Good afternoon I would like to welcome everyone to First Commonwealth’s first quarter earnings conference call. (Operator instructions). At this time I will turn the call over to Rich Stimel Communications Manager at First Commonwealth. Mr. Stimel, the floor is yours sir.

Thank you Mike, as a reminder a copy of today’s earning release can be accessed by logging on to www.scbanking.com and clicking on the investor relations link at the top of the page. Before we begin I’d like to caution listeners that this conference call will contain forward looking statements about First Commonwealth, its business, strategies and prospects. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward looking statements. These risks and uncertainties include a variety of factors. Some of which are beyond our control. These forward looking statements speak as of today and you should not rely on them as representing our views in the future. We undertake no obligation to update these forward looking statements to reflect events of circumstances that occur after this call. Please refer to our SEC filings including our most recent annual report on form 10K for a more detailed description of the risk factors that may affect our results. Copies of these documents may be obtained from the SEC or by visiting the investor relations section of our website. Now I would like to introduce to you, the president and CEO of First Commonwealth Financial Corporation, Mr. John Dolan.

Thanks Rich, good afternoon everyone, we certainly appreciate you joining us today for our first quarter earnings call. Joining me today is our Chief Financial Officer, Ed Lipkus, who will be providing additional details on our first quarter performance and Mike Price, President of First Commonwealth Bank and he’ll update you on the progress we’re making in our wealth management commercial services and consumer services lines of business. I would like to start out by stating that our strategy is to win in our marketplace by becoming the best community based financial institution in our markets and first choice amongst our clients employees and shareholders. I’m please with our first quarter results and I’d like to share some key highlights with you. Net income increased 2.1% compared to the same period last year. Net interest income increased 2.3% compared to the fourth quarter 2007 or 9.2% annualized and has increased consecutively over the last three quarters. Total loans increased $190 million and the provision for credit losses increased $200,000, primarily due to the increase in loan growth year of year. Net interest income increased 17.8% compared to the first quarter 2007. We had a great quarter of loan growth. Mike will talk to you about the strengths of our corporate lending group however I would like to discuss opportunities that were created as a result of market conditions and how our balance sheet allowed us to capitalize on them. Regarding the market, for credits over a certain size, say $5 to $10 million the market seemed to have seized up. The bigger banks are reticent to lend and are much more cautious with their balance sheets. We see this especially in the commercial real estate and corporate finance both areas where we’ve grown appreciably. Regarding our positioning, we’d like to…

Well thank you John and good afternoon everyone. I want to start out by identifying the areas that I’ll be covering on today’s call. First I will provide some details on our quarterly earning and our net interest margin. Then I’ll follow up with some additional information regarding loan growth and asset quality. Fist commonwealth reported first quarter 2008 net income of $11.1 million or $0.15 per diluted share compared to $10.9 million or $0.15 per diluted share in the same period last year. And $11.6 million or $0.16 per share for the fourth quarter of 2007. Net income increase $226,000 or 2.1% as John indicated earlier year over year primarily due to an increase in non interest income partly offset by a decline in net interest income slightly larger provision for debt losses and higher non interest expense. Compared to fourth quarter 2007, net income decreased $527,000 or 4.5% mainly due to higher non interest expense and provision for credit losses partly offset by increased by net interest income and a lower tax provision. Net interest income was up $926,000 or 2.3% from the fourth quarter of 2007. this improvement in net interest income is primarily due to increased levels of loans and investments and a 29 basis point decrease in funding costs. Despite significant federal reserve bank reductions in short term rates, our net interest margin decreased on 4 basis points compared to last quarter and 8 basis point compared to the first quarter of 2007. In anticipation of the yield curve becoming steeper in 2008 we began to reduce our de-leveraging of investments towards the end of 2007. and we began to shorten the length of our funding to be able to reacted to the expected changing yield curve. Due to the yield curve becoming steeper in…

Thanks Ed, as John indicated earlier, our aspiration is simply to become the best community bank in Western Pennsylvania. I think we’ve generated good momentum in the first quarter of 2008, or corporate banking group had a strong quarter in the wealth management group also performed well. Let me just say that we have some real opportunities to grow our consumer services business which includes branch and business banking. We’ve solidified our retail banking operations with the hiring of [Eric Brenner] as the new head of retail banking and he started just a few weeks ago. And he joins first commonwealth with about 20 years of banking experience with both a large bank and a number of community banks as well. As I think about our approach to winning in 2008, and beyond just like to talk about 5 themes in our strategic process in each line of business. And these themes are first customer focus, we feel we need to be consumed as an organization with what happens between our folks on the front line and our customers and how we can make that better, and we need to deliver locally like a community bank with all the friendliness care and respect that that entails. The second theme in our plan is really talent and leadership and quite simply we need to retain develop and attract the most talent team in the marketplace. Our third theme is execution and accountability and our feeling is we need to become the best and the most pervasive sales force and service organization in our market. Our fourth strategic theme is strategic focus and quite simply we need to focus on the few levers in each of our lines businesses that will really drive results. Our fifth theme is partnering and our vision…

Thanks Mike, as I indicated earlier I believe that we’re well positioned to take full advantage of the opportunities that continue to result from the recent disruptions in the credit capital markets. We can’t predict how long this window of opportunity will last but we intend to capitalize it while it’s open. We do recognize that long term grown requires improvement in our core lines of business and as you just heard from Mike this is a significant focus of his current efforts. Mike and the team have made significant progress in a short period of time and I’m excited about our plans for 2008 and beyond. This concludes our discussion segment, I’d like to now open the floor to questions.

Thank you sir. (Operator instructions). Okay, our first question comes from Tom, excuse me Tim [Brazillo] with KBW. Please go ahead sir. Tim [Brazillo] - KBW: Hello good afternoon. I have two questions for you the first one is in regard to the loan growth, it’s been healthy quarter over quarter and year over year. And I’m just kind of curious about the run rate going forward, should we be expecting the same type of growth or is it going to stifle down a little bit?

I think for the short term we have a nice pipeline and will continue to grow. I think quite frankly to do this quarter over quarter is unrealistic.

And this is Ed Lipkus Tim, I’d have to say that because of some of the conduit markets if not all of them drying up and the capital market season up we don’t know how long that’s going to last so it’s really hard to predict any kind of run rate on these types of credits. It’s our expectation to minimize the run rates and we do certainly strategically try to position ourselves to avoid but it’s really hard to predict. Tim [Brazillo] - KBW: Okay, thank you for that. And the second question I have is in regards to reserves. I see that they’ve been declining slightly for the past couple quarters, is a trend that’s going to continue or should we expect them to kind of level out at this current level.

That’s an excellent question Tim, again it’s Ed Lipkus and I’ll say this. We’ve disclosed that we had too large credit problems that we are working out we think we’re working them out satisfactorily right now. We do believe that our asset quality overall has improved over the last couple of quarters. We do an extensive analysis every quarter to determine how, to make sure that our allowance is adequate and the numbers are the number we do a significant amount of modeling here and we are very comfortable whether or not we would expect the trend to continue we think we’re using very conservative underwriting fundamentals I don’t have a personal wall but I can tell you that they’ve been in a band here north of 1% to say 1.15 of loans and they’ll probably remain in that band. Tim [Brazillo] - KBW: Okay perfect. Thank you very much.

Our next question comes from Matt Schultheis with Ferris Baker and Watts.

Good afternoon. I wanted to focus in our your long range growth a little more. I noticed that obviously you had a slot of C & I and a lot of commercial real estate. The commercial real estate construction, what are we looking at there in the construction side? What type of building?

Matt that’s an excellent question and certainly in this marketplace one might say commercial construction you think risk, you think we’re seeing it across all areas, we’re looking at commercial office buildings medical health hospitality, it’s really a mix bag here. We have some residential units, not a lot we did branch out into the State College area so we have a few deals over there.

Is that multi family or single family?

Yeah, multi family.

Okay, just to make sure. Okay and as far as the C & I, is that what would you say the average size company is that you’re financing out of this new growth. And would you say this companies doing $5 million to $10 million in sales basically small business or somewhere north of that?

Well Matt we’re seeing a wonderful opportunity right now for bank size we’re uniquely poised to take advantage of some of the capital markets right now so we are seeing some looks and it’s all across the board here but we are seeing some a few national syndications we are seeing a few large credit in our footprint. Nothing that I would say I could categorize as over the top here but I can say that the C & I growth because of the market seizing up we’re getting some looks that we’re kind of taking away from us in the last year or two.

Okay and as far as your new efforts though more aligned branches with the commercial lenders that obviously going to be somewhat smaller I would assume because they have to be branch dependent companies?

We are just, this is Mike Price Matt, we’re just really kicking up our small business banking effort and we have those business bankers aligned with branches and those are credits that are you know probably average a couple hundred thousand and are all south of a $1 million each.

A nice big margins on them I’m sure.

Yes, and we fell like we’re under penetrated in that market and there’s perhaps an opportunity to grown.

Okay, obviously you still have some EFI loans which you’re trying to work out here and I was wondering my understanding and this is just what I’m hearing through the grapevine is that there are two types of EFI loans that there have turned out to be fraudulent vapor loans which are basically paper signed by made up people. There’s nothing there and then loans that are signed by real people who are participating, colluding on fraud. And my understanding is that Sterling Financial just kind of walked away from the second type of paper saying we’re not going to take that one back and say that’s an issue between you and the borrow at this. I was wondering if you have any comment relating to that or if you’ve had any negotiations with PNC?

Matt let me say that I think I heard you say vapor loans? That’s an interesting term I’ve never heard that one before and I’ve been in this business 26 years. But you’re following this closely and I think you know what my answer is going to be. This is a very delicate relation ship that we’re in and I’m limited to what I can disclose. We have been forthright in our last four or five quarterly disclosures we’ve said in our press release here that we have $4.1 million in outstanding which $3 million has been classified as non accrual, we have been getting cooperation from Sterling and I would not categorize our relationship as one of anything less than that. But at this point, anything can happen in these types of negotiations and we’re kind of stand where we’ve stood for the last couple of quarters. And should that change and we have to if this does change we’ll obviously disclose it but that’s kind of where we are.

Have you heard from anyone from PNC?

Yes, we are currently having dialogues with the folks at PNC this deal did close with PNC on April 4th and, which has been in the works for 6 months now so I haven’t seen any southern deterioration here because of the, usually, in a [prior worlds] would send some signals out though the inquiree well in advance and we haven’t seen any change in their posturing at least any material change so we are having discussions with them that’s where we are.

Okay, thank you very much.

The next question we have comes from David Darst with FTN Midwest Securities.

Good afternoon. Could you, you indicated there’s still liability sensitive and I wondered if you’re now slipping back to a more neutral position or maybe becoming asset sensitive given the growth in the construction and C & I and also maybe could you give us the percentage of the loans that are tied to run rate?

That’s a good question Dave and I think for now where we stand we still see some opportunities with deposit re-pricing in 2008. We’re as I said earlier, we’re cautiously optimistic we do have a portion of our portfolio that’s tied to prime and other and LIBOR I would say that that’s probably somewhere between 30% and 35% of our total portfolio.

Okay and what was the amount of income from the derivative of swaps. Is that a new product that you began implementing?

Well the I believe just hold on for one minute Dave. We strategically enter into these swaps because we don’t want to put the interest rate risk on our books and so it didn’t give rise to materiality so we don’t have it on our income statement as a separate line item. I know there were several swap fees, several swaps we did during the first quarter but none gave rise to materiality.

Okay and then you indicated that you’ve done some shared national credits and some other participations, could you give us the dollar amount of those?

Well, right now that’s not something that I would say has given rise to level of concentration or materiality that we would want or even to disclose so really don’t’ have that information right now. Let’s just say when we do underwrite these things we apply the same conservative underwriting fundamentals and we’re not taking the deals because of risk, we’re in a unique position David because we’re actually able to turn deals away that not because they’re that much more risky but because we’re, we’ve got such a healthy pipeline we can choose just to be pickier. And these are deals that are top notch and it’s hard for us to not underwrite them.

Okay and then maybe a little color on the types of loans that you’re following your customers out of market to do.

Well when you want color on the types of loans.

Yeah you said you’ve gone to Wheeling and to State College and you’re following some customers out of market.

Okay alright, I’m sorry.

Is that hotels?

We’re in State College, I’m going to be real careful as to how much information we want to share here because we don’t want to put ourselves in a competitive disadvantage. We’ve strategically placed an LPO in State College because of opportunities in I think it’s a healthy market, we’ve got some multi family residential construction out there, there’s some student housing there’s commercial construction that’s underway right now it’s a robust area and we think that we can continue to diversity our risk. Generally David the clients, our clients that we’re familiar with and we’re able to follow them to those locations where they’re growing so we know them, we know the creditors, the borrowers I mean and that’s what makes it a good relationship for us.

Okay that’s it John I appreciate you taking the time to have a call. Thank you.

Sure David.

The next question we have comes from Rick Weiss with Janney.

Hey Guys. I just have a follow-up question with regards on the loan growth. it came in so fast this quarter compared to last year when it was shrinking, and I guess with the loans that you are doing organically rather than the participations is that coming from kind of new business in your areas the economy doing pretty well or is it simply picking up business that these larger banks are ignoring or passing on for now.

Its a little combination of that Rick I’d have to say that it didn’t happen overnight and it didn’t just happen in the first quarter. There’s been a lot of work being done over the last year and a half and it takes a while to cultivate those relationships however some of the opportunities that didn’t occur was because some of the larger banks started to stumble and had to walk away from some deals some were may have been relationships that we had been talking to and weren’t able to be competitive with but all of a sudden when the competitors had to walk away, our deal looked a lot better so it’s a little bit of combination some of these larger lenders lost some of the participants as well. So they were looking to have somebody else as a participant and we were able to do it and they were good credits for us.

Okay are any of the larger lenders cutting back on their own loan officers can you actually pick up some people?

There is that possibility, that’s one of the other opportunities that the marketplace has afforded us is good quality individuals and within the confines of any restrictions that we have right now but generally yes there’s more people on the market available to looking around to go to a good organization with a good franchise going forward.

Okay and let me just ask you back to the reserves so I guess the charge offs exceeded a provision this quarter, and I think this kind of like happened in the December quarter as well. So kind of like what’s the strategy here, would you think that there’s a time where provisions a going to pick up to maintain the allowance and will start exceeding charge offs as they normally do for you guys.

Hey Rick this is Ed Lipkus. Rick let me answer your question as best I can to say that we had as I indicated earlier we had some improvement on accruals, we worked out that one large $4.3 million non accrual that we put on in the fourth quarter 2007. And with that and some of the other workouts we had, we actually worked it out faster than we thought and so we had some charge offs related to that we yes it’s a little bit higher than our provision but I right now I can just reiterate that our reserve is adequate we go through extensive modeling here we don’t target a magic number we just put it through our normal process and to put it another way, if we were to make our provision equal to our charge offs we would have had too much in our reserve and that would have been an undesired result as well.

Rick I can say that some of the charge offs that we had freed up some of our allowance and therefore that reduced the pressure on the provision.

Okay, alright, thank you.

The next question you have comes from Mac Hodgson with SunTrust Robinson Humphrey.

Hey guys, just a couple of other questions on the loan growth, some things that people have already asked but could you give a percentage of the loan growth that you got as a result of the inactivity in the capital markets or the lack of capital markets as an atlas of some of these borrowers?

That’s a good question Mac and I have to say that maybe 20, two thirds that’s in total C & I, but related you are asking related to national credit?

I’m just talking about total loan growth in the quarter, how much of that would you say is a result of that disruption in the capital markets?

This is Mike Price and this is a bit of a slag but I would say probably about half.

And I think somebody asked this already but would that half also be the loans that you did through participations?

Not necessarily.

Okay. And maybe comment about the security portfolio I know it rose a little bit this quarter is that something we should anticipate going on again in the second quarter.

Well, it’s hard to say, we’re being real selective on our investments right now. We’re trying to get in there when we think spreads are going to be at a certain level. I’d be reluctant to try to give you any additional color.

Okay, and then maybe finally on low production obviously I know you guys have talked in the past about selectively entering some new markets. Maybe just give some commentary on the possibility of opening up another loan production office in a new market.

We’re going to continue looking at that right now we’ve got our hands full and our pipeline is very strong but that’s not always going to be the case so we will look at some of the faster growing market areas to, which we have already begun to look at. We aren’t ready to pull trigger yet. so we’ll try to keep the momentum going by looking at the proper places for those LPO’s.

Okay great thanks guys.

Mr. Dolan, gentlemen, there appear to be no further questions at this time.

Okay great, thank you everybody.

Thank you gentlemen. This now concludes First Commonwealths’ first quarter 2008 earnings conference call. A replay of today’s call can be accessed for the next 30 days by logging on to the investor relations page at fcbanking.com. Thank you for joining today’s presentation, at this time you may disconnect your lines.