NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES In November 2002, the FASB issued FASB Interpretation No. 45 (“FIN 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantees of Indebtedness of Others.” The disclosure requirements of FIN 45 are effective for financial statements of interim or annual periods ending after December 15, 2002, and requires disclosure of the nature of the guarantee, the maximum potential of future payments the guarantor could be required to make under the guarantee, and the current amount of the liability, if any, for the guarantor’s obligation under the guarantee. The recognition requirements of FIN 45 are to be applied prospectively to guarantees issued or modified after December 31, 2002. This interpretation expands the disclosures to be made by a guarantor in its financial statements about its obligations under certain guarantees and requires the guarantor to recognize a liability for the fair value of an obligation assumed under a guarantee. FIN 45 clarifies the requirements of FASB Statement No. 5 (“FAS No. 5”),  “Accounting for Contingencies,” relating to guarantees. In general, FIN 45 applies to contracts or indemnification agreements that contingently require the guarantor to make payments to the guaranteed party based on changes in an underlying that is related to an asset, liability, or equity security of the guaranteed party. Certain guarantee contracts are excluded from both the disclosure and recognition requirements of this interpretation, including, but not limited to, guarantees related to employee compensation, residual value guarantees under capital lease arrangements, commercial letters of credit, loan commitments, subordinated interests in Special Purpose Entities and guarantees of a company’s own future performance. Other guarantees are subject to the disclosure requirements of FIN 45 but not the recognition provisions and include, among others, a guarantee accounted for as a derivative instrument under FAS No. 133, a parent’s guarantee of debt owed to a third party by its subsidiary or vice versa and a guarantee which is based on performance not price. Guarantees that have been entered into by the Corporation are disclosed in Note 11. The Corporation does not expect the requirements of FIN 45 to have a material impact on its financial condition or results of operations. In January 2003, the FASB issued FASB Interpretation No. 46 (“FIN 46”), “Consolidation of Variable Interest Entities,” the provisions of which became effective upon issuance. This interpretation provides guidance on identification of variable interest entities (“VIE”) and the determination of when the assets, liabilities, noncontrolling interest and results of operations of a VIE should be included in a company’s consolidated financial statements. Companies that hold variable interests in an entity will need to consolidate that entity if the company’s interest in the VIE is such that the company will absorb a majority of the entity’s expected residual returns, should they occur. The Corporation is currently assessing the impact, if any, the interpretation will have on the Corporation’s financial condition or results of operations. effect. As a result, the criteria in Opinion 30 will now be used to classify those gains and losses. This statement also amends FASB Statement No. 13 to require that certain lease modifications that have economic effects similar to sale- leaseback transactions be accounted for in the same manner as sale-leaseback transactions. This statement also makes technical corrections to existing pronouncements, which are not substantive but in some cases may change accounting practice. FAS No.145 was effective for transactions occurring after May 15, 2002. Implementation of FAS No. 145 did not have a material impact on the Corporation’s financial condition or results of operations. In July 2002, the FASB issued Statement No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“FAS No. 146”). FAS No. 146 replaced EITF Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)”. The standard requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. FAS No. 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. Upon adoption, FAS No. 146 is not expected to have a material impact on the Corporation’s financial condition or results of operations. In October 2002, the FASB issued Statement No. 147, “Acquisitions of Certain Financial Institutions, an amendment of FASB Statements No. 72 and 144 and FASB No. 9” (“FAS No. 147”). FAS No. 147 removes acquisitions of financial institutions, except for transactions between two or more mutual enterprises, from the scope of both FASB Statement No. 72 and Interpretation 9 and requires that those transactions be accounted for in accordance with FASB Statements No. 141 and No. 142. As a result, the requirement in FASB Statement No. 72 to recognize, and subsequently amortize, any excess of the fair value of liabilities assumed over the fair value of tangible and identifiable assets acquired as an unidentifiable asset no longer applies to acquisitions within the scope of this statement. In addition, this statement amends FASB Statement No. 144 to include in its scope long-term customer relationship intangible assets of financial institutions such as depositor and borrower- relationship intangible assets and credit cardholder assets. Consequently, those intangible assets are subject to the same undiscounted cash flow recoverability test and impairment loss recognition and measurement provisions that FASB Statement No. 144 requires for other long-lived assets that are held and used. The provisions of FAS No. 147 were effective October 1, 2002. Implementation of FAS No. 147 did not have any impact on the Corporation’s financial condition or results of operations. 23