15 CONSOLIDATED STATEMENTS OF INCOME (Dollar Amounts in Thousands, except per share data) FIRST COMMONWEALTH FINANCIAL CORPORATION AND SUBSIDIARIES Years Ended December 31, 2002 2001 2000 Interest Income Interest and fees on loans $ 179,901 $ 202,173 $ 208,548 Interest and dividends on investments: Taxable interest 84,137 93,961 89,723 Interest exempt from Federal income taxes 9,520 9,534 9,638 Dividends  1,973  2,661 3,657 Interest on Federal funds sold  6 492 234 Interest on bank deposits 31 70 82 Total interest income 275,568 308,891 311,882 Interest Expense Interest on deposits 78,572 118,165 115,507 Interest on short-term borrowings 6,029 11,227 22,218 Interest on mandatorily redeemable capital securities of subsidiary trust 3,325 3,325 3,325 Interest on other long-term debt 34,747 34,453 33,489 Total interest on long-term debt  38,072 37,778 36,814 Total interest expense  122,673 167,170 174,539 Net interest income 152,895 141,721 137,343 Provision for credit losses 12,223  11,495 10,030 Net interest income after provision for credit losses 140,672  130,226 127,313 Other Income Securities gains 642 3,329 1,745 Trust income  5,008 4,995 5,555 Service charges on deposits 11,538 11,160 10,562 Insurance commissions 3,631 3,192 1,951 Income from bank owned life insurance 4,711 4,618 3,419 Other income 11,676 12,930 10,451 Total other income 37,206 40,224 33,683 Other Expenses Salaries and employee benefits 58,149 54,521  52,529 Net occupancy expense 6,750 6,520 6,577 Furniture and equipment expense 9,970 9,050 8,154 Data processing expense 2,124 3,296 3,310 Pennsylvania shares tax expense 3,937  3,825 3,495 Goodwill amortization -0-  920 865 Intangible amortization 203 490 498 Litigation settlement 8,000 -0- -0- Restructuring charges 6,140 -0- -0- Other operating expenses 30,168 26,385 24,033 Total other expenses 125,441 105,007  99,461 Income before income taxes 52,437 65,443 61,535 Applicable income taxes 8,911 15,254 14,289 Net Income $ 43,526 $ 50,189 $ 47,246 Average Shares Outstanding 58,409,614 57,885,478  57,558,929 Average Shares Outstanding Assuming Dilution 58,742,018 58,118,057  57,618,671 Per Share Data: Basic Earnings Per Share $ 0.75 $ 0.87 $ 0.82 Diluted Earnings Per Share $ 0.74 $ 0.86 $ 0.82 The accompanying notes are an integral part of these consolidated financial statements.