*** NEWS RELEASE ***

 

TO:                  AllArea News AgenciesFROM:            FirstCommonwealth                         FinancialCorporationDATE:             October23, 2003

For More Information Contact: John Dolan, Executive Vice President and ChiefFinancial Officer, First Commonwealth Financial Corporation, (724) 349-7220

FIRST COMMONWEALTHANNOUNCES THIRD QUARTER EARNINGS

INDIANA, PA - First Commonwealth Financial Corporation (NYSE:FCF) reported netincome of $13.8 million for the third quarter of 2003 which translates into$0.23 basic and diluted earnings per share and compared to $12.2 million netincome and $0.21 basic and diluted earnings per share for the comparable periodin 2002.During the third quarter of 2003, the Corporation sold two branches producing again of $3.1 million (pre-tax). The results of the related quarter of 2002included the effects of a $2.5 million (pre-tax) restructuring charge relatedto employee separation pay and costs associated with amounts paid to retiringdirectors.  These items, net of tax,increased net income in the 2003 period by $2.0 million, and decreased netincome in the 2002 period by $1.6 million.  Return on equity was 13.63% and return on assets was 1.14% for the thirdquarter of 2003 compared to 12.11% and 1.06%, respectively in the 2002 period.Net income for the nine months ended September 30, 2003 was $40.6 million, or$0.69 basic and diluted earnings per share compared to $30.8 million net incomeand $0.53 basic and $0.52 diluted earnings per share for the related period in2002. The nine-month period of 2002 included the effects of an $8.0 million (pre-tax)settlement of litigation and the 2003 period reflects a partial recovery frominsurance for that claim in the amount of $610 thousand (pre-tax).  Additionally, the 2002 period reflects a$5.6 million (pre-tax) restructuring charge and the 2003 period included theabove-mentioned gain on the sale of branches. These items, net of tax, increased income in 2003 by $2.4 million, andreduced net income by $8.8 million in the 2002 period.  Return on equity was 13.26% and return onassets was 1.16% in the nine-month period of 2003 compared to 10.58% and 0.90%respectively, for the 2002 period.

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*Net Interest Income*

Net interest income declined $3.3 million in the third quarter of 2003,primarily as the earning asset yields declined faster than funding costs.  Net interest income, on a fullytax-equivalent basis, as a percentage of average earning assets ("netinterest margin") was 3.31% in the 2003 quarter compared to 3.78% in thethird quarter of 2002.  Net interest income for the nine months of 2003 declined $7.0 million from thesame period of 2002 while net interest margin was 3.52% for the 2003 periodcompared to 3.79% for the 2002 period. The reduction of short-term interest rates tends to reduce rates on loancategories and time deposits, but the non-maturity deposits (savings and NOWaccounts) are already at very low levels. Continued low or declining interest rates would tend to continue tostrain net interest income.  TheCorporation continues to explore strategies to help mitigate any negativeimpact of low interest rates.*Noninterest income*

Net securities gains were minimal in the third quarter of 2003 and 2002while net securities gains were $5.6 million in the first nine months of 2003compared to $641 thousand in the 2002 period. The Corporation sold some debt securities but gains were primarily fromthe sale of equity securities.  The debtsecurities sold in the nine-month period of 2003 were securities available forsale and had an average remaining life of one year and proceeds were reinvestedin securities with an average life of three years to partially mitigate theCorporation's exposure to low and declining interest rates.  Noninterest income, excluding the net securities gains and gains on the branchsale described above, increased $1.2 million in the third quarter of 2003 whencompared to the same quarter of 2002 and increased $2.3 million in the correspondingnine-month periods.  The mostsignificant portion of the remaining increase was primarily driven by depositfee increases and merchant discount fee income.*Noninterest Expense*

Noninterest expense decreased $1.5 million during the 2003 quarter whencompared to the third quarter of 2002, while noninterest expense for the ninemonths of 2003 decreased $12.4 million when compared to the 2002 period,primarily reflecting the effects of the above mentioned litigation settlementand restructuring charges.  The thirdquarter of 2003 reflects a write-off of $529 thousand (pre-tax) as a result ofdonating three branch structures, due to their consolidation into nearbyexisting locations.  The mostsignificant other noninterest expense item that increased was employee benefitcosts with hospitalization costs increasing 23%.*Provision for Credit Losses*

The provision for credit losses increased $392 thousand in the thirdquarter of 2003 when compared to the 2002 related quarter and increased $1.4million for the nine months of 2003 when compared to the comparable 2002period, reflecting management's assessment of its portfolio.  The third quarter of 2003 reflected anincrease of  $305 thousand in netcharge-offs when compared to the 2002 quarter, while net charge-offs for thenine-month period of 2003 increased $342 thousand over the comparable 2002period.

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*Credit quality *

Nonperforming loan levels continue to show improvement at September 30,2003 when compared to September 30, 2002. Nonaccrual loans contained two significant credits that were describedin the 2002 Form 10K and Annual Report. The largest credit ($6.1 million at September 30, 2003) carries an 80%guaranty of a U.S. government agency.  While a sale of the underlying assets is pending, delays with the bankruptcycourt would continue to result in a delay of the final sale and resolution ofthe remaining balance.  The secondcredit, which was $3.0 million at September 30, 2003, continues to be resolvedthrough the liquidation of collateral and exercising other remedies.  While the final resolution of this credit isuncertain, the potential loss on this credit is reserved.  The Corporation believes that the allowancefor credit losses is adequate at this time. Other significant credits are monitored closely.  The uncertain economic conditions present arisk to the company and the industry but management feels that its riskmanagement process is thorough and serves as an early warning system so that anappropriate response will be promptly implemented.First Commonwealth Financial Corporation is a $4.8 billion bank holding companyheadquartered in Indiana, PA.  Itoperates in 17 counties in western and central Pennsylvania through FirstCommonwealth Bank, a Pennsylvania chartered bank.  Financial services and insurance products are also providedthrough First Commonwealth Trust Company, First Commonwealth FinancialAdvisors, Inc. and First Commonwealth Insurance Agency.  The Corporation also operates FirstCommonwealth Systems Corporation, a data processing subsidiary, FirstCommonwealth Professional Resources, Inc., a support services subsidiary, andjointly owns Commonwealth Trust Credit Life Insurance Company, a credit lifereinsurance company.

*Statements contained in this pressrelease that are not historical facts are forward looking statements as thatitem is defined in the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are subjectto risks and uncertainties that could cause actual results to differ materiallyfrom estimates results.  Such risks anduncertainties are detailed in the Corporation's filings with the Securities andExchange Commission.*

 

 

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| FIRST COMMONWEALTH FINANCIAL CORPORATION                                        |                 |                 |       |       |
|---------------------------------------------------------------------------------|----------------------|----------------------|------------|------------|
| CONSOLIDATED SELECTED FINANCIAL DATA                                            |                 |                 |       |       |
| (Dollar Amounts in Thousands, except per share data)                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
|                                                                            | For the  Quarter     | For the  9 Months    |
|                                                                            | Ended  September 30, | Ended  September 30, |
|                                                                            | 2003                 | 2002                 | 2003       | 2002       |
| Interest income                                                                 | $59,605              | $68,784              | $183,108   | $209,185   |
| Interest expense                                                                | 24,616               | 30,457               | 75,832     | 94,883     |
|      Net  interest income                                   | 34,989               | 38,327               | 107,276    | 114,302    |
| Provision for credit losses                                                     | 3,495                | 3,103                | 10,420     | 9,028      |
|      Net  interest income after provision for credit losses | 31,494               | 35,224               | 96,856     | 105,274    |
|                                                                            |                 |                 |       |       |
| Securities gains                                                                | 166                  | 26                   | 5,621      | 641        |
| Trust income                                                                    | 1,342                | 1,227                | 3,811      | 3,782      |
| Service charges on deposits                                                     | 3,447                | 3,010                | 9,551      | 8,449      |
| Gain on sale of branches                                                        | 3,062                | 0                    | 3,062      | 0          |
| Insurance commissions                                                           | 910                  | 1,055                | 2,555      | 2,862      |
| Income from bank owned life insurance                                           | 1,136                | 1,186                | 3,234      | 3,428      |
| Other income                                                                    | 3,794                | 2,897                | 10,292     | 8,565      |
|      Total  other income                                    | 13,857               | 9,401                | 38,126     | 27,727     |
|                                                                            |                 |                 |       |       |
| Salaries and employee benefits                                                  | 15,163               | 14,505               | 45,644     | 43,915     |
| Net occupancy expense                                                           | 2,023                | 1,668                | 5,768      | 4,967      |
| Furniture and equipment expense                                                 | 2,522                | 2,391                | 7,618      | 7,357      |
| Data processing expense                                                         | 688                  | 558                  | 1,836      | 1,484      |
| Pennsylvania shares tax expense                                                 | 1,075                | 969                  | 3,216      | 2,960      |
| Intangible amortization                                                         | 3                    | 8                    | 16         | 196        |
| Litigation settlement                                                           | 0                    | 0                    | (610)      | 8,000      |
| Restructuring charges                                                           | 0                    | 2,473                | 0          | 5,589      |
| Other operating expense                                                         | 6,531                | 6,919                | 20,671     | 22,081     |
|      Total  other expenses                                  | 28,005               | 29,491               | 84,159     | 96,549     |
| Income before income taxes                                                      | 17,346               | 15,134               | 50,823     | 36,452     |
| Applicable income taxes                                                         | 3,511                | 2,947                | 10,257     | 5,670      |
|      Net income                                             | $13,835              | $12,187              | $40,566    | $30,782    |
|                                                                            |                 |                 |       |       |
| Average shares outstanding                                                      | 58,950,258           | 58,521,562           | 58,808,464 | 58,342,470 |
| Average shares outstanding assuming dilution                                    | 59,376,716           | 58,862,215           | 59,139,101 | 58,734,144 |
|                                                                            |                 |                 |       |       |
| ***Per Share Data:***                                                           |                 |                 |       |       |
| Basic earnings per share                                                        | $0.23                | $0.21                | $0.69      | $0.53      |
| Diluted earnings per share                                                      | $0.23                | $0.21                | $0.69      | $0.52      |
| Cash dividends per share                                                        | $0.155               | $0.150               | $0.465     | $0.450     |
|                                                                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
| FIRST COMMONWEALTH FINANCIAL CORPORATION                                        |                 |                 |       |       |
| CONSOLIDATED SELECTED FINANCIAL DATA                                            |                 |                 |       |       |
| (Dollar Amounts in Thousands, except per share data)                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
| ***Asset Quality Data At   September 30,***                                |                 |                 |       |       |
|                                                                            | 2003                 | 2002                 |       |       |
| Loans on nonaccrual basis                                                       | $18,430              | $24,463              |       |       |
| Past due loans                                                                  | 13,949               | 14,385               |       |       |
| Renegotiated loans                                                              | 198                  | 209                  |       |       |
|      Total  nonperforming loans                             | $32,577              | $39,057              |       |       |
| Loans outstanding at end of period                                              | $2,597,443           | $2,617,465           |       |       |
| Average loans outstanding(year-to-date)                                         | $2,630,009           | $2,596,081           |       |       |
| Allowance for credit losses                                                     | $36,183              | $34,794              |       |       |
| Nonperforming loans as percent of total loans                                   | 1.25%                | 1.49%                |       |       |
| Net charge-offs(year-to-date)                                                   | $8,733               | $8,391               |       |       |
| Net charge-offs as percent of average loans                                     | 0.33%                | 0.32%                |       |       |
| Allowance for credit losses as percent of average  loans                        |                 |                 |       |       |
|    outstanding                                                        | 1.38%                | 1.34%                |       |       |
| Allowance for   credit losses as percent of nonperforming                  |                 |                 |       |       |
|    loans                                                              | 111.07%              | 89.09%               |       |       |
| Other real estate owned                                                         | $1,698               | $1,661               |       |       |
|                                                                            |                 |                 |       |       |
| ***End of Period Data At   September 30,***                                |                 |                 |       |       |
|                                                                            | 2003                 | 2002                 |       |       |
| Assets                                                                          | $4,820,190           | $4,576,445           |       |       |
| Earning assets                                                                  | $4,588,504           | $4,331,038           |       |       |
| Securities                                                                      | $1,990,261           | $1,710,962           |       |       |
| Loans,net of unearned income                                                    | $2,597,443           | $2,617,465           |       |       |
| Total deposits                                                                  | $3,150,790           | $3,134,069           |       |       |
|       Non-interest bearing deposits                         | $393,070             | $393,092             |       |       |
|      NOW,  Moneymarket & Savings                        | $1,292,168           | $1,168,516           |       |       |
|     Time  deposits                                               | $1,465,552           | $1,572,461           |       |       |
| Short-term borrowings                                                           | $655,357             | $334,580             |       |       |
| Long-term debt                                                                  | $577,578             | $680,577             |       |       |
| Other liabilities                                                               | $26,472              | $28,160              |       |       |
| Shareholders' equity                                                            | $409,993             | $399,060             |       |       |
| Shares outstanding                                                              | 59,290,575           | 58,847,898           |       |       |
| Book value per share                                                            | $6.91                | $6.78                |       |       |
| Market value per share                                                          | $13.16               | $12.39               |       |       |
|                                                                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
| FIRST COMMONWEALTH FINANCIAL CORPORATION                                        |                 |                 |       |       |
| CONSOLIDATED SELECTED FINANCIAL DATA                                            |                 |                 |       |       |
| (Dollar Amounts in Thousands, except per share data)                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
| ***Quarter To Date Average Balances At   September 30,***                  |                 |                 |       |       |
|                                                                            | 2003                 | 2002                 |       |       |
| Assets                                                                          | $4,812,119           | $4,544,664           |       |       |
| Earning assets                                                                  | $4,542,210           | $4,302,436           |       |       |
| Securities                                                                      | $1,938,626           | $1,689,951           |       |       |
| Loans,net of unearned income                                                    | $2,602,367           | $2,610,263           |       |       |
| Deposits                                                                        | $3,197,403           | $3,155,973           |       |       |
| Shareholders' Equity                                                            | $402,608             | $399,350             |       |       |
|                                                                            |                 |                 |       |       |
| ***YearTo Date Average Balances At   September 30,***                      |                 |                 |       |       |
|                                                                            | 2003                 | 2002                 |       |       |
| Assets                                                                          | $4,677,114           | $4,548,543           |       |       |
| Earning assets                                                                  | $4,413,244           | $4,304,562           |       |       |
| Securities                                                                      | $1,781,828           | $1,706,257           |       |       |
| Loans,net of unearned income                                                    | $2,630,009           | $2,596,081           |       |       |
| Deposits                                                                        | $3,152,897           | $3,130,398           |       |       |
| Shareholders' Equity                                                            | $409,063             | $388,991             |       |       |
|                                                                            |                 |                 |       |       |
|                                                                            |                 |                 |       |       |
| ***Profitability Ratios***                                                      |                 |                 |       |       |
|                                                                            | For the  Quarter     | For the  9 Months    |
|                                                                            | Ended  September 30, | Ended  September 30, |
|                                                                            | 2003                 | 2002                 | 2003       | 2002       |
| Return on average assets                                                        | 1.14%                | 1.06%                | 1.16%      | 0.90%      |
| Return on average equity                                                        | 13.63%               | 12.11%               | 13.26%     | 10.58%     |
| Yield on earning assets (FTE)                                                   | 5.49%                | 6.61%                | 5.81%      | 6.73%      |
| Total cost of funds                                                             | 2.44%                | 3.23%                | 2.62%      | 3.38%      |
| Net interest margin (FTE)                                                       | 3.31%                | 3.78%                | 3.52%      | 3.79%      |
| Efficiency ratio (FTE) (a)                                                      | 54.06%               | 58.58%               | 54.54%     | 64.50%     |
| Fully tax equivalent adjustment                                                 | $2,953               | $2,617               | $8,913     | $7,666     |

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| (a) Efficiency ratio is "total other expenses"  as a percentage of total revenue.                                                                 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      Total  revenue consists of "net interest income, on a fully tax-equivalent  basis", plus "total other income". |

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