Note 30—Condensed Financial Information of First Commonwealth Financial Corporation (parent company only)


Statements of Financial Condition	December 31,
	2011		2010
	(dollars in thousands)
Assets
Cash	$	6,376	$	20,871
Loans to affiliated parties		34		39
Investment in subsidiaries		751,702		730,066
Investment in unconsolidated subsidiary trusts		3,291		3,291
Investment in jointly-owned company		8,007		7,883
Premises and equipment, net		14,196		12,225
Recievable from subsidiaries		2,545		2,856
Other assets		85,833		91,924

Total assets	$	871,984	$	869,155

Liabilities and Shareholders' Equity
Accrued expenses and other liabilities	$	6,091	$	10,028
Loans payable		1,600		3,600
Subordinated debentures payable		105,750		105,750
Shareholders' equity		758,543		749,777

Total liabilities and shareholders' equity	$	871,984	$	869,155


Statements of Operations	2011			2010			2009
	(dollars in thousands)
Interest and dividends	$	1		$	1		$	2
Dividends from subsidiaries		10,321			3,190			31,048
Interest expense		(5,605	)		(5,658	)		(6,265	)
Other income		30,595			28,789			29,125
Operating expense		(44,057	)		(42,786	)		(42,916	)

Income (loss) before taxes and equity in undistributed earnings of subsidiaries		(8,745	)		(16,464	)		10,994
Applicable income tax benefits		6,618			6,790			7,226

Income (loss) before equity in undistributed earnings of subsidiaries		(2,127	)		(9,674	)		18,220
Equity in undistributed earnings of subsidiaries		17,401			32,652			(38,284	)

Net income (loss)	$	15,274		$	22,978		$	(20,064	)


Statements of Cash Flow	2011			2010			2009
	(dollars in thousands)
Operating Activities
Net income (loss)	$	15,274		$	22,978		$	(20,064	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		3,730			3,658			3,330
Net (gain) loss on sales of assets		(1,069	)		(3	)		8
Decrease (increase) in prepaid income taxes		0			23			(23	)
Undistributed equity in subsidiaries		(17,401	)		(32,652	)		38,285
Other net		1,649			9,029			(3,819	)

Net cash provided by operating activities		2,183			3,033			17,717
Investing Activities
Net change in loans to affiliated parties		5			7			8
Purchases of premises and equipment		(5,736	)		(3,026	)		(3,282	)
Proceeds from sale of other assets		1,461			15			(6	)
Additional investment in subsidiary		0			(70,000	)		0

Net cash used by investing activities		(4,270	)		(73,004	)		(3,280	)
Financing Activities
Proceeds from issuance of common stock		144			83,913			0
Discount on dividend reinvestment plan purchases		(63	)		(33	)		(369	)
Dividends paid		(12,558	)		(5,306	)		(29,677	)
Proceeds from reissuance of treasury stock		72			4,248			484
Purchase of treasury stock		(9	)		(9	)		(18	)
Stock option tax benefit		6			0			149

Net cash (used in) provided by financing activities		(12,408	)		82,813			(29,431	)

Net (decrease) increase in cash		(14,495	)		12,842			(14,994	)
Cash at beginning of year		20,871			8,029			23,023

Cash at end of year	$	6,376		$	20,871		$	8,029

Cash dividends declared per common share were $0.12 for 2011, $0.06 for 2010 and $0.18 for 2009.

During 2004, the ESOP obtained a $14.0 million line of credit from an unrelated financial institution. The line of credit was used to purchase stock in 2005 for the ESOP and is guaranteed by First Commonwealth. During 2005, $8.5 million was borrowed on the line. There were no borrowings on the line during 2011, 2010 and 2009. The loan was recorded as long-term debt and the offset was recorded as a reduction of common shareholders' equity. Current balance of the ESOP loan is $1.6 million. See Note 24 "Unearned ESOP Shares." We are currently not meeting debt covenants on this loan related to Return on Average Assets and expect to either obtain a waiver or a modification from the lender for these covenants.

First Commonwealth Financial Corporation has an unsecured $15.0 million line of credit with another financial institution. There are no amounts outstanding on this line as of December 31, 2011. As of December 31, 2011, we did not meet the debt covenants related to Return on Average Assets but have obtained a waiver from the lender for this covenant for the quarter ended December 31, 2011.

Quarterly Summary of Financial Data—Unaudited

The unaudited quarterly results of operations for the years ended December 31 are as follows:


	2011
	Fourth Quarter			Third Quarter		Second Quarter		First Quarter
	(dollars in thousands, except per share data)
Interest income	$	56,487		$	57,600	$	57,989	$	59,469
Interest expense		8,854			10,120		11,104		11,600

Net interest income		47,633			47,480		46,885		47,869
Provision for credit losses		25,912	(a)		6,975		9,112		13,817

Net interest income after provision for credit losses		21,721			40,505		37,773		34,052
Net impairment losses		0			0		0		0
Net securities gains		0			0		1,608		577
Other noninterest income		15,478			10,799		15,456		13,751
Other expenses		48,576			41,121		45,700		41,429

(Loss) income before income taxes		(11,377	)		10,183		9,137		6,951
Income tax (benefit) provision		(5,660	)		1,857		1,718		1,705

Net (loss) income	$	(5,717	)	$	8,326	$	7,419	$	5,246

Basic (loss) earnings per share	$	(0.05	)	$	0.08	$	0.07	$	0.05
Diluted (loss) earnings per share		(0.05	)		0.08		0.07		0.05
Average shares outstanding		104,765,492			104,728,915		104,686,072		104,618,499
Average shares outstanding assuming dilution		104,765,492			104,728,915		104,686,072		104,623,518

(a)

The increase in the provision for credit losses during the fourth quarter can be attributed to revised collateral valuations on nine impaired commercial loan relationships, primarily secured by commercial real estate, the transfer of three loan relationships to held-for-sale and the restructuring of two commercial loans.


	2010
	Fourth Quarter			Third Quarter			Second Quarter			First Quarter
	(dollars in thousands, except per share data)
Interest income	$	63,363		$	65,982		$	68,937		$	70,078
Interest expense		13,392			14,886			16,341			16,980

Net interest income		49,971			51,096			52,596			53,098
Provision for credit losses		8,000			4,522			4,010			45,020

Net interest income after provision for credit losses		41,971			46,574			48,586			8,078
Net impairment losses		(43	)		(4,290	)		(2,110	)		(2,750	)
Net securities gains		10			1,430			562			420
Other noninterest income		14,288			13,739			14,197			13,781
Other expenses		43,378			40,931			43,678			43,239

Income (loss) before income taxes		12,848			16,522			17,557			(23,710	)
Income tax provision (benefit)		903			5,863			4,015			(10,542	)

Net income (loss)	$	11,945		$	10,659		$	13,542		$	(13,168	)

Basic earnings (loss) per share	$	0.11		$	0.11		$	0.15		$	(0.15	)
Diluted earnings (loss) per share		0.11			0.11			0.15			(0.15	)
Average shares outstanding		104,524,923			97,199,306			85,777,550			85,029,748
Average shares outstanding assuming dilution		104,527,683			97,203,753			85,788,566			85,029,748