FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES NOTESTO CONSOLIDATED FINANCIAL STATEMENTS (Dollar Amounts in Thousands) Capital Securities and Subordinated Debentures outstanding  at December 31 are as follows: The Corporation has established two trusts, First  Commonwealth Capital Trust I and First Commonwealth  Capital Trust II, of which 100% of the common equity  is owned by the Corporation. The trusts were formed for  the purpose of issuing company obligated mandatorily  redeemable capital securities to third-party investors and  investing the proceeds from the sale of the capital securities  solely in junior subordinated debt securities (“subordinated  debentures”) of the Corporation. The subordinated debentures  held by each trust are the sole assets of the trust. Proceeds from subordinated debentures issued to First  Commonwealth Capital Trust II in December 2003 are  anticipated to be used to partially finance the pending  business combination of GAF (See NOTE 4). Interest on the  debentures is paid quarterly at a floating rate of LIBOR plus  2.85% which is reset quarterly. The Corporation may redeem  the debentures, in whole or in part, at its option on or after  January 23, 2009, at a redemption price equal to 100% of the  principal amount of the debentures, plus accrued and unpaid  interest to the date of the redemption. Deferred issuance costs  of $471 are being amortized on a straight-line basis over the  term of the securities. 31 Short-term borrowings at December 31 were as follows: NOTE 17— Capital Securities and Subordinated Debentures NOTE 16— Short-term Borrowings 2003 2002 Amount Rate Amount Rate Company obligated mandatorily  redeemable capital securities  of First Commonwealth  Capital Trust I due 2029 $ -0- $35,000 9.50% Subordinated Debentures: Owed to Pittsburgh  Home Capital  Trust I and  due 2028 $ 8,292 8.56% $ -0- Owed to First  Commonwealth  Capital Trust I  and due 2029  36,083  9.50% -0- Owed to First  Commonwealth  Capital Trust II  and due 2033  30,929 LIBOR +2.85% -0- Total junior subordinated  debentures owed to  unconsolidated  subsidiary trusts $ 75,304 $ -0- Total consolidated debt  obligations related to  subsidiary trusts  $ 75,304 $35,000 2003 2002 Ending Average Average Ending Average Average  Balance Balance Rate Balance Balance Rate Federal funds  purchased $ 14,100 $ 68,455 1.32% $ 51,600 $ 63,169 1.86% Borrowings from  FHLB 120,000 151,860 1.33% 146,395 30,044 1.76% Securities  sold under  agreements  to repurchase 450,140 326,226 1.16% 222,577 225,793 1.78% Treasury, tax  and loan  note option  49,887 7,592 0.87% 48,493 20,902 1.47% Total $ 634,127 $554,133 1.22% $469,065 $339,908 1.77% Maximum total at any  month-end $699,326 $469,065 2003 2002 2001 Federal funds purchased $ 902 $ 1,176 $ 1,527 Borrowings from FHLB  2,019 530 243 Securities sold under  agreements to repurchase  3,768 4,015 8,483 Treasury, tax and loan note option 66 308 974 Total interest on  short-term borrowings $ 6,755 $ 6,029 $ 11,227 Interest expense on short-term borrowings for the years  ended December 31 is detailed below: