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## NOTE 3— Supplemental Cash Flow Disclosures 

<img src='content_image/55504.jpg'>

## NOTE 4— Joint Venture Buy-Out of Insurance Agency 

When the Corporation formed First Commonwealth Insurance Agency (“ FCIA” ), its wholly-owned subsidiary, it entered into a joint venture agreement with a partner to assist FCIA in establishing itself as a full service insurance agency in exchange for an undivided 50% interest in FCIA’ s expiring list of policy holders. Effective August 31, 2000 the Corporation acquired the 50% interest in the policy holders’  list owned by its joint venture partner; thereby becoming the sole owner of such list. In exchange, the joint venture partner received 89,742 shares of the Corporation’ s common stock. 

## NOTE 5— Sale of Subsidiary 

Effective April 1, 1999, the Corporation sold all of the outstanding common stock of BSI Financial Services, Inc. (“ BSI” ), a wholly-owned subsidiary of the Corporation, to a bank headquartered in Richmond, Indiana. Cash proceeds in the amount of $1,709 were received, resulting in a loss on sale of $202 which has been reflected in the financial statements. BSI provided mortgage banking, loan servicing and collection services to the Corporation’ s subsidiary banks and unaffiliated organizations. Services performed by BSI for the subsidiary banks have been transferred to the subsidiary banks or other nonbank subsidiaries of the Corporation. 

## NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

(Dollar Amounts in Thousands, except per share data) 

## NOTE 6— Subsequent Event 

Effective March 1, 2002, the Corporation acquired all of the outstanding shares of Strategic Capital Concepts, Inc. (“ SCC” ) and Strategic Financial Advisors, Inc. (“ SFA” ), each a Pennsylvania corporation headquarted in Allison Park, Pennsylvania. As a registered investment adviser, Strategic Capital Concepts provides financial planning, asset management and consulting services to individuals, businesses, retirement plans, trusts and estates. Strategic Financial Advisors offers investment and insurance products as well as employee benefit services. Each of the outstanding shares of Strategic Capital Concepts, Inc. and Strategic Financial Advisors, Inc. were exchanged for shares of the Corporation’ s common stock. In addition, the shareholders of SCC and SFA are entitled to receive additional shares of the Corporation’ s common stock for each of the years 2002 through 2005 based on a formula defined in the merger agreement which takes into consideration the financial performance of SCC and SFA after the merger date. The merger was accounted for as a purchase transaction whereby the identifiable tangible and intangible assets and liabilities of SCC and SFA have been recorded at their fair values at the acquisition date. As prescribed under the purchase method of accounting, the results of operations of SCC and SFA from the date of acquisition will be included in the Corporation’ s financial statements for the first quarter of 2002. 

## NOTE 7— Cash and Due From Banks on Demand 

Regulations of the Board of Governors of the Federal Reserve System impose uniform reserve requirements on all depository institutions with transaction accounts (checking accounts, NOW accounts, etc.). Reserves are maintained in the form of vault cash or a noninterest-bearing balance held with the Federal Reserve Bank. The subsidiary banks maintained with the Federal Reserve Bank average balances of $4,269 during 2001 and $3,075 during 2000. 

