FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar Amounts in Thousands) NOTE 14— Short-term Borrowings NOTE 12— Premises and Equipment (continued) NOTE 13— Interest-Bearing Deposits NOTE 15— Company Obligated Mandatorily Redeemable Capital Securities of Subsidiary Trust 28 The Corporation established First Commonwealth Capital Trust I (the “Trust”), a Delaware business trust and the Trust issued 35,000 capital securities (liquidation amount of $35,000) during September 1999, through a private offering to qualified investors. Additionally, the Trust issued common securities to the Corporation. The Trust used the proceeds from the sale to buy a series of 9.50% junior subordinated deferrable interest debentures due 2029 from the Corporation with the same economic terms as the capital securities. The sole asset of the Trust is the $36,083 aggregate liquidation amount of the junior subordinated debentures. The Trust will distribute the cash payments it receives from the Corporation on the debentures to the holders of the capital securities and the common securities. Included in time deposits at December 31, 2002, were certificates of deposit with the following scheduled maturities: 2003 $ 636,476 2004 335,887 2005 226,121 2006 148,820 2007 and thereafter 146,598 $ 1,493,902 Interest expense related to $100 or greater certificates of deposit amounted to $21,685 in 2002, $27,922 in 2001, and $22,639 in 2000. Included in time deposits at December 31, 2002 and 2001, were certificates of deposit in denominations of $100 or more of $489,702 and $497,318, respectively. Interest-bearing deposits at December 31, 2002 and 2001, include reallocations from NOW and Super NOW accounts of $374,695 and $323,490, respectively into Savings and MMDA accounts. These reallocations are based on a formula and have been made to reduce the Corporation’s reserve requirement in compliance with regulatory guidelines. Components of interest-bearing deposits at December 31 were as follows: Interest expense on short-term borrowings for the years ended December 31 is detailed below: 2002 2001 NOW and Super NOW accounts $ 71,649 $ 61,791 Savings and MMDA accounts 1,100,889  1,028,368 Time deposits 1,494,120 1,590,296 Total interest-bearing deposits $ 2,666,658 $ 2,680,455 2002 2001 2000 Federal funds purchased $ 1,176 $ 1,527 $ 3,138 Borrowings from FHLB 530 243 1,256 Securities sold under agreements to repurchase 4,015 8,483  16,335 Treasury, tax and loan note option 308 974 1,489 Total interest on short-term borrowings $ 6,029 $ 11,227 $ 22,218 2002 2001 Ending Average Average Ending Average Average Balance Balance Rate Balance Balance Rate Federal funds purchased $ 51,600 $ 63,169 1.86% $ 108,250 $ 46,608 3.28% Borrowings from FHLB 146,395 30,044 1.76% 40,000 9,918 2.45% Securities sold under agreements to repurchase 222,577 225,793 1.78% 216,486 214,900 3.95% Treasury, tax and loan note option 48,493 20,902 1.47% 63,000 28,747 3.39% Total $ 469,065 $339,908 1.77% $ 427,736 $ 300,173 3.74% Maximum total at any month-end $ 469,065 $ 427,736 Premises Equipment 2003 $ 1,586 $ 963 2004 789 39 2005 719 -0- 2006 749 -0- 2007 667 -0- Thereafter 1,946  -0- Total $ 6,456 $ 1,002 Under the terms of various lease agreements, increases in utilities and taxes may be passed on to the lessee. Such adjustments are not reflected in the above table. Additionally, various lease renewal options are available and are not included in the minimum lease commitments until such options are exercised. Total lease expense amounted to $1,699 in 2002, $2,105 in 2001 and $1,935 in 2000. Short-term borrowings at December 31 were as follows: The Corporation leases various premises and assorted equipment under noncancellable agreements. Total future minimal rental commitments at December 31, 2002 were as follows: