FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTESTO FINANCIAL STATEMENTS (Dollar Amounts in Thousands) NOTE 29— Fair Values of Financial Instruments (continued) difficulty in predicting the timing of such cash flows, fair values  were not estimated for these instruments for both periods. Deposit liabilities Deposit liabilities: Management estimates that the fair value  of deposits is based on a market valuation of similar deposits.  The carrying value of variable rate time deposit accounts  and certificates of deposit approximate their fair values at  the report date. Also, fair values of fixed rate time deposits  for both periods are estimated by discounting the future  cash flows using interest rates currently being offered and a  schedule of aggregated expected maturities.  Short-term borrowings Short-term borrowings: The estimated fair values of  borrowings from the Federal Home Loan Bank were  estimated based on the estimated incremental borrowing rate  for similar types of borrowings. The carrying amounts of  other short-term borrowings such as Federal funds purchased,  securities sold under agreement to repurchase and treasury,  tax and loan notes were used to approximate fair value. Long-term debt Long-term debt: The fair value of long-term debt is estimated  by discounting the future cash flows using the Corporation’s  estimated incremental borrowing rate for similar types of  borrowing arrangements. The following table presents carrying amounts and estimated  fair values of the Corporation’s financial instruments at  December 31, 2003 and 2002: 2003 2002 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Financial assets  Cash and due from banks $ 82,510 $ 82,510 $ 81,114 $ 81,114 Interest-bearing deposits with banks 5,362 5,362 1,973 1,973 Securities available for sale $ 1,969,176 $ 1,969,176 $ 1,482,771 $ 1,482,771 Investments held to maturity 104,254 109,609 197,838 204,887 Loans, net $ 2,787,497 $ 2,858,032 $ 2,574,138 $ 2,631,557 Financial liabilities  Deposits $ 3,288,275 $ 3,193,216 $ 3,044,124 $ 3,011,354 Short-term borrowings 634,127 634,361 469,065 469,381 Long-term debt $ 793,972 $ 863,444 $ 579,934 $ 642,127 40