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## Postretirement Benefits other than Pensions for Acquired Subsidiary 

Employees of Southwest Bank were also covered by a post retirement benefit plan. The measurement date for this plan was October 1. 

Net periodic benefit cost of this plan was as follows: 

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The following table sets forth the plan’s funded status and the amounts recognized on the Corporation’s Consolidated Balance Sheet as of December 31: 

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The following table sets forth the change in benefit obligation: 

The discount rate used in determining the actuarial present value of the accumulated postretirement benefit obligation was 6.25% for 2003 and 6.75% for 2002. The health care cost trend rates used for 2003 were projected at an initial rate of 8.00% for 2004 decreasing over time to an annual rate of 4.25% in 2008 for both indemnity plan participants and non-indemnity plan participants. For 2002, rates used were projected at an initial rate of 9.00% for 2003 decreasing over time to an annual rate of 4.25% in 2008 for both indemnity plan participants and non-indemnity plan participants. 

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) introduces a prescription drug benefit under Medicare Part D. The Act also introduces a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially 

## NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 

equivalent to Medicare Part D. The preceding measures of the accumulated postretirement benefit obligation or net periodic postretirement benefit cost do not reflect the effects of the Act on the Corporation’s plan. The Corporation has elected to defer recognizing the effects of the Act in accounting and reporting for its plan until authoritative accounting guidance, including guidance on accounting for the federal subsidy is issued. That guidance, when issued, could impact reported calculations. 

The health care cost trend rate assumption can have a significant impact on the amounts reported for this plan. A one-percentage-point change in assumed health care cost trend rates would have the following effects: 

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## NOTE 23— Unearned ESOP Shares 

The Corporation had borrowed amounts which were concurrently loaned to the First Commonwealth Financial Corporation Employee Stock Ownership Plan Trust (“ESOP”) on the same terms. The combined balances of the ESOP related loans were $1,994 at December 31, 2003 and $3,055 at December 31, 2002. 

The loans have been recorded as long-term debt on the Corporation’s Consolidated Balance Sheets. A like amount of unearned ESOP shares was recorded as a reduction of common shareholders’ equity. Unearned ESOP shares, included as a component of shareholders’ equity, represent the Corporation’s prepayment of future compensation expense. The shares acquired by ESOP are held in a suspense account and will be released to the ESOP for allocation to the plan participants as the loan is reduced. Repayment of the loans is scheduled to occur over a remaining two-year period from contributions to the ESOP by the Corporation and dividends on unallocated ESOP shares. 

The following is an analysis of ESOP shares held in suspense: 

See NOTE 1 for the definition of “old shares” and “new shares” 

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The fair market value of the new shares remaining in suspense was approximately $1,890 and $2,359 at December 31, 2003 and 2002, respectively. 

(Dollar Amounts in Thousands) 

