, respectively.  Upon implementation of
the standard, the Corporation determined no impairment of its outstanding
goodwill existed.  55FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
8.  Financial Statements and Supplementary DataNotes to
Consolidated Financial StatementsYears Ended December 31, 2002, 2001 and
2000(Dollar Amounts in Thousands)NOTE 5--Business
CombinationEffective March 1, 2002, the Corporation acquired all of the
outstanding shares of Strategic Capital Concepts, Inc. ("SCC") and Strategic
Financial Advisors, Inc. ("SFA"), each a Pennsylvania corporation headquartered
in Allison Park, Pennsylvania.  As a registered investment adviser,
Strategic Capital Concepts provides financial planning, asset management and
consulting services to individuals, businesses, retirement plans, trusts and
estates.  Strategic Financial Advisors offers investment and insurance
products as well as employee benefit services.  Each of the outstanding
shares of Strategic Capital Concepts, Inc. and Strategic Financial Advisors,
Inc. were exchanged for shares of the Corporation's common stock.  In
addition, the shareholders of SCC and SFA are entitled to receive additional
shares of the Corporation's common stock for each of the years 2002 through 2005
based on a formula defined in the merger agreement whichtakes into
consideration the financial performance of SCC and SFA after the merger
date.  The merger was accounted for as a purchase transaction whereby the
identifiable tangible and intangible assets and liabilities of SCC and SFA have
been recorded at their fair values at the acquisition date.  Goodwill in
the amount of $1,656 was recorded as a result of the transaction.  As
prescribed under the purchase method of accounting, the results of operations of
SCC and SFA from the date of acquisition are included in the Corporation's
financial statements for 2002.In October 2002, SFA was merged into SCC
and the name was changed to First Commonwealth Financial Advisors, Inc. 
This acquisition should expand the Corporation's product offerings and
positively impact fee based revenue, which is a continuing priority.NOTE
6--Cash and Due From Banks on DemandRegulations of the Board of
Governors of the Federal Reserve System impose uniform reserve requirements on
all depository institutions with transaction accounts (checking accounts, NOW
accounts, etc.).  Reserves are maintained in the form of vault cash or a
noninterest-bearing balance held with the Federal Reserve Bank.  The
subsidiary bank maintained with the Federal Reserve Bank average balances of
$1,896 during 2002 and $4,269 during
2001.56FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
8.  Financial Statements and Supplementary DataNotes to
Consolidated Financial StatementsYears Ended December 31, 2002, 2001 and
2000(Dollar Amounts in Thousands)NOTE 7--Securities Available For
SaleBelow is an analysis of the amortized cost and approximate fair
values of securities available for sale at December 31, 2002 and
2001:

|                                                               | 2002          | 2001                
|-------------------------------------------------------------- | ------------- | --------------------
|                                                               | AmortizedCost | GrossUnrealizedGains
|                                                               |               |                     
|U.S. Treasury Securities                                       | $    3,509    | $    87             
|                                                               |               |                     
|Obligations of U.S. Government
      Corporation and Agencies: |               |                     
|                                                               |               |                     
|Mortgage Backed
Securities                                     | 870,777       | 24,623              
|                                                               |               |                     
|Other                                                          | 101,464       | 1,324               
|                                                               |               |                     
|Obligations of States and Political
      Subdivisions         | 115,936       | 2,800               
|                                                               |               |                     
|Debt Securities Issued by Foreign
      Governments            | 75            | -0-                 
|                                                               |               |                     
|Corporate Securities                                           | 235,460       | 9,000               
|                                                               |               |                     
|Other Mortgage
      Backed Securities                         | 51,388        | 958                 
|Total Debt Securities                                          | 1,378,609     | 38,792              
|                                                               |               |                     
|Equities                                                       | 64,392        | 2,978               
|Total Securities Available 
      for Sale                     | $1,443,001    | $ 41,770            

Mortgage backed securities include mortgage
backed obligations of U.S. Government agencies and corporations, mortgage backed
securities issued by other organizations and other asset backed
securities.  These obligations have contractual maturities ranging from
less than one year to 30 years and have an anticipated average life to maturity
ranging from less than one year to 18 years.  All mortgage backed
securities contain a certain amount of risk related to the uncertainty of
prepayments of the underlying mortgages.  Interest rate changes have a
direct impact upon prepayment speeds, therefore the Corporation uses computer
simulation models to test the average life and yield volatility of all mortgage
backed securities under various interest rate scenarios to insure that
volatility falls within acceptable limits.  At December 31, 2002 and
2001, the Corporation owned no high risk mortgage backed securities as defined
by the Federal Financial Institutions Examination Council's Supervisory Policy
Statement on Securities
Activities.57FIRST
COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM 8. 
Financial Statements and Supplementary DataNotes to Consolidated
Financial StatementsYears Ended December 31, 2002, 2001 and 2000(Dollar
Amounts in Thousands)NOTE 7--Securities Available For Sale
(Continued)The amortized cost and estimated market value of debt
securities at December 31, 2002, by contractual maturity, are shown below. 
Expected maturities will differ from contractual maturities because borrowers
may have the right to call or repay obligations with or without call or
prepayment penalties.

|                                | AmortizedCost | ApproximateFair
      Value
|------------------------------- | ------------- | ---------------------------
|Due within 1 year               | $  
72,216    | $  
    74,165             
|Due after 1 but within 5 years  | 162,273       | 166,077                    
|Due after 5 but within 10 years | 8,977         | 9,329                      
|Due after 10 years              | 212,978       | 219,505                    
|                                | 456,444       | 469,076                    
|Mortgage Backed Securities      | 922,165       | 947,707                    
|Total Debt Securities           | $1,378,609    | $1,416,783                 

Proceeds from the sales of securities available
for sale were $15,328, $85,737 and $22,391 during 2002, 2001 and 2000,
respectively.  Gross gains of $609, $3,419 and $1,752 and gross losses of
$-0-, $224 and $18 were realized on those sales during 2002, 2001 and 2000,
respectively.Securities available for sale with an approximate fair
value of $712,827 and $637,915 were pledged at December 31, 2002 and 2001,
respectively, to secure public deposits and for other purposes required or
permitted by law.NOTE 8--Securities Held to MaturityBelow is an
analysis of the amortized cost and approximate fair values of debt securities
held to maturity at December 31, 2002 and 2001:

|                                                                                        | 2002          | 2001                           
|--------------------------------------------------------------------------------------- | ------------- | -------------------------------
|                                                                                        | AmortizedCost | Gross
        UnrealizedGains__
|                                                                                        |               |                                
|Obligations of 
          U.S. Government
          Corporation and
          Agencies: |               |                                
|                                                                                        |               |                                
|Mortgage Backed 
          Securities                                                   | $ 63,535      | $ 1,713                        
|                                                                                        |               |                                
|Other                                                                                   | 15,000        | 934                            
|                                                                                        |               |                                
|Obligations of  States and
         Political  Subdivisions                             | 96,869        | 3,685                          
|                                                                                        |               |                                
|Debt Securities  Issued
         By Foreign  Governments                                | 408           | -0-                            
|                                                                                        |               |                                
|Corporate  Securities                                                                   | 22,026        | 725                            
|                                                                                        |               |                                
|Total Securities   Held to
          Maturity                                           | $  197,838    | $  7,057                       

58FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 8.  Financial
Statements and Supplementary DataNotes to Consolidated Financial
StatementsYears Ended December 31, 2002, 2001 and 2000(Dollar Amounts in
Thousands)NOTE 8--Securities Held to Maturity (Continued)The
amortized cost and estimated market value of debt securities at December 31,
2002, by contractual maturity, are shown below.  Expected maturities will
differ from contractual maturities because borrowers may have the right to call
or repay obligations with or without call or prepayment
penalties.

|                                | AmortizedCost |  | ApproximateFair
      Value
|------------------------------- | ------------- |  | ---------------------------
|Due within 1 year               | $ 22,047      |  | $ 22,273                   
|Due after 1 but within 5 years  | 30,186        |  | 32,157                     
|Due after 5 but within 10 years | 34,298        |  | 36,092                     
|Due after 10 years              | 47,772        |  | 49,117                     
|                                | 134,303       |  | 139,639                    
|Mortgage Backed Securities      | 63,535        |  | 65,248                     
|Total Debt Securities           | $197,838      |  | $204,887                   

There were no sales of securities held to
maturity in 2002, 2001 or 2000.Securities held to maturity with an
amortized cost of $149,119 and $205,150 were pledged at December 31, 2002 and
2001, respectively, to secure public deposits and for other purposes required or
permitted by law.NOTE 9--Loans (all domestic)Loans at year end
were divided among these general categories:

|                                                                                 | December
  31,
|-------------------------------------------------------------------------------- | --------------
|                                                                                 | 2002          
|Commercial, financial, agricultural and
      other                              | $  633,955    
|Real estate loans:  Construction and
      land development                      | 20,998        
|1-4 family dwellings                                                             | 739,018       
|Other real estate loans                                                          | 663,220       
|Loans to individuals for household, family
      and other personal expenditures | 505,139       
|Leases, net of unearned income                                                   | 47,110        
|Subtotal                                                                         | 2,609,440     
|Unearned income                                                                  | (806)         
|Total loans and
      leases                                                     | $2,608,634    

Most of the Corporation's business activity was
with customers located within Pennsylvania.  The portfolio is well
diversified, and as of December 31, 2002 and 2001, there were no significant
concentrations of credit.59FIRST
COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM 8. 
Financial Statements and Supplementary DataNotes to Consolidated
Financial StatementsYears Ended December 31, 2002, 2001 and 2000(Dollar
Amounts in Thousands)NOTE 10--Allowance for Credit
LossesDescription of changes:

|                                                 | 2002    | 2001    | 2000   
|------------------------------------------------ | ------- | ------- | -------
|                                                 |         |         |        
|Allowance at January 1                           | $34,157 | $33,601 | $33,539
|Additions:                                       |         |         |        
|Recoveries of previously charged off
      loans | 2,048   | 1,281   | 1,299  
|Provision charged to operating
      expense     | 12,223  | 11,495  | 10,030 
|Deductions:                                      |         |         |        
|Loans charged off                                | 13,932  | 12,220  | 11,267 
|Allowance at December 31                         | $34,496 | $34,157 | $33,601

Relationship to impaired
loans:

|                                                                           | 2002    | 2001     
|-------------------------------------------------------------------------- | ------- | ---------
|Recorded investment in impaired loans at end
      of period               | $23,657 | $23,731  
|Average balance for impaired loans for the
      year                      | $24,740 | $16,133  
|Allowance for credit losses related to
      impaired loans                | $ 5,204 | $ 3,835  
|Impaired loans with an allocation of the
      allowance for credit losses | $15,065 | $16,266  
|Impaired loans with no allocation of the
      allowance for credit losses | $ 8,592 | $ 7,465  
|Income recorded on impaired loans on a cash
      basis                    | $   286 | $  
  750

NOTE 11--Financial Instruments with Off-Balance-Sheet Risk
  The Corporation is a party to financial instruments with off-balance-sheet risk
  in the normal course of business to meet the financial needs of its customers. 
  These financial instruments include commitments to extend credit, standby letters
  of credit and commercial letters of credit.  Those instruments involve,
  to varying degrees, elements of credit and interest rate risk in excess of the
  amount recognized in the balance sheet.  The contract or notional amount
  of those instruments reflects the extent of involvement the Corporation has
  in particular classes of financial instruments.
  As of December 31, 2002 and 2001, the Corporation did not own or trade any other
  financial instruments with significant off-balance-sheet risk including derivatives
  such as futures, forwards, interest rate swaps, option contracts and the like,
  although such instruments may be appropriate to use in the future to manage
  interest rate risk.
  60
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 11--Financial Instruments with Off-Balance-Sheet Risk (Continued)
  The Corporation's exposure to credit loss in the event of nonperformance by
  the other party of the financial instrument for commitments to extend credit,
  standby letters of credit and commercial letters of credit written is represented
  by the contract or notional amount of those instruments.  The Corporation
  uses the same credit policies in making commitments and conditional obligations
  as it does for on-balance-sheet instruments.  The following table identifies
  the notional amount of those instruments at December 31, 2002 and 2001:2002      2001Financial instruments whose contract amounts represent
    credit risk:
      Commitments to extend credit     
                   
        $535,692   $517,587
      Standby letters of credit                 
                 $
  32,301   $ 48,739
      Commercial letters of credit     
                   
        $    385   $   
  390Commitments to extend credit are agreements to lend to a customer as long as
  there is no violation of any condition established in the contract.  Commitments
  generally have fixed expiration dates or other termination clauses and may require
  payment of a fee.  Since many of the commitments are expected to expire
  without being drawn upon, the total commitment amounts do not necessarily represent
  future cash requirements.  The Corporation evaluates each customer's creditworthiness
  on a case-by-case basis.  The amount of collateral obtained, if deemed
  necessary by the Corporation upon extension of credit, is based on management's
  credit evaluation of the counter-party.  Collateral held varies but may
  include accounts receivable, inventory, property, plant and equipment, residential
  and income-producing commercial properties.
  Standby letters of credit and commercial letters of credit written are conditional
  commitments issued by the Corporation to guarantee the performance of a customer
  to a third party.  Those guarantees are primarily issued to support public
  and private borrowing arrangements.  The credit risk involved in issuing
  letters of credit is essentially the same as that involved in extending loan
  facilities to customers.
  61
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 12--Premises and Equipment
  Premises and equipment are described as follows:

|                                                     | EstimatedUseful
      Life | 2002     | 2001      
|---------------------------------------------------- | -------------------------- | -------- | ----------
|                                                     |                            |          |           
|Land                                                 | Indefinite                 | $  6,023 | $  5,338  
|Buildings and improvements                           | 7-50 years                 | 46,995   | 45,910    
|Leasehold improvements                               | 7-39 years                 | 9,112    | 9,960     
|Furniture and equipment                              | 3-10 years                 | 52,732   | 50,771    
|Software                                             | 3-7 years                  | 15,777   | 14,231    
|Subtotal                                             |                            | 130,639  | 126,210   
|Less accumulated depreciation and
      amortization |                            | 84,909   | 79,844    
|                                                     |                            |          |           
|Total premises and
    equipment                     |                            | $ 45,730 | $
  46,366

Depreciation and amortization related to
premises and equipment was $6,840 in 2002, $6,153 and $5,996 in 2001 and 2000,
respectively.The Corporation leases various premises and assorted
equipment under noncancellable agreements.  Total future minimal rental
commitments at December 31, 2002 were as follows:

|           | Premises | Equipment
|---------- | -------- | ---------
|2003       | $1,586   | $  963   
|2004       | 789      | 39       
|2005       | 719      | -0-      
|2006       | 749      | -0-      
|2007       | 667      | -0-      
|Thereafter | 1,946    | -0-      
|Total      | $6,456   | $1,002   

Under the terms of various lease agreements,
increases in utilities and taxes may be passed on to the lessee.  Such
adjustments are not reflected in the above table.  Additionally, various
lease renewal options are available and are not included in the minimum lease
commitments until such options are exercised.   Total lease expense
amounted to $1,699 in 2002, $2,105 in 2001 and $1,935 in 2000.NOTE
13--Interest-Bearing DepositsComponents of interest-bearing deposits at
December 31 were as follows:

|                                      | 2002       | 2001      
|------------------------------------- | ---------- | ----------
|NOW and Super NOW accounts            | $   71,649 | $   61,791
|Savings and MMDA accounts             | 1,100,889  | 1,028,368 
|Time deposits                         | 1,494,120  | 1,590,296 
|Total interest-bearing
      deposits | $2,666,658 | $2,680,455
|                                      |            |           

62
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 13--Interest-Bearing Deposits (Continued)
  Interest-bearing deposits at December 31, 2002 and 2001, include reallocations
  from NOW and Super NOW accounts of $374,695 and $323,490, respectively into
  Savings and MMDA accounts.  These reallocations are based on a formula
  and have been made to reduce the Corporation's reserve requirement in compliance
  with regulatory guidelines.
  Included in time deposits at December 31, 2002 and 2001, were certificates of
  deposit in denominations of $100 or more of $489,702 and $497,318, respectively.
  Interest expense related to $100 or greater certificates of deposit amounted
  to $21,685 in 2002, $27,922 in 2001 and $22,639 in 2000.
  Included in time deposits at December 31, 2002, were certificates of deposit
  with the following scheduled maturities:
                 
  2003               
       $  636,476
                 
  2004               
          335,887
                 
  2005               
          226,121
                 
  2006               
          148,820
                 
  2007 and thereafter      146,598
                       
                    
  $1,493,902
  NOTE 14--Short-term Borrowings
  Short-term borrowings at December 31 were as follows:

|                                                     | EndingBalance | 2002AverageBalance | AverageRate | EndingBalance | 2001AverageBalance | AverageRate
|---------------------------------------------------- | ------------- | ------------------ | ----------- | ------------- | ------------------ | -----------
|Federal funds purchased                              | $ 51,600      | $ 63,169           | 1.86%       | $108,250      | $ 46,608           | 3.28%      
|Borrowings from FHLB                                 | 146,395       | 30,044             | 1.76%       | 40,000        | 9,918              | 2.45%      
|Securities sold under agreements to
      repurchase | 222,577       | 225,793            | 1.78%       | 216,486       | 214,900            | 3.95%      
|Treasury, tax and loan Note
      option             | 48,493        | 20,902             | 1.47%       | 63,000        | 28,747             | 3.39%      
|Total                                                | $469,065      | $339,908           | 1.77%       | $427,736      | $300,173           | 3.74%      
|                                                     |               |                    |             |               |                    |            
|Maximum total at any month-end                       | $469,065      |                    |             | $427,736      |                    |            

63
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 14--Short-term Borrowings (Continued)
  Interest expense on short-term borrowings for the years ended December 31 is
  detailed below:20022001        2000Federal funds purchased              
                   $1,176  
     $ 1,527      $ 3,138
  Borrowings from FHLB              
                   
       530          243
         1,256
  Securities sold under agreements to repurchase       
    4,015        8,483    
    16,335
  Treasury, tax and loan note option           
           308    
   974      
  1,489  Total interest on short-term borrowings             
  $6,029      $11,227     
  $22,218NOTE 15--Company Obligated Mandatorily Redeemable Capital Securities of Subsidiary
  Trust
  The Corporation established First Commonwealth Capital Trust I (the "Trust"),
  a Delaware business trust and the Trust issued 35,000 capital securities (liquidation
  amount of $35,000) during September 1999, through a private offering to qualified
  investors.  Additionally, the Trust issued common securities to the Corporation. 
  The Trust used the proceeds from the sale to buy a series of 9.50% junior subordinated
  deferrable interest debentures due 2029 from the Corporation with the same economic
  terms as the capital securities.  The sole asset of the Trust is the $36,083
  aggregate liquidation amount of the junior subordinated debentures.  The
  Trust will distribute the cash payments it receives from the Corporation on
  the debentures to the holders of the capital securities and the common securities.
  The original series A capital securities and series A junior subordinated deferrable
  interest debentures have since been exchanged for registered series B capital
  securities and registered series B junior subordinated deferrable interest debentures
  having the same economic terms as the original series A securities.
  The Trust will redeem all of the outstanding capital securities when the debentures
  are paid at maturity on September 1, 2029.  Subject to receiving prior
  approval of the Board of Governors of the Federal Reserve System, the Corporation
  may redeem the debentures, in whole or in part, at any time on or after September
  1, 2009, at a redemption price equal to 104.750% of the principal amount of
  the debentures on September 1, 2009, declining ratably on each September 1 thereafter
  to 100% on or after September 1, 2019, plus accrued and unpaid interest to the
  date of redemption.  The Corporation may also redeem the debentures prior
  to September 1, 2009, upon the occurrence of certain tax and bank regulatory
  events, subject to receiving prior approval of the Board of Governors of the
  Federal Reserve System.  If the Corporation redeems any debentures before
  their maturity, the Trust will 
  64
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 15--Company Obligated Mandatorily Redeemable Capital Securities of Subsidiary
  Trust (Continued)
  use the cash it receives on the redemption of the debentures to redeem, on a
  pro rata basis, capital securities and common securities having an aggregate
  liquidation amount equal to the aggregate principal amount of the debentures
  redeemed.
  The net proceeds (after deduction of offering expenses and the initial purchaser's
  commission) from the sale of the debentures to the Trust were approximately
  $34,200.  The Corporation used the net proceeds from the issuance of the
  debentures to partially finance the purchase of 3,819,420 shares of its outstanding
  common stock (approximately 6.5% of its outstanding shares of common stock)
  pursuant to a "modified Dutch Auction" tender offer.  Unamortized deferred
  issuance costs associated with the capital securities amounted to $909 as of
  December 31, 1999, and are being amortized on a straight-line basis over the
  term of the capital securities.  The outstanding balance of the capital
  securities are included as a separate component of long-term debt on the Consolidated
  Balance Sheets while interest on the capital securities is included as a separate
  component of interest expense on the Consolidated Statements of Income. 
  The amortization of the deferred issuance costs is included in interest expense
  from the capital securities on the Consolidated Statements of Income.
  65
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 16-Other Long-term Debt
  Other Long-term debt at December 31, follows:

|                            | 2002     | 2001     
|--------------------------- | -------- | ---------
|                            | Amount   | Rate     
|ESOP loan due December 2005 | $  3,055 | Libor +1%
|Borrowings from FHLB due:   |          |          
|November 2002               | -0-      |          
|December 2002               | -0-      |          
|September 2007              | 5,000    | 6.94%    
|February 2008               | 100,000  | 5.45%    
|February 2008               | 100,000  | 5.48%    
|May 2008                    | 100,000  | 5.67%    
|November 2008               | 50,000   | 5.03%    
|December 2008               | 65,000   | 4.96%    
|February 2010               | 25,000   | 6.12%    
|December 2010               | 55,000   | 4.70%    
|April 2011                  | 6,525    | 5.68%    
|February 2014               | 10,000   | 5.40%    
|March 2016                  | 1,844    | 5.65%    
|December 2017               | 6,542    | 6.17%    
|June 2019                   | 8,091    | 5.72%    
|April 2020                  | 842      | 7.37%    
|March 2022                  | 8,035    | 5.90%    
|                            | $544,934 |          

All Federal Home Loan Bank stock, along with an
interest in unspecified mortgage loans and mortgage-backed securities, with an
aggregate statutory value equal to the amount of the above advances, have been
pledged as collateral with the Federal Home Loan Bank of
Pittsburgh.Capital securities included in total long-term debt on the
Consolidated Balance Sheets are excluded from Note 16, but are described in Note
15.Scheduled loan payments for other long-term debt are summarized
below:

|              | 2003   | 2004   | 2005   | 2006   | 2007   | Thereafter
|------------- | ------ | ------ | ------ | ------ | ------ | ----------
|Loan payments | $3,185 | $3,222 | $3,640 | $2,650 | $7,805 | $524,432  
|              |        |        |        |        |        |           

66FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
8.  Financial Statements and Supplementary DataNotes to
Consolidated Financial StatementsYears Ended December 31, 2002, 2001 and
2000(Dollar Amounts in Thousands, except per share data)NOTE
17--Common Share CommitmentsAt December 31, 2002 and 2001, the
Corporation had 100,000,000 common shares authorized and 62,525,412 shares
outstanding.  Outstanding shares were reduced by 3,562,869 shares of
treasury stock at December 31, 2002 and 4,073,788 shares at December 31,
2001.  The Corporation may be required to issue additional shares to
satisfy common share purchases related to the employee stock ownership plan
described in Note 20.  The dilutive effect of stock options outstanding on
average shares outstanding in the diluted earnings per share reported on the
income statement were 332,404, 232,579 and 59,742 shares at December 31, 2002,
2001 and 2000, respectively.During 2000, 78,380 shares of treasury stock
were acquired at an average price of $11.14.  Treasury shares consisting of
447,001 and 256,174 were reissued during 2002 and 2001 upon exercise of stock
options.During 2002, 67,484 shares of treasury stock were reissued to
fund the business combination described in Note 5.NOTE 18--Restructuring
ChargesThe Corporation incurred restructuring charges of $6,140 during
2002.  These restructuring charges were comprised of the following: 
$4,652 of employee separation costs consisting of severance packages for 95
employees from various affiliates of the Corporation including all levels of
staff from the executive management level to back office support staff, $1,068
related to realignment of the various Boards of Directors and Board committees
and $420 primarily related to the write off of obsolete signage and
supplies.  These amounts are included as restructuring charges, as a
component of Other Expenses on the Consolidated Statements of
Income.These restructuring charges resulted from the merger of the
charters of the Corporation's two commercial banks (First Commonwealth Bank and
Southwest Bank) and the adoption of a new common brand and identity for all
financial services subsidiaries. The actual termination benefits paid
and charged against the total restructuring liability for 2002 were
$1,263.  67FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
8.  Financial Statements and Supplementary DataNotes to
Consolidated Financial StatementsYears Ended December 31, 2002, 2001 and
2000(Dollar Amounts in Thousands)NOTE 19--Income TaxesThe
income tax provision consists of:

|                                            | 2002   | 2001    | 2000   
|------------------------------------------- | ------ | ------- | -------
|Current tax provision for
income            |        |         |        
|exclusive of securities
      transactions: |        |         |        
|Federal                                     | $9,279 | $14,865 | $12,155
|State                                       | 1      | 55      | (10)   
|Securities transactions                     | 225    | 1,165   | 611    
|Total current tax
    provision             | 9,505  | 16,085  | 12,756 
|Deferred tax provision
(benefit)            | (594)  | (831)   | 1,533  
|Total tax provision                         | $8,911 | $15,254 | $14,289

Temporary differences between financial
statement carrying amounts and tax bases of assets and liabilities that
represent significant portions of the deferred tax assets (liabilities) at
December 31, 2002 and 2001 were as follows:

|                                                       | 2002      | 2001    
|------------------------------------------------------ | --------- | --------
|Deferred tax assets:                                   |           |         
|Allowance for credit
    losses                        | $ 12,074  | $11,965 
|Postretirement benefits other than
      pensions      | 1,036     | 1,005   
|Accumulated depreciation                               | -0-       | 237     
|Severence expense                                      | 1,186     | -0-     
|Other                                                  | 948       | 1,060   
|Total deferred tax
assets                              | 15,244    | 14,267  
|                                                       |           |         
|Deferred tax liabilities:                              |           |         
|Accumulated accretion of bond
      discount           | (327)     | (295)   
|Unrealized gain on securities available
      for sale | (13,920)  | (4,686) 
|Lease financing deduction                              | (9,272)   | (10,535)
|Loan origination fees and
      costs                  | (1,774)   | (999)   
|Basis difference in assets
      acquired              | (337)     | (453)   
|Pension expense                                        | (399)     | (281)   
|Accumulated depreciation                               | (578)     | -0-     
|Other                                                  | (574)     | (315)   
|Total deferred tax
      liabilities                   | (27,181)  | (17,564)
|                                                       |           |         
|Net deferred tax liability                             | $(11,937) | $(3,297)

68FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
8.  Financial Statements and Supplementary DataNotes to
Consolidated Financial StatementsYears Ended December 31, 2002, 2001 and
2000(Dollar Amounts in Thousands)NOTE 19--Income Taxes
(Continued)The total tax provision for financial reporting purposes
differs from the amount computed by applying the statutory income tax rate to
income before income taxes.  The differences are as
follows:

|                                                                       | 2002    | 2001                   | 2000   
|---------------------------------------------------------------------- | ------- | ---------------------- | -------
|                                                                       | Amount  | %
      ofPretaxIncome | Amount 
|Tax at statutory rate                                                  | $18,353 | 35.0                   | $22,905
|Increase (decrease) resulting
      from: Effect of nontaxable  income | (7,865) | (15.0)                 | (7,137)
|State income taxes                                                     | 1       | 0.0                    | 55     
|Other                                                                  | (1,578) | (3.0)                  | (569)  
|Total tax provision                                                    | $ 8,911 | 17.0                   | $15,254
|                                                                       |         |                        |        

NOTE 20--Retirement Plans
  All employees with at least one year of service are eligible to participate
  in the employee stock ownership plan ("ESOP").  Contributions to the plan
  are determined by the Board of Directors, and are based upon a prescribed percentage
  of the annual compensation of all participants.  During a prior period,
  the ESOP acquired shares of the Corporation's common stock in a transaction,
  whereby the Corporation borrowed the required funds and concurrently loaned
  this amount to the ESOP.  The borrowed amount represents leveraged and
  unallocated shares, and accordingly has been recorded as long-term debt and
  the offset as a reduction of common shareholders' equity.  Compensation
  costs related to the plan were $940 in 2002, $1,173 in 2001 and $1,005 in 2000. 
  (See Note 22.)
  The Corporation also has a savings plan pursuant to the provisions of section
  401(k) of the Internal Revenue Code.  Under the terms of the plan, each
  participant will receive an automatic employer contribution to the plan in an
  amount equal to 3% of compensation.  Each participating employee may contribute
  up to 8% of compensation to the plan of which up to 4% is matched 100% by the
  employer's contribution.  The 401(k) plan expense was $2,616 in 2002, $2,583
  in 2001 and $2,444 in 2000.  Prior to the plan amendment effective February
  1, 2002, the Corporation's 401(k) plan permitted each participating employee
  to contribute 10% of compensation to the plan of which up to 4% was matched
  100% by the employer's contribution.
  69
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 20--Retirement Plans (Continued)
  Upon shareholder approval at the regular 1998 meeting, the Corporation established
  a "Supplemental Executive Retirement Plan" ("SERP") to provide deferred compensation
  for a select group of management.  The purpose of this plan is to restore
  some of the benefits lost to the highly compensated employees compared to other
  employees due to limits and restrictions incorporated into the Corporation's
  401(k) and ESOP plans.  The Corporation's 401(k) and ESOP plans include
  restrictions on maximum compensation, actual deferral percentage, actual contribution,
  maximum contribution and maximum salary reduction which are required in order
  to meet specific legal requirements.
  Participants in the SERP may elect to contribute up to 10% of plan compensation
  (compensation in excess of limits of the Corporation's 401(k) and ESOP plans)
  into the SERP, through salary reduction.  The Corporation will make an
  elective contribution to the SERP equal to the elective contribution of the
  participant.  Each participant of the SERP will also receive a matching
  contribution equal to 100% of the employee's elective contribution up to 4%,
  and an additional non-elective contribution from the employer equal to 8% of
  plan compensation.
  The SERP will continue to supplement the Corporation's 401(k) and ESOP plans
  and will therefore be modified at the same time and in the same respect as the
  basic plans are modified in future periods.  The SERP plan expense was
  $133 in 2002, $150 in 2001 and $182 in 2000.Pension Plan of Acquired Subsidiary
  The noncontributory defined benefit pension plan of Southwest Bank covered all
  eligible employees and provided benefits based on each employee's years of service
  and compensation.  On December 31, 1998, the participants' accrued benefit
  was frozen and participation in the First Commonwealth Financial Corporation
  ESOP Plan with no lapse in credited service began.  The Southwest Bank
  Pension Plan was terminated effective December 31, 2001.  As the result
  of the plan termination, an asset reversion of $1,271 and a gain, net of applicable
  excise tax, of $277 were recognized.
  Net periodic pension cost of this plan for each of the last three years was
  as follows:2002        
  2001       2000
  Service cost           
                         
          $ -0-       
  $ -0-      $ -0-
  Interest cost on projected benefit obligation       
       -0-          346     
    343
  Expected return on plan assets           
                 
  -0-        (438)      
  (542)
  Net amortization and deferral           
                 -0-       (33)     
  93 
  Net periodic pension cost (benefit)              
        $ -0-      $(125)     
  $(106)70
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 20--Retirement Plans (Continued)Pension Plan of Acquired Subsidiary(Continued)
  The following table sets forth the plan's funded status and the amounts recognized
  on the Corporation's Consolidated Balance Sheet as of December 31:20022001Market value of plan assets     
                         
     $  -0-      $1,271
  Projected benefit obligation             
                   
  -0-      -0-
  Plan assets greater than projected benefit obligation       
    -0-       1,271
  Unrecognized net transition asset                  
             -0-     
     -0- 
  Unrecognized net loss (gain)                 
                   -0-     
     -0- 
  Settlement loss (gain)           
                           
  -0-      (1,271)
  Prepaid pension expense recognized on the balance sheet     $ 
  -0-      $  -0-
  Actuarial present value of accumulated benefits,
   including vested benefits of $0 and $0              
        $  -0-     
  $  -0-The following table sets forth the change in benefit obligation:2002      2001
  Benefit obligation at beginning of year       
  $   -0-    $5,822
  Service cost           
                         
     -0-       -0-
  Interest cost                   
                   
  -0-       346
  Benefit payment                
                   
   -0-    (6,496)
  Actuarial loss                   
                   -0-  
      -0- 
  Settlement loss                   
              -0-    328Benefit obligation at end of year       
        $   -0-    $ 
  -0-The following table sets forth the change in plan
  assets:2002      
   2001
  Fair value of plan assets at beginning of year      $ 
  -0-      $6,785
  Return on plan assets           
                    
     -0-         982
  Employer contribution           
                    
     -0-         -0-
  Benefits paid                   
                    
  -0-      (6,496)
  Fair value of plan assets at end of year           
  $  -0-      $1,271Assumptions used in determining the actuarial present
  value of the projected benefit obligation were as follows at December 31:2002       
  2001Discount rates                  
                       
  N/A         6.0%
  Rates of increase in compensation levels              
  N/A         N/A
  Expected long-term rates of return on assets          
  N/A         6.5%71
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 20--Retirement Plans (Continued)Postretirement Benefits other than Pensions for Acquired Subsidiary
  Employees of Southwest were also covered by a post retirement benefit plan.
  Net periodic benefit cost of this plan was as follows:2002       
  2001        2000Service cost           
                   
         $-0-       
  $  6        $  7
  Interest cost on projected benefit obligation     273        
  232         190
  Amortization of transition obligation              
  2           2       
     2
  Loss amortization           
                     
  60        65        
  -0-Net periodic benefit cost           
              $335 
        $305       
  $199The following table sets forth the plan's funded status
  and the amounts recognized on the Corporation Consolidated Balance Sheet as
  of December 31:

|                                                                             | 2002    | 2001   
|---------------------------------------------------------------------------- | ------- | -------
|Accumulated post retirement benefit
      obligation:                        |         |        
|Retirees                                                                     | $5,142  | $3,941 
|Actives                                                                      | -0-     | 210    
|Total accumulated postretirement benefit
      obligation                    | 5,142   | 4,151  
|Plan assets at fair value                                                    | -0-     | -0-    
|                                                                             |         |        
|Accumulated postretirement benefit obligation
      in excess of plan assets | 5,142   | 4,151  
|Unrecognized transition
    obligation                                       | (16)    | (18)   
|Unrecognized net loss                                                        | (2,165) | (1,262)
|Accrued benefit liability recognized on the
      balance sheet              | $2,961  | $2,871 

The following table sets forth the change in
benefit obligation:

|                                              | 2002   | 2001  
|--------------------------------------------- | ------ | ------
|                                              |        |       
|Benefit obligation at beginning of
      year | $4,151 | $3,590
|Service cost                                  | -0-    | 6     
|Interest cost                                 | 273    | 232   
|Benefit payments                              | (245)  | (276) 
|Actuarial loss                                | 963    | 599   
|Benefit obligation at end of
    year         | $5,142 | $4,151

The discount rate used in determining the actuarial present value of the accumulated
  postretirement benefit obligation was 6.75% for 2002 and 2001.  The health
  care cost trend rates used for 2002 were projected at an initial rate of 9.00%
  decreasing over time to an annual rate of 4.25% for indemnity plan participants
  and for non-indemnity plan participants.  For 2001, rates used were projected
  at an initial rate of 6.75% decreasing over time to an annual rate of 4.25%
  for indemnity plan participants and an initial rate of 6.00% decreasing over
  time to an annual rate of 4.00% for non-indemnity plan participants.
  72
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 20--Retirement Plans (Continued)Postretirement Benefits other than Pensions for Acquired Subsidiary(continued)
  The health care cost trend rate assumption can have a significant impact on
  the amounts reported for this plan.  A one-percentage-point change in assumed
  health care cost trend rates would have the following effects:1-Percentage-     
  1-Percentage-
                         
                         
        Point Increase     
  Point Decrease
  Effect on total of service and interest cost components     $
  20           $ (19)
  Effect on postretirement benefit obligation             
     $301           $(275)NOTE 21--Unearned ESOP Shares
  The Corporation had borrowed amounts which were concurrently loaned to the First
  Commonwealth Financial Corporation Employee Stock Ownership Plan Trust ("ESOP")
  on the same terms.  The combined balances of the ESOP related loans were
  $3,055 at December 31, 2002 and $4,126 at December 31, 2001.
  The loans have been recorded as long-term debt on the Corporation's Consolidated
  Balance Sheets.  A like amount of unearned ESOP shares was recorded as
  a reduction of common shareholders' equity.  Unearned ESOP shares, included
  as a component of shareholders' equity, represent the Corporation's prepayment
  of future compensation expense.  The shares acquired by the ESOP are held
  in a suspense account and will be released to the ESOP for allocation to the
  plan participants as the loan is reduced.  Repayment of the loans is scheduled
  to occur over a five year period from contributions to the ESOP by the Corporation
  and dividends on unallocated ESOP shares.
  The following is an analysis of ESOP shares held in suspense:
  (See Note 1 for the definition of "old shares" and "new shares")Total     Old Shares     New
  SharesShares in suspense December 31, 2000      493,521    
  120,830        372,691
  Shares allocated during 2001            
  (120,961)    (29,616)      
  (91,345)
  Shares in suspense December 31, 2001      372,560   
    91,214        281,346
  Shares allocated during 2002            
  (100,894)    (24,702)      
  (76,192)
  Shares in suspense December 31, 2002       271,666    
  66,512        205,154The fair market value of the new shares remaining in suspense was approximately
  $2,359 and $3,241 at December 31, 2002 and 2001, respectively.
  73
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 21--Unearned ESOP Shares (Continued)
  Interest on ESOP loans was $109 in 2002, $263 in 2001 and $446 in 2000. 
  During 2002, 2001 and 2000, dividends on unallocated shares in the amount of
  $242, $301 and $354, respectively, were used for debt service while all dividends
  on allocated shares were allocated or paid to the participants.
  NOTE 22--Stock Option Plan
  At December 31, 2002, the Corporation had a stock-based compensation plan, which
  is described below.  The plan permits the Executive Compensation Committee
  to grant options for up to 4.5 million shares of the Corporation's common stock
  through October 15, 2005.  Although the vesting requirements and terms
  of future options granted are at the discretion of the Executive Compensation
  Committee, all options granted from 1997 through 2002 were exercisable by December
  31 of the grant year respectively, and expire ten years from the grant date. 
  
  Equity Compensation Plan Information as of December 31, 2002:

|                                                                   | Number
      ofOptionsOutstanding | Weighted AverageExercise
      Price ofOptions Outstanding | SharesAvailable
      forFuture Grant
|------------------------------------------------------------------ | --------------------------------- | ---------------------------------------------------------- | -------------------------------------
|                                                                   |                                   |                                                            |                                      
|Equity compensation plans  approved
      by security  holders     | 2,841,772                         | $11.33                                                     | 685,121                              
|                                                                   |                                   |                                                            |                                      
|Equity compensation plans  not
      approved by security  holders | -0-                               | -0-                                                        | -0-                                  
|                                                                   | _________                         | ______                                                     | _______                              
|Total                                                              | 2,841,772                         | $11.33                                                     | 685,121                              

The Corporation has elected, as permitted by
FAS No. 123, to apply APB Opinion 25 and related interpretations in accounting
for its plan.  Accordingly, no compensation cost has been recognized for
its stock options outstanding.  Had compensation cost for the Corporation's
stock option plan been determined based upon the fair value at the grant dates
for awards under the plan consistent with the method of FAS No. 123, the
Corporation's net income and earnings per share would have been reduced to the
pro forma amounts shown below:74FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
8.  Financial Statements and Supplementary DataNotes to
Consolidated Financial StatementsYears Ended December 31, 2002, 2001 and
2000(Dollar Amounts in Thousands, except per share data)NOTE
22--Stock Option Plan (Continued)

|                           | 2002        | 2001      | 2000       
|-------------------------- | ----------- | --------- | -----------
|                           | As Reported | Pro Forma | As Reported
|Net income                 | $43,526     | $41,248   | $50,189    
|Basic earnings per share   | $  0.75     | $  0.71   | $  0.87    
|Diluted earnings per share | $  0.74     | $  0.70   | $  0.86    

The fair value of each option granted is
estimated on the date of the grant using the Black-Scholes options pricing model
with the following weighted average assumptions used:

|                        | 2002            | 2001            | 2000           
|----------------------- | --------------- | --------------- | ---------------
|Dividend yield          | 5.13% per annum | 5.59% per annum | 5.65% per annum
|Expected volatility     | 54.0%           | 55.1%           | 61.7%          
|Risk-free interest rate | 5.0%            | 5.1%            | 5.3%           
|Expected option life    | 7.0 years       | 10.0 years      | 9.1
  years    

A summary of the status of the Corporation's
outstanding stock options as of December 31, 2002, 2001 and 2000 and changes for
the years ending on those dates is presented below:

|                                 | 2002      | 2001                         | 2000     
|-------------------------------- | --------- | ---------------------------- | ---------
|                                 | Shares    | WeightedAverageExercisePrice | Shares   
|Outstanding at beginning of
year | 2,687,887 | $11.13                       | 2,210,651
|Granted                          | 820,775   | $11.70                       | 796,743  
|Exercised                        | (447,001) | $10.51                       | (256,174)
|Forfeited                        | (219,889) | $11.90                       | (63,333) 
|Outstanding at end of year       | 2,841,772 | $11.33                       | 2,687,887
|Exercisable at end of year       | 2,841,772 | $11.33                       | 2,687,887

The following table summarizes information
about the stock options outstanding at December 31, 2002:

|                              | Options Outstanding          | Options Exercisable                   
|----------------------------- | ---------------------------- | --------------------------------------
|Range ofExercise
      Prices | NumberOutstandingAt 12/31/02 | Weighted-AverageRemainingContract
Life
|$9.19-$9.25                   | 412,908                      | 3.9                                   
|$10.75                        | 569,115                      | 8.1                                   
|$11.06                        | 473,014                      | 7.0                                   
|$11.56                        | 408,966                      | 6.0                                   
|$11.70                        | 688,131                      | 9.1                                   
|$14.69                        | 289,638                      | 5.2                                   
|Total                         | 2,841,772                    | 6.9                                   

75
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands, except per share data)
  NOTE 23--Commitments and Contingent Liabilities
  In May, 2002, the Corporation reached final settlement with the plaintiffs in
  a lender liability action filed in 1994 against one of its subsidiary banks
  relating to lending activities occurring prior to the Corporation's acquisition
  of that subsidiary.  The decision to settle followed an adverse pre-trial
  judgment by the trial judge on procedural grounds.  Under the settlement
  agreement, the Corporation paid the plaintiffs $8,000 in cash.  The settlement
  resulted in a one-time charge of $8,000 ($5,200, net of tax effect) or $0.09
  per share, after tax to the company's earnings for 2002.
  There are no other material proceedings to which the Corporation or its subsidiaries
  are a party, or of which their property is the subject, except proceedings which
  arise in the normal course of business and, in the opinion of management, will
  not have a material adverse effect on the consolidated operations or financial
  position of the Corporation and its subsidiaries.
  NOTE 24--Related Party Transactions
  Some of the Corporation's or its subsidiaries' directors, executive officers,
  principal shareholders and their related interests, had transactions with the
  subsidiary banks in the ordinary course of business.  All loans and commitments
  to loans in such transactions were made on substantially the same terms, including
  collateral and interest rates, as those prevailing at the time for comparable
  transactions.  In the opinion of management, these transactions do not
  involve more than the normal risk of collectibility nor do they present other
  unfavorable features.  It is anticipated that further such extensions of
  credit will be made in the future.
  The following is an analysis of loans to those parties whose aggregate loan
  balances exceeded $60 during 2002:
            Balances December 31, 2001  
       $ 7,887      
            Advances       
                      6,070   
    
            Repayments     
                    
  (5,469)      
            Other          
                    
  (3,885)     
            Balances December 31, 2002  
       $ 4,603
  "Other" primarily reflects the change in those classified as a "related party"
  as a result of mergers, resignations and retirements.
  This category for 2002 includes amounts related to separating directors and
  officers as a result of the Corporation's restructuring plan.
  76
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 25--Regulatory Restrictions and Capital Adequacy
  The amount of funds available to the parent from its subsidiary banks is limited
  by restrictions imposed on all financial institutions by banking regulators. 
  At December 31, 2002, dividends from subsidiary banks were restricted not to
  exceed $59,702.  These restrictions have not had, and are not expected
  to have, a significant impact on the Corporation's ability to meet its cash
  obligations.
  The Corporation is subject to various regulatory capital requirements administered
  by the Federal banking agencies.  Failure to meet minimum capital requirements
  can initiate certain mandatory and possibly additional discretionary actions
  by regulators that, if undertaken, could have a direct material effect on the
  Corporation's financial statements.  Under capital adequacy guidelines
  and the regulatory framework for prompt corrective action, the Corporation and
  its banking subsidiaries must meet specific capital guidelines that involve
  quantitative measures of the Corporation's assets, liabilities and certain off-balance-sheet
  items as calculated under regulatory accounting practices.
  The Corporation's capital amounts and classification are also subject to qualitative
  judgments by the regulators about components, risk weighting and other factors.
  Quantitative measures established by regulation to ensure capital adequacy require
  the Corporation to maintain minimum amounts and ratios of total and Tier I capital
  (common and certain other "core" equity capital) to risk weighted assets, and
  of Tier I capital to average assets.  As of 
  December 31, 2002, the Corporation and its banking subsidiaries meet all capital
  adequacy requirements to which they are subject.
  As of December 31, 2002, the most recent notifications from the Federal Reserve
  Board and Federal Deposit Insurance Corporation categorized First Commonwealth
  Bank as well capitalized under the regulatory framework for prompt corrective
  action.  To be considered as well capitalized, the bank must maintain minimum
  total risk-based capital, Tier I risk-based capital and Tier I leverage ratios
  as set forth in the table below.  There are no conditions or events since
  that notification that management believes have changed the institutions' category.
  77
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 25--Regulatory Restrictions and Capital Adequacy (Continued)

|                                         | Actual   | Regulatory
        Minimum | To Be Well
        Capitalized Under
        Prompt Corrective
        Action Provisions
|---------------------------------------- | -------- | -------------------------- | ----------------------------------------------------------------------------------------
|                                         | Amount   | Ratio                      | Amount                                                                                  
|As of December 31, 2002                  |          |                            |                                                                                         
|                                         |          |                            |                                                                                         
|Total Capital to Risk Weighted Assets    |          |                            |                                                                                         
|First Commonwealth Financial Corporation | $436,850 | 14.0%                      | $249,240                                                                                
|First Commonwealth Bank                  | $402,319 | 13.0%                      | $246,779                                                                                
|                                         |          |                            |                                                                                         
|Tier I Capital to Risk Weighted Assets   |          |                            |                                                                                         
|First Commonwealth Financial Corporation | $402,354 | 12.9%                      | $124,620                                                                                
|First Commonwealth Bank                  | $367,823 | 11.9%                      | $123,389                                                                                
|                                         |          |                            |                                                                                         
|Tier I Capital to Average Assets         |          |                            |                                                                                         
|First Commonwealth Financial Corporation | $402,354 | 8.9%                       | $135,282                                                                                
|First Commonwealth Bank                  | $367,823 | 8.2%                       | $133,944                                                                                
|                                         |          |                            |                                                                                         
|As of December 31, 2001                  |          |                            |                                                                                         
|                                         |          |                            |                                                                                         
|Total Capital to Risk Weighted Assets    |          |                            |                                                                                         
|First Commonwealth Financial Corporation | $423,649 | 14.0%                      | $241,615                                                                                
|First Commonwealth Bank (a)              | $394,139 | 13.2%                      | $239,218                                                                                
|                                         |          |                            |                                                                                         
|Tier I Capital to Risk Weighted Assets   |          |                            |                                                                                         
|First Commonwealth Financial Corporation | $389,492 | 12.9%                      | $120,807                                                                                
|First Commonwealth Bank (a)              | $359,982 | 12.0%                      | $119,609                                                                                
|                                         |          |                            |                                                                                         
|Tier I Capital to Average Assets         |          |                            |                                                                                         
|First Commonwealth Financial Corporation | $389,492 | 8.5%                       | $138,144                                                                                
|First Commonwealth Bank (a)              | $359,982 | 7.9%                       | $137,318                                                                                

(a) Restated to reflect the merger of the Corporation's two subsidiary banks,
  First Commonwealth Bank and Southwest Bank on October 15,2002.
  78
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 26--Condensed Financial Information of First Commonwealth Financial Corporation
  (parent company only)Balance SheetsDecember
  31,                       
                         
           2002       
     2001Assets
  Cash                   
                         
        $ 13,844      
  $  7,667
  Securities available for sale               
              1,407      
       270
  Loans to affiliated parties                
                 498      
       540
  Investment in subsidiaries           
                 
   413,542        387,626
  Investment in jointly-owned company          
             5,081      
     4,570
  Premises and equipment              
                   
    6,095          6,437
  Dividends receivable from subsidiaries       
             3,394      
     3,986
  Receivable from subsidiaries           
                   7,625      
     8,099
  Other assets           
                         
        1,936      
  2,280
        
    Total assets                 
                       
  $453,422       $421,475Liabilities and Shareholders' Equity
  Accrued expenses and other liabilities               
  $  3,755       $  2,432
  Dividends payable                
                         9,139      
     8,768
  Loans payable                
                         
     3,055          4,126
  Subordinated debentures payable                
          36,083         36,083
  Shareholders' equity               
                    
  401,390        370,066
    Total liabilities and shareholders' equity         
  $453,422       $421,475Statements of Income                       
                         
             Years Ended December
  31,                       
                         
           2002      
    2001         2000
  Interest and dividends              
                   
  $    48      $    42     
  $    41
  Dividends from subsidiaries           
                  
  43,609       40,442      
  61,664
  Interest expense                
                        
  (3,570)      (3,724)     
  (5,335)
  Other revenue                
                          
      -0-          
  16           31
  Operating expenses               
                       
  (9,161)      (7,033)     
  (7,451)
  Income before taxes and equity in undistributed
   earnings of subsidiaries           
                    
  30,926       29,743      
  48,950
  Applicable income tax benefits               
           5,304     
  3,495      4,340
  Income before equity in undistributed earnings of
   subsidiaries           
                         
         36,230      
  33,238       53,290
  Equity in undistributed earnings of subsidiaries      
  7,296       16,951      
  (6,044)
     Net income                 
                   
        $43,526     
  $50,189      $47,24679
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 26--Condensed Financial Information of First Commonwealth Financial Corporation
  (parent company only)(Continued)Statements of Cash FlowsYears Ended December
  31,                       
                         
          2002     
    2001        2000Operating Activities
   Net income           
                         
          $43,526     $50,189   
  $47,246
   Adjustments to reconcile net income to net cash
    provided by operating activities:
     Depreciation and amortization           
                
  537       1,140      1,263
     Decrease (increase) in prepaid income taxes           
  (397)        431       
  212 
     Undistributed equity in subsidiaries           
       (7,296)    (16,951)    
  6,044
     Other - net                    
                      
  1,270     (592)   
  97
     Net cash provided by operating activities           
  37,640      34,217    
  54,862Investing Activities
   Transactions with securities available for sale:
     Purchases of investment securities                 
     (943)       (123)      
  -0-
     Sales of investment securities             
              -0-   
       -0-        -0-
   Net change in loans to affiliated parties          
         42         (61) 
         1
   Purchases of premises and equipment              
          (33)       
  (90)      (337)
   Changes in receivable from and net investment 
     in subsidiary             
                
              436     (792)   
  (3,861)     
   
     Net cash used by investing activities                
  (498)     (1,066)   
  (4,197)Financing Activities
   Issuance of other long-term debt              
             -0-   
       -0-      4,000
   Repayment of other long-term debt       
                  
  -0-         -0-    (20,000)
   Discount on dividend reinvestment plan purchases        
  (637)       (612)      (593)
   Treasury stock acquired               
                    
  -0-         -0-       (873)
   Treasury stock reissued               
                  
  4,655       2,499        326
   Cash dividends paid                   
                
  (35,208)    (33,809)   (32,553)
   Stock option tax benefit                
               225     269   
  75
     Net cash used by financing activities       
         (30,965)    (31,653)  
  (49,618)
   Net increase in cash                   
                 
  6,177       1,498     
  1,047
   Cash at beginning of year                   
           7,667     6,169    5,122
   Cash at end of year                
                   
  $13,844     $ 7,667    $
  6,16980
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  NOTE 27--Fair Values of Financial Instruments
  Below are various estimated fair values at December 31, 2001 and 2000, as required
  by Statement of Financial Accounting Standards No. 107 ("FAS No. 107"). 
  Such information, which pertains to the Corporation's financial instruments,
  is based on the requirements set forth in FAS No. 107 and does not purport to
  represent the aggregate net fair value of the Corporation.  It is the Corporation's
  general practice and intent to hold its financial instruments to maturity, except
  for certain securities designated as securities available for sale, and not
  to engage in trading activities.  Many of the financial instruments lack
  an available trading market, as characterized by a willing buyer and seller
  engaging in an exchange transaction.  Therefore, the Corporation had to
  use significant estimations and present value calculations to prepare this disclosure.
  Changes in the assumptions or methodologies used to estimate fair values may
  materially affect the estimated amounts.  Also, management is concerned
  that there may not be reasonable comparability between institutions due to the
  wide range of permitted assumptions and the methodologies in absence of active
  markets.  This lack of uniformity gives rise to a high degree of subjectivity
  in estimating financial instrument fair values.
  The following methods and assumptions were used by the Corporation in estimating
  financial instrument fair values:Cash and short-term instruments:  For 2002 and 2001, the balance
  sheet carrying amounts for cash and short-term instruments approximate the estimated
  fair values of such assets.Securities:  For 2002 and 2001, fair values for securities held
  to maturity and securities available for sale are based on quoted market prices,
  if available.  If quoted market prices are not available, fair values are
  based on quoted market prices of comparable instruments.  The carrying
  value of nonmarketable equity securities, such as Federal Home Loan Bank stock,
  is considered a reasonable estimate of fair value.Loans receivable:  For 2002, the estimated fair values of all loans
  are estimated by discounting the future cash flows using interest rates currently
  offered for loans with similar terms to borrowers of similar credit quality. 
  For 2001, fair values of variable rate loans subject to frequent repricing and
  which entail no significant credit risk are based on carrying values. 
  The estimated fair values of other loans are estimated by discounting the future
  cash flows using interest rates currently offered for loans with similar terms
  to borrowers of similar credit quality.  For both years, the carrying amount
  of accrued interest is considered a reasonable estimate of fair value.
  81
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  NOTE 27--Fair Values of Financial Instruments (Continued)Off-balance-sheet instruments:  Many of the Corporation's off-balance-sheet
  instruments, primarily loan commitments and standby letters of credit, are expected
  to expire without being drawn upon, therefore the commitment amounts do not
  necessarily represent future cash requirements.  Management has determined
  that due to the uncertainties of cash flows and difficulty in predicting the
  timing of such cash flows, fair values were not estimated for these instruments
  for both periods.Deposit liabilities:  For 2002, management estimates that the carrying
  value of noninterest-bearing demand deposits is a reasonable estimate of fair
  value.  For interest-bearing deposits which are payable on demand, fair
  value is based on a market valuation of similar deposits.  For 2001 for
  all deposits which are payable on demand at the reporting date other than time
  deposits, management estimates the carrying value of such deposits is a reasonable
  estimate of fair value.  For both years, the carrying value of variable
  rate time deposit accounts and certificates of deposit approximate their fair
  values at the report date.  Also, fair values of fixed rate time deposits
  for both periods are estimated by discounting the future cash flows using interest
  rates currently being offered and a schedule of aggregated expected maturities. 
  The carrying amount of accrued interest for both years approximates fair value.Short-term borrowings:  For 2002, the estimated fair values of borrowings
  from the Federal Home Loan Bank were estimated based on the estimated incremental
  borrowing rate for similar types of borrowings.  For 2001, the carrying
  value of Federal Home Loan Bank borrowings was used to approximate fair values. 
  For both the 2002 and 2001 periods, the carrying amounts of other short-term
  borrowings such as Federal funds purchased, securities sold under agreement
  to repurchase and treasury, tax and loan notes were used to approximate fair
  value.    Long-term debt:  For 2002 and 2001, the carrying amounts of variable
  rate debt approximate their fair values at the report date.  Fair values
  of fixed rate debt are estimated by discounting the future cash flows using
  the Corporation's estimated incremental borrowing rate for similar types of
  borrowing arrangements.
  82
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES
  ITEM 8.  Financial Statements and Supplementary Data
  Notes to Consolidated Financial Statements
  Years Ended December 31, 2002, 2001 and 2000
  (Dollar Amounts in Thousands)
  NOTE 27--Fair Values of Financial Instruments (Continued)
  The following table presents carrying amounts and estimated fair values of the
  Corporation's financial instruments at December 31, 2001 and 2000:

|                                           | 2002           | 2001              
|------------------------------------------ | -------------- | ------------------
|                                           | CarryingAmount | EstimatedFairValue
|Financial assets                           |                |                   
|Cash and due from banks                    | $   81,114     | $   81,114        
|Interest-bearing deposits with
      banks | $    1,973     | $    1,973        
|Federal funds sold                         | $     
    -0- | $     
    -0-    
|Securities available for
    sale          | $1,482,771     | $1,482,771        
|Investments held to
    maturity           | $  197,838     | $  204,887        
|Loans, net of allowance                    | $2,574,138     | $2,631,557        
|Financial liabilities                      |                |                   
|Deposits                                   | $3,044,124     | $3,011,354        
|Short-term borrowings                      | $  469,065     | $  469,381        
|Long-term debt                             | $  579,934     | $  642,127        

83FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
8.  Financial Statements and Supplementary
DataINDEPENDENT AUDITORS' REPORTTo the Board of
Directors and Shareholders of First Commonwealth Financial
Corporation:We have audited the accompanying consolidated balance
sheets of First Commonwealth Financial Corporation and subsidiaries (the
"Corporation") as of December 31, 2002 and 2001, and the related consolidated
statements of income, changes in shareholders' equity, and cash flows for each
of the three years in the period ended December 31, 2002.  These financial
statements are the responsibility of the Corporation's management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.We conducted our audits in accordance with auditing standards
generally accepted in the United States of America.  Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.In
our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of First Commonwealth Financial
Corporation and subsidiaries at December 31, 2002 and 2001, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2002 in conformity with accounting principles generally
accepted in the United States of America./S/Deloitte &
Touche LLPPittsburgh, PennsylvaniaJanuary 22,
200384FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESITEM
8.  Financial Statements and Supplementary DataQuarterly
Summary of Financial Data-Unaudited(Dollar Amounts in Thousands, except per
share data)The unaudited quarterly results of operations for the years
ended December 31, 2002 and 2001 are as follows:

|                                                                     | 2002        
|-------------------------------------------------------------------- | ------------
|                                                                     | FirstQuarter
|Interest
      income................................                | $70,523     
|Interest
      expense...............................                | 32,481      
|                                                                     |             
|Net interest
      income..........................                  | 38,042      
|Provision for credit
      losses....................                | 2,917       
|                                                                     |             
|Net interest income after provision
        for credit losses....... | 35,125      
|                                                                     |             
|Securities
      gains...............................                | 39          
|Other operating
      income.........................                | 8,350       
|Litigation
      settlement..........................                | 8,000       
|Restructuring
      charges..........................                | -0-         
|Other operating
      expenses.......................                | 27,443      
|                                                                     |             
|Income before income
      taxes...................                  | 8,071       
|Applicable income
      taxes........................                | 433         
|                                                                     |             
|Net
      income...................................                  | $ 7,638     
|                                                                     |             
|Basic earnings per
      share.......................                | $  0.13     
|Diluted earnings per
      share.....................                | $  0.13     
|                                                                     |             
|Average shares
      outstanding.....................                | 58,142,359  
|Average shares outstanding assuming
      dilution...                | 58,484,806  



|                                                                     | 2001        
|-------------------------------------------------------------------- | ------------
|                                                                     | FirstQuarter
|Interest
      income................................                | $79,080     
|Interest
      expense...............................                | 44,848      
|                                                                     |             
|Net interest
      income..........................                  | 34,232      
|Provision for credit
      losses....................                | 2,407       
|                                                                     |             
|Net interest income after provision
        for credit losses....... | 31,825      
|                                                                     |             
|Securities
      gains...............................                | 205         
|Other operating
      income.........................                | 9,062       
|Other operating
      expenses.......................                | 25,456      
|                                                                     |             
|Income before income
      taxes...................                  | 15,636      
|Applicable income
      taxes........................                | 3,613       
|                                                                     |             
|Net
      income...................................                  | $12,023     
|                                                                     |             
|Basic earnings per
      share.......................                | $  0.21     
|Diluted earnings per
      share.....................                | $  0.21     
|                                                                     |             
|Average shares
      outstanding.....................                | 57,721,959  
|Average shares outstanding assuming
      dilution...                | 57,802,012  

85FIRST COMMONWEALTH
FINANCIAL CORPORATION AND SUBSIDIARIESITEM 9.    
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES          On
November 7, 2002, the Board of Directors of First
Commonwealth          Financial
Corporation (the "Company") approved, by unanimous    
     consent, the engagement of Ernst & Young LLP as its
independent          auditors for
the year ending December 31, 2003 and the dismissal    
     of Deloitte & Touche LLP, effective upon completion
of their           audit of the
Company's financial statements for the year ending    
     December 31, 2002.  The Audit Committee of the
Board of Directors          approved
the change in auditors on November 5, 2002.  Deloitte
&          Touche LLP's role as
the Corporation's independent auditor will    
     cease upon the filing of this Form
10-K.          The reports of
Deloitte & Touche LLP on the Company's financial    
     statement for the years ended December 31, 2002 and
2001, did          not contain an
adverse opinion or a disclaimer of opinion and    
     were not qualified or modified as to uncertainty, audit
scope or          accounting
principles.          In
connection with the audits of the Company's
financial          statements for
the fiscal years ended December 31, 2002 and    
     December 31, 2001, and any subsequent period preceding
the filing          of this Form
10-K, there were no disagreements with Deloitte
&          Touche LLP on any
matters of accounting principles or practices,    
     financial statement disclosure, or auditing scope and
procedures,          which if not
resolved to the satisfaction of Deloitte &
Touche          LLP would have
caused Deloitte & Touche LLP to make reference
to          the matter in their
report.           The
Corporation has provided Deloitte & Touche LLP with a
copy          of the disclosure in
this Item 9 and has requested that Deloitte    
     & Touche LLP furnish the Corporation with a letter
which is          included as
Exhibit 16.1 to this Form 10-K. PART IIIITEM 10.     DIRECTORS AND EXECUTIVE
OFFICERS OF THE REGISTRANTInformation appearing in the definitive
Proxy Statement related to the annual meeting of security holders to be held
April 21, 2003, is incorporated herein by reference in response to the listing
of directors.86FIRST COMMONWEALTH FINANCIAL CORPORATION AND
SUBSIDIARIESPART IIIITEM 10.    
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (Continued)The
table below lists the current executive officers of the
Corporation.

|Name                 | Age | Positions Held During the Past Five
      Years                                                                                                                                                                                                                                                                                                                                                                                                  
|-------------------- | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|E. James Trimarchi   | 80  | Chairman of the Board of the Corporation,
      FCB, FCTC, FCSC, FCIA and FCFA; Director of CTCLIC and
      FCPRI                                                                                                                                                                                                                                                                                                                               
|Joseph E. O'Dell     | 57  | President and Chief Executive Officer of the
      Corporation; Director of FCB, FCTC, FCPRI, FCSC, FCFA and FCIA; Vice
      Chairman of the Board of FCSC and FCPRI                                                                                                                                                                                                                                                                            
|Johnston A. Glass    | 53  | Vice Chairman of the Corporation; President
      and Chief Executive Officer of FCB; Director of FCB, FCTC, FCFA, FCIA and
      FCPRI                                                                                                                                                                                                                                                                                                          
|Gerard M. Thomchick  | 47  | Senior Executive Vice President and Chief
      Operating Officer of the Corporation; President, Chief Executive Officer,
      Director and Investment Committee Member of CTCLIC; President, Chief
      Executive Officer and Director of FCPRI; Director of FCB, FCTC, FCIA and
      FCFA                                                                                                                                                   
|John J. Dolan        | 46  | Executive Vice President and Chief Financial
      Officer of the Corporation; Chief Financial Officer of FCB; Comptroller
      and Chief Financial Officer of CTCLIC; Chief Financial Officer of FCSC;
      Treasurer and Assistant Secretary of FCTC; Chief Financial Officer of
      FCPRI; Treasurer of FCIA; Vice President and Chief Financial Officer of
      FCFA; Administrative Trustee of First Commonwealth Capital Trust
      I
|David R. Tomb Jr.    | 71  | Senior Vice President, Secretary, Treasurer
      and Director of the Corporation; Secretary of FCB, FCIA, FCTC, FCPRI, FCFA
      and FCSC; Director of FCB, FCSC, FCTC, FCPRI, FCIA and
      CTCLIC                                                                                                                                                                                                                                           
|Thaddeus J. Clements | 46  | Executive Officer of the Corporation and FCB;
      Senior Vice President, Human Resources of FCPRI                                                                                                                                                                                                                                                                                                                                              
|William R. Jarrett   | 68  | Senior Vice President, Risk Management of the
      Corporation                                                                                                                                                                                                                                                                                                                                                                                  
|Sue A. McMurdy       | 46  | Senior Vice President and Chief Information
      Officer of the Corporation; President, Chief Executive Officer and
      Director of FCSC; Director of FCPRI; former Executive Vice President,
      Technical Services of First Commonwealth Systems
      Corporation                                                                                                                                                                        
|R. John Previte      | 53  | Senior Vice President, Investments of the
      Corporation; Investment Officer of FCB; Senior Vice President of
      FCPRI                                                                                                                                                                                                                                                                                                                     

87
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESPART III
  ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE
  REGISTRANT (Continued)
  Each of the officers identified above has held the position indicated above
  or other executive positions with the same entity (or a subsidiary thereof)
  for at least the past five years except where noted.
  Executive officers of the Corporation serve at the pleasure of the Board of
  Directors of the Corporation and for a term of office extending through the
  election and qualification of their successors.
  ITEM 11.  MANAGEMENT RENUMERATION
  Information appearing in the definitive Proxy Statement related to the annual
  meeting of security holders to be held April 21, 2003, is incorporated herein
  by reference in response to this item.
  ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
  OWNERS AND MANAGEMENT
  Information appearing in the definitive Proxy Statement related to the annual
  meeting of security holders to be held April 21, 2003, is incorporated herein
  by reference in response to this item.
  ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  Information appearing in the definitive Proxy Statement related to the annual
  meeting of security holders to be held April 21, 2003, is incorporated herein
  by reference in response to this item.
  ITEM 14.     CONTROLS AND PROCEDURES
            (a) Disclosure controls and
  procedures.  Within 90 days before
            filing this report, we evaluated
  the effectiveness of the design
            and operation of our disclosure
  controls and procedures.  Our
            disclosure controls and procedures
  are the controls and other
            procedures that we designed
  to ensure that we record, process, 
            summarize and report in a
  timely manner the information we must
            disclose in reports that we
  file with or submit to the SEC. 
            Joseph E. O'Dell, our President
  and Chief Executive Officer, and
            John J. Dolan, our Executive
  Vice President and Chief Financial
            Officer, reviewed and participated
  in this evaluation.  Based on
            this    
  evaluation, Messrs. O'Dell and Dolan concluded that, as of
            the date of their evaluation,
  our disclosure controls were
            effective.
            (b) Internal controls. 
  Since the date of evaluation described 
            above, there have not been
  any significant changes in our 
            internal accounting controls
  or in other factors that could 
            significantly affect those
  controls. 
  88
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESPART IV
  ITEM 15.     EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES
  ANDREPORTS ON FORM 8-K
  (A)     Documents Filed as Part of this Report
       1)   Financial Statements
            All financial statements of
  the registrant as set forth under
            Item 8 of the Report on Form
  10-K.
       2)   Financial Statement Schedules
            Schedule          Number    
  Description               
                 
       Page
            I         
  Indebtedness to Related Parties                 
  N/A
            II        
  Guarantees of Securities of Other Issuers        N/A
                       
                       
            Page Number or
            Exhibit        
                       
        Incorporated by
       3)   Number     
  Description               
       Reference to3.1         Articles of Incorporation    
        Exhibit 3(i) to the
                         
                               
        Corporation's quarterly 
                         
                         
              report of Form
  10Q for 
                         
                         
              the quarter ended
  March 31,
                         
                         
              1994
              3.2  
        By-Laws of Registrant        
        Exhibit 3.0 to Form 10Q
                         
                         
              filed May 15,
  2001
              10.1       
  Change in Control Agreement         Exhibit
  10.4 to Form 10-K
                   
        dated October 27, 1995       
        filed March 21, 1996
                   
        Joseph E. O'Dell
              10.2       
  Change in Control Agreement         Exhibit
  10.5 to Form l0-K
                   
        dated October 27, 1995       
        filed March 21, 1996
                   
        Gerard M. Thomchick
              10.3       
  Change in Control Agreement         Exhibit
  10.6 to Form 10-K
                   
        dated October 30, 1995,      
        filed March 21, 1996
                   
        entered into between First
                   
        Commonwealth Financial Corporation
                   
        and John J. Dolan, together with a 
                   
        schedule listing substantially identical
                   
        Change in Control Agreements with the
                   
        following individuals:  William R.
                   
        Jarrett, R. John Previte, and
                   
        Johnston A. Glass89
  FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIESPART IV (Continued)
  ITEM 15.   EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND           REPORTS ON FORM
  8-K (Continued)10.5 
        Supplemental Executive        
       Exhibit 10.7 to Form 10-K
                   
        Retirement Plan              
        filed March 31, 1999
              10.6       
  Deferred Compensation           
     Exhibit 10.8 to Form 10-K
                   
        Plan              
                   filed
  March 31, 1999
              10.7       
  Cash Incentive Bonus               
  Exhibit 10.9 to Form 10-K
                   
        Program          
                   
  filed March 31, 1999
              10.8       
  Change in Control Agreement         Exhibit
  10.8 to Form 10-K
                   
        dated November 22, 2000,       
      filed April 2, 2001
                   
        entered into between First
                   
        Commonwealth Financial
                   
        Corporation and Sue A. McMurdy
              10.9       
  Form of Separation Agreement        Exhibit
  10.2 to Form 10-Q
                   
        and General Release of David       
  filed November 8, 2002
                   
        S. Dahlmann
              16.1       
  Letter from Deloitte & Touche       Page 96
                   
        LLP regarding change in 
                   
        certifying accountant
              21.1       
  Subsidiaries of the                
  Page 97
                   
        Registrant
              23.1       
  Consent of Deloitte &              
  Page 98
                   
        Touche LLP Certified
                   
        Public Accountants
              24.1       
  Power of Attorney           
         Page 99
              99.1       
  Chief Executive Officer          
    Page 100
                   
        Certification pursuant to
                   
        18 U.S.C. Section 1350 as
                   
        adopted pursuant to Section
                   
        906 of the Sarbanes-Oxley
                   
        Act of 2002
              99.2       
  Chief Financial Officer          
    Page 101
                   
        Certification pursuant to 
                   
        18 U.S.C. Section 1350 as
                   
        adopted pursuant to Section
                   
        906 of the Sarbanes-Oxley
                   
        Act of 2002
  (B)   Report on Form 8-K      
              The following
  report on Form 8-K was filed during the quarter ended
              December 31, 2002. 
  Form 8-K dated November 7, 2002, reporting on a
              change in the
  Corporation's certifying accountants.90
  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, in
  Indiana, Pennsylvania, on the 21st day of March 2003.
            FIRST COMMONWEALTH FINANCIAL
  CORPORATION
            (Registrant)
                 
       /S/JOSEPH E. O'DELL
                 
       Joseph E. O'Dell, President and Chief Executive Officer
  91
  CHIEF EXECUTIVE OFFICER CERTIFICATION
  I, Joseph E. O'Dell, President and Chief Executive Officer, certify that:
  1.   I have reviewed this annual report on Form 10-K of the First
       Commonwealth Financial Corporation;
  2.   Based on my knowledge, this annual 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 annual report;
  3.   Based on my knowledge, the financial statements, and other financial
       information included in this annual 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 annual report;
  4.   The registrant's other certifying officers and I are responsible
  for
       establishing and maintaining disclosure controls
  and procedures (as
       defined in Exchange Act Rules 13a-14 and 15d-14)
  for the registrant
       and we have:
  a)   designed such disclosure controls and procedures to ensure
       that material information relating to the registrant,
       including its consolidated subsidiaries, is made
  known to us
       by others within those entities, particularly during
  the
       period in which this annual 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 annual report (the "Evaluation
       Date"); and
  c)   presented in this annual report our conclusions about the
       effectiveness of the disclosure controls and procedures
       based on our evaluation as of the Evaluation Date;
  5.   The registrant's other certifying officers and I have disclosed,
  based
       on our most recent evaluation, to the registrant's
  auditors and the
       audit committee of registrant's board of directors
  (or persons
       performing the equivalent function):
  a)   all significant deficiencies in the design or operation of
       internal controls which could adversely affect
  the
       registrant's ability to record, process, summarize
  and
       report financial data and have identified for
  the
       registrant's auditors any material weaknesses
  in internal
       controls; and
  b)   any fraud, whether or not material, that involves management
       or other employees who have a significant role in the
       registrant's internal controls; and
   
  92
  6.   The registrant's other certifying officers and I have indicated
  in
       this annual 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.
     
       March 21, 2003    
  /s/ Joseph E. O'Dell
            Date      
                        
  Signature
             
                                
  President and Chief Executive Officer                                           
  Title93
  CHIEF FINANCIAL OFFICER CERTIFICATIONI, John J. Dolan, Executive Vice President and Chief Financial Officer, certify
  that:
  1.   I have reviewed this annual report on Form 10-K of the First
       Commonwealth Financial Corporation;
  2.   Based on my knowledge, this annual 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 annual report;
  3.   Based on my knowledge, the financial statements, and other financial
       information included in this annual 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 annual report;
  4.   The registrant's other certifying officers and I are responsible
  for
       establishing and maintaining disclosure controls
  and procedures (as
       defined in Exchange Act Rules 13a-14 and 15d-14)
  for the registrant
       and we have:
  a)   designed such disclosure controls and procedures to ensure
       that material information relating to the registrant,
       including its consolidated subsidiaries, is made
  known to us
       by others within those entities, particularly during
  the
       period in which this annual 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 annual report (the "Evaluation
       Date"); and
  c)   presented in this annual report our conclusions about the
       effectiveness of the disclosure controls and procedures
       based on our evaluation as of the Evaluation Date;
  5.   The registrant's other certifying officers and I have disclosed,
  based
       on our most recent evaluation, to the registrant's
  auditors and the
       audit committee of registrant's board of directors
  (or persons
       performing the equivalent function):
  a)   all significant deficiencies in the design or operation of
       internal controls which could adversely affect
  the
       registrant's ability to record, process, summarize
  and
       report financial data and have identified for
  the
       registrant's auditors any material weaknesses
  in internal
       controls; and
  b)   any fraud, whether or not material, that involves management
       or other employees who have a significant role in the
       registrant's internal controls; and
  94
  6.   The registrant's other certifying officers and I have indicated
  in
       this annual 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.
       March 21, 2003    
  /s/ John J. Dolan
            Date      
                        
  Signature
                       
            Executive Vice President and
                                
  Chief Financial Officer                                            Title
  95