I would like to welcome everybody to the First Commonwealth fourth quarter earnings conference call. (Operator Instructions) Please note that this conference is being recorded. At this time I would like to turn the call over to Richard Stimel, Communication Manager at First Commonwealth.

As a reminder a copy of today’s earnings release can be accessed by logging on to www.FCBanking.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 or 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’d like to introduce the President and CEO of First Commonwealth Financial Corporation, Mr. John Dolan.

I appreciate everyone’s participation today given we found ourselves needing to reschedule this call last week. Joining me today are Ed Lipkus, Executive Vice President and CFO for First Commonwealth Financial Corporation and Mike Price, the President of First Commonwealth Bank. In this morning’s release of our fourth quarter and year-end results, we can say without a doubt, 2008 was one of a kind year. It was a year of difficult challenges but encouraging successes. But, more than anything, it was a year of ongoing progress for our company as illustrated in the growth in our core net income. It goes without saying that the tough economic and volatile economic environment and volatile capital markets we found ourselves in had an effect on our performance in the fourth quarter. I’m disappointed in our performance for the fourth quarter considering the additional loan loss provision. But, at the same time we’re fundamentally strong with our core net income growing nearly 13% year-over-year. This equates to core earnings per share of $0.69, that’s more than a 11% increase in earnings per share over 2007. The fourth quarter core net income was up more than 7% versus the same period in 2007. The fourth quarter net income was negatively affected by an additional loan loss provision primarily related to three commercial real estate loans and the overall growth of our loan portfolio. We were able to maintain our lending momentum because of our successful fourth quarter capital raise. On November 5th we raised $115 million of common stock through the public offering which enhanced our well capitalized position. We also chose not to participate in the government’s TARP or capital purchase program. We’re extremely pleased that the loan growth we’ve generated in both the fourth quarter and for the year was without sacrificing…

Today I would like to cover four areas. We’re going to go over our loan growth, our margin improvement, credit quality and then we’ll finish with additional color around our other than temporary impairment on our investment portfolio. So this is our fifth consecutive quarter of strong loan growth. Loans are up 5.6% for the fourth quarter and are up nearly 20% for the entire year. We’ve had a lot of opportunities here in 2008 to grow both our commercial and our consumer lines of business and Mike a little later on will provide some additional commentary on how we were able to get some results and the momentum that we see in those areas. Our loan growth in the fourth quarter was mainly due to increased commercial loan originations. Commercial loans increased $242 million or 9.8% on a link quarter basis. The C&I portfolio grew by $123 million and that growth was spread across I’d say all sectors. Our construction loan portfolio grew $80 million and all of the new commitments this quarter came from Pennsylvania projects. I would say half of that growth or about $47 million came from draws on current projects. These projects include multifamily, healthcare, office space, transportation and hospitality. Our CRE portfolio also grew by about $38 million and the top three areas of growth were office space, multifamily and rentals and retail. We’re putting multifamily and rentals in the same category here. Our CRE portfolio now represents nearly 38% of our total commercial loan portfolio. Now, switching to the consumer side, home equity loans grew $17 million during the fourth quarter. Indirect installments were pretty much flat and our mortgage loans decreased $21 million in our one to four family and that’s primarily due to the planned run off in our portfolio. Now,…

We are proud of the strides we have made in the last year. 2008 operating results within our lines of business: commercial banking; consumer banking; and wealth management are strong with very good fundamentals. We’ve had good year-over-year balance sheet growth, improving sales productivity and solid household growth in virtually every category. 2008 corporate banking loan growth of 36% and DDA and savings growth of 12.5% were particularly impressive. Branch consumer loans grew a healthy 9.2% and reversed several years of runoff. We feel that both commercial and consumer loan growth came without sacrificing credit quality. Also important, our treasury and finance functions proactively navigated through a precipitous decline in interest rates and a volatile economic environment to lower funding costs and help improve the net interest margin. Before I comment on the individual lines of business, I would share that the market disruption in Pittsburg and the specter of even more disruption has helped propel our household growth across the board. Just one example, through the first six months of 2008 we were enthusiastic about our annualized small business household growth. At the end of the year that same number had virtually doubled and John had mentioned that it averaged almost 6%. Let me comment specifically now on each line of business. In commercial services loans grew some $700 million to roughly $2.7 billion. We feel our focus on our Western PA base coupled with the credit underwriting that has served us well for years at First Commonwealth will allow us to weather the current economic environment relatively well. Additionally, the competitive landscape in 2008 allowed us to both get better credit quality by historical standards and more spread. As an aside, I would mention that Moody’s just ranked Pittsburg commercial real estate as one of the strongest in…

I guess just to summarize again, Mike said that our fundamentals are strong and as a result we continue to show strong performance in our core business. We recognize what the challenges are that are presented to us and we will remain vigilant in our positioning First Commonwealth to navigate these obstacles and to take full advantage of the opportunities they produce within our market. We believe that our focusing on the fundamentals, particularly in an environment like this that we’re currently in will result in sustainable earnings growth for First Commonwealth and our shareholders. Thank you all and now we’ll be happy to take your questions.

(Operator Instructions) Our first question comes from Damon DelMonte – Keefe Bruyette & Woods, Inc. Damon DelMonte – Keefe Bruyette & Woods, Inc.: I was just wondering if you could provide a little insight in to the way you guys go about valuing your trust preferreds? I know in the press release you made the comment of how a large portion of the pooled issuances were downgraded to below investment grade yet the impairments taken this quarter amounted to only $1.3 million.

I’ll let Ed get in a little more of those details.

First of all I want to say that we have as we indicated last quarter, we hired an outside valuation expert to value the securities. As they were valuing them last quarter they were valuing them with current information prior to the downgrade so we feel that the pricing prior to the third quarter pretty much reflected the downgrade at that point. So, the methodology that is used is a rather rigorous one where each one of the banks in the pools are examined by this firm. They look at their financial condition and they simply assign certain probabilities of default based on the strength of each bank. Then, we determine the expected cash flows and then model out whether or not we feel there’s going to be any short falls in the cash flows. If there’s short falls then we feel that under the current accounting guidance we have to take an other than temporary impairment charge because obviously, if the cash flows are short we wouldn’t expect to get our contractual payments back and we record it on PreTSL VII last quarter to reflect that breakage and we recorded an additional impairment charge this quarter because of the additional price deterioration due to that PreTSL. Damon DelMonte – Keefe Bruyette & Woods, Inc.: As far as the amount of deferrals or defaults by the underlying issuers, are you guys up high enough in the structure of the security that your cash flow testing is not showing future impairment?

Damon, on PreTSL VII because there’s no junior tranche left we had one deferral and that resulted in the $1.3 million but, as of 12/31 we had enough subordination in all the other PreTSL to absorb any potential expected losses according to our model. So, to answer your questions, according to our modeling we have high enough – most of our tranches are Mezzanine and two of our tranches are senior. I do want to point out that these pools are seasoned in that they’re four or five years old and that they’ve built subordination over the years so that’s given us some additional cushion here to withstand losses. That’s not to say that if there’s further deterioration at those banks that we’re not going to experience some losses down the line, it’s just as of 12/31/08 with the information that we have we don’t expect that the expected losses will be large enough to cause breakage where we won’t get back our contractual cash flows.

I’d just like to clarify that Damon, we’re using current information but we’re evaluating as of December 31st. So, if anything has happened since then, that’s factored in to our analysis as well. Damon DelMonte – Keefe Bruyette & Woods, Inc.: Then, just to try to frame out the margin here, you mentioned the refinancing of the FHLB borrowings and you put that in to short term borrowings. What was the rate at the FHLB and what’s the rate for the short term borrowing?

I would say that the average rate on the Federal Home Loan Bank advances was probably in the 3% to 3.5% rate and current overnight borrowings, you can see what the target Fed funds rate is. Damon DelMonte – Keefe Bruyette & Woods, Inc.: Then just lastly with respect to the dividend, a lot of banks out there are reducing their dividends trying to preserve and build tangible capital levels. I know you guys just did the equity raise but what are your thoughts here about going forward as being able to work towards that goal of 65% payout ratio and maintaining the current dividend where it’s at.

That’s a good question Damon because I think that it’s a board decision and while we can’t read their minds, I think the concept is if we continue to perform showing that our core foundation that we’re building here is going to get that level of the 60% to 65% earnings in the payout ratio in a reasonable time period, I believe that they’ll hold the dividend. I think everybody looks at it as, I wouldn’t say it’s quite the same of as what Jamie Dimon said at J. P. Morgan as a covenant with the shareholders but it’s a pretty good component of our value.

Your next question is from Mac Hodgson – SunTrust Robinson Humphrey. Mac Hodgson – SunTrust Robinson Humphrey: I had a question on the loan growth in the quarter. I know I think Ed you mentioned that some of the growth was due to draws on specific commitments, when I look specifically at the construction portfolio going from $338 to $418 how much of that was actually new commitments during the quarter that were drawn upon versus draw downs on existing commitments?

On new projects, new commitments or draws on new commitments would have been $33 million. I’m showing about $33 million out of the $80 million and $47 million came from draws on current projects. Mac Hodgson – SunTrust Robinson Humphrey: Was that primarily Western PA stuff or was that more from the out-of-marked shared national credit portfolio?

11.3% of the draws on current projects were out-of-market or outside PA. Mac Hodgson – SunTrust Robinson Humphrey: Then just another question on the shared national credit portfolio, how much growth on the aggregate portfolio occurred in the quarter, loan growth occurred in that SNC during the quarter?

I would say that on our syndication loans for the quarter, now they may not be all shared national credits, I can’t say so I’ll lump them all in to shared syndication loans.

Do we have just the shared national credits?

I think we do know what the growth is, just give us one moment. Mac Hodgson – SunTrust Robinson Humphrey: You can speak on the syndications, that’s fine.

I think out of the $242, about $100 million was in syndication growth. Mac Hodgson – SunTrust Robinson Humphrey: And how much of that is in market?

97%. Mac Hodgson – SunTrust Robinson Humphrey: Then maybe a couple of those non-accruals in the shared national credit portfolio, I think $11.8 million according to the chart, and I do appreciate that detail, it looks like you have pretty high reserves on those, I was curious when those loans were originated?

I don’t have that information. I could tell you that they weren’t originated in 2008 and I think the approvals were made sometime in 2006. Mac Hodgson – SunTrust Robinson Humphrey: Then I guess maybe the last question just the loan to deposit ratio, I know you guys are around 100%, do you have a target there? Would you see it going higher than 100% going forward? I know you have pretty strong loan growth still?

We don’t really have a target for that Mac but I think we want to continue growing our foundation with deposits here in particular because of what’s going on in the marketplace. We think there’s a great opportunity to do that. I think you’re going to see continued loan growth and deposit growth and it could get above the 100%.

Hey Mac, what we really like is the shift in the deposit mix here as Mike and John indicated, we’ve made a conscious effort to let some of the hot money go and we’ve got lots of great opportunities here with the market disruption to grow the non-interest DDA and the low interest bearing savings accounts. If you look at our peers where we have been in comparison to our peers, there’s lots of opportunities for us to grow those portfolios and continue to improve that mix going forward.

I would just add that we’ve really created nice alignment with our commercial sales force both small business and corporate banking group and really nice incentives and focus on core deposit growth as a key part of our fundamentals that I alluded to earlier. That bore good dividends for us in 2008.

Your next question comes from Richard D. Weiss – Janney Montgomery Scott, LLC. Richard D. Weiss – Janney Montgomery Scott, LLC: Let me follow up on I guess a Damon question with regard to the OTTI on the trust preferred, was the first charges was that in the first quarter? The first time you took OTTI?

The first charge was in the third quarter. Richard D. Weiss – Janney Montgomery Scott, LLC: We had it looks like the cost basis of the whole entire pool was about $106 million?

That’s correct. Richard D. Weiss – Janney Montgomery Scott, LLC: If we could switch over just to the net interest margin because you’re using the overnight as a good source of borrowings, when do you decide enough is enough in terms of low interest rates and it’s time to lock in longer term funding.

When they start to rise. Richard D. Weiss – Janney Montgomery Scott, LLC: Is that it John? As soon as you see them start to rise, that’s pretty much it, you don’t go too long? That’s a tough decision I think?

It is, it’s a balancing thing that we constantly struggle with but I think we’re also monitoring our interest rate risk at the same time. So, there was an opportunity to do what we’ve done without jeopardizing our interest rate position because of the capital that we had while it was being deployed so I think that gave us a little bit more of an opportunity that we may have had without having raised that extra $100 million capital. Richard D. Weiss – Janney Montgomery Scott, LLC: Also, in terms of the loan growth which is certainly this year much higher than your historical norms, have there been any changing to your underwriting or pricing standards?

I’ll just start out and then I’ll let either Mike or Ed comment but, there have been changes. The underwritings standards are still pretty strict and I think what we found was staying strict with our underwriting standards has kept us out of the market pretty much in the last few years. This year, I think not only have we been able to keep the underwriting standards strong but I think we’ve improved our spreads, improved our yields because there’s a lot of last man standing kind of thing. There’s less competition for the deals and we’ve been able to turn down enough and keep enough that the ones we’re keeping we’re able to price them effectively and we’ve actually improved our scores, our pricing and our credit scores. Would any of you two like to add on that?

I would just like to say on the commercial banking side we risk rate each credit we approve and we feel like the risk rating there has strengthened on the credits we’ve approved over the last year. I would say the same thing on the consumer lending side, we feel like whether it is FICO scores or other lead indicators, actually the deals that we’ve put on the books and the loans look more promising even than the loans historically. Richard D. Weiss – Janney Montgomery Scott, LLC: Are you hiring more commercial loan officers or have you in the past year?

We did in the last year but we’re going to be opportunistic on that. Richard D. Weiss – Janney Montgomery Scott, LLC: So it’s mostly the same people are just doing a greater amount of business?

It’s partly doing a greater amount of business and I think we did a little bit of restructuring the group to allow focuses on commercial real estate, regional lending and the participations or the core finances as we call it. So, that allowed them to specialize a little bit better and get a little bit more traction in each one of those three areas. We do have some LPOs that have opened up in the last two years that are starting to show some growth. We had one down in Pittsburg for a while but we opened a state college operation and we got some good traction there.

Your next question comes from Thomas Alonso – Fox-Pitt Kelton Cochran LLC. Thomas Alonso – Fox-Pitt Kelton Cochran LLC: On the LIBOR benefit for the margin for the quarter, can you quantify that in any way? Can you give us a sense of how much that helped?

It wasn’t significant. I have to say I have to be careful here because we’ve been very disciplined in we try not to give any kind of forward-looking guidance. It was for two months, I don’t have that information in front of me Tom, sorry about that. Thomas Alonso – Fox-Pitt Kelton Cochran LLC: It’s fair to say that if you say it’s not significant than I would assume that it’s not going to move the needle as it rolls off here in the first quarter?

I would say that the spreads were higher at the end of the third quarter and we might have had a one month benefit from some of that which would have been in the fourth quarter. But, it’s more in a normal range today than it was back then in September. Thomas Alonso – Fox-Pitt Kelton Cochran LLC: The securities book, just to get a sense, kind of flat this quarter actually on an average basis if I remember correctly, actually down a little bit, is that a trend we should expect to continue or do you think that’s going to sort of flatten out here as you guys are more focused on loan growth? Or, are you going to still use those securities to run off in that portfolio to fund the loan growth?

We’re going to continue using that portfolio to fund loan growth. I think the concept is that’s a better place for it to be. We’ll evaluate as the markets change and go back to a little more normal I think we can reevaluate our investment position at that time. Thomas Alonso – Fox-Pitt Kelton Cochran LLC: Then on the provision, the expense this quarter, part of that was related to the credits you mentioned and part of it was for loan growth, is that the way we should look at it going forward, focus more on the loan growth and then if as things pop up you’ll reserve for them as required? Or, are you guys going to maybe try to get ahead of some stuff here as the economy continues to get weaker?

I think that you probably would expect a normal amount going in for loan growth but we believe it’s inappropriate to be doing a kitchen sink approach type of thing.

Your next question comes from Matthew C. Schultheis – Boenning & Scattergood, Inc. Matthew C. Schultheis – Boenning & Scattergood, Inc.: You mentioned that the non-performers out of your SNC portfolio were approved 2006. When did they hit your balance sheet?

I don’t have the exact information in front of me Matt, but I know that most of them hit the balance sheet either in 2006 or prior. There was probably some of them hit in early 2007 that were funded in early 2007. Matthew Schultheis – Boenning & Scattergood Inc.: I just want to verify this, basically the trust preferred portfolio you talked about how you guys went through the valuation of that, but that’s basically all level three assets, right?

Yes, it is. It’s the required approach under current accounting guidance that you use level three when observable market data is not available as you know. Matthew Schultheis – Boenning & Scattergood Inc.: Now, if you were to go though and find similar securities to these you’d probably be getting what, $0.45 on the $1.00 in the market right now?

Right now we don’t see any active market in these securities. From what we’ve observed any trading was done at distressed levels. That’s why the guidance came out to address the lack of a market and so we were pricing in accordance with the guidance with a pretty strong empirical model that we think is certainly appropriate under a level three environment. Matthew Schultheis – Boenning & Scattergood Inc.: Most people are shrinking their construction portfolio both commercial and particularly residential obviously, but even a lot of the commercial out of concerns that office buildings will have high vacancy rates, even multi-family may have been a little overly optimistic on some of the cap rate substance when those projects were initially analyzed. What do you guys see in construction that keeps you going back and making construction loans that everybody else seems to be asleep with?

Primarily they’re in our Western PA footprint. We know the borrowers, they’re high quality borrowers and people that we’ve been doing business with for years and one I can think about in particular it’s their corporate headquarters so it’s line of sight, it’s not much of a stretch. That one in particular I’m thinking of, our largest construction loan is owner occupied and I just think we’re playing it close to the vest and we know the borrowers and we feel good about the individual transactions one by one.

Matt, if I could just add to that because I think there’s a concern about the residential marketplace here, construction marketplace. In the quarter out of the $80 million in gross here only $1.1 million of that came from financing one to four family residential construction. Matthew Schultheis – Boenning & Scattergood Inc.: One last question and this may be more theoretical than anything else, obviously with the Federal Home Loan Bank of both Seattle and Pittsburgh implying that they were going to be undercapitalized at the end of the year and cutting their dividend, not repurchasing excess stock that you guys may have, have they come to you and said that they want you to put up more money to recapitalize the Federal Home Loan Bank of Pittsburgh? What do you think this does as far as the possibility of impairments on the stock for the Federal Home Loan Bank, understanding that the accounting behind it is open to a tremendous amount of interpretation? Lastly, how much of that stock do you have? John I’ll ask the last one first, $51 million because that’s the only given and the rest of it’s all speculation. First of all I guess we probably can’t disclose other than I just already did, they haven’t come to us and asked us about increasing our capital or our investment in them. So I don’t know what they’re doing out there. As far as the accounting report, that’s a fluid situation and we’re monitoring that closely as we go. Ed, you want to add anything on that?

Matt, my experience with the Federal Home Loan Bank is that they’ve always been very conservative and the first sign of trouble, they cut their dividend and it could be three, six, nine months or more before they start paying that back and they’re going to try and recapitalize themselves before they go out and ask. As John said, we have not had any communications and it would be highly speculative and probably not valuable to talk more about it because we just don’t know. Matthew Schultheis – Boenning & Scattergood Inc.: One of the things that they’re doing to recapitalize, my understanding, is that they are charging borrowers more to borrow from them. That’s the best way to become profitable if you’re a bank, huh?

What a concept. Matthew Schultheis – Boenning & Scattergood Inc.: Are you guys seeing any pressure on your wholesale rates for that or are you not really worried about that right now?

I would say that it hasn’t dropped to the same extent that the Fed Funds target rate has, so it was riding a lower rate prior to that and that slowed down, that reduction slowed down. Ed, you want to comment?

Matt, we might be seeing something maybe from a zero to 10 basis point effect here from that. The other thing I want to point is that there are other opportunities that we’re having here in terms of borrowing and replacing Federal Home Loan Bank as a source. So you know they’ve been publicly announced through Federal Reserve Bank, so there’ll be other opportunities to get short term funding here in 2009.

We show no further questions at this time. I would like to turn the conference back over to management for any closing remarks.

Thank you all for participating on the call. I think we’re a time where we’ve been focused on laying the foundation for the future and we appreciate your commitment to being with us today. Thanks.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.