FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar Amounts in Thousands, except per share data) The following is an analysis of loans to those parties whose aggregate loan balances exceeded $60 during 2001: The following table summarizes information about the stock options outstanding at December 31, 2001: “ Other”  primarily reflects the change in those classified as a “ related party”  as a result of mergers, resignations and retirements. The amount of funds available to the parent from its subsidiary banks is limited by restrictions imposed on all financial institutions by banking regulators. At December 31, 2001, dividends from subsidiary banks were restricted not to exceed $74,233. These restrictions have not had, and are not expected to have, a significant impact on the Corporation’ s ability to meet its cash obligations. The Corporation is subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation’ s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation and its banking subsidiaries must meet specific capital guidelines that involve quantitative measures of the Corporation’ s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Corporation’ s capital amounts and classification are also subject to qualitative judgements by the regulators about components, risk weighting and other factors. In 1994, a Bank which is now a subsidiary, and its President at that time, were named as defendants in a lender liability action. The Plaintiffs filed a multi-million dollar claim, plus punitive damages. The case, originally scheduled for trial in the first quarter 2002 has been rescheduled for the second quarter 2002. Although the Corporation believes it has meritorious defenses and is vigorously defending itself, it is not possible to predict the outcome of this matter. Insurance may cover some or all of a judgment up to a policy limit of $10 million. Depending upon the specific elements of an adverse judgment, it is possible there will be no insurance coverage for the claims. It is the opinion of management and its legal counsel that the resolution of this matter will not produce a material impact on the Corporation’ s financial statements. There are no other material proceedings to which the Corporation or its subsidiaries are a party, or of which their property is the subject, except proceedings which arise in the normal course of business and, in the opinion of management, will not have a material adverse effect on the consolidated operations or financial position of the Corporation and its subsidiaries. Quantitative measures established by regulation to ensure capital adequacy require the Corporation to maintain minimum amounts and ratios of total and Tier I capital (common and certain other “ core”  equity capital) to risk weighted assets, and of Tier I capital to average assets. As of December 31, 2001, the Corporation and its banking subsidiaries meet all capital adequacy requirements to which they are subject. As of December 31, 2001, the most recent notifications from the Federal Reserve Board and Federal Deposit Insurance Corporation categorized First Commonwealth Bank and Southwest Bank as well capitalized under the regulatory framework for prompt corrective action. To be considered as well capitalized, the banks must maintain minimum total risk-based capital, Tier I risk-based capital and Tier I leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the institutions’  category. Some of the Corporation’ s or its subsidiaries’  directors, executive officers, principal shareholders and their related interests, had transactions with the subsidiary banks in the ordinary course of business. All loans and commitments to loans in such transactions were made on substantially the same terms, including collateral and interest rates, as those prevailing at the time for comparable transactions. In the opinion of management, these transactions do not involve more than the normal risk of collectibility nor do they present other unfavorable features. It is anticipated that further such extensions of credit will be made in the future. NOTE 24— Related Party Transactions NOTE 23— Commitments and Contingent Liabilities NOTE 25— Regulatory Restrictions and Capital Adequacy NOTE 22— Stock Option Plan  (continued) 34 Balances December 31, 2000 $ 9,416 Advances 6,432 Repayments (6,507) Other (1,454) Balances December 31, 2001 $ 7,887 Options Outstanding Options Exercisable Weighted- Average Weighted- Weighted- Range of Number Remaining Average Number Average Exercise Outstanding Contract Exercise Exercisable Exercise Prices at 12/31/01 Life Price at 12/31/01 Price $ 2.79 9,680 0.3 $ 2.79 9,680 $ 2.79 $ 4.04 8,800 1.2 $ 4.04 8,800 $ 4.04 $9.19-$9.25 463,804 4.9 $ 9.23 463,804 $ 9.23 $10.75 777,076 9.1 $ 10.75 777,076 $10.75 $11.06 592,471 8.0 $ 11.06 592,471 $11.06 $11.56 519,424 7.0 $ 11.56 519,424 $11.56 $14.69 316,632 6.2 $ 14.69 316,632 $14.69 Total 2,687,887 $ 11.13 2,687,887 $11.13