FORM 10-QSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C.  20549

|  

(X) |  

QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934       |
|-------------|--------------------------------------------------------------------------------------------------------|
|        |                                                                                                   |
|        | For  the quarterly period ended March 31, 2003                                                         |
|        | OR                                                                                                     |
| ( )    | TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934              |
|        |                                                                                                   |
|        | For  the transition period from       to        |

Commission File Number   0-11242        First Commonwealth FinancialCorporation       (Exact name of registrant as specified in its charter)

|  

        Pennsylvania           |  

     25-1428528     |
|----------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------|
| (State or other jurisdiction of                                                                                                  | (I.R.S. Employer                                                         |
| incorporation or organization)                                                                                                   | Identification No.)                                                      |

 

|         22  North Sixth Street          | Indiana, PA  15701 |
|------------------------------------------------------------------------------------------------------------------------------|-------------------------|
| (Address of principal executive  offices)                                                                                    | (Zip Code)              |

                    724-349-7220                   (Registrant's telephone number, including area code)                         N/A                          (Former name, former address and former fiscal year, if changed since last report)

Indicate a check mark whether the registrant (1) has filed all reports requiredto be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrantwas required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.Yes    X     No      .Number of shares outstanding of issuer's common stock, $1.00 Par Value as ofMay 12, 2003, was 59,004,133.

     FIRST COMMONWEALTH FINANCIAL CORPORATION ANDSUBSIDIARIESPART I - FINANCIAL INFORMATION

|  

ITEM 1. |  

FINANCIAL STATEMENTS                                                                                              |  

PAGE |
|-----------------|---------------------------------------------------------------------------------------------------------------------------|--------------|
|            |                                                                                                                      |         |
|            | Included in Part I of this report:                                                                                        |         |
|            |                                                                                                                      |         |
|            | First Commonwealth Financial Corporation and                                                                              |         |
|            |   Subsidiaries Consolidated Balance Sheets..................                                                    | 3            |
|            |   Consolidated Statements of Income.........................                                                    | 4            |
|            |   Consolidated Statements of Changes in                                                                         |         |
|            |     Shareholders' Equity....................................                                          | 5            |
|            |   Consolidated Statements of Cash Flows.....................                                                    | 6            |
|            |                                                                                                                      |         |
|            |   Notes to Consolidated Financial  Statements................                                                   | 7            |
|            |                                                                                                                      |         |
| ITEM 2.         | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF OPERATIONS................................... | 12           |
|            |                                                                                                                      |         |
| ITEM 3.         | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT  MARKET RISK..                                                             | 28           |
|            |                                                                                                                      |         |
| ITEM 4.         | CONTROLS AND PROCEDURES.....................................                                                              | 29           |

 

PART II - OTHER INFORMATION

|  

Other Information...................................................... | 30     |
|---------------------------------------------------------------------------------|--------|
|                                                                            |   |
| Signatures.............................................................         | 31     |
|                                                                            |   |
| Certification of Chief Executive Officer...............................         | 32     |
|                                                                            |   |
| Certification of Chief Financial Officer...............................         | 34     |
|                                                                            |   |
| Exhibits and Reports on Form 8K                                                 |   |

 

FIRST COMMONWEALTH FINANCIALCORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS (Unaudited)(Dollars in thousands)

|                                                                                                                                                                                                                                                               | March  31,2003 | December  31,2002         |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|---------------------------|
|                                                                                                                                                                                                                                                               |           |                      |   |   |
| **ASSETS**                                                                                                                                                                                                                                                         |           |                      |   |   |
|   Cash and due  from banks on demand........................                                                                                                                                                                                             | $              | 82,252               |   $ | 81,114  |
|   Interest-bearing  bank deposits...........................                                                                                                                                                                                             |           | 1,880                |   | 1,973  |
|   Securities  available for sale, at market.................                                                                                                                                                                                             |           | 1,517,975            |   | 1,482,771  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|   Securities held  to maturity, at cost,(Market value $177,643 in      2003 and $204,887 in 2002).............................                                                                                                       |           | 170,648              |   | 197,838  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|   Loans....................................................                                                                                                                                                                                              |           | 2,650,597            |   | 2,609,440  |
|     Unearned  income........................................                                                                                                                                                                                   |           | (725)                     |   | (806) |
|     Allowance  for credit losses............................                                                                                                                                                                                   |           |   (35,321)      |   |   (34,496) |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|         Net  loans..........................................                                                                                                                                                               |           | 2,614,551            |   | 2,574,138  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|   Premises and  equipment...................................                                                                                                                                                                                             |           | 44,877               |   | 45,730  |
|   Other real  estate owned..................................                                                                                                                                                                                             |           | 1,862                |   | 1,651  |
|   Goodwill.................................................                                                                                                                                                                                              |           | 8,131                |   | 8,131  |
|   Amortizing  intangibles, net..............................                                                                                                                                                                                             |           | 22                   |   | 29  |
|   Other assets.............................................                                                                                                                                                                                              |           |   133,259  |   |   131,368  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|     Total  assets...........................................                                                                                                                                                                                   | $              | 4,575,457            | $ | 4,524,743  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
| **LIABILITIES**                                                                                                                                                                                                                                                    |           |                      |   |   |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|   Deposits (all  domestic):                                                                                                                                                                                                                              |           |                      |   |   |
|     Noninterest-bearing....................................                                                                                                                                                                                    | $              | 364,495              | $ | 377,466  |
|     Interest-bearing.......................................                                                                                                                                                                                    |           | 2,782,640            |   | 2,666,658  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|       Total  deposits.......................................                                                                                                                                                                         |           | 3,147,135            |   | 3,044,124  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|   Short-term  borrowings....................................                                                                                                                                                                                             |           | 408,725              |   | 469,065  |
|   Other  liabilities........................................                                                                                                                                                                                             |           | 33,699               |   | 30,230  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|   Company  obligated mandatorily redeemable capital securities of      subsidiary trust.......................................                                                                                                       |           | 35,000               |   | 35,000  |
|   Other long-term  debt.....................................                                                                                                                                                                                             |           |   544,230  |   |   544,934  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|       Total  long-term debt.................................                                                                                                                                                                         |           |   579,230  |   |   579,934  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|       Total  liabilities....................................                                                                                                                                                                         |           | 4,168,789            |   | 4,123,353  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
| **SHAREHOLDERS' EQUITY**                                                                                                                                                                                                                                           |           |                      |   |   |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|   Preferred  stock, $1 par value per share, 3,000,000 shares      authorized, none issued................................                                                                                                            |           | -0-                       |   | -0- |
|   Common stock $1  par value per share, 100,000,000 shares authorized,      62,525,408 shares issued; 58,997,787 and 58,962,543  shares outstanding      at March 31, 2003 and December 31, 2002 respectively... |           | 62,525               |   | 62,525  |
|   Additional  paid-in capital...............................                                                                                                                                                                                             |           | 64,683               |   | 64,885  |
|   Retained earnings........................................                                                                                                                                                                                              |           | 300,324              |   | 296,165  |
|   Accumulated  other comprehensive income...................                                                                                                                                                                                             |           | 26,459               |   | 25,851  |
|   Treasury stock  (3,527,621 shares at March 31, 2003 and 3,562,869 at      December 31, 2002, at cost)............................                                                                                                  |           | (44,536)                  |   | (44,981) |
|   Unearned ESOP  shares.....................................                                                                                                                                                                                             |           |    (2,787) |   |    (3,055) |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|     Total  shareholders' equity.............................                                                                                                                                                                                   |           |   406,668  |   |   401,390  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |
|     Total  liabilities and shareholders' equity.............                                                                                                                                                                                   | $              | 4,575,457            | $ | 4,524,743  |
|                                                                                                                                                                                                                                                               |           |                      |   |   |

  Theaccompanying notes are an integral part of these consolidated financialstatements.3

FIRST COMMONWEALTH FINANCIALCORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME (Unaudited)(Dollars in thousands)

|                                                                                                                                                       | For  the QuarterEnded March 31, |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|
|                                                                                                                                                       | 2003                            | 2002 |
|                                                                                                                                                       |                            |   |   |   |
| **Interest Income**                                                                                                                                        |                            |   |   |   |
|   Interest and  fees on loans...............................                                                                                     | $                               | 42,029  | $ | 45,327  |
|   Interest and  dividends on investments:                                                                                                        |                            |   |   |   |
|     Taxable  interest.......................................                                                                           |                            | 17,156  |   | 22,238  |
|     Interest  exempt from Federal income taxes..............                                                                           |                            |     2,523  |   |     2,392  |
|     Dividends..............................................                                                                            |                            | 602  |   | 552  |
|   Interest on  Federal funds sold...........................                                                                                     |                            |       1  |   |       3  |
|   Interest on  bank deposits................................                                                                                     |                            |          6  |   |         11  |
|                                                                                                                                                  |                            |   |   |   |
|     Total  interest income..................................                                                                           |                            |    62,317  |   |    70,523  |
|                                                                                                                                                       |                            |   |   |   |
| **Interest Expense**                                                                                                                                       |                            |   |   |   |
|   Interest on  deposits.....................................                                                                                     |                            |  15,797  |   |  21,321  |
|   Interest on  short-term borrowings........................                                                                                     |                            | 1,552  |   | 1,765  |
|                                                                                                                                                       |                            |   |   |   |
|   Interest on  company obligated mandatorily redeemable capital      securities of subsidiary trust......................... |                            |       831  |   | 831  |
|   Interest on  other long-term debt.........................                                                                                     |                            |      7,291  |   |      8,564  |
|                                                                                                                                                       |                            |   |   |   |
|     Total  interest on long-term debt.......................                                                                           |                            |      8,122  |   |       9,395  |
|                                                                                                                                                       |                            |   |   |   |
|     Total  interest expense.................................                                                                           |                            |     25,471  |   |     32,481  |
|                                                                                                                                                       |                            |   |   |   |
| **Net Interest Income.................................**                                                                                                   |                            |    36,846  |   |    38,042  |
|   Provision for  credit losses..............................                                                                                     |                            |      3,460  |   |      2,917  |
|                                                                                                                                                       |                            |   |   |   |
| **Net interest income after provision for credit losses**                                                                                                  |                            |     33,386  |   |     35,125  |
|                                                                                                                                                       |                            |   |   |   |
| **Other Income**                                                                                                                                           |                            |   |   |   |
|   Securities  gains.........................................                                                                                     |                            | 2,234  |   | 39  |
|   Trust income.............................................                                                                                      |                            |   1,185  |   |   1,213  |
|   Service charges  on deposit accounts......................                                                                                     |                            |  2,849  |   |  2,693  |
|   Insurance  commissions....................................                                                                                     |                            | 797  |   | 856  |
|   Income from  bank owned life insurance....................                                                                                     |                            | 1,046  |   | 1,069  |
|   Other income.............................................                                                                                      |                            |      2,960  |   |      2,519  |
|                                                                                                                                                       |                            |   |   |   |
|     Total  other income.....................................                                                                           |                            |     11,071  |   |      8,389  |
|                                                                                                                                                       |                            |   |   |   |
| **Other Expenses**                                                                                                                                         |                            |   |   |   |
|   Salaries and  employee benefits...........................                                                                                     |                            | 15,335  |   | 14,643  |
|   Net occupancy  expense....................................                                                                                     |                            | 1,974  |   | 1,686  |
|   Furniture and  equipment expense..........................                                                                                     |                            |  2,552  |   |  2,398  |
|   Data processing  expense..................................                                                                                     |                            |    527  |   |    442  |
|   Pennsylvania  shares tax expense..........................                                                                                     |                            |   1,060  |   |     995  |
|   Intangible  amortization..................................                                                                                     |                            |      7  |   |    120  |
|   Litigation  settlement (recovery).........................                                                                                     |                            |   (610) |   |   8,000  |
|   Other operating  expenses.................................                                                                                     |                            |      6,927  |   |      7,159  |
|                                                                                                                                                       |                            |   |   |   |
|     Total  other expenses...................................                                                                           |                            |     27,772  |   |     35,443  |
|                                                                                                                                                       |                            |   |   |   |
| **Income before income taxes..........................**                                                                                                   |                            | 16,685  |   |     8,071  |
|   Applicable  income taxes..................................                                                                                     |                            |      3,381  |   |        433  |
|                                                                                                                                                       |                            |   |   |   |
| **Net income..........................................**                                                                                                   | $                               |     13,304  | $ |      7,638  |
|                                                                                                                                                       |                            |   |   |   |
| Average Shares Outstanding.................................                                                                                                |                            | 58,703,260  |   | 58,142,359  |
| Average Shares Outstanding  Assuming Dilution...............                                                                                               |                            | 58,934,248  |   | 58,484,806  |
| **Per Share Data:**                                                                                                                                        |                            |   |   |   |
|   Basic earnings  per share.................................                                                                                     | $                               | 0.23  | $ | 0.13  |
|   Diluted  earnings per share...............................                                                                                     | $                               | 0.23  | $ | 0.13  |
|   Cash dividends  per share.................................                                                                                     | $                               | 0.155  | $ | 0.150  |
|                                                                                                                                                       |                            |   |   |   |

  Theaccompanying notes are an integral part of these consolidated financialstatements.4

FIRST COMMONWEALTH FINANCIALCORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY(Unaudited)(Dollars in thousands)

|                                                                                                                                          | CommonStock | Additional  Paid-inCapital  | RetainedEarnings | Accumulated  Other  ComprehensiveIncome | TreasuryStock | Unearned  ESOP Shares  | Total  Shareholders'Equity |
|-----------------------------------------------------------------------------------------------------------------------------------------------|-------------|-----------------------------|------------------|-----------------------------------------|---------------|-----------------------------|----------------------------|
| Balance  December 31, 2001..........                                                                                                          | $           | 62,525                 |   $    | 66,176                             |   $ | 288,219                |   $              | 8,703  |   $ | (51,431) |   $ | (4,126) |   $ | 370,066  |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
|  Comprehensive  income                                                                                                                   |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
|   Net  income.......................                                                                                                |        | -0-                    |             | -0-                                |          | 7,638                  |                       | -0-  |   | -0-  |   | -0-  |   | 7,638  |
|   Other  comprehensive income, net of tax:                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
|     Unrealized  holding (losses) on securities       arising during the period.....              |        | -0-                    |             | -0-                                |          | -0-                    |                       | (2,787) |   | -0-  |   | -0-  |   | (2,787) |
|     Less:  reclassification adjustment for       gains on securities included in net income |        |    -0-  |             |    -0-              |          |    -0-  |                       |    (26) |   |     -0-  |   |    -0-  |   |     (26) |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
|   Total  other comprehensive income.                                                                                                |        |    -0-  |             |    -0-              |          |    -0-  |                       | (2,813) |   |     -0-  |   |    -0-  |   |  (2,813) |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Total  comprehensive income.........                                                                                                          |        | ‑0-              |             | -0-                                |          | 7,638                  |                       | (2,813) |   | -0-  |   | -0-  |   | 4,825  |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Cash  dividends declared............                                                                                                          |        | -0-                    |             | -0-                                |          | (8,795)                     |                       | -0-  |   | -0-  |   | -0-  |   | (8,795) |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Decrease  in unearned ESOP shares...                                                                                                          |        | -0-                    |             | -0-                                |          | -0-                    |                       | -0-  |   | -0-  |   | 268  |   | 268  |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Discount  on dividend reinvestment plan purchases                                                                                             |        | -0-                    |             | (157)                                   |          | -0-                    |                       | -0-  |   | -0-  |   | -0-  |   | (157) |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Treasury  stock reissued............                                                                                                          |        |    -0-  |             |   (352)                       |          |    -0-  |                       |    -0-  |   |   2,393  |   |    -0-  |   |   2,041  |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Balance  at March 31, 2002..........                                                                                                          | $           | 62,525                 | $                | 65,667                             | $             | 287,062                | $                          |  5,890  | $ | (49,038) | $ | (3,858) | $ | 368,248  |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Balance  December 31, 2002..........                                                                                                          | $           | 62,525                 | $                | 64,885                             | $             | 296,165                | $                          | 25,851  | $ | (44,981) | $ | (3,055) | $ | 401,390  |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
|  Comprehensive  income                                                                                                                   |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
|   Net  income.......................                                                                                                |        | -0-                    |             | -0-                                |          | 13,304                 |                       | -0-  |   | -0-  |   | -0-  |   | 13,304  |
|   Other  comprehensive income, net of tax:                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
|     Unrealized  holding gains on securities       arising during the period.....                 |        | -0-                    |             | -0-                                |          | -0-                    |                       | 2,045  |   | -0-  |   | -0-  |   |  2,045  |
|     Less:  reclassification adjustment for       gains on securities included in net income |        |    -0-  |             |    -0-              |          |    -0-  |                       | (1,437) |   |     -0-  |   |    -0-  |   |  (1,437) |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
|   Total  other comprehensive income.                                                                                                |        |    -0-  |             |    -0-              |          |    -0-  |                       |    608  |   |     -0-  |   |    -0-  |   |     608  |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Total  comprehensive income.........                                                                                                          |        | ‑0-              |             | -0-                                |          | 13,304                 |                       | 608  |   | -0-  |   | -0-  |   | 13,912  |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Cash  dividends declared............                                                                                                          |        | -0-                    |             | -0-                                |          | (9,145)                     |                       | -0-  |   | -0-  |   | -0-  |   | (9,145) |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Decrease  in unearned ESOP shares...                                                                                                          |        | -0-                    |             | -0-                                |          | -0-                    |                       | -0-  |   | -0-  |   | 268  |   | 268  |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Discount  on dividend reinvestment plan purchases                                                                                             |        | -0-                    |             | (167)                                   |          | -0-                    |                       | -0-  |   | -0-  |   | -0-  |   | (167) |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Treasury  stock reissued............                                                                                                          |        |    -0-  |             |    (35)                  |          |    -0-  |                       |    -0-  |   |     445  |   |    -0-  |   |     410  |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |
| Balance  at March 31, 2003..........                                                                                                          | $           | 62,525                 | $                | 64,683                             | $             | 300,324                | $                          | 26,459  | $ | (44,536) | $ | (2,787) | $ | 406,668  |
|                                                                                                                                          |        |                        |             |                                    |          |                        |                       |   |   |   |   |   |   |   |

5

FIRST COMMONWEALTH FINANCIALCORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)(Dollars in thousands)

|                                                                                                                    |   | For  the 3 MonthsEnded March 31,  |
|-------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|
|                                                                                                                    | 2003   | 2002                              |
|                                                                                                                    |   |                              |   |   |
| **Operating Activities**                                                                                                |   |                              |   |   |
|   Net income...............................................                                                   | $      | 13,304                       |   $ | 7,638  |
|   Adjustments to  reconcile net income to net cash provided by operating      activities: |   |                              |   |   |
|     Provision  for credit losses ...........................                                   |   | 3,460                        |   | 2,917  |
|     Depreciation  and amortization..........................                                        |   | 1,810                        |   | 1,836  |
|     Net  losses (gains) on sales of assets..................                                        |   | (2,213)                           |   | 179  |
|     Income  from increase in cash surrender value of bank owned life insurance                      |   | (1,046)                           |   | (1,068) |
|     Decrease  in interest receivable........................                                        |   | 1,925                        |   | 838  |
|     Decrease  in interest payable...........................                                        |   | (1,263)                           |   | (1,245) |
|     Increase  in income taxes payable.......................                                        |   | 4,111                        |   | 476  |
|     Change  in deferred taxes...............................                                        |   | (731)                             |   | (49) |
|     Other-net..............................................                                         |   |  (1,572)                     |   |   3,912  |
|                                                                                                                    |   |                              |   |   |
|       Net  cash provided by operating activities............                              |   | 17,785                       |   | 15,434  |
|                                                                                                                    |   |                              |   |   |
| **Investing Activities**                                                                                                |   |                              |   |   |
|   Transactions  with securities held to maturity:                                                             |   |                              |   |   |
|     Proceeds  from sales....................................                                        |   | -0-                               |   | -0- |
|     Proceeds  from maturities and redemptions...............                                        |   | 27,216                       |   | 28,937  |
|     Purchases..............................................                                         |   | -0-                               |   | (15,241) |
|   Transactions  with securities available for sale:                                                           |   |                              |   |   |
|     Proceeds  from sales....................................                                        |   | 37,753                       |   | 3,200  |
|     Proceeds  from maturities and redemptions...............                                        |   | 240,971                      |   | 114,941  |
|     Purchases..............................................                                         |   | (310,785)                         |   | (90,617) |
|   Proceeds from  sales of loans and other assets............                                                  |   | 29,922                       |   | 5,037  |
|   Acquisition of  affiliate, net of cash received...........                                                  |   | -0-                               |   | 8  |
|   Investment in  bank owned life insurance..................                                                  |   | -0-                               |   | (5,000) |
|   Net decrease in  time deposits with banks.................                                                  |   | 93                           |   | 2,971  |
|   Net increase in  loans....................................                                                  |   | (74,061)                          |   | (29,039) |
|   Purchases of  premises and equipment......................                                                  |   |    (892)           |   |  (1,776) |
|                                                                                                                    |   |                              |   |   |
|     Net  cash provided (used) by investing activities.......                                        |   | (49,783)                          |   | 13,421  |
|                                                                                                                    |   |                              |   |   |
| **Financing Activities**                                                                                                |   |                              |   |   |
|                                                                                                                    |   |                              |   |   |
|   Repayments of  other long-term debt.......................                                                  |   | (10,436)                          |   |  (306) |
|   Proceeds from  issuance of other long-term debt...........                                                  |   | 10,000                       |   |  18,200  |
|   Discount on  dividend reinvestment plan purchases.........                                                  |   | (167)                             |   | (157) |
|   Dividends paid...........................................                                                   |   | (9,139)                           |   |  (8,768) |
|   Net increase  (decrease) in Federal funds purchased.......                                                  |   | 16,100                       |   | (65,579) |
|   Net (decrease)  in other short-term borrowings............                                                  |   | (76,440)                          |   | (20,171) |
|   Net increase in  deposits.................................                                                  |   | 103,011                      |   | 11,403  |
|   Proceeds from  sale of treasury stock.....................                                                  |   |     207  |   |   1,229  |
|                                                                                                                    |   |                              |   |   |
|     Net  cash provided (used) by financing activities.......                                        |   |  33,136                 |   | (64,149) |
|                                                                                                                    |   |                              |   |   |
|     Net  increase (decrease) in cash and cash equivalents...                                        |   | 1,138                        |   | (35,294) |
|                                                                                                                    |   |                              |   |   |
|   Cash and cash  equivalents at January 1...................                                                  |   |  81,114                 |   |  98,130  |
|                                                                                                                    |   |                              |   |   |
|   Cash and cash  equivalents at March 31....................                                                  | $      |  82,252                 | $ |  62,836  |
|                                                                                                                    |   |                              |   |   |

  Theaccompanying notes are an integral part of these consolidated financialstatements.6

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSMarch 31, 2003(Unaudited)

NOTE 1 Management RepresentationThe consolidated financial statements include the accounts of FirstCommonwealth Financial Corporation and its subsidiaries ("theCorporation").  All significantintercompany transactions and balances have been eliminated.  The accounting and reporting policies of theCorporation conform with accounting principles generally accepted in the UnitedStates of America.  The preparation offinancial statements in conformity with generally accepted accounting principlesrequires management to make estimates, assumptions and judgments that affectthe amounts reported in the financial statements and accompanying notes.  Actual realized amounts could differ fromthose estimates.  In the opinion ofmanagement, the unaudited interim consolidated financial statements include alladjustments (consisting of only normal recurring adjustments) necessary for afair statement of financial position as of March 31, 2003 and the results ofoperations for the three month periods ended March 31, 2003 and 2002, andstatements of cash flows and changes in shareholders' equity for the threemonth periods ended March 31, 2003 and 2002. The results of operations for the three months ended March 31, 2003 and2002 are not necessarily indicative of the results that may be expected for thefull year or any other interim period. These interim financial statements should be read in conjunction withthe Corporation's 2002 Annual Report on Form 10-K which is available on theCorporation's website at http://www.fcbanking.com.  The Corporation's website also provides additional information ofinterest to investors and clients, including other regulatory filings made tothe Securities and Exchange Commission, press releases, historical stockprices, dividend declarations and corporate governance, as well as informationabout products and services offered through the Corporation's banking,insurance, trust and financial management subsidiaries.NOTE 2 Cash Flow Disclosures (dollar amounts in thousands)

|                                                                                                                             | 2003   | 2002         |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|
|                                                                                                                             |   |         |   |   |
| Cash  paid during the first three months of the year for:                                                                        |   |         |   |   |
|                                                                                                                             |   |         |   |   |
|   Interest                                                                                                             | $      | 26,734  |   $ | 33,726  |
|   Income  Taxes                                                                                                        |   | -0-     |   | -0-  |
|                                                                                                                             |   |         |   |   |
| Noncash  investing and financing activities:                                                                                     |   |         |   |   |
|                                                                                                                             |   |         |   |   |
|   ESOP  loan reductions                                                                                                | $      | 268     | $ | 268  |
|   Loans  transferred to other real estate owned and      repossessed assets                        | $      | 1,247   | $ | 2,109  |
|   Gross  increase (decrease) in market value      adjustment to securities available for sale | $      | 935     | $ | (4,327) |
|   Treasury  stock reissued for business combination                                                                    | $      | -0-     | $ | 812  |

7

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSMarch 31, 2003(Unaudited)

NOTE 3 Comprehensive Income DisclosuresThe following table identifies the related tax effects allocated to eachcomponent of other comprehensive income in the Statements of Changes inShareholder's Equity: (dollar amounts in thousands)

|                                                                                               | March  31, 2003 | March  31, 2002             |
|----------------------------------------------------------------------------------------------------|-----------------|-----------------------------|
|                                                                                               | Pre-taxAmount   | Tax  (Expense)  Benefit     | Net of  TaxAmount | Pre-taxAmount | Tax  (Expense)Benefit | Net of  TaxAmount |
|                                                                                               |            |                        |   |   |   |   |   |   |   |   |   |   |
| Unrealized gains (losses) on securities:                                                           |            |                        |   |   |   |   |   |   |   |   |   |   |
|  Unrealized holding gains    (losses) arising during    the period        | $               | 3,145                  |  $ | (1,100) |  $ | 2,045  |  $ | (4,287) |  $ | 1,500 |   $ | (2,787) |
|  Less: reclassification    adjustment for gains realized    in net income |                 | (2,210)                     |   |    773  |   | (1,437) |   |    (40) |   |    14 |   |    (26) |
|  Net unrealized gains (losses)                                                                |            |    935  |   |   (327) |   |    608  |   | (4,327) |   | 1,514 |   | (2,813) |
| Other comprehensive income                                                                         | $               |    935  | $ |   (327) | $ |    608  | $ | (4,327) | $ | 1,514 | $ | (2,813) |

NOTE 4 Accounting for Stock Options GrantedIn December 2002, the Financial Accounting Standards Board ("FASB")issued Statement No. 148, "Accounting for Stock-BasedCompensation-Transition and Disclosure" ("FAS No. 148").  FAS No. 148 amended 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 fairvalue method of accounting for stock-based employee compensation.  FAS No. 148 also amended the disclosureprovisions of FAS No. 123 and APB Opinion No. 28, "Interim FinancialReporting" ("APB 28"), to require disclosure in the summary ofsignificant accounting policies the effects of the entity's accounting policywith respect to stock-based employee compensation on reported net income andearnings per share in annual and interim financial statements.  FAS No. 148 does not amend FAS No. 123 torequire companies to account for employee stock options using the fair valuemethod, but the disclosure provisions of the statement apply to all companieswith stock-based compensation, regardless of whether they account for thatcompensation using the fair value method of FAS No. 123 or the intrinsic valuemethod of APB Opinion No. 25 "Accounting for Stock Issued toEmployees" ("APB 25"). FAS No. 148 amendments to the transitional and annual disclosurerequirements of FAS No. 123 were effective for fiscal years ending afterDecember 15, 2002, while the interim disclosure provisions are effective forfinancial reports containing financial statements for interim periods beginningafter December 15, 2002.  Implementationof FAS No. 148 did not have a material impact on the Corporation's financialcondition or results of operations.FAS No. 123 defines a method of measuring stock-based compensation, such asstock options granted, at an estimated fair value but also permits thecontinued measurement of stock based compensation under the provisions of APB25.  As permitted under FAS No. 123, theCorporation has elected to use the intrinsic value method to measure stockbased compensation under APB 25.  Nostock-based employee compensation expense is reflected in the Corporation's netincome as reported in the Consolidated Statements of Income because all stockoptions granted under the Corporation's plan had an exercise price equal to themarket value of the underlying common stock on the date of grant.8

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSMarch 31, 2003(Unaudited)

NOTE 4 Accounting for Stock Options Granted (continued)The following table illustrates the effect on net income and earnings per shareif the Corporation had applied the fair value recognition provisions of FAS No.123 to stock-based employee compensation:

| (Dollar  amounts in thousands,    except per share data)                                                                                              | Three months ended  March 31, |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|
|                                                                                                                                                            | 2003                          | 2002 |
|                                                                                                                                                            |                          |   |
| Net  Income, as reported                                                                                                                                        | $                             | 13,304  |   $ | 7,638  |
| Deduct:  Total stock-based employee compensation   expense determined under fair value based method   for all awards, net of related tax effects | $                             |   (338) | $ |   (570) |
| Pro  forma net income                                                                                                                                           | $                             | 12,966  | $ |  7,068  |
|                                                                                                                                                            |                          |   |   |   |
| Earnings  per share:                                                                                                                                            |                          |   |   |   |
|  Basic  - as reported                                                                                                                                      | $                             |   0.23  | $ |   0.13  |
|  Basic  - pro forma                                                                                                                                        | $                             |   0.22  | $ |   0.12  |
|  Diluted  - as reported                                                                                                                                    | $                             |   0.23  | $ |   0.13  |
|  Diluted  - pro forma                                                                                                                                      | $                             |   0.22  | $ |   0.12  |

Note 5 Restructuring ChargesThe Corporation incurred restructuring charges of $6,140 thousand during thesecond, third and fourth quarters of 2002 in accordance with EITF 94-3.  These restructuring charges resulted fromthe merger of the charters of the Corporation's two commercial banks (FirstCommonwealth Bank and Southwest Bank) and the adoption of a new common brandand identity for all financial services subsidiaries.  The largest component of these charges was $4,652 thousand ofemployee separation costs consisting of severance packages for 95 employeesfrom various affiliates of the Corporation including all levels of staff fromthe executive management level to back office support staff.  Restructuring charges during 2002 alsoincluded $1,068 thousand related to realignment of the various Boards ofDirectors and Board committees and $420 thousand primarily related to thewrite-off of obsolete signage and supplies. These amounts were included as restructuring charges, a component ofOther Expenses on the Consolidated Statements of Income during 2002.During 2002 actual termination benefits paid and charged against the totalseverance liability were $1,263 thousand, leaving a remaining unpaid liabilityfor severance costs of $3,389 thousand at December 31, 2002.  During the first quarter of 2003, monthlyseverance payments totaling $929 thousand were made, reducing the outstandingseverance liability to $2,460 thousand at March 31, 2003.  No additional severance accruals oradjustments were recorded during the first quarter of 2003. 9

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSMarch 31, 2003(Unaudited)

NOTE 6 New Accounting PronouncementsIn July 2002, the FASB issued statement No. 146, "Accounting for CostsAssociated with Exit or Disposal Activities" ("FAS No.146").  FAS No. 146 replaced EITFIssue No. 94-3, "Liability Recognition for Certain Employee TerminationBenefits and Other Costs to Exit an Activity (including Certain Costs Incurredin a Restructuring)."  The standardrequires companies to recognize costs associated with exit or disposalactivities when they are incurred rather than at the date of a commitment to anexit or disposal plan.  Statement 146 isto be applied to exit or disposal activities initiated after December 31,2002.  Adoption of FAS No. 146 did nothave a material impact on the Corporation's financial condition or results ofoperations. In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN45"), "Guarantor's Accounting and Disclosure Requirements forGuarantees of Indebtedness of Others". The disclosure requirements of FIN 45 are effective for financialstatements of interim or annual periods ending after December 15, 2002, andrequire disclosure of the nature of the guarantee, the maximum potential offuture payments the guarantor could be required to make under the guarantee, andthe current amount of the liability, if any, for the guarantor's obligationunder the guarantee.  The recognitionrequirements of FIN 45 are to be applied prospectively to guarantees issued ormodified after December 31, 2002.  Thisinterpretation expands the disclosures to be made by the guarantor in itsfinancial statements about its obligation under certain guarantees and requiresthe guarantor to recognize a liability for the fair value of an obligationassumed under a guarantee.  FIN 45clarifies the requirements of FASB Statement No. 5 ("FAS No. 5")"Accounting for Contingencies", relating to guarantees.  In general, FIN 45 applies to contracts orindemnification agreements that contingently require the guarantor to makepayments to the guaranteed party based on changes in an underlying that isrelated to an asset, liability, or equity security of the guaranteedparty.  Certain guarantee contracts areexcluded from both the disclosure and recognition requirements of thisinterpretation, including, but not limited to, guarantees related to employeecompensation, residual value guarantees under capital lease arrangements,commercial letters of credit, loan commitments, subordinated interests inspecial purpose entities and guarantees of a company's own futureperformance.  Other guarantees aresubject to the disclosure requirements of FIN 45 but not the recognitionprovisions and include, among others, a guarantee accounted for as a derivativeinstrument under FAS No. 133, a parent's guarantee of debt owed to a thirdparty by its subsidiary or vice versa and a guarantee which is based onperformance not price.  Guarantees thathave been entered into by the Corporation are disclosed in NOTE 7.  The adoption of FIN 45 did not have amaterial impact on the Corporation's financial condition or results ofoperations.In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN46"), "Consolidation of Variable Interest Entities", theprovisions of which became effective upon issuance.  As defined by FIN 46 a variable interest entity ("VIE")is a corporation, partnership, trust or any other legal structure used forbusiness purposes that either (a) does not have equity

10

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSMarch 31, 2003(Unaudited)

 

NOTE6 New Accounting Pronouncements (continued)

investors with voting rights or (b) has equity investors that do not providesufficient financial resources for the entity to support its activities.  This interpretation also defines when theassets, liabilities, noncontrolling interest and results of operations of a VIEshould be included in a company's consolidated financial statements.  Companies that hold variable interests in anentity will need to consolidate that entity if the company's interest in theVIE is such that the company will obtain a majority of the entity's expectedresidual returns, should such occur. The Corporation has reviewed its current business interests in order todetermine the impact of FIN 46 and has determined that no additional businessinterests require consolidation in the Corporation's financial statements.  The adoption of FIN 46 therefore did nothave any impact on the Corporation's financial condition or results ofoperations.In April 2003, the FASB issued Statement No. 149 "Amendment of Statement133 on Derivative Instruments and Hedging Activities" ("FAS No.149").  FAS No. 149 amends andclarifies accounting for derivative instruments, including certain derivativeinstruments embedded in other contracts, and for hedging activities underStatement 133.  In particular, FAS No.149 clarifies under what circumstances a contract with an initial netinvestment meets the characteristic of a derivative and when a derivativecontains a financing component that warrants special reporting in the statementof cash flows.  This statement iseffective for contracts entered into or modified after June 30, 2003 and forhedging relationships designated after June 30, 2003.  The adoption of FAS No. 149 is not expected to have a materialimpact on the Corporation's financial condition or results of operations.NOTE 7 GuaranteesStandby letters of credit are conditional commitments issued by the Corporationto guarantee the performance of a customer to a third party.  The contract or notional amount of theseinstruments reflects the maximum amount of future payments that could be lostunder the guarantees if there were a total default by the guaranteed partieswithout consideration of possible recoveries under recourse provisions or fromcollateral held or pledged.  Inaddition, many of these commitments are expected to expire without being drawnupon, therefore the total commitment amounts do not necessarily representfuture cash requirements.  The tablebelow identifies the notional amounts of these guarantees at March 31, 2003:

| Financial  standby letters of credit   |   $ | 24,363 |
|----------------------------------------|---------------|--------|
| Performance  standby letters of credit |   $ | 6,862  |

The current notional amounts outstanding above include financial standbyletters of credit of $565 thousand and performance standby letters of credit of$123 thousand issued during the first quarter of 2003.  There is currently no liability recorded onthe Corporation's balance sheet related to the above letters of credit.11

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS (continued)

RESULTS OF OPERATIONS**First Three Months of 2003 as Compared to theFirst Three Months of 2002**This discussion and the related financial data are presented to assist in theunderstanding and evaluation of the consolidated financial condition andresults of operations of First Commonwealth Financial Corporation including itssubsidiaries (the "Corporation"). In addition to historical information, this discussion and analysiscontains forward-looking statements (as defined in the Private SecuritiesLitigation Reform Act of 1995), which reflect management's beliefs and expectationsbased on information currently available and may contain the words"expect," "estimate," "project,""anticipate," "should," "intend,""probability," "risk," "target," and similarexpressions.  These forward-lookingstatements are inherently subject to significant risks and uncertainties,including but not limited to:  changesin general economic and financial market conditions, the Corporation's abilityto effectively carry out its business plans, changes in regulatory orlegislative requirements, changes in competitive conditions and continuingconsolidation of the financial services industry.  Although management believes the expectations reflected in suchforward-looking statements are reasonable, actual results could differmaterially.  Readers are cautioned notto place undue reliance on these forward-looking statements, which reflectmanagement's analysis only as of the date hereof.  The Corporation undertakes no obligation to publicly revise orupdate these forward-looking statements to reflect events or circumstances thatarise after the date hereof.

Net income for the first three months of 2003 was $13.3 million reflecting anincrease of $5.7 million compared to 2002 results of $7.6 million.  Net income for the 2002 period included an$8.0 million litigation settlement ($5.2 million net of tax) while the 2003period includes a partial recovery from insurance for that claim in the amountof $610 thousand ($397 thousand net of tax). This settlement related to a lender liability action filed in 1994against one of the Corporation's subsidiary banks and followed an adversepre-trial judgment by the trial judge on procedural grounds.  The first quarter of 2003 includessecurities gains of $2.2 million compared to securities gains of $39 thousandfor the first quarter of 2002.  Dilutedearnings per share were $0.23 for the first quarter of 2003 compared to $0.13for the first quarter of 2002.  

 

Thefollowing is an analysis of the impact of changes in net income on dilutedearnings per share:

| Net  income per share, prior year     | $      | 0.13        |
|---------------------------------------|--------|------------------|
|                                  |   |             |
| Increase  (decrease) from changes in: |   |             |
|  Net  interest income            |   | (0.03)           |
|  Provision  for credit losses    |   | (0.01)           |
|  Security  transactions          |   | 0.04        |
|  Other  income                   |   | 0.01        |
|  Salaries  and employee benefits |   | (0.01)           |
|  Litigation  settlement          |   | 0.15        |
|  Applicable  income taxes        |   | (0.05)           |
|                                  |   |             |
| Net  income per share                 | $      |  0.23  |

12

 FIRST COMMONWEALTH FINANCIAL CORPORATION ANDCONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS(continued)**First Three Months of 2003 as Compared to theFirst Three Months of 2002**(continued)Return on average assets was 1.19% and return on average equity was 13.15% forthe first quarter of 2003 compared to 0.68% and 8.09%, respectively, for thefirst quarter of 2002.Net interest income, the most significant component of earnings, is the amountby which interest income generated from earning assets exceeds interest expenseon liabilities.  Net interest incomedeclined $1.2 million for the first quarter of 2003 compared to the firstquarter of 2002, primarily as earning asset yields declined faster than fundingcosts.  Net interest margin (netinterest income, on a tax-equivalent basis, as a percentage of average earningassets) was 3.78% for the three months of 2003 compared to 3.82% for the threemonths of 2002.  Continued low ordeclining interest rates would tend to further strain net interest income dueto low reinvestment rates and accelerated prepayments of certain loans andinvestments.The following table shows the effect of changes in volumes and rates oninterest income and interest expense:

| Analysis  of Changes in Net Interest Income  (dollar amounts in thousands) |
|----------------------------------------------------------------------------|
|                                                                       | 2003 Change From 2002 |
|                                                                       | TotalChange | Change Due  To Volume | Change DueTo Rate |
| Interest-earning  assets:                                                  |   |   |   |   |   |   |
|   Time  deposits with banks                                      | $ | (5) |     $ | (2) |     $ | (3) |
|   Securities                                                     |   | (4,901) |   | (1,475) |   | (3,426) |
|   Federal  funds sold                                            |   | (2) |   | (2) |   | -0- |
|   Loans                                                          |   | (3,298) |   |    253  |   | (3,551) |
|     Total  interest income                             |   | (8,206) |   | (1,226) |   | (6,980) |
| Interest-bearing  liabilities:                                             |   |   |   |   |   |   |
|   Deposits                                                       |   | (5,524) |   | (465) |   | (5,059) |
|   Short-term  borrowings                                         |   | (213) |   | 278  |   | (491) |
|   Long-term  debt                                                |   | (1,273) |   | (1,263) |   |    (10) |
|     Total  interest expense                            |   | (7,010) |   | (1,450) |   | (5,560) |
|       Net  interest income                   | $ | (1,196) | $ |    224  | $ | (1,420) |

 

Interestand fees on loans declined $3.3 million for the first quarter of 2003 comparedto 2002 levels as loan yields declined in the lower interest rateenvironment.  The total yield on loansfor the first quarter of 2003 was 6.70%, compared to loan yields of 7.30% forthe first quarter of 2002.  Averageloans for the first three months of 2003 rose $64.1 million compared toaverages for the first three months of 2002 as increases in commercial loans,municipal loans and indirect installment loans were partially offset bydecreases in average mortgage loans. The Corporation13

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS(continued)**First Three Months of 2003 as Compared to theFirst Three Months of 2002**(continued)has continued to capitalize on lending opportunities with small to mid-sizedcommercial borrowers, including loans generated through its preferred SmallBusiness Administration ("SBA") lender status.  The Corporation was one of the top smallbusiness lenders in Pennsylvania during the past two years.  The Corporation continues to take advantageof the lower interest rate cycle to change the mix of its loan portfolio.  Average mortgage loans declined during 2003as consumers refinanced their loans at near record levels.  The Corporation continued to offercompetitive mortgage loans but generally sold them immediately afterorigination along with the related servicing rights.Interest income on investments declined $4.9 million for the first quarter of2003 compared to the first quarter of 2002 reflecting decreases due to interestrates of $3.4 million combined with decreases due to investment volumes of $1.5million.  Total yield on investments was5.29% for the first three months of 2003 compared to 6.14% for the same periodof 2002.  Declines in interest incomedue to rate for U.S. government agency securities were $2.9 million as yieldson U.S. government agency securities decreased 112 basis points (1.12%) for the2003 period compared to the corresponding period of 2002.  Average investments for the first quarter of2003 included decreases in average U.S. government agencies of $51.2 millionand average asset backed securities of $73.3 million which reduced interestincome for the first quarter of 2003 by $760 thousand and $1.1 million comparedto 2002 levels.Interest on deposits dropped $5.5 million for the 2003 period compared to 2002primarily due to decreases in interest expense due to interest rates of $5.1million.  Deposit costs were 2.09% forthe first quarter of 2003 compared to 2.80% for the first quarter of 2002.  The rate on savings deposits fell 48 basispoints (0.48%) resulting in a decrease to interest expense of $1.3 million forthe first three months of 2003 compared to the first three months of 2002.  The rate on time deposits for 2003 alsodeclined, down 94 basis points (0.94%) compared to 2002 levels, resulting in adecrease to interest expense of $3.7 million for the first quarter of2003.  Interest on deposits alsoreflected decreases due to volumes for 2003 as average deposits for the firstquarter of 2003 declined $19.7 million compared to the first quarter of2002.  The Corporation's deposit mixalso changed for the first quarter of 2003 as clients registered a preferencefor savings deposits during continuing economic uncertainties.  Average savings deposits increased $73.2million for 2003 compared to 2002 averages while average time deposits dropped$70.9 million over the same time frame. During its management of deposit levels and mix the Corporationcontinues to evaluate the cost of time deposits compared to alternative fundingsources as it balances its goals of providing clients with the competitiverates they are looking for while also minimizing the Corporation's cost offunds.

14

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS(continued)**First Three Months of 2003 as Compared to theFirst Three Months of 2002**(continued)Interest expense on short-term borrowings decreased $213 thousand for the threemonths of 2003 compared to the three months of 2002 as decreases in interestexpense due to rate of $491 thousand were partially offset by increases ininterest expense due to volume of $278 thousand compared to 2002 levels.  The cost of short-term borrowings for the2003 period decreased by 47 basis points (0.47%) compared to 2002 costs of1.87%.  The average balance ofshort-term borrowings for the first quarter of 2003 increased by $66.2 millionover averages for the prior year, primarily as a result of increasedutilization of short-term borrowing from the Federal Home Loan Bank.Interest expense on long-term debt decreased $1.3 million for the first quarterof 2003 compared to the corresponding period of 2002, primarily as a result ofvolume decreases.  Average long-termdebt for the three months of 2003 decreased by $90.0 million compared to 2002averages.The provision for credit losses is an amount added to the allowance againstwhich credit losses are charged.  Theamount of the provision is determined by management based upon its assessmentof the size and quality of the loan portfolio and the adequacy of the allowancein relation to the risks inherent within the loan portfolio.  The provision for credit losses was $3.5million for the three months of 2003 compared to $2.9 million for the threemonths of 2002.  Net charge-offs againstthe allowance for credit losses were $2.6 million, reflecting a decrease of$361 thousand compared to net charge-offs for the 2002 period.  The most significant components of thisyear-to-year change were decreases in the following categories: residentialmortgages (down $95 thousand), commercial loans not secured by real estate(down $411 thousand) and loans to individuals (down $408 thousand.)  These decreases in net charge-offs for thefirst quarter of 2003 were partially offset by increases in net charge-offs forconstruction loans and commercial real estate loans of $377 thousand and $248thousand, respectively compared to the corresponding period of 2002.  Net charge-offs as a percent of averageloans outstanding were 0.10% for the first quarter of 2003 compared to 0.12%for the first quarter of 2002.  Theprovision for credit losses as a percent of net charge-offs was 131.31% atMarch 31, 2003 compared to 102.85% at December 31, 2002 and 97.36% at March 31,2002.  See the "Credit Review"section for any analysis of the quality of the loan portfolio.15

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS(continued)**First Three Months of 2003 as Compared to theFirst Three Months of 2002**(continued)Below is an analysis of the consolidated allowance for credit losses for thethree month periods ended March 31, 2003 and 2002:

|                                                | 2003                   | 2002                            |
|-----------------------------------------------------|------------------------|---------------------------------|
|                                                | (amounts in thousands) |
|                                                |                   |                            |   |   |
| Balance  January 1,                                 | $                      | 34,496                          |   $ | 34,157 |
| Loans  charged off:                                 |                   |                            |   |   |
|   Commercial,  financial and agricultural |                   | 1,268                           |   | 1,231 |
|   Real  estate-construction               |                   | 378                             |   | 1 |
|   Real  estate-commercial                 |                   | 419                             |   | 171 |
|   Real  estate-residential                |                   | 336                             |   | 434 |
|   Loans  to individuals                   |                   | 659                             |   | 1,199 |
|   Lease  financing receivables            |                   |    114           |   |    144 |
|                                                |                   |                            |   |   |
|     Total  loans charged off    |                   |  3,174                     |   |  3,180 |
|                                                |                   |                            |   |   |
| Recoveries  of previously charged off loans:        |                   |                            |   |   |
|   Commercial,  financial and agricultural |                   | 368                             |   | 34 |
|   Real  estate-construction               |                   | 0                               |   | 0 |
|   Real  estate-commercial                 |                   | 0                               |   | 0 |
|   Real  estate-residential                |                   | 0                               |   | 3 |
|   Loans  to individuals                   |                   | 171                             |   | 147 |
|   Lease  financing receivables            |                   |      0 |   |      0 |
|                                                |                   |                            |   |   |
|     Total  recoveries           |                   |    539           |   |    184 |
|                                                |                   |                            |   |   |
|     Net  charge offs            |                   |  2,635                     |   |  2,996 |
|                                                |                   |                            |   |   |
| Provision  charged to operations                    |                   |  3,460                     |   |  2,917 |
|                                                |                   |                            |   |   |
| Balance  March 31,                                  | $                      | 35,321                          | $ | 34,078 |

 

Netsecurities gains were $2.2 million during the first three months of 2003compared to $39 thousand for the first three months of 2002.  Securities gains during the 2003 periodresulted primarily from the sale of fixed rate corporate bonds classified assecurities "available for sale" with book values of $34.5 million andPennsylvania bank stocks with book values of $1.1 million.  The corporate bonds sold during 2003 had anaverage remaining life of one year and the proceeds were reinvested inadjustable rate trust preferred securities with maturities of 30 years andmortgage backed securities with an average life of 3.6 years.  This reinvestment strategy was initiated topartially mitigate the Corporation's exposure to low and declining interestrates.16

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS(continued) **First Three Months of 2003 as Compared to theFirst Three Months of 2002**(continued)Trust income for the first quarter of 2003 was relatively stable when comparedto the first quarter of 2002 and although fee revenue continues to benegatively impacted by low market values, the enhanced referral programs andintegrated growth plans for financial affiliates that have been initiated havehelped to offset this trend.  TheCorporation's continued success in building relationships with commercialclients provides fee based affiliates with additional sales opportunitiesthrough 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 providingcomprehensive financial services offerings.Service charges on deposits are the Corporation's most significant component ofnon-interest income and increased $156 thousand for the first three months of2003 compared to the corresponding period of 2002.  Increases in insufficient funds fees "NSF" of $353 thousandfor the first quarter of 2003 were partially offset by decreases in selectedfees related to certain transaction accounts compared to 2002 levels.  Management strives to implement reasonablefees for services and closely monitors collection of those fees.Insurance commissions fell $59 thousand for the 2003 period as decreases inannuity and credit insurance revenues were larger than the increases that weregenerated in all other insurance categories. As part of the previously discussed TSFM process the Corporation'sinsurance subsidiary will continue to have expanded opportunities to meet theinsurance needs of commercial clients. In addition, the Corporation has developed "FOCUS" a financialplanning tool designed to help clients prioritize and assess their financialneeds.  The "FOCUS" concept resultsin a systematic approach covering a wide range of personal financial goalsincluding appropriate insurance coverage.Other income for the first three months of 2003 rose $441 thousand from the$2.5 million reported for the first three months of 2002.  Other income for the first quarter of 2003included increases in STAR interchange fees, merchant discount and gains onsale of mortgages of $387 thousand, $198 thousand and $109 thousand,respectively versus 2002 results.  Otherincome for the 2003 period included decreases in debit card interchange fees,and gains on sale of foreclosed property.17

 FIRST COMMONWEALTH FINANCIAL CORPORATION AND CONSOLIDATEDSUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS(continued)**First Three Months of 2003 as Compared to theFirst Three Months of 2002**(continued)Noninterest expense was $27.8 million for the three months of 2003 reflecting adecrease of $7.6 million from the 2002 level of $35.4 million, primarilyreflecting the effects of the previously mentioned litigation settlement.  The 2002 period includes the $8.0 millionlitigation charge while the 2003 period includes a $610 thousand recovery frominsurance coverage related to the settlement. Employee costs were $15.3 million for the first three months of 2003,representing an increase of $692 thousand over 2002 levels.  Salary costsfor the first quarter of 2003 increased $302 thousand or 2.7% compared to 2002levels of $11.2 million.  Salary costsfor 2003 include on-going savings resulting from the merger of theCorporation's banking subsidiaries under one charter and the consolidation ofsupport functions which caused some staff positions to be eliminated during2002.  These staffing reductions werepart of the corporate restructuring initiative which also provided severancebenefits to affected employees. Severance costs were expensed as incurred during 2002 while monthly cashpayments for some individuals continue during 2003.  Employee benefit costs rose $390 thousand or 11.4% for the firstquarter of 2003 with the largest increase being hospitalization costs, whichwere up $257 thousand or 21.7%.  TheCorporation continues to evaluate its current menu of employee benefits toprovide a competitive benefits package while also managing costs.  Current benefit options include coveragesfully paid for by the employer, as well as voluntary benefits whereby employeeshave the option of purchasing additional benefits at reduced group rates.Net occupancy expense increased $288 thousand for the first quarter of 2003 andincluded increases in building repairs and maintenance, utilities and netrental expense compared to 2002 costs. Much of these increases were due to increased utility costs and snowremoval expenses resulting from the harsh winter.  The Corporation is actively evaluating its branch deliverynetwork to optimize client service in existing branches and to continueexpansion into growth markets.  Theexecution of these initiatives may impact occupancy and other expenses infuture periods.  Increases in furnitureand equipment expenses of $154 thousand for the first quarter of 2003 resultedprimarily from increases in computer software depreciation and softwaremaintenance combined with increases in depreciation on furniture and equipment18

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (continued)**First Three Months of 2003 as Compared to theFirst Three Months of 2002**(continued)Other operating expenses for the 2003 period were $6.9 million reflecting adecrease of $232 thousand (3.2%) from the 2002 amount of $7.2 million.  The first three months of 2003 includeddecreases in loss on sale of assets (primary lease vehicles), otherprofessional fees and telephone expenses of $144 thousand, $191 thousand and$160 thousand, respectively compared to 2003 costs.  Directors' fees for the 2003 period reflected decreases of $118thousand resulting from the restructuring of the Corporation's Boards ofDirectors and committees during 2002. The first quarter of 2003 included an increase in charge cardinterchange charges of $174 thousand compared to the first quarter of2002.  Advertising and promotion costsfor 2003 reflected increases totaling $189 thousand, primarily as a result ofcontinued promotion of the Corporation's brand and identity launched during thefourth quarter of 2002, as well as on-going marketing campaigns for freechecking products introduced during 2002. These free checking products are expected to have a favorable impact ondeposit costs and service charge revenue in future periods as well as providingpotential add on sales of other financial products and services.Income tax expense increased $2.9 million for the first quarter of 2003compared to the first quarter of 2002. The 2002 period included a $2.8 million tax effect related to the $8.0million litigation settlement recorded during 2002.  The Corporation's effective tax rate was 20.3% for the firstthree months of 2003 compared to 5.4% for the corresponding period of 2002.LIQUIDITYLiquidity is a measure of the Corporation's ability to efficiently meet normalcash flow requirements of both borrowers and depositors.  In the ordinary course of business, fundsare generated from the banking subsidiary's core deposit base and the maturityor repayment of earning assets such as securities and loans.  As an additional secondary source,short-term liquidity needs may be provided through the use of overnight Federalfunds purchased, borrowings through use of lines available for repurchaseagreements, and borrowings from the Federal Reserve Bank.  Additionally, the banking subsidiary is amember of the Federal Home Loan Bank and may borrow under overnight and termborrowing arrangements.  The sale ofearning assets may also provide an additional source of liquidity.  In addition to the previously describedfunding sources, the Corporation also has the ability to access the capitalmarkets.Liquidity risk stems from the possibility that the Corporation may not be ableto meet current or future financial obligations, or the Corporation may becomeoverly reliant on alternative funding sources. The Corporation maintains a liquidity management policy to manage thisrisk.  This policy identifies theprimary sources of liquidity, establishes procedures for

19

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

LIQUIDITY (continued)monitoring and measuring liquidity and quantifies minimum liquidityrequirements which comply with regulatory requirements.  The policy also includes a liquiditycontingency plan to address funding needs to maintain liquidity under a varietyof business conditions.  TheCorporation's liquidity position is monitored by the Asset/Liability ManagementCommittee ("ALCO").At March 31, 2003 total earning assets were $4,340.4 million, up from the$4,291.2 million recorded at December 31, 2002.  Net loans increased $40.4 million for the first three months of2003 as commercial loans increased by $38.2 million and municipal loansincreased by $25.1 million compared to year-end 2002, while loans toindividuals increased by $8.2 million over the same time frame.  The first quarter of 2003 reflecteddecreases of $31.1 million in residential real estate loans, due in part to thecontinued run-off of the existing portfolio and sale of new loan production asthe Corporation continues to change its loan mix.  The Corporation's auto lease portfolio also continues to declineas focus shifts from indirect leasing to indirect lending activities.  Total deposits increased $103.0 million forthe first three months of 2003 as increases in time deposits of $112.9 millionand total savings deposits of $3.1 million were partially offset by decreasesin demand deposits of $13.0 million compared to year-end 2002.  Included in time deposits for the firstquarter of 2003 were $100 million of brokered deposits with a weighted averageterm of 27 months.  Proceeds from theissuance of brokered deposits were utilized to pay down short-term borrowings,which declined $60.3 million during the first quarter of 2003 to $408.7 millionat March 31, 2003.Marketable securities that the Corporation holds in its investment portfolioare an additional source of liquidity. These securities are classified as "securities available forsale" and while the Corporation does not have specific intentions to sellthese securities they have been designated as "available for sale"because they may be sold for the purpose of obtaining future liquidity, formanagement of interest rate risk or as part of the implementation of taxmanagement strategies.  As of March 31,2003, securities available for sale had an amortized cost of $1,477.3 millionand an approximate fair value of $1,518.0 million.**Interest Sensitivity**Market risk is the risk of loss arising from adverse changes in the fair valueof financial instruments due to changes in interest rates, currency exchangerates or equity prices.  TheCorporation's market risk is composed primarily of interest rate risk.  Interest rate risk results principally fromtiming differences in the repricing of assets and liabilities, changes in therelationship of rate indices and the potential exercise of free standing orembedded options.20

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

**Interest Sensitivity** (continued)****The objective of interest rate sensitivity management is to maintain anappropriate balance between the stable growth of income and the risksassociated with maximizing income through interest sensitivity imbalances.  While no single number can accuratelydescribe the impact of changes in interest rates on net interest income,interest rate sensitivity positions, or "gaps", when measured over avariety of time periods, may be helpful.An asset or liability is considered to be interest-sensitive if the rate ityields or bears is subject to change within a predetermined time period.  If interest-sensitive assets("ISA") exceed interest-sensitive liabilities ("ISL")during the prescribed time period, a positive gap results.  Conversely, when ISL exceed ISA during atime period, a negative gap results.The cumulative gap at the 365 day repricing period was negative in the amountof $156.4 million or 3.42% of total assets at March 31, 2003.  A positive gap tends to indicate thatearnings will be impacted favorably if interest rates rise during the periodand negatively when interest rates fall during the time period.  A negative gap tends to indicate thatearnings will be affected inversely to interest rate changes.  In other words, as interest rates fall, anegative gap should tend to produce a positive effect on earnings, and wheninterest rates rise, a negative gap should tend to affect earnings negatively.The primary components of ISA include adjustable rate loans and investments,loan repayments, investment maturities and money market investments.  The primary components of ISL includematurity certificates of deposit, money market deposits, savings deposits, NOWaccounts and short-term borrowings.21

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

**Interest Sensitivity** (continued)** **The following table lists the amounts and ratios of assets andliabilities with rates or yields subject to change within the periods indicatedas of March 31, 2003, and December 31, 2002 (dollar amounts in thousands):

|                                             | March  31, 2003                  |
|--------------------------------------------------|----------------------------------|
|                                             | 0-90  Days   | 91-180  Days   | 181-365  Days   | Cumulative0-365 Days |
| Loans                                            | $                                | 1,015,538  | $ | 150,085  | $ | 305,799  | $ | 1,471,422  |
| Investments                                      |                             | 329,697  |   | 155,524  |   | 243,269  |   | 728,490  |
| Other interest-earning assets                    |                             |     1,880  |   |       0  |   |       0  |   |     1,880  |
|                                             |                             |   |   |   |   |   |   |   |
|   Total interest-sensitive assets      |                             | 1,347,115  |   | 305,609  |   | 549,068  |   | 2,201,792  |
|                                             |                             |   |   |   |   |   |   |   |
| Certificates of deposit                          |                             | 255,812  |   | 160,025  |   | 355,135  |   | 770,972  |
| Other deposits                                   |                             | 1,175,628  |   | 0  |   | 0  |   | 1,175,628  |
| Borrowings                                       |                             |   409,572  |   |     562  |   |   1,499  |   |   411,633  |
|                                             |                             |   |   |   |   |   |   |   |
|   Total interest-sensitive liabilities |                             | 1,841,012  |   | 160,587  |   | 356,634  |   | 2,358,233  |
|                                             |                             |   |   |   |   |   |   |   |
| Gap                                              | $                                |  (493,897) | $ | 145,022  | $ | 192,434  | $ |  (156,441) |
|                                             |                             |   |   |   |   |   |   |   |
| ISA/ISL                                          |                             | 0.73  |   | 1.90  |   | 1.54  |   | 0.93  |
| Gap/Total assets                                 |                             | 10.79% |   | 3.17% |   | 4.21% |   | 3.42% |
|                                             |                             |   |   |   |   |   |   |   |
|                                             | December  31, 2002               |
|                                             | 0-90  Days   | 91-180  Days   | 181-365  Days   | Cumulative0-365 Days |
| Loans                                            | $                                | 962,398  |  $ | 157,172  |  $ | 295,273  |  $ | 1,414,843  |
| Investments                                      |                             | 292,206  |   | 162,578  |   | 262,287  |   | 717,071  |
| Other interest-earning assets                    |                             |     1,973  |   |       0  |   |       0  |   |     1,973  |
|                                             |                             |   |   |   |   |   |   |   |
|   Total interest-sensitive assets      |                             | 1,256,577  |   | 319,750  |   | 557,560  |   | 2,133,887  |
|                                             |                             |   |   |   |   |   |   |   |
| Certificates of deposits                         |                             | 354,625  |   | 170,687  |   | 263,882  |   | 789,194  |
| Other deposits                                   |                             | 1,172,538  |   | 0  |   | 0  |   | 1,172,538  |
| Borrowings                                       |                             |   469,735  |   |     905  |   |   1,483  |   |   472,123  |
|                                             |                             |   |   |   |   |   |   |   |
|   Total interest-sensitive liabilities |                             | 1,996,898  |   | 171,592  |   | 265,365  |   | 2,433,855  |
|                                             |                             |   |   |   |   |   |   |   |
| Gap                                              | $                                |  (740,321) | $ | 148,158  | $ | 292,195  | $ |  (299,968) |
|                                             |                             |   |   |   |   |   |   |   |
| ISA/ISL                                          |                             | 0.63  |   | 1.86  |   | 2.10  |   | 0.88  |
| Gap/Total assets                                 |                             | 16.36% |   | 3.27% |   | 6.46% |   | 6.63% |

22

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

**Interest Sensitivity** (continued)Although the periodic gap analysis provides management with a method ofmeasuring current interest rate risk, it only measures rate sensitivity at aspecific point in time, and as a result may not accurately predict the impactof changes in general levels of interest rates or net interest income.  This is exemplified as the gap analysisshows the Corporation's earnings to be negatively impacted by rising rates, butcomputer modeling indicates that rising rates would have a favorable impact on earnings.  Therefore, to more precisely measure theimpact of interest rate changes on the Corporation's net interest income,management simulates the potential effects of changing interest rates throughcomputer modeling.  The incomesimulation model used by the Corporation captures all assets, liabilities, andoff-balance sheet financial instruments, accounting for significant variablesthat are believed to be affected by interest rates.  These variables include prepayment speeds on mortgage loans andmortgage backed securities, cash flows from loans, deposits and investments andbalance sheet growth assumptions.  Themodel also captures embedded options, such as interest rate caps/floors or calloptions, and accounts for changes in rate relationships as various rate indiceslead or lag changes in market rates. The Corporation is then better able to implement strategies which wouldinclude an acceleration of a deposit rate reduction or lag in a deposit rateincrease.  The repricing strategies forloans would be inversely related.The Corporation's asset/liability management policy guidelines limit interestrate risk exposure for the succeeding twelve month period.  Simulations are prepared under the base casewhere interest rates remain flat and most likely case where interest rates aredefined using projections of economic factors. Additional simulations are produced estimating the impact on netinterest income of a 300 basis point (3.00%) movement upward or a 100 basispoint 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 riskbelow the established maximum level. The analysis at March 31, 2003 indicated that a 300 basis point (3.00%)increase in interest rates would increase net interest income 318 basis points(3.18%) above the base case scenario and a 100 basis point (1.00%) decline ininterest rates would decrease net interest income by 315 basis points (3.15%)below the base case scenario, over the next twelve months, both within policylimits.The Corporation's "Asset/Liability Management Committee"("ALCO") is responsible for the identification, assessment andmanagement of interest rate risk exposure, liquidity, capital adequacy andinvestment portfolio position.  Theprimary objective of the ALCO process is to ensure that the Corporation'sbalance sheet structure maintains prudent levels of risk within the context ofcurrently known and forecasted economic conditions and to establish strategieswhich provide the Corporation with appropriate compensation for the assumptionof those risks.  The ALCO attempts tomitigate interest rate risk through the use of strategies such as asset sales,asset and liability pricing and matched maturity funding.  The ALCO23

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

**Interest Sensitivity** (continued)strategies are established by the Corporation's senior management.  The ALCO continues to evaluate the use ofderivative instruments to protect against the risk of adverse price or interestrate movements on the values of certain assets and liabilities, although noneare being utilized currently.  CREDIT REVIEWThe following table identifies amounts of loan losses and nonperformingloans.  Past due loans are those whichwere contractually past due 90 days or more as to interest or principalpayments but are well secured and in the process of collection.  Renegotiated loans are those loans whichterms have been renegotiated to provide a reduction or deferral of principal orinterest as a result of the deteriorating financial position of the borrowerand are in compliance with the restructured terms.

 

|                                                                         | At March 31,           |
|------------------------------------------------------------------------------|------------------------|
|                                                                         | 2003                   | 2002 |
|                                                                         | (amounts in thousands) |
| Nonperforming  Loans:                                                        |                   |   |   |   |
|                                                                         |                   |   |   |   |
|   Loans  on nonaccrual basis                                       | $                      | 22,982  |   $ | 24,589  |
|   Past  due loans                                                  |                   | 13,007  |   | 15,594  |
|   Renegotiated  loans                                              |                   |       205  |   |       827  |
|                                                                         |                   |   |   |   |
|     Total  Nonperforming loans                           | $                      |    36,194  | $ |    41,010  |
|                                                                         |                   |   |   |   |
| Other  real estate owned                                                     | $                      | 1,862  | $ | 2,106  |
|                                                                         |                   |   |   |   |
| Loans  outstanding at end of period                                          | $                      | 2,649,872  | $ | 2,587,925  |
|                                                                         |                   |   |   |   |
| Average  loans outstanding (year-to-date)                                    | $                      | 2,633,040  | $ | 2,568,911  |
|                                                                         |                   |   |   |   |
| Nonperforming  loans as percent of total loans                               |                   | 1.37% |   | 1.58% |
|                                                                         |                   |   |   |   |
| Provision  for credit losses                                                 | $                      | 3,460  | $ | 2,917  |
|                                                                         |                   |   |   |   |
| Net  charge-offs                                                             | $                      | 2,635  | $ | 2,996  |
|                                                                         |                   |   |   |   |
| Net  charge-offs as a percent of average loans outstanding                   |                   | 0.10% |   | 0.12% |
|                                                                         |                   |   |   |   |
| Provision  for credit losses as a percent of net charge-offs                 |                   | 131.31% |   | 97.36% |
|                                                                         |                   |   |   |   |
| Allowance  for credit losses as a percent of average loans outstanding       |                   | 1.34% |   | 1.33% |
|                                                                         |                   |   |   |   |
| Allowance  for credit losses as a percent of end-of-period loans outstanding |                   | 1.33% |   | 1.32% |
|                                                                         |                   |   |   |   |
| Allowance  for credit losses as a percent of nonperforming loans             |                   | 97.59% |   | 83.10% |
|                                                                         |                   |   |   |   |
|                                                                         |                   |   |   |   |

24

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

CREDIT REVIEW (continued)The Corporation considers a loan to be impaired when, based on currentinformation and events, it is probable that the Corporation will be unable tocollect principal or interest due according to the contractual terms of theloan.  Loan impairment is measured basedon the present value of expected cash flows discounted at the loan's effectiveinterest rate or, as a practical expedient, at the loan's observable marketprice or the fair value of the collateral if the loan is collateraldependent.  Payments received onimpaired loans are applied against the recorded investment in the loan.  For loans other than those that theCorporation expects repayment through liquidation of the collateral, when theremaining recorded investment in the impaired loan is less than or equal to thepresent value of the expected cash flows, income is recorded on a cashbasis.  Impaired loans include loans ona nonaccrual basis and renegotiated loans.The following table identifies impaired loans, and information regarding therelationship of impaired loans to the reserve for credit losses at March 31,2003 and March 31, 2002:

|                                                                              | 2003                   | 2002   |
|-----------------------------------------------------------------------------------|------------------------|--------|
|                                                                              | (amounts in thousands) |
|                                                                              |                   |   |   |   |
| Recorded  investment in impaired loans at end    of period                   |  $                | 23,187 |   $ | 25,416 |
|                                                                              |                   |   |   |   |
| Year  to date average balance of impaired loans                                   | $                      | 23,266 | $ | 24,532 |
|                                                                              |                   |   |   |   |
| Allowance  for credit losses related to    impaired loans                    | $                      | 5,791  | $ | 4,480 |
|                                                                              |                   |   |   |   |
| Impaired  loans with an allocation of the   allowance for credit losses      | $                      | 15,675 | $ | 13,816 |
|                                                                              |                   |   |   |   |
| Impaired  loans with no allocation of the allowance   for credit losses | $                      | 7,512  | $ | 11,600 |
|                                                                              |                   |   |   |   |
| Year  to date income recorded on impaired loans    on a cash basis           | $                      | 140    | $ | 134 |

Other than those described above, there are no material credits that managementhas serious doubts as to the borrower's ability to comply with the present loanrepayment terms.  Additionally, theportfolio is well diversified and as of March 31, 2003, there were nosignificant concentrations of credit.Nonperforming loans at March 31, 2003 decreased $4.8 million compared to 2002levels as nonaccrual loans, past due loans and renegotiated loans decreasedcompared to March 31, 2002.  Thedecrease in nonaccrual loan levels of $1.6 million included decreases innonaccrual commercial loans which were partially offset by increases innonaccrual commercial loans secured by residential real estate.  Nonaccrual loans include two 25

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

CREDIT REVIEW (continued)significant credits in both periods. The largest credit ($6.1 million) carries an 80% guaranty of a U.S.government agency.  While a sale of theunderlying assets is pending, delays with the bankruptcy court would result inthe final sale and resolution of the remaining balance occurring in the thirdquarter of 2003.  The second creditwhich was $3.1 million at March 31, 2003, continues to be resolved through theliquidation of collateral and exercising other remedies.  While final resolution of this credit isuncertain, management's estimate of the potential loss on this credit isreserved.Past due loans for the 2003 period decreased $2.6 million compared to thecorresponding period of 2002 and included decreases in all majorcategories.  Renegotiated loans alsofell, decreasing by $622 thousand for the 2003 period.  Nonperforming loans as a percent of totalloans was 1.37% at March 31, 2003 compared to 1.47% at December 31, 2002, and1.58% at March 31, 2002, while the allowance for credit losses as a percent ofnonperforming loans was 97.59%, 89.76% and 83.10%, respectively for the sameperiods.The Corporation's loan portfolio continues to be monitored by senior managementto identify potential portfolio risks and detect potential credit deteriorationin the early stages.  This processincludes close monitoring of watchlist credits for workout progress ordeterioration, as well as evaluating the status of significant nonperformingcredits and loan loss adequacy.  Creditrisk is mitigated during the loan origination process through the use of soundunderwriting policies and collateral requirements.The Corporation maintains an allowance for credit losses at a level deemedsufficient to absorb losses which are inherent in the loan and lease portfoliosat each balance sheet date.  Managementreviews the adequacy of the allowance on a quarterly basis to ensure that theprovision for credit losses has been charged against earnings in an amountnecessary to maintain the allowance at a level that is appropriate based onmanagement's assessment of probable estimated losses.  The Corporation's methodology for assessing the appropriatenessof the allowance for credit losses consists of several key elements.  These elements include a specific allowancefor primary watch list classified loans, a formula allowance based onhistorical trends, an additional allowance for special circumstances and anunallocated allowance.While the Corporation consistently applies a comprehensive methodology andprocedure, allowance for credit loss methodologies incorporate management'scurrent judgments about the credit quality of the loan portfolio, as well ascollection probabilities for problem credits. Although management considers the allowance for credit losses to beadequate based on information currently available, additional allowance forcredit loss  provisions may be necessarydue to changes in management estimates and assumptions about asset impairment,information about borrowers that26

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

CREDIT REVIEW (continued)indicate changes in the expected future cash flows or changes in economicconditions.  The allowance for creditlosses and the provision for credit losses are significant elements of theCorporation's financial statements, therefore management periodically reviewsthe processes and procedures utilized in determining the allowance for creditlosses to identify potential enhancements to these processes, includingdevelopment of additional management information systems to ensure that allrelevant factors are appropriately considered in the allowance analysis.  In addition, the Corporation maintains asystem of internal controls which are independently monitored and tested byinternal audit and loan review staff to ensure that the loss estimation modelis maintained in accordance with internal policies and procedures, as well asgenerally accepted accounting principles. CAPITAL RESOURCESEquity capital stood at $406.7 million at March 31, 2003, an increase of $5.3million compared to December 31, 2002. Dividends declared reduced equity by $9.1 million during the first threemonths of 2003.  The retained net incomeof $4.2 million remained in permanent capital to fund future growth andexpansion.  Payment by the Corporation'sEmployee Stock Ownership Plan ("ESOP") to reduce debt it incurred toacquire the Corporation's common stock for future distribution as employeecompensation, net of fair value adjustments to unearned ESOP shares, increasedequity by $268 thousand.  Amounts paidto fund the discount on reinvested dividends reduced equity by $167 thousandduring the first three months of 2003. The market value adjustment to securities available for sale increasedequity by $608 thousand for the period. Proceeds from the reissuance of treasury shares to fund stock optionsexercised increased equity by $207 thousand during 2003.  Equity capital was also impacted during 2003by an increase of $203 thousand from the reissuance of treasury shares to fundcontingent payments related to the acquisition of First Commonwealth FinancialAdvisors, which occurred during the first quarter of 2002.  This contingent payment of the Corporation'scommon stock was the first of four scheduled annual installments.A strong capital base provides the Corporation with a foundation to expandlending, to protect depositors and to provide for growth while protectingagainst future uncertainties.  Theevaluation of capital adequacy depends on a variety of factors, including assetquality, liquidity, earnings history and prospects, internal controls andmanagement ability.  In consideration ofthese factors, management's primary emphasis with respect to the Corporation'scapital position is to maintain an adequate and stable ratio of equity toassets.The Federal Reserve Board has issued risk-based capital adequacy guidelineswhich are designed principally as a measure of credit risk.  These guidelines require:  (1) at least 50% of a banking organization'stotal capital be common and other "core" equity capital ("Tier ICapital"); (2) assets and off-balance-sheet items be weighted according torisk; (3) the total capital to risk-weighted assets ratio be at least 8%; and(4) a minimum leverage ratio of Tier I capital to average total assets.27

FIRST COMMONWEALTH FINANCIAL CORPORATIONAND CONSOLIDATED SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

CAPITAL RESOURCES (continued)

The minimum leverage ratio is not specifically defined, but is generallyexpected to be 3-5 percent for all but the most highly rated banks, asdetermined by a regulatory rating system.The table below presents the Corporation's capital position at March 31, 2003:

 

|                          | Amount(in thousands) |         | Percent ofAdjusted Assets |
|-------------------------------|----------------------|--------------|---------------------------|
| Tier  I Capital               | $  407,038 |    | 12.7%                     |
| Risk-Based  Requirement       | 127,787              |         | 4.0                  |
|                          |                 |         |                      |
| Total  Capital                | 442,359              |         | 13.9                 |
| Risk-Based  Requirement       | 255,574              |         | 8.0                  |
|                          |                 |         |                      |
| Minimum  Leverage Capital     | 407,038              |         | 9.0                  |
| Minimum  Leverage Requirement | 135,636              |         | 3.0                  |

For an institution to qualify as well capitalized under regulatory guidelines,Tier I, Total and Leverage Capital ratios must be at least 6.0%, 10.0%, and5.0%, respectively.  At March 31, 2003,the Corporation's banking and trust subsidiaries exceeded those requirements.ITEM 3.  QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISKInformation appearing in Item 2 of this report under the caption "InterestSensitivity" is incorporated herein by reference in response to this item.28

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIES

ITEM 4. CONTROLS AND PROCEDURES(a) Disclosure controls and procedures. Within 90 days before filing this report, we evaluated the effectivenessof the design and operation of our disclosure controls and procedures.  Our disclosure controls and procedures arethe controls and other procedures that we designed to ensure that we record,process, summarize and report in a timely manner the information we mustdisclose in reports that we file with or submit to the SEC.  Joseph E. O'Dell, our President and ChiefExecutive Officer, and John J. Dolan, our Executive Vice President and ChiefFinancial Officer, reviewed and participated in this evaluation.  Based on this evaluation, Messrs. O'Dell andDolan concluded that, as of the date of their evaluation, our disclosurecontrols were effective.(b) Internal controls.  Since the dateof evaluation described above, there have not been any significant changes inour internal accounting controls or in other factors that could significantlyaffect those controls.29

FIRST COMMONWEALTH FINANCIALCORPORATION AND CONSOLIDATED SUBSIDIARIESPART II - OTHER INFORMATION

| ITEM  1. | LEGAL  PROCEEDINGS                                                                                                                                                                                                                                                                                                                                                                                  |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
|     | There  were no material legal proceedings to which the Corporation or its  subsidiaries are a party, or of which any of 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. |
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
| ITEM  2. | CHANGES  IN SECURITIES                                                                                                                                                                                                                                                                                                                                                                              |
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
|     | Not  applicable                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
| ITEM  3. | DEFAULTS  UPON SENIOR SECURITIES                                                                                                                                                                                                                                                                                                                                                                    |
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
|     | Not  applicable                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
| ITEM  4. | SUBMISSION  OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                                                                                                                                                                                                                                                                                                |
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
|     | Not  applicable                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
| ITEM  5. | OTHER  INFORMATION                                                                                                                                                                                                                                                                                                                                                                                  |
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
|     | The  Corporation's Chief Executive Officer and Chief Financial Officer have  furnished to the SEC the certification with respect to this Form 10-Q that is  required by Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                               |
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
| ITEM  6. | EXHIBITS  AND REPORTS ON FORM 8-K                                                                                                                                                                                                                                                                                                                                                                   |
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
|     | (a)  Exhibits                                                                                                                                                                                                                                                                                                                                                                                       |
|     |     Exhibit  10.1 Employment Contract of Johnston A. Glass                                                                                                                                                                                                                                                                                                                      |
|     |     Exhibit  10.2 Change of Control Agreement of Johnston A.        Glass                                                                                                                                                                                                                                                                         |
|     |     Exhibit  10.3 Change of Control Agreement of Thaddeus J.         Clements                                                                                                                                                                                                                                                                     |
|     |     Exhibit  99.1 Chief Executive Officer Certification pursuant        to 18 U.S.C. Section 1350 as adopted  pursuant to Section        906 of the Sarbanes-Oxley Act of 2002                                                                                                                                           |
|     |     Exhibit  99.2 Chief Financial Officer Certification pursuant        to 18 U.S.C. Section 1350 as adopted  pursuant to Section        906 of the Sarbanes-Oxley Act of 2002                                                                                                                                           |
|     |                                                                                                                                                                                                                                                                                                                                                                                                |
|     | (b)  Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                            |
|     |     Form  8-K dated April 17, 2003 reporting the Corporation's       press release announcing its earnings for the three  month      period ended March 31, 2003                                                                                                                                                                             |

30

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, theregistrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.

FIRST COMMONWEALTH FINANCIALCORPORATION(Registrant)

| DATED:  May 13, 2003 | /s/Joseph  E.  O'Dell                                    |
|---------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      | Joseph  E. O'Dell, President and Chief Executive Officer                                                                                                     |
|                      |                                                                                                                                                         |
|                      |                                                                                                                                                         |
|                      |                                                                                                                                                         |
| DATED:  May 13, 2003 | /s/John  J.  Dolan                        |
|                      | John  J. Dolan, Executive Vice President and Chief Financial Officer                                                                                         |

31

**CHIEF EXECUTIVEOFFICER CERTIFICATION**

****

| I,  Joseph E. O'Dell, President and Chief Executive Officer, certify that: |
|----------------------------------------------------------------------------|
|                                                                       |   |
| 1.                                                                         | I  have reviewed this quarterly report on Form 10-Q of First Commonwealth  Financial Corporation; |
|                                                                       |   |
| 2.                                                                         | Based  on my knowledge, this quarterly report does not contain any untrue statement  of a material fact or omit to state a material fact necessary to make the  statements made, in light of the circumstances under which such statements  were made, not misleading with respect to the period covered by this  quarterly report; |
|                                                                       |   |
| 3.                                                                         | Based  on my knowledge, the financial statements, and other financial information  included in this quarterly report, fairly present in all material respects  the financial condition, results of operations and cash flows of the  registrant as of, and for, the periods presented in this quarterly report; |
|                                                                       |   |
| 4.                                                                         | The  registrant's other certifying officers and I are responsible for establishing  and maintaining disclosure controls and procedures (as defined in Exchange  Act Rules 13a-14 and 15d-14) for the registrant and we have: |

| a)     | designed  such disclosure controls and procedures to ensure that material information  relating to the registrant, including its consolidated subsidiaries, is made  known to us by others within those entities, particularly during the period  in which this quarterly report is being prepared; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                |
| b)     | evaluated  the effectiveness of the registrant's disclosure controls and procedures as  of a date within 90 days prior to the filing date of this quarterly report  (the "Evaluation Date"); and                                                                                          |
|   |                                                                                                                                                                                                                                                                                                |
| c)     | presented  in this quarterly report our conclusions about the effectiveness of the  disclosure controls and procedures based on our evaluation as of the  Evaluation Date;                                                                                                                          |

 

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

 

| a)     | all  significant deficiencies in the design or operation of internal controls  which could adversely affect the registrant's ability to record, process,  summarize and report financial data and have identified for the registrant's  auditors any material weaknesses in internal controls; and |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                               |
| b)     | any  fraud, whether or not material, that involves management or other employees  who have a significant role in the registrant's internal controls; and                                                                                                                                           |

32

 

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

 

|      May  13, 2003      | /s/Joseph  E.  O'Dell                   |
|---------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|
|          Date                |            Signature                                                       |
|                                                                      |                                                                                                                              |
|                                                                      | President  and Chief Executive Officer                                                                                            |
|                                                                      |              Title                                               |

33

**CHIEF FINANCIALOFFICER CERTIFICATION**

****

| I,  John J. Dolan, Executive Vice President and Chief Financial Officer, certify  that: |
|-----------------------------------------------------------------------------------------|
|                                                                                    |   |
| 1.                                                                                      | I  have reviewed this quarterly report on Form 10-Q of First Commonwealth  Financial Corporation; |
|                                                                                    |   |
| 2.                                                                                      | Based  on my knowledge, this quarterly report does not contain any untrue statement  of a material fact or omit to state a material fact necessary to make the  statements made, in light of the circumstances under which such statements  were made, not misleading with respect to the period covered by this  quarterly report; |
|                                                                                    |   |
| 3.                                                                                      | Based  on my knowledge, the financial statements, and other financial information  included in this quarterly report, fairly present in all material respects  the financial condition, results of operations and cash flows of the  registrant as of, and for, the periods presented in this quarterly report; |
|                                                                                    |   |
| 4.                                                                                      | The  registrant's other certifying officers and I are responsible for establishing  and maintaining disclosure controls and procedures (as defined in Exchange  Act Rules 13a-14 and 15d-14) for the registrant and we have: |

| a)     | designed  such disclosure controls and procedures to ensure that material information  relating to the registrant, including its consolidated subsidiaries, is made  known to us by others within those entities, particularly during the period  in which this quarterly report is being prepared; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                |
| b)     | evaluated  the effectiveness of the registrant's disclosure controls and procedures as  of a date within 90 days prior to the filing date of this quarterly report  (the "Evaluation Date"); and                                                                                          |
|   |                                                                                                                                                                                                                                                                                                |
| c)     | presented  in this quarterly report our conclusions about the effectiveness of the  disclosure controls and procedures based on our evaluation as of the  Evaluation Date;                                                                                                                          |

 

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

 

| a)     | all  significant deficiencies in the design or operation of internal controls  which could adversely affect the registrant's ability to record, process,  summarize and report financial data and have identified for the registrant's  auditors any material weaknesses in internal controls; and |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                               |
| b)     | any  fraud, whether or not material, that involves management or other employees  who have a significant role in the registrant's internal controls; and                                                                                                                                           |

34

 

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

 

|      May  13, 2003      | /s/John  J.  Dolan                                     |
|------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          Date |                     Signature                                                                                                          |
|                                                       |                                                                                                                                                                                                                                       |
|                                                       | Executive  Vice President and Chief Financial Officer                                                                                                                                                                                      |
|                                                       |                        Title                                                                                            |

35