FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollar Amounts in Thousands) NOTE 8— Securities Available For Sale Mortgage backed securities include mortgage backed obligations of U.S. Government agencies and corporations, mortgage backed securities issued by other organizations and other asset backed securities. These obligations have contractual maturities ranging from less than one year to 30 years and have an anticipated average life to maturity ranging from less than one year to 17 years. All mortgage backed securities contain a certain amount of risk related to the uncertainty of prepayments of the underlying mortgages. Interest rate changes have a direct impact upon prepayment speeds, therefore the Corporation uses computer simulation models to test the average life and yield volatility of all mortgage backed securities under various interest rate scenarios to insure that volatility falls within acceptable limits. At December 31, 2001 and 2000, the Corporation owned no high risk mortgage backed securities as defined by the Federal Financial Institutions Examination Council’ s Supervisory Policy Statement on Securities Activities. The amortized cost and estimated market value of debt securities at December 31, 2001, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or prepayment penalties. Proceeds from the sales of securities available for sale were $85,737, $22,391 and $39,282 during 2001, 2000 and 1999 respectively. Gross gains of $3,419, $1,752 and $541 and gross losses of $224, $18 and $-0- were realized on those sales during 2001, 2000 and 1999, respectively. Securities available for sale with an approximate fair value of $637,915 and $626,719 were pledged at December 31, 2001 and 2000, respectively, to secure public deposits and for other purposes required or permitted by law. 26 Amortized Approximate Cost Fair Value Due within 1 year $ 16,783 $ 16,845 Due after 1 but within 5 years 248,220 255,507 Due after 5 but within 10 years 11,042 11,098 Due after 10 years 183,429 179,212 459,474 462,662 Mortgage Backed Securities 951,151 960,743 Total Debt Securities $ 1,410,625 $ 1,423,405 2001 2000 Gross Gross Approximate Gross Gross Approximate Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cost Gains Losses Value U.S. Treasury Securities $ 13,084 $ 137 $ -0- $ 13,221 $ 9,972 $ 77 $ -0- $ 10,049 Obligations of U.S. Government Corporation and Agencies: Mortgage Backed Securities 840,639 8,140 (954) 847,825 752,481 1,636 (7,126) 746,991 Other 113,464 2,181 (5) 115,640 117,585 125 (370) 117,340 Obligations of States and Political Subdivisions 103,492 749 (1,599) 102,642 76,066 606 (1,376) 75,296 Debt Securities Issued by Foreign Governments 175 -0- -0- 175 425 -0- -0- 425 Corporate Securities 229,259 5,382 (3,657) 230,984 142,933 1,814 (6,271) 138,476 Other Mortgage Backed Securities 110,512 2,438 (32) 112,918  97,922 336 (418) 97,840 Total Debt Securities 1,410,625 19,027 (6,247) 1,423,405 1,197,384 4,594 (15,561) 1,186,417 Equities 45,091 622 -0- 45,713 52,824 -0-  ( 1,011) 51,813 Total Securities Available for Sale $ 1,455,716 $ 19,649 $ (6,247) $ 1,469,118 $ 1,250,208 $ 4,594 $(16,572) $ 1,238,230 Below is an analysis of the amortized cost and approximate fair values of securities available for sale at December 31, 2001 and 2000: