| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|--------------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

|   | Farmers Capital Bank Corporation                       |   |
|--------|--------------------------------------------------------|--------|
|   | (Exact name of registrant as specified in its charter) |   |

| Kentucky                                                            |   | 61-1017851                             |
|---------------------------------------------------------------------|--------|----------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. EmployerIdentification Number) |

| P.O. Box 309, 202 West Main St.          |   |       |
|------------------------------------------|--------|------------|
| Frankfort, Kentucky                      |   | 40601      |
| (Address of principal executive offices) |   | (Zip Code) |

| Common Stock - $.125 per share Par Value |   | The NASDAQ Global Select Market             |
|------------------------------------------|--------|---------------------------------------------|
| (Title of each class)                    |   | (Name of each exchange on which registered) |

|   | None             |   |
|--------|------------------|--------|
|   | (Title of Class) |   |

| Yes o | No x |
|-------|------|

| Yes o | No x |
|-------|------|

| Yes x | No o |
|-------|------|

----

| Large accelerated filer o |   | Accelerated filer x         |
|---------------------------|--------|-----------------------------|
|                      |   |                        |
| Non-accelerated filer o   |   | Smaller reporting company o |

| Yes o | No x |
|-------|------|

Part III

index of exhibits 

----

|   |              |                                                                                                         | Page   |
|--------|-------------------|--------------------------------------------------------------------------------------------------------------|--------|
|   |              | Part I                                                                                                       |   |
|   |              |                                                                                                         |   |
|   | Item 1.           | Business                                                                                                     | 11     |
|   | Item 1A.          | Risk Factors                                                                                                 | 21     |
|   | Item 1B.          | Unresolved Staff Comments                                                                                    | 30     |
|   | Item 2.           | Properties                                                                                                   | 30     |
|   | Item 3.           | Legal Proceedings                                                                                            | 31     |
|   | Item 4.           | Submission of Matters to a Vote of Security Holders                                                          | 31     |
|   |              |                                                                                                         |   |
|   |              | Part II                                                                                                      |   |
|   |              |                                                                                                         |   |
|   | Item 5.           | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 31     |
|   | Item 6.           | Selected Financial Data                                                                                      | 34     |
|   | Item 7.           | Management's Discussion and Analysis of Financial Condition and Results of Operations                        | 35     |
|   | Item 7A.          | Quantitative and Qualitative Disclosures About Market Risk                                                   | 60     |
|   | Item 8.           | Financial Statements and Supplementary Data                                                                  | 61     |
|   | Item 9.           | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                         | 100    |
|   | Item 9A.          | Controls and Procedures                                                                                      | 100    |
|   | Item 9B.          | Other Information                                                                                            | 101    |
|   |              |                                                                                                         |   |
|   |              | Part III                                                                                                     |   |
|   |              |                                                                                                         |   |
|   | Item 10.          | Directors, Executive Officers and Corporate Governance                                                       | 102    |
|   | Item 11.          | Executive Compensation                                                                                       | 102    |
|   | Item 12.          | Security Ownership of Certain Beneficial Owners and  Management and Related Stockholder Matters    | 102    |
|   | Item 13.          | Certain Relationships and Related Transactions                                                               | 102    |
|   | Item 14.          | Principal Accounting Fees and Services                                                                       | 102    |
|   |              |                                                                                                         |   |
|   |              | Part IV                                                                                                      |   |
|   |              |                                                                                                         |   |
|   | Item 15.          | Exhibits, Financial Statement Schedules                                                                      | 102    |
|   |              |                                                                                                         |   |
|   | Signatures        | 105                                                                                                          |
|   | Index of Exhibits | 106                                                                                                          |

----

PART I

Item 1. Business

Risk Factors
Forward-Looking Statements
Item 7

| Tier   | Entity                                          |
|--------|-------------------------------------------------|
| 1      | Farmers Capital Bank Corporation, Frankfort, KY |
|   |                                            |   |
| 2      |                                            | United Bank & Trust Company, Versailles, KY 100% |
| 3      |                                            |   | EGT Properties, Inc., Georgetown, KY 100% |
| 4      |                                            |   |   | NUBT Properties, LLC, Georgetown, KY 83% |
| 5      |                                            |   |   | Flowing Creek Realty, LLC, Bloomfield, IN 67% |
|   |                                            |   |   |
| 2      |                                            | The Lawrenceburg Bank and Trust Company, Lawrenceburg KY 100% |
|   |                                            |   |
| 2      |                                            | Farmers Bank & Capital Trust Company, Frankfort, KY 100% |
| 3      |                                            |   | Farmers Bank Realty Co., Frankfort, KY 100% |
| 3      |                                            |   | Leasing One Corporation, Frankfort, KY 100% |

----

| 3      |   |                                                              | EG Properties, Inc., Frankfort, KY 100%                   |
|--------|--------|-------------------------------------------------------------------|-----------------------------------------------------------|
| 3      |   |                                                              | Austin Park Apartments, LTD, Frankfort, KY 99%            |
| 3      |   |                                                              | FA Properties, Inc., Frankfort, KY 100%                   |
| 3      |   |                                                              | FORE Realty, LLC, Frankfort, KY 100%                      |
| 3      |   |                                                              | Frankfort Apartments II, LTD, Frankfort, KY 99.9%         |
| 3      |   |                                                              | St. Clair Properties, LLC, Frankfort, KY 95%              |
| 3      |   |                                                              | Farmers Capital Insurance Corporation, Frankfort, KY 100% |
| 4      |   |                                                              |                                                      | Farmers Fidelity Insurance Agency, LLP, Lexington, KY 50% |
|   |   |                                                              |                                                      |   |
| 2      |   | First Citizens Bank, Elizabethtown, KY 100%                       |
|   |   |                                                              |                                                      |
| 2      |   | Citizens Bank of Northern Kentucky, Inc., Newport, KY 100%        |
| 3      |   |                                                              | ENKY Properties, Inc., Newport, KY 100%                   |
| 4      |   |                                                              |                                                      | NUBT Properties, LLC, Georgetown, KY 17% |
| 5      |   |                                                              |                                                      | Flowing Creek Realty, LLC, Bloomfield, IN 67% |
|   |   |                                                              |                                                      |
| 2      |   | FCB Services, Inc., Frankfort, KY 100%                            |
|   |   |                                                              |
| 2      |   | Kentucky General Holdings, LLC, Frankfort, KY 100%                |
|   |   |                                                              |                                                      |   |
| 2      |   | FFKT Insurance Services, Inc., Frankfort, KY 100%                 |
|   |   |                                                              |                                                      |
| 2      |   | Farmers Capital Bank Trust I, Frankfort, KY 100%                  |
|   |   |                                                              |
| 2      |   | Farmers Capital Bank Trust II, Frankfort, KY 100%                 |
|   |   |                                                              |
| 2      |   | Farmers Capital Bank Trust III, Frankfort, KY 100%                |
|   |   |                                                              |
| 2      |   | EKT Properties, Inc. Frankfort, KY (100%)                         |
|   |   |                                                              |
| 2      |   | Kentucky General Life Insurance Company, Frankfort, KY (Inactive) |

----

----

----

----

----

----

|   | · | limit the interest and other charges collected or contracted for by all of the Company’s subsidiary banks; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | govern disclosures of credit terms to consumer borrowers; |
|--------|--------|-----------------------------------------------------------|

|   | · | require financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | prohibit discrimination on the basis of race, creed, or other prohibited factors in extending credit; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | require all of the Company’s subsidiary banks to safeguard the personal non-public information of its customers, provide annual notices to consumers regarding the usage and sharing of such information and limit disclosure of such information to third parties except under specific circumstances; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | govern the manner in which consumer debts may be collected by collection agencies. |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | require disclosure of the interest rate and other terms of consumer deposit accounts; |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | impose a duty to maintain the confidentiality of consumer financial records and prescribe procedures for complying with administrative subpoenas of financial records; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

Item 1A. Risk Factors

----

----

----

----

----

| ·   | general economic conditions and conditions in the financial markets, |
|--------------------|----------------------------------------------------------------------|

| ·   | changes in global financial markets, such as interest or foreign exchange rates, stock, commodity or real estate valuations or volatility and other geopolitical events, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | conditions in our local and national credit, mortgage and housing markets, |
|--------------------|----------------------------------------------------------------------------|

| ·   | developments with respect to financial institutions generally, including government regulation, |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | our dividend practice, and |
|--------------------|----------------------------|

| ·   | actual and anticipated quarterly fluctuations in our operating results and earnings. |
|--------------------|--------------------------------------------------------------------------------------|

----

----

----

|   | · | unanticipated declines in borrower income or cash flow; |
|--------|--------|---------------------------------------------------------|

|   | · | changes in economic and industry conditions; |
|--------|--------|----------------------------------------------|

|   | · | the duration of the loan; and |
|--------|--------|-------------------------------|

|   | · | in the case of a collateralized loan, uncertainties as to the future value of the collateral. |
|--------|--------|-----------------------------------------------------------------------------------------------|

----

Item 1B. Unresolved Staff Comments

Item 2. Properties

Notes to Consolidated Financial Statements 
Item 8, Financial Statement and Supplementary Data

| Banking Offices                                               |
|---------------------------------------------------------------|
| 125 W. Main Street, Frankfort, KY                             |
| 555 Versailles Road, Frankfort, KY                            |
| 1401 Louisville Road, Frankfort, KY                           |
| 154 Versailles Road, Frankfort, KY                            |
| 1301 US 127 South, Frankfort, KY (leased)                     |
| 200 E. Main Street, Georgetown, KY                            |
| 100 Farmers Bank Drive, Georgetown, KY (leased)               |
| 100 N. Bradford Lane, Georgetown, KY                          |
| 3285 Main Street, Stamping Ground, KY                         |
| 2509 Sir Barton Way, Lexington, KY (leased)                   |
| 3098 Harrodsburg Road, Lexington, KY (leased)                 |
| 100 United Drive, Versailles, KY                              |
| 146 N. Locust Street, Versailles, KY                          |
| 206 N. Gratz, Midway, KY                                      |
| 128 S. Main Street, Lawrenceburg, KY                          |
| 201 West Park Shopping Center, Lawrenceburg, KY               |
| 838 N. College Street, Harrodsburg, KY                        |
| 1035 Ben Ali Drive, Danville, KY (leased)                     |
| 425 W. Dixie Avenue, Elizabethtown, KY                        |
| 3030 Ring Road, Elizabethtown, KY                             |
| 111 Towne Drive (Kroger Store) Elizabethtown, KY (leased)     |
| 645 S. Dixie Blvd., Radcliff, KY                              |
| 4810 N. Preston Highway, Shepherdsville, KY                   |
| 157 Eastbrooke Court, Mt. Washington, KY                      |
| 103 Churchill Drive, Newport, KY                              |
| 7300 Alexandria Pike, Alexandria, KY                          |
| 164 Fairfield Avenue, Bellevue, KY                            |
| 8730 US Highway 42, Florence, KY                              |
| 34 N. Ft. Thomas Avenue, Ft. Thomas, KY (leased)              |
| 2911 Alexandria Pike, Highland Heights, KY (leased)           |
| 2006 Patriot Way, Independence, KY                            |
| 2774 Town Center Blvd., Crestview Hills, KY (leased)          |
| 201 N. Main Street, Nicholasville, KY                         |
| 995 S. Main Street (Kroger Store), Nicholasville, KY (leased) |
| 986 N. Main Street, Nicholasville, KY                         |
| 106 S. Lexington Avenue, Wilmore, KY                          |

----

Item 3. Legal Proceedings

Item 4. Submission of Matters to a Vote of Security Holders

| For       | Abstain | Against | Total     |
|-----------|---------|---------|-----------|
| 5,305,292 | 198,434 | 464,343 | 5,968,069 |

| For       | Abstain | Against | Total     |
|-----------|---------|---------|-----------|
| 5,338,044 | 107,262 | 522,763 | 5,968,069 |

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

----

|                                                     |   | 2004   |   |   | 2005   |   |   | 2006   |   |   | 2007   |   |   | 2008   |   |   | 2009   |   |
|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Farmers Capital Bank Corporation                         |   | $      | 100.00 |   |   | $      | 77.62  |   |   | $      | 91.32  |   |   | $      | 75.54  |   |   | $      | 71.92 |   |   | $ | 31.71 |   |
| NASDAQ Composite                                         |   |   | 100.00 |   |   |   | 101.33 |   |   |   | 114.01 |   |   |   | 123.71 |   |   |   | 73.11 |   |   |   | 105.61 |   |
| Southeastern Banks Under 1 Billion Market-Capitalization |   |   | 100.00 |   |   |   | 98.61  |   |   |   | 117.88 |   |   |   | 90.06  |   |   |   | 76.83 |   |   |   | 53.94 |   |

----

| NASDAQ Market Makers              |                          |
|-----------------------------------|-------------------------------|
| J.J.B. Hilliard, W.L. Lyons, Inc. | Morgan, Keegan and Company    |
| (502) 588-8400                    | (800) 260-0280                |
| (800) 444-1854                    |                          |
|                              |                          |
| UBS Securities, LLC               | Howe Barnes Investments, Inc. |
| (859) 269-6900                    | (800) 621-2364                |
| (502) 589-4000                    |                          |
|                              |                          |

page 59 
Note 17 

----

Item 6. Selected Financial Data

| Selected Financial Highlights                                                |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |
|------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|
| December 31,(In thousands, except per share data)                            |   | 2009   |      |   | 2008   |   |      | 2007   |   |   | 2006      |   |   | 2005   |      |
| Results of Operations                                                        |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |
| Interest income                                                              |   | $      | 100,910   |   |   | $      | 113,920   |   |   | $      | 114,257   |   |   | $      | 92,340    |   |   | $ | 65,651 |   |
| Interest expense                                                             |   |   | 47,065    |   |   |   | 55,130    |   |   |   | 56,039    |   |   |   | 41,432    |   |   |   | 24,409 |   |
| Net interest income                                                          |   |   | 53,845    |   |   |   | 58,790    |   |   |   | 58,218    |   |   |   | 50,908    |   |   |   | 41,242 |   |
| Provision for loan losses                                                    |   |   | 20,768    |   |   |   | 5,321     |   |   |   | 3,638     |   |   |   | 965       |   |   |   | 622 |   |
| Noninterest income                                                           |   |   | 28,169    |   |   |   | 9,810     |   |   |   | 24,157    |   |   |   | 20,459    |   |   |   | 19,867 |   |
| Noninterest expense                                                          |   |   | 115,141   |   |   |   | 60,098    |   |   |   | 58,823    |   |   |   | 53,377    |   |   |   | 42,164 |   |
| (Loss) income from continuing operations                                     |   |   | (44,742   | )      |   |   | 4,395     |   |   |   | 15,627    |   |   |   | 13,665    |   |   |   | 14,532 |   |
| Income from discontinued operations1                                         |   |   |      |   |   |   |      |   |   |   |      |   |   |   | 7,707     |   |   |   | 1,240 |   |
| Net (loss) income                                                            |   |   | (44,742   | )      |   |   | 4,395     |   |   |   | 15,627    |   |   |   | 21,372    |   |   |   | 15,772 |   |
| Dividends and accretion on preferred shares                                  |   |   | (1,802    | )      |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Net (loss) income available to common shareholders                           |   |   | (46,544   | )      |   |   | 4,395     |   |   |   | 15,627    |   |   |   | 21,372    |   |   |   | 15,772 |   |
| Per Common Share Data                                                        |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Basic:                                                                       |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| (Loss) income from continuing operations                                     |   | $      | (6.32     | )      |   | $      | .60       |   |   | $      | 2.03      |   |   | $      | 1.82      |   |   | $ | 2.13 |   |
| Net (loss) income                                                            |   |   | (6.32     | )      |   |   | .60       |   |   |   | 2.03      |   |   |   | 2.85      |   |   |   | 2.31 |   |
| Diluted:                                                                     |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| (Loss) income from continuing operations                                     |   |   | (6.32     | )      |   |   | .60       |   |   |   | 2.03      |   |   |   | 1.82      |   |   |   | 2.12 |   |
| Net (loss) income                                                            |   |   | (6.32     | )      |   |   | .60       |   |   |   | 2.03      |   |   |   | 2.84      |   |   |   | 2.30 |   |
| Cash dividends declared                                                      |   |   | .85       |   |   |   | 1.32      |   |   |   | 1.32      |   |   |   | 1.43      |   |   |   | 1.32 |   |
| Book value                                                                   |   |   | 16.11     |   |   |   | 22.87     |   |   |   | 22.82     |   |   |   | 22.43     |   |   |   | 20.87 |   |
| Tangible book value2                                                         |   |   | 15.44     |   |   |   | 14.81     |   |   |   | 14.43     |   |   |   | 15.81     |   |   |   | 16.04 |   |
| Selected Ratios                                                              |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Percentage of (loss) income from continuing operations to:                   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Average shareholders’ equity (ROE)                                     |   |   | (22.68    | )%     |   |   | 2.62      | %      |   |   | 8.88      | %      |   |   | 8.49      | % |   |   | 10.81 | % |
| Average total assets3 (ROA)                                                  |   |   | (1.98     | )      |   |   | .21       |   |   |   | .83       |   |   |   | .85       |   |   |   | 1.10 |   |
| Percentage of common dividends declared to income from continuing operations |   | NM     |      |   |   | 220.96 |      |   |   | 64.52  |      |   |   | 78.89  |      |   |   | 61.67 |   |
| Percentage of average shareholders’ equity to average total assets3    |   |   | 8.72      |   |   |   | 7.86      |   |   |   | 9.33      |   |   |   | 10.04     |   |   |   | 10.19 |   |
| Total shareholders’ equity                                             |   | $      | 147,227   |   |   | $      | 168,296   |   |   | $      | 168,491   |   |   | $      | 177,063   |   |   | $ | 154,236 |   |
| Total assets                                                                 |   |   | 2,171,562 |   |   |   | 2,202,167 |   |   |   | 2,068,247 |   |   |   | 1,825,108 |   |   |   | 1,673,943 |   |
| Other term borrowings and notes payable                                      |   |   | 316,932   |   |   |   | 335,661   |   |   |   | 316,309   |   |   |   | 87,992    |   |   |   | 75,291 |   |
| Senior perpetual preferred stock                                             |   |   | 28,348    |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Weighted Average Common Shares Outstanding                                   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Basic                                                                        |   |   | 7,365     |   |   |   | 7,357     |   |   |   | 7,706     |   |   |   | 7,511     |   |   |   | 6,831 |   |
| Diluted                                                                      |   |   | 7,365     |   |   |   | 7,357     |   |   |   | 7,706     |   |   |   | 7,526     |   |   |   | 6,864 |   |

----

|   | Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|--------|-----------------------------------------------------------------------------------------------------|

----

Forward-Looking Statements

----

Note 1

Asset Quality
Nonperforming Assets
1
4 

----

1
18 

| ·   | U.S. Treasury securities are priced using dealer quotes from active market makers and real-time trading systems. |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| ·   | Marketable equity securities are priced utilizing real-time data feeds from active market exchanges for identical securities. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | Government-sponsored agency debt securities, obligations of states and political subdivisions, corporate bonds, and other similar investment securities are priced with available market information through processes using benchmark yields, matrix pricing, prepayment speeds, cash flows, live trading data, and market spreads sourced from new issues, dealer quotes, and trade prices, among others sources. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | The Company recorded a one-time, non-cash, pretax goodwill impairment charge of $52.4 million during the fourth quarter of 2009 which does not impact regulatory capital. The impairment charge was attributed to the decline in the Company’s common share price, which has suffered similar to other peer financial institutions as a result of continuing economic weaknesses and heightened market concern surrounding the credit risk profile and capital positions of financial institutions. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Nonperforming assets have grown as a result of an increasing number of our borrowers that are unable to repay their loans due mainly as a result of the ongoing economic challenges that they and their customers face. This has resulted in lower interest income, a higher provision for loans losses, and impairment charges related to properties that the Company has repossessed in an attempt to satisfy customer loan obligations. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Parent Company and three of its subsidiary banks have entered into agreements with their respective banking regulator primarily as a result of higher levels of nonperforming loans. The agreements with these three bank subsidiaries require them, among other things, to increase and maintain future capital ratios in certain increments over the next two quarters. Although each of the subsidiary banks are considered “well-capitalized” by historically established measures at December 31, 2009, banking authorities are increasingly requiring banks to maintain higher capital levels as a cushion for dealing with further deteriorating loan portfolios. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | During the first quarter of 2009 the Company received a $30.0 million equity investment by the U.S. Department of Treasury (“Treasury”) as part of its Capital Purchase Program. The Company issued to the Treasury 30 thousand shares of Series A, no par cumulative perpetual preferred stock and a warrant to purchase an additional 223,992 common shares at a price of $20.09. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Company put in motion a plan to improve its capital position toward the end of 2009. Part of that plan includes reducing the quarterly common stock dividend announced during the fourth quarter of 2009 to $.10 per share from the previous amount of $.25 per share. The Company decided to forgo declaring dividends on its common stock entirely in the first quarter of 2010 for an undetermined time period. The Company also filed a registration statement on Form S-3 with the SEC that became effective in the fourth quarter. As part of that filing, equity securities of the Company of up to a maximum aggregate offering price of $70 million could be offered for sale in one or more public or private offerings at an appropriate time.  The Company continues to explore potential capital raising scenarios. However, no determination as to if or when a capital raise will be completed has been made. Net proceeds from a potential sale of securities under the registration statement could be used for any corporate purpose determined by the Company’s board of directors. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In January 2010, the Company named Lloyd C. Hillard, Jr. as its president and chief executive officer following the resignation of the previous chief executive officer. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | The provision for loan losses increased $15.4 million in the current twelve months compared to a year ago. |
|--------------------|------------------------------------------------------------------------------------------------------------|

| ·   | Net interest income decreased $4.9 million or 8.4% due mainly to lower interest on earning assets, primarily loans, which were negatively impacted by higher nonaccrual loans and loans that have repriced downward. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net interest margin was 2.85% in the current twelve months, a decrease of 40 basis points from 3.25% in the prior-year twelve months. Net interest spread decreased 37 basis points to 2.61% from 2.98% driven mainly by the loan portfolio. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Noninterest income in the current year increased $18.4 million or 187%. The increase is mainly due to the impact of the other-than-temporary impairment (“OTTI”) charge recorded during 2008 related to the Company’s investment in preferred stocks of the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association (collectively, the “GSE’s”). This non-cash transaction reduced noninterest income during 2008 by $14.0 million. Noninterest income for 2009 was also positively impacted by a $3.7 million increase in net gains on the sale of investment securities. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The $55.0 million increase in noninterest expense is mainly attributed to the one-time, non-cash goodwill $52.4 million pre-tax impairment charge previously discussed along with an increase in deposit insurance expense of $2.7 million. The increase in deposit insurance expense is due in part to the special assessment imposed by the Federal Deposit Insurance Corporation during the current year as part of its plan to replenish the Deposit Insurance Fund. The Company was able to offset a portion of its deposit insurance expense in the prior year with a one-time assessment credit it received during 2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The $7.9 million increase in income tax benefit is due mainly to the impact of the goodwill impairment charge. A portion of the Company’s previously recorded goodwill was created in taxable business combinations and therefore was able to record a tax benefit of $5.9 million attributed to the impairment charge. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                                                             |   |    |      |   |     |   |    |    |   |
|--------------------------------------------------------------------------------------------------|--------|---------|-----------|--------|----------|--------|---------|---------|--------|
| Years Ended December 31,                                                                         |   | 2009    |      |   | 2008     |   |    | 2007    |   |
|                                                                                             |   | Average |      |   |     |   |    | Average |   |   | Average |   |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
| (In thousands)                                                                                   |   | Balance |      |   | Interest |   |    | Rate    |   |   | Balance |   |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Earning Assets                                                                                   |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities                                                                            |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                          |   | $       | 445,329   |   |     | $      | 20,424  |    |   |   | 4.59 | % |   | $ | 425,206 |   |   | $ | 22,894 |   |   |   | 5.38 | % |   | $ | 253,423 |   |   | $ | 12,627 |   |   |   | 4.98 | % |
| Nontaxable1                                                                                      |   |    | 97,960    |   |     |   | 5,186   |    |   |   | 5.29 |   |   |   | 86,784 |   |   |   | 4,653 |   |   |   | 5.36 |   |   |   | 88,501 |   |   |   | 4,794 |   |   |   | 5.42 |   |
| Time deposits with banks, federal funds sold and securities purchased under agreements to resell |   |    | 129,092   |   |     |   | 302     |    |   |   | .23 |   |   |   | 65,477 |   |   |   | 1,199 |   |   |   | 1.83 |   |   |   | 70,062 |   |   |   | 3,333 |   |   |   | 4.76 |   |
| Loans 1,2,3                                                                                      |   |    | 1,306,800 |   |     |   | 77,522  |    |   |   | 5.93 |   |   |   | 1,302,394 |   |   |   | 87,509 |   |   |   | 6.72 |   |   |   | 1,250,423 |   |   |   | 95,825 |   |   |   | 7.66 |   |
| Total earning assets                                                                             |   |    | 1,979,181 |   |     | $      | 103,434 |    |   |   | 5.23 | % |   |   | 1,879,861 |   |   | $ | 116,255 |   |   |   | 6.18 | % |   |   | 1,662,409 |   |   | $ | 116,579 |   |   |   | 7.01 | % |
| Allowance for loan losses                                                                        |   |    | (18,965   | )      |     |   |    |    |   |   |   |   |   |   | (14,757 | ) |   |   |   |   |   |   |   |   |   |   | (11,486 | ) |   |   |   |   |   |   |   |   |
| Total earning assets, net of allowance for loan  losses                                |   |    | 1,960,216 |   |     |   |    |    |   |   |   |   |   |   | 1,865,104 |   |   |   |   |   |   |   |   |   |   |   | 1,650,923 |   |   |   |   |   |   |   |   |   |
| Nonearning Assets                                                                                |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                                                                          |   |    | 96,965    |   |     |   |    |    |   |   |   |   |   |   | 72,373 |   |   |   |   |   |   |   |   |   |   |   | 78,810 |   |   |   |   |   |   |   |   |   |
| Premises and equipment, net                                                                      |   |    | 41,069    |   |     |   |    |    |   |   |   |   |   |   | 40,649 |   |   |   |   |   |   |   |   |   |   |   | 38,860 |   |   |   |   |   |   |   |   |   |
| Other assets                                                                                     |   |    | 163,804   |   |     |   |    |    |   |   |   |   |   |   | 159,228 |   |   |   |   |   |   |   |   |   |   |   | 117,459 |   |   |   |   |   |   |   |   |   |
| Total assets                                                                                     |   | $       | 2,262,054 |   |     |   |    |    |   |   |   |   |   | $ | 2,137,354 |   |   |   |   |   |   |   |   |   |   | $ | 1,886,052 |   |   |   |   |   |   |   |   |   |
| Interest Bearing Liabilities                                                                     |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                         |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing demand                                                                          |   | $       | 247,235   |   |     | $      | 713     |    |   |   | .29 | % |   | $ | 256,129 |   |   | $ | 1,805 |   |   |   | .70 | % |   | $ | 258,992 |   |   | $ | 3,684 |   |   |   | 1.42 | % |
| Savings                                                                                          |   |    | 256,063   |   |     |   | 1,976   |    |   |   | .77 |   |   |   | 261,692 |   |   |   | 3,499 |   |   |   | 1.34 |   |   |   | 244,299 |   |   |   | 5,299 |   |   |   | 2.17 |   |
| Time                                                                                             |   |    | 902,066   |   |     |   | 30,508  |    |   |   | 3.38 |   |   |   | 793,561 |   |   |   | 33,741 |   |   |   | 4.25 |   |   |   | 748,939 |   |   |   | 36,174 |   |   |   | 4.83 |   |
| Federal funds purchased and other short-term borrowings                                          |   |    | 62,948    |   |     |   | 453     |    |   |   | .72 |   |   |   | 81,180 |   |   |   | 1,785 |   |   |   | 2.20 |   |   |   | 97,192 |   |   |   | 4,504 |   |   |   | 4.63 |   |
| Securities sold under agreements to repurchase and other long-term borrowings                    |   |    | 331,073   |   |     |   | 13,415  |    |   |   | 4.05 |   |   |   | 330,468 |   |   |   | 14,300 |   |   |   | 4.33 |   |   |   | 127,277 |   |   |   | 6,378 |   |   |   | 5.01 |   |
| Total interest bearing liabilities                                                               |   |    | 1,799,385 |   |     | $      | 47,065  |    |   |   | 2.62 | % |   |   | 1,723,030 |   |   | $ | 55,130 |   |   |   | 3.20 | % |   |   | 1,476,699 |   |   | $ | 56,039 |   |   |   | 3.79 | % |
| Noninterest Bearing Liabilities                                                                  |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commonwealth of Kentucky deposits                                                                |   |    | 34,992    |   |     |   |    |    |   |   |   |   |   |   | 37,025 |   |   |   |   |   |   |   |   |   |   |   | 37,119 |   |   |   |   |   |   |   |   |   |
| Other demand deposits                                                                            |   |    | 191,656   |   |     |   |    |    |   |   |   |   |   |   | 177,347 |   |   |   |   |   |   |   |   |   |   |   | 177,304 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                                                |   |    | 38,725    |   |     |   |    |    |   |   |   |   |   |   | 31,952 |   |   |   |   |   |   |   |   |   |   |   | 19,009 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                                                |   |    | 2,064,758 |   |     |   |    |    |   |   |   |   |   |   | 1,969,354 |   |   |   |   |   |   |   |   |   |   |   | 1,710,131 |   |   |   |   |   |   |   |   |   |
| Shareholders’ equity                                                                       |   |    | 197,296   |   |     |   |    |    |   |   |   |   |   |   | 168,000 |   |   |   |   |   |   |   |   |   |   |   | 175,921 |   |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders’ equity                                                 |   | $       | 2,262,054 |   |     |   |    |    |   |   |   |   |   | $ | 2,137,354 |   |   |   |   |   |   |   |   |   |   | $ | 1,886,052 |   |   |   |   |   |   |   |   |   |
| Net interest income                                                                              |   |    |      |   |     |   | 56,369  |    |   |   |   |   |   |   |   |   |   |   | 61,125 |   |   |   |   |   |   |   |   |   |   |   | 60,540 |   |   |   |   |   |
| TE basis adjustment                                                                              |   |    |      |   |     |   | (2,524  | )       |   |   |   |   |   |   |   |   |   |   | (2,335 | ) |   |   |   |   |   |   |   |   |   |   | (2,322 | ) |   |   |   |   |
| Net interest income                                                                              |   |    |      |   |     | $      | 53,845  |    |   |   |   |   |   |   |   |   |   | $ | 58,790 |   |   |   |   |   |   |   |   |   |   | $ | 58,218 |   |   |   |   |   |
| Net interest spread                                                                              |   |    |      |   |     |   |    |    |   |   | 2.61 | % |   |   |   |   |   |   |   |   |   |   | 2.98 | % |   |   |   |   |   |   |   |   |   |   | 3.22 | % |
| Effect of noninterest bearing sources of funds                                                   |   |    |      |   |     |   |    |    |   |   | .24 |   |   |   |   |   |   |   |   |   |   |   | .27 |   |   |   |   |   |   |   |   |   |   |   | .42 |   |
| Net interest margin                                                                              |   |    |      |   |     |   |    |    |   |   | 2.85 | % |   |   |   |   |   |   |   |   |   |   | 3.25 | % |   |   |   |   |   |   |   |   |   |   | 3.64 | % |

| 1Income and yield stated at a fully tax equivalent basis using the marginal corporate Federal tax rate of 35%. |
|----------------------------------------------------------------------------------------------------------------|

| 2Loan balances include principal balances on nonaccrual loans. |
|----------------------------------------------------------------|

| 3Loan fees included in interest income amounted to $1.8 million, $2.3 million, and $2.7 million for 2009, 2008, and 2007, respectively. |
|----------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                             |   |     |      |          |                   |   |   |     |   |   |                   |   |
|--------------------------------------------------------------------------------------------------|--------|----------|-----------|---------------|------------------------|--------|--------|----------|--------|--------|------------------------|--------|
|                                                                                             |   | Variance |      |          | Variance Attributed to |   |   | Variance |   |   | Variance Attributed to |   |
| (In thousands)                                                                                   |   |     | 2009/2008 | 1             |                   | Volume |   |     | Rate   |   |                   |   | 2008/2007 | 1 |   | Volume |   |   | Rate |   |
| Interest Income                                                                                  |   |     |      |          |                   |   |   |     |   |   |                   |   |   |   |   |   |   |   |   |   |
| Taxable investment securities                                                                    |   | $        | (2,470    | )             |                   | $      | 1,036  |     |   | $      | (3,506                 | )      |   | $ | 10,267 |   |   | $ | 9,179 |   |   | $ | 1,088 |   |
| Nontaxable investment securities2                                                                |   |     | 533       |          |                   |   | 594    |     |   |   | (61                    | )      |   |   | (141 | ) |   |   | (90 | ) |   |   | (51 | ) |
| Time deposits with banks, federal funds sold and securities purchased under agreements to resell |   |     | (897      | )             |                   |   | 631    |     |   |   | (1,528                 | )      |   |   | (2,134 | ) |   |   | (205 | ) |   |   | (1,929 | ) |
| Loans2                                                                                           |   |     | (9,987    | )             |                   |   | 296    |     |   |   | (10,283                | )      |   |   | (8,316 | ) |   |   | 3,844 |   |   |   | (12,160 | ) |
| Total interest income                                                                            |   |     | (12,821   | )             |                   |   | 2,557  |     |   |   | (15,378                | )      |   |   | (324 | ) |   |   | 12,728 |   |   |   | (13,052 | ) |
| Interest Expense                                                                                 |   |     |      |          |                   |   |   |     |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing demand deposits                                                                 |   |     | (1,092    | )             |                   |   | (61    | )        |   |   | (1,031                 | )      |   |   | (1,879 | ) |   |   | (40 | ) |   |   | (1,839 | ) |
| Savings deposits                                                                                 |   |     | (1,523    | )             |                   |   | (73    | )        |   |   | (1,450                 | )      |   |   | (1,800 | ) |   |   | 354 |   |   |   | (2,154 | ) |
| Time deposits                                                                                    |   |     | (3,233    | )             |                   |   | 4,235  |     |   |   | (7,468                 | )      |   |   | (2,433 | ) |   |   | 2,074 |   |   |   | (4,507 | ) |
| Federal funds purchased and other short-term borrowings                                          |   |     | (1,332    | )             |                   |   | (333   | )        |   |   | (999                   | )      |   |   | (2,719 | ) |   |   | (649 | ) |   |   | (2,070 | ) |
| Securities sold under agreements to repurchase and other long-term borrowings                    |   |     | (885      | )             |                   |   | 26     |     |   |   | (911                   | )      |   |   | 7,922 |   |   |   | 8,896 |   |   |   | (974 | ) |
| Total interest expense                                                                           |   |     | (8,065    | )             |                   |   | 3,794  |     |   |   | (11,859                | )      |   |   | (909 | ) |   |   | 10,635 |   |   |   | (11,544 | ) |
| Net interest income                                                                              |   | $        | (4,756    | )   |                   | $      | (1,237 | )        |   | $      | (3,519                 | )      |   | $ | 585 |   |   | $ | 2,093 |   |   | $ | (1,508 | ) |
| Percentage change                                                                                |   |     | 100.0     | %             |                   |   | 26.0   | %        |   |   | 74.0                   | %      |   |   | 100.0 | % |   |   | 357.8 | % |   |   | (257.8 | )% |

| 1 | The changes which are not solely due to rate or volume are allocated on a percentage basis using the absolute values of rate and volume variances as a basis for allocation. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Income stated at fully tax equivalent basis using the marginal corporate Federal tax rate of 35%. |
|---|---------------------------------------------------------------------------------------------------|

----

----

|                                                                   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |
|------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|
| (In thousands)December 31,                                             |   | 2009   |      |   | %      |   |   | 2008   |   |   | %         |   |   | 2007   |   |   | %      |   |      | 2006   |   |   | %      |   |   | 2005   |      |   | %      |   |
| Commercial, financial, and agricultural                                |   | $      | 146,530   |   |   |   | 11.5   | %      |   | $      | 144,788   |   |   |   | 11.0   | %      |   | $      | 154,015   |   |   |   | 11.9   | %      |   | $      | 197,613   |   |   |   | 16.5 | % |   | $ | 173,797 |   |   |   | 18.1 | % |
| Real estate  – construction                            |   |   | 211,744   |   |   |   | 16.7   |   |   |   | 260,524   |   |   |   | 19.9   |   |   |   | 254,788   |   |   |   | 19.7   |   |   |   | 176,779   |   |   |   | 14.7 |   |   |   | 88,693 |   |   |   | 9.2 |   |
| Real estate mortgage – residential                               |   |   | 466,018   |   |   |   | 36.6   |   |   |   | 444,487   |   |   |   | 33.9   |   |   |   | 405,992   |   |   |   | 31.5   |   |   |   | 381,081   |   |   |   | 31.8 |   |   |   | 331,508 |   |   |   | 34.4 |   |
| Real estate mortgage – farmland and other commercial enterprises |   |   | 386,626   |   |   |   | 30.4   |   |   |   | 390,424   |   |   |   | 29.7   |   |   |   | 394,900   |   |   |   | 30.6   |   |   |   | 351,793   |   |   |   | 29.4 |   |   |   | 274,411 |   |   |   | 28.5 |   |
| Installment                                                            |   |   | 36,727    |   |   |   | 2.9    |   |   |   | 45,135    |   |   |   | 3.4    |   |   |   | 52,028    |   |   |   | 4.0    |   |   |   | 57,116    |   |   |   | 4.8 |   |   |   | 56,169 |   |   |   | 5.8 |   |
| Lease financing                                                        |   |   | 24,297    |   |   |   | 1.9    |   |   |   | 27,222    |   |   |   | 2.1    |   |   |   | 30,262    |   |   |   | 2.3    |   |   |   | 33,454    |   |   |   | 2.8 |   |   |   | 37,993 |   |   |   | 4.0 |   |
| Total                                                                  |   | $      | 1,271,942 |   |   |   | 100.0  | %      |   | $      | 1,312,580 |   |   |   | 100.0  | %      |   | $      | 1,291,985 |   |   |   | 100.0  | %      |   | $      | 1,197,836 |   |   |   | 100.0 | % |   | $ | 962,571 |   |   |   | 100.0 | % |

----

|                                    |   |            |    |   |              |   |    |             |   |   |   |   |
|-----------------------------------------|--------|-----------------|---------|--------|-------------------|--------|---------|------------------|--------|--------|--------|--------|
|                                    |   |            |    |   | After One But     |   |    |             |   |   |   |   |
| (In thousands)                          |   | Within One Year |    |   | Within Five Years |   |    | After Five Years |   |   | Total  |   |
| Commercial, financial, and agricultural |   | $               | 54,474  |   |              | $      | 49,134  |             |   | $      | 42,922 |   |   | $ | 146,530 |   |
| Real estate – construction        |   |            | 150,087 |   |              |   | 51,859  |             |   |   | 9,798  |   |   |   | 211,744 |   |
| Total                                   |   | $               | 204,561 |   |              | $      | 100,993 |             |   | $      | 52,720 |   |   | $ | 358,274 |   |

|                                |   |   |   |   |     |   |
|-------------------------------------|--------|--------|--------|--------|----------|--------|
|                                |   | Fixed  |   |   | Variable |   |
| (In thousands)                      |   | Rate   |   |   | Rate     |   |
| Due after one but within five years |   | $      | 66,181 |   |     | $      | 34,812 |   |
| Due after five years                |   |   | 16,777 |   |     |   | 35,943 |   |
| Total                               |   | $      | 82,958 |   |     | $      | 70,755 |   |

Asset Quality

----

----

|                                                                                     |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |
|------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|
| Years Ended December 31, (In thousands)                                                  |   | 2009   |      |   | 2008   |   |      | 2007   |   |   | 2006      |   |   | 2005   |      |
| Balance of allowance for loan losses at beginning of year                                |   | $      | 16,828    |   |   | $      | 14,216    |   |   | $      | 11,999    |   |   | $      | 11,069    |   |   | $ | 11,043 |   |
| Acquisition of Citizens Jessamine                                                        |   |   |      |   |   |   |      |   |   |   |      |   |   |   | 1,066     |   |   |   |   |   |
| Acquisition of Citizens Northern                                                         |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   | 1,410 |   |
| Loans charged off:                                                                       |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Commercial, financial, and agricultural                                                  |   |   | 1,585     |   |   |   | 1,273     |   |   |   | 520       |   |   |   | 486       |   |   |   | 301 |   |
| Real estate                                                                              |   |   | 9,618     |   |   |   | 1,824     |   |   |   | 626       |   |   |   | 200       |   |   |   | 288 |   |
| Installment loans to individuals                                                         |   |   | 1,090     |   |   |   | 1,089     |   |   |   | 956       |   |   |   | 839       |   |   |   | 1,254 |   |
| Lease financing                                                                          |   |   | 2,475     |   |   |   | 356       |   |   |   | 52        |   |   |   | 254       |   |   |   | 602 |   |
| Total loans charged off                                                                  |   |   | 14,768    |   |   |   | 4,542     |   |   |   | 2,154     |   |   |   | 1,779     |   |   |   | 2,445 |   |
| Recoveries of loans previously charged off:                                              |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Commercial, financial, and agricultural                                                  |   |   | 130       |   |   |   | 168       |   |   |   | 126       |   |   |   | 262       |   |   |   | 69 |   |
| Real estate                                                                              |   |   | 87        |   |   |   | 977       |   |   |   | 241       |   |   |   | 81        |   |   |   | 66 |   |
| Installment loans to individuals                                                         |   |   | 247       |   |   |   | 316       |   |   |   | 319       |   |   |   | 294       |   |   |   | 260 |   |
| Lease financing                                                                          |   |   | 72        |   |   |   | 372       |   |   |   | 47        |   |   |   | 41        |   |   |   | 44 |   |
| Total recoveries                                                                         |   |   | 536       |   |   |   | 1,833     |   |   |   | 733       |   |   |   | 678       |   |   |   | 439 |   |
| Net loans charged off                                                                    |   |   | 14,232    |   |   |   | 2,709     |   |   |   | 1,421     |   |   |   | 1,101     |   |   |   | 2,006 |   |
| Additions to allowance charged to expense                                                |   |   | 20,768    |   |   |   | 5,321     |   |   |   | 3,638     |   |   |   | 965       |   |   |   | 622 |   |
| Balance at end of year                                                                   |   | $      | 23,364    |   |   | $      | 16,828    |   |   | $      | 14,216    |   |   | $      | 11,999    |   |   | $ | 11,069 |   |
| Average loans net of unearned income                                                     |   | $      | 1,306,800 |   |   | $      | 1,302,394 |   |   | $      | 1,250,423 |   |   | $      | 1,051,002 |   |   | $ | 805,014 |   |
| Ratio of net charge-offs  during year to average loans, net of unearned income |   |   | 1.09      | %      |   |   | .21       | %      |   |   | .11       | %      |   |   | .10       | % |   |   | .25 | % |

|                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| December 31, (In thousands)             |   | 2009   |   |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |
| Commercial, financial, and agricultural |   | $      | 4,782  |   |   | $      | 2,474  |   |   | $      | 2,505  |   |   | $      | 2,223  |   |   | $ | 2,840 |   |
| Real estate                             |   |   | 16,937 |   |   |   | 11,217 |   |   |   | 9,201  |   |   |   | 6,497  |   |   |   | 5,849 |   |
| Installment loans to individuals        |   |   | 1,007  |   |   |   | 2,336  |   |   |   | 1,979  |   |   |   | 2,316  |   |   |   | 1,601 |   |
| Lease financing                         |   |   | 638    |   |   |   | 801    |   |   |   | 531    |   |   |   | 963    |   |   |   | 779 |   |
| Total                                   |   | $      | 23,364 |   |   | $      | 16,828 |   |   | $      | 14,216 |   |   | $      | 11,999 |   |   | $ | 11,069 |   |

Investment Securities

Nonperforming Assets

----

|                                              |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| December 31, (In thousands)                       |   | 2009   |    |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |
| Loans accounted for on nonaccrual basis           |   | $      | 56,630  |   |   | $      | 21,545 |   |   | $      | 18,073 |   |   | $      | 1,462  |   |   | $ | 2,269 |   |
| Loans past due 90 days or more and still accruing |   |   | 1,807   |   |   |   | 3,913  |   |   |   | 2,977  |   |   |   | 2,856  |   |   |   | 2,383 |   |
| Restructured loans                                |   |   | 17,911  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total nonperforming loans                         |   |   | 76,348  |   |   |   | 25,458 |   |   |   | 21,050 |   |   |   | 4,318  |   |   |   | 4,652 |   |
| Other real estate owned                           |   |   | 31,232  |   |   |   | 14,446 |   |   |   | 6,044  |   |   |   | 5,031  |   |   |   | 8,786 |   |
| Other foreclosed assets                           |   |   | 38      |   |   |   | 47     |   |   |   | 66     |   |   |   | 54     |   |   |   | 21 |   |
| Total nonperforming assets                        |   | $      | 107,618 |   |   | $      | 39,951 |   |   | $      | 27,160 |   |   | $      | 9,403  |   |   | $ | 13,459 |   |

Investment Securities

----

|                                              |   |              |    |   |            |   |   |              |   |
|---------------------------------------------------|--------|-------------------|---------|--------|-----------------|--------|--------|-------------------|--------|
| December 31,                                      |   | 2009              |    |   | 2008            |   |   | 2007              |   |
|  (In thousands)                              |   | Availablefor Sale |    |   | Held toMaturity |   |   | Availablefor Sale |   |   | Held toMaturity |   |   | Availablefor Sale |   |   | Held toMaturity |   |
| Obligations of states and political subdivisions  |   | $                 | 108,958 |   |            | $      | 975    |              |   | $ | 90,838 |   |   | $ | 1,814 |   |   | $ | 94,181 |   |   | $ | 3,844 |   |
| Obligations of U.S. government-sponsored entities |   |              | 90,752  |   |            |   |   |              |   |   | 34,567 |   |   |   |   |   |   |   | 88,522 |   |   |   |   |   |
| Mortgage-backed securities                        |   |              | 325,519 |   |            |   |   |              |   |   | 375,327 |   |   |   |   |   |   |   | 343,176 |   |   |   |   |   |
| U.S. Treasury securities                          |   |              | 3,002   |   |            |   |   |              |   |   | 10,256 |   |   |   |   |   |   |   | 863 |   |   |   |   |   |
| Money market mutual funds                         |   |              | 910     |   |            |   |   |              |   |   | 374 |   |   |   |   |   |   |   | 1,396 |   |   |   |   |   |
| Corporate debt securities                         |   |              | 18,732  |   |            |   |   |              |   |   | 13,991 |   |   |   |   |   |   |   | 5,132 |   |   |   |   |   |
| Equity securities                                 |   |              | 9,148   |   |            |   |   |              |   |   | 8,942 |   |   |   |   |   |   |   | 9,363 |   |   |   |   |   |
| Total                                             |   | $                 | 557,021 |   |            | $      | 975    |              |   | $ | 534,295 |   |   | $ | 1,814 |   |   | $ | 542,633 |   |   | $ | 3,844 |   |

----

|                                              |   |            |   |   |              |   |   |             |   |   |            |   |
|---------------------------------------------------|--------|-----------------|--------|--------|-------------------|--------|--------|------------------|--------|--------|-----------------|--------|
|                                              |   |            |   |   | After One But     |   |   | After Five But   |   |   |            |   |
|                                              |   | Within One Year |   |   | Within Five Years |   |   | Within Ten Years |   |   | After Ten Years |   |
| (In thousands)                                    |   | Amount          |   |   | Rate              |   |   | Amount           |   |   | Rate            |   |   | Amount |   |   | Rate |   |   | Amount |   |   | Rate |   |
| Obligations of U.S. government-sponsored entities |   | $               | 13,749 |   |              |   | .7     | %                |   | $      | 30,680          |   |   |   | 1.5 | % |   | $ | 21,122 |   |   |   | 3.9 | % |   | $ | 25,201 |   |   |   | 4.4 | % |
| Obligations of states and political subdivisions  |   |            | 7,799  |   |              |   | 2.8    |             |   |   | 41,220          |   |   |   | 2.8 |   |   |   | 34,889 |   |   |   | 3.7 |   |   |   | 25,050 |   |   |   | 3.7 |   |
| Mortgage-backed securities                        |   |            | 167    |   |              |   | 4.1    |             |   |   | 9,414           |   |   |   | 3.8 |   |   |   | 11,105 |   |   |   | 4.2 |   |   |   | 304,833 |   |   |   | 4.9 |   |
| U.S. Treasury securities                          |   |            | 1,999  |   |              |   | .5     |             |   |   | 1,003           |   |   |   | .9 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Money market mutual funds                         |   |            | 910    |   |              |   | .3     |             |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate debt securities                         |   |            | 1,125  |   |              |   | 7.0    |             |   |   | 1,296           |   |   |   | 5.6 |   |   |   |   |   |   |   |   |   |   |   | 16,311 |   |   |   | 6.1 |   |
| Total                                             |   | $               | 25,749 |   |              |   | 1.6    | %                |   | $      | 83,613          |   |   |   | 2.5 | % |   | $ | 67,116 |   |   |   | 3.8 | % |   | $ | 371,395 |   |   |   | 4.8 | % |

|                                             |            |              |             |   |            |   |
|--------------------------------------------------|-----------------|-------------------|------------------|--------|-----------------|--------|
|                                             |            | After One But     | After Five But   |   |            |   |
|                                             | Within One Year | Within Five Years | Within Ten Years |   | After Ten Years |   |
| (In thousands)                                   | Amount          | Rate              | Amount           | Rate   | Amount          | Rate   |   | Amount |   |   | Rate |   |
| Obligations of states and political subdivisions |            |              |             |   |            |   |   | $ | 975 |   |   |   | 3.6 | % |

|                       |   |           |      |   |        |   |   |           |   |
|----------------------------|--------|----------------|-----------|--------|-------------|--------|--------|----------------|--------|
| Years Ended December 31,   |   | 2009           |      |   | 2008        |   |   | 2007           |   |
|  (In thousands)       |   | AverageBalance |      |   | AverageRate |   |   | AverageBalance |   |   | AverageRate |   |   | AverageBalance |   |   | AverageRate |   |
| Noninterest bearing demand |   | $              | 226,648   |   |        |   |   |           | $      | 214,372 |   |   |   |   |   | $ | 214,423 |   |   |   |   |
| Interest bearing demand    |   |           | 247,235   |   |        |   | .29    | %              |   |   | 256,129 |   |   |   | .70 | % |   |   | 258,992 |   |   |   | 1.42 | % |
| Savings                    |   |           | 256,063   |   |        |   | .77    |           |   |   | 261,692 |   |   |   | 1.34 |   |   |   | 244,299 |   |   |   | 2.17 |   |
| Time                       |   |           | 902,066   |   |        |   | 3.38   |           |   |   | 793,561 |   |   |   | 4.25 |   |   |   | 748,939 |   |   |   | 4.83 |   |
| Total                      |   | $              | 1,632,012 |   |        |   | 2.03   | %              |   | $ | 1,525,754 |   |   |   | 2.56 | % |   | $ | 1,466,653 |   |   |   | 3.08 | % |

----

|                     |   |   |    |
|--------------------------|--------|--------|---------|
| (In thousands)           |   | Amount |    |
| 3 months or less         |   | $      | 61,261  |   |
| Over 3 through 6 months  |   |   | 65,950  |   |
| Over 6 through 12 months |   |   | 120,185 |   |
| Over 12 months           |   |   | 79,436  |   |
| Total                    |   | $      | 326,832 |   |

|                                  |   |   |    |   |   |   |    |   |   |
|---------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| (In thousands)                        |   | 2009   |    |   | 2008   |   |    | 2007   |   |
| Amount outstanding at year-end        |   | $      | 47,215  |   |   | $      | 77,474  |   |   | $ | 80,755 |   |
| Maximum outstanding at any month-end  |   |   | 105,844 |   |   |   | 125,096 |   |   |   | 155,362 |   |
| Average outstanding                   |   |   | 62,946  |   |   |   | 81,180  |   |   |   | 97,192 |   |
| Weighted average rate at year-end     |   |   | .79     | %      |   |   | .74     | %      |   |   | 3.71 | % |
| Weighted average rate during the year |   |   | .72     |   |   |   | 2.20    |   |   |   | 4.63 |   |

Long-term Borrowings

----

|                                                     |   |                   |      |
|----------------------------------------------------------|--------|------------------------|-----------|
|                                                     |   | Payments Due by Period |      |
|  Contractual Obligations (In thousands)             |   | Total                  |      |   | Less ThanOne Year |   |   | One to ThreeYears |   |   | Three to FiveYears |   |   | More Than FiveYears |   |
| Time deposits                                            |   | $                      | 904,978   |   |   | $ | 667,915 |   |   | $ | 192,844 |   |   | $ | 37,152 |   |   | $ | 7,067 |   |
| Long-term FHLB debt                                      |   |                   | 67,630    |   |   |   | 14,000 |   |   |   | 23,814 |   |   |   | 10,083 |   |   |   | 19,733 |   |
| Subordinated notes payable                               |   |                   | 48,970    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 48,970 |   |
| Long-term securities sold under agreements to repurchase |   |                   | 200,000   |   |   |   | 50,000 |   |   |   | 50,000 |   |   |   |   |   |   |   | 100,000 |   |
| Unfunded postretirement benefit obligations              |   |                   | 5,928     |   |   |   | 442 |   |   |   | 979 |   |   |   | 1,137 |   |   |   | 3,370 |   |
| Operating leases                                         |   |                   | 6,034     |   |   |   | 639 |   |   |   | 1,053 |   |   |   | 881 |   |   |   | 3,461 |   |
| Capital lease obligations                                |   |                   | 332       |   |   |   | 248 |   |   |   | 84 |   |   |   |   |   |   |   |   |   |
| Total                                                    |   | $                      | 1,233,872 |   |   | $ | 733,244 |   |   | $ | 268,774 |   |   | $ | 49,253 |   |   | $ | 182,601 |   |

Long-Term Borrowings
Note 8

Market Risk Management

----

----

Note 17 
Note 17 
Item 1A 
Capital Resources

Note 17 
Risk Factors
Capital Resources

----

Note 14 

CAPITAL RESOURCES

|              |                            |              |
|-------------------|---------------------------------|-------------------|
|              | Farmers CapitalBank Corporation | RegulatoryMinimum |
| Tier 1 risk-based | 13.95%                          | 4.00%             |
| Total risk-based  | 15.20                           | 8.00              |
| Leverage          | 8.15                            | 4.00              |

----

|                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Years Ended December 31,                                                                       |   | 2009   |   |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |   |
| Percentage of common dividends declared to (loss)  income from continuing operations |   | NM     |   |   |   | 220.96 | %      |   |   | 64.52  | %      |   |   | 78.89  | %      |   |   | 61.67 | % |
| Percentage of average shareholders’ equity to average total assets1                      |   |   | 8.72   | %      |   |   | 7.86   |   |   |   | 9.33   |   |   |   | 10.04  |   |   |   | 10.19 |   |

1

|                |   | Tier 1 Leverage Capital Ratio |   |   | Total Risk-Based Capital Ratio |   |
|---------------------|--------|-------------------------------|--------|--------|--------------------------------|--------|
|                |   |                          |   |   |                           |   |
| Farmers Bank        |   |                          | 7.68   | %      |                           |   | 15.66 | % |
| United Bank         |   |                          | 7.35   | %      |                           |   | 13.75 | % |
| Lawrenceburg Bank   |   |                          | 5.46   | %      |                           |   | 11.50 | % |
| First Citizens Bank |   |                          | 7.96   | %      |                           |   | 12.76 | % |
| Citizens Northern   |   |                          | 6.23   | %      |                           |   | 10.95 | % |

|   |                                                                                                                            |
|--------|---------------------------------------------------------------------------------------------------------------------------------|
| 1      | The Leverage Ratio is computed by dividing a bank’s Total Capital, as defined by regulation, by its total average assets. |

|   | The Risk-Based Ratio is computed by dividing a bank’s Total Capital, as defined by regulation, by a risk-weighted sum of the bank's assets, with the risk weighting determined by general standards established by regulation.  The safest assets (e.g., government obligations) are assigned a weighting of 0% with riskier assets receiving higher ratings (e.g., ordinary commercial loans are assigned a weighting of 100%). |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

December 31

----

|           |   |   |   |   |   |   |   |               |   |
|----------------|--------|--------|--------|--------|--------|--------|--------|--------------------|--------|
|           |   | High   |   |   | Low    |   |   | Dividends Declared |   |
| 2009           |   |   |   |   |   |   |   |               |   |
| Fourth Quarter |   | $      | 18.04  |   |   | $      | 9.08   |               |   | $ | .10 |   |
| Third Quarter  |   |   | 26.90  |   |   |   | 17.10  |               |   |   | .25 |   |
| Second Quarter |   |   | 27.11  |   |   |   | 14.62  |               |   |   | .25 |   |
| First Quarter  |   |   | 25.99  |   |   |   | 11.10  |               |   |   | .25 |   |
|           |   |   |   |   |   |   |   |               |   |   |   |   |
| 2008           |   |   |   |   |   |   |   |               |   |   |   |   |
| Fourth Quarter |   | $      | 30.05  |   |   | $      | 16.00  |               |   | $ | .33 |   |
| Third Quarter  |   |   | 32.70  |   |   |   | 17.25  |               |   |   | .33 |   |
| Second Quarter |   |   | 26.99  |   |   |   | 17.01  |               |   |   | .33 |   |
| First Quarter  |   |   | 28.40  |   |   |   | 23.20  |               |   |   | .33 |   |

Recently Issued But Not Yet Effective Accounting Standards

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

Market Risk Management

----

Item 8. Financial Statements and Supplementary Data

|                  |                                      |
|-----------------------|-------------------------------------------|
| Lloyd C. Hillard, Jr. | C. Douglas Carpenter                      |
| President and CEO     | Senior Vice President, Secretary, and CFO |
|                  |                                      |
|                  |                                      |
| March 12, 2010        |                                      |

----

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

----

Consolidated Balance Sheets

|                                                                                                                                                                                 |   |   |      |   |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| December 31, (In thousands, except share data)                                                                                                                                       |   | 2009   |      |   | 2008   |   |
| Assets                                                                                                                                                                               |   |   |      |   |   |   |
| Cash and cash equivalents:                                                                                                                                                           |   |   |      |   |   |   |
| Cash and due from banks                                                                                                                                                              |   | $      | 35,841    |   |   | $      | 87,656 |   |
| Interest bearing deposits in other banks                                                                                                                                             |   |   | 175,926   |   |   |   | 94,823 |   |
| Federal funds sold and securities purchased under agreements to resell                                                                                                               |   |   | 6,569     |   |   |   | 8,296 |   |
| Total cash and cash equivalents                                                                                                                                                      |   |   | 218,336   |   |   |   | 190,775 |   |
| Investment securities:                                                                                                                                                               |   |   |      |   |   |   |   |   |
| Available for sale, amortized cost of $547,021 (2009) and $526,698 (2008)                                                                                                            |   |   | 557,021   |   |   |   | 534,295 |   |
| Held to maturity, fair value of $922 (2009) and $1,667 (2008)                                                                                                                        |   |   | 975       |   |   |   | 1,814 |   |
| Total investment securities                                                                                                                                                          |   |   | 557,996   |   |   |   | 536,109 |   |
| Loans, net of unearned income                                                                                                                                                        |   |   | 1,271,942 |   |   |   | 1,312,580 |   |
| Allowance for loan losses                                                                                                                                                            |   |   | (23,364   | )      |   |   | (16,828 | ) |
| Loans, net                                                                                                                                                                           |   |   | 1,248,578 |   |   |   | 1,295,752 |   |
| Premises and equipment, net                                                                                                                                                          |   |   | 39,121    |   |   |   | 43,046 |   |
| Company-owned life insurance                                                                                                                                                         |   |   | 36,626    |   |   |   | 35,396 |   |
| Goodwill                                                                                                                                                                             |   |   |      |   |   |   | 52,408 |   |
| Other intangible assets, net                                                                                                                                                         |   |   | 4,989     |   |   |   | 6,941 |   |
| Other real estate owned                                                                                                                                                              |   |   | 31,232    |   |   |   | 14,446 |   |
| Other assets                                                                                                                                                                         |   |   | 34,684    |   |   |   | 27,294 |   |
| Total assets                                                                                                                                                                         |   | $      | 2,171,562 |   |   | $      | 2,202,167 |   |
| Liabilities                                                                                                                                                                          |   |   |      |   |   |   |   |   |
| Deposits:                                                                                                                                                                            |   |   |      |   |   |   |   |   |
| Noninterest bearing                                                                                                                                                                  |   | $      | 214,518   |   |   | $      | 241,518 |   |
| Interest bearing                                                                                                                                                                     |   |   | 1,418,915 |   |   |   | 1,352,597 |   |
| Total deposits                                                                                                                                                                       |   |   | 1,633,433 |   |   |   | 1,594,115 |   |
| Term federal funds purchased and other short-term borrowings                                                                                                                         |   |   | 47,215    |   |   |   | 77,474 |   |
| Securities sold under agreements to repurchase and other long-term borrowings                                                                                                        |   |   | 267,962   |   |   |   | 286,691 |   |
| Subordinated notes payable to unconsolidated trusts                                                                                                                                  |   |   | 48,970    |   |   |   | 48,970 |   |
| Dividends payable                                                                                                                                                                    |   |   | 925       |   |   |   | 2,427 |   |
| Other liabilities                                                                                                                                                                    |   |   | 25,830    |   |   |   | 24,194 |   |
| Total liabilities                                                                                                                                                                    |   |   | 2,024,335 |   |   |   | 2,033,871 |   |
|                                                                                                                                                                                 |   |   |      |   |   |   |   |   |
| Commitments and contingencies (Notes 14 and 16)                                                                                                                                      |   |   |      |   |   |   |   |   |
|                                                                                                                                                                                 |   |   |      |   |   |   |   |   |
| Shareholders’ Equity                                                                                                                                                           |   |   |      |   |   |   |   |   |
| Preferred stock, no par value1,000,000 shares authorized; 30,000 Series A shares issued and outstanding at December 31, 2009; Liquidation preference of $30,000 at December 31, 2009 |   |   | 28,348    |   |   |   |   |   |
| Common stock, par value $.125 per share; 14,608,000 shares authorized; 7,378,605 and 7,357,362 shares issued and outstanding atDecember 31, 2009 and 2008, respectively         |   |   | 922       |   |   |   | 920 |   |
| Capital surplus                                                                                                                                                                      |   |   | 50,476    |   |   |   | 48,222 |   |
| Retained earnings                                                                                                                                                                    |   |   | 63,617    |   |   |   | 116,419 |   |
| Accumulated other comprehensive income                                                                                                                                               |   |   | 3,864     |   |   |   | 2,735 |   |
| Total shareholders’ equity                                                                                                                                                     |   |   | 147,227   |   |   |   | 168,296 |   |
| Total liabilities and shareholders’ equity                                                                                                                                     |   | $      | 2,171,562 |   |   | $      | 2,202,167 |   |

----

| Consolidated Statements of Operations |
|---------------------------------------|

|                                                                                    |   |   |    |   |   |   |    |   |   |
|-----------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| (In thousands, except per share data)                                                   |   |   |    |   |   |   |    |   |   |
| Years Ended December 31,                                                                |   | 2009   |    |   | 2008   |   |    | 2007   |   |
| Interest Income                                                                         |   |   |    |   |   |   |    |   |   |
| Interest and fees on loans                                                              |   | $      | 76,614  |   |   | $      | 86,596  |   |   | $ | 94,941 |   |
| Interest on investment securities:                                                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Taxable                                                                                 |   |   | 20,424  |   |   |   | 22,894  |   |   |   | 12,627 |   |
| Nontaxable                                                                              |   |   | 3,570   |   |   |   | 3,231   |   |   |   | 3,356 |   |
| Interest on deposits in other banks                                                     |   |   | 278     |   |   |   | 133     |   |   |   | 64 |   |
| Interest on federal funds sold and securities purchased under agreements to resell      |   |   | 24      |   |   |   | 1,066   |   |   |   | 3,269 |   |
| Total interest income                                                                   |   |   | 100,910 |   |   |   | 113,920 |   |   |   | 114,257 |   |
| Interest Expense                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Interest on deposits                                                                    |   |   | 33,197  |   |   |   | 39,045  |   |   |   | 45,157 |   |
| Interest on federal funds purchased and other short-term borrowings                     |   |   | 453     |   |   |   | 1,785   |   |   |   | 4,504 |   |
| Interest on subordinated notes payable to unconsolidated trusts                         |   |   | 2,178   |   |   |   | 2,865   |   |   |   | 2,394 |   |
| Interest on securities sold under agreements to purchase and other long-term borrowings |   |   | 11,237  |   |   |   | 11,435  |   |   |   | 3,984 |   |
| Total interest expense                                                                  |   |   | 47,065  |   |   |   | 55,130  |   |   |   | 56,039 |   |
| Net interest income                                                                     |   |   | 53,845  |   |   |   | 58,790  |   |   |   | 58,218 |   |
| Provision for loan losses                                                               |   |   | 20,768  |   |   |   | 5,321   |   |   |   | 3,638 |   |
| Net interest income after provision for loan losses                                     |   |   | 33,077  |   |   |   | 53,469  |   |   |   | 54,580 |   |
| Noninterest Income                                                                      |   |   |    |   |   |   |    |   |   |   |   |   |
| Service charges and fees on deposits                                                    |   |   | 9,347   |   |   |   | 9,847   |   |   |   | 10,320 |   |
| Allotment processing fees                                                               |   |   | 5,403   |   |   |   | 4,791   |   |   |   | 4,363 |   |
| Other service charges, commissions, and fees                                            |   |   | 4,414   |   |   |   | 4,346   |   |   |   | 4,164 |   |
| Data processing income                                                                  |   |   | 1,317   |   |   |   | 1,087   |   |   |   | 1,227 |   |
| Trust income                                                                            |   |   | 1,763   |   |   |   | 2,032   |   |   |   | 2,053 |   |
| Investment securities gains (losses), net                                               |   |   | 3,488   |   |   |   | (166    | )      |   |   |   |   |
| Other-than-temporary impairment of investment securities                                |   |   |    |   |   |   | (13,962 | )      |   |   |   |   |
| Gains on sale of mortgage loans, net                                                    |   |   | 1,034   |   |   |   | 407     |   |   |   | 591 |   |
| Income from company-owned life insurance                                                |   |   | 1,282   |   |   |   | 1,235   |   |   |   | 1,278 |   |
| Other                                                                                   |   |   | 121     |   |   |   | 193     |   |   |   | 161 |   |
| Total noninterest income                                                                |   |   | 28,169  |   |   |   | 9,810   |   |   |   | 24,157 |   |
| Noninterest Expense                                                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| Salaries and employee benefits                                                          |   |   | 29,816  |   |   |   | 30,174  |   |   |   | 31,420 |   |
| Occupancy expenses, net                                                                 |   |   | 4,991   |   |   |   | 4,515   |   |   |   | 4,261 |   |
| Equipment expenses                                                                      |   |   | 3,075   |   |   |   | 3,187   |   |   |   | 3,232 |   |
| Data processing and communications expenses                                             |   |   | 5,568   |   |   |   | 5,423   |   |   |   | 4,770 |   |
| Bank franchise tax                                                                      |   |   | 2,265   |   |   |   | 2,158   |   |   |   | 2,086 |   |
| Correspondent bank fees                                                                 |   |   | 1,009   |   |   |   | 1,040   |   |   |   | 721 |   |
| Goodwill impairment                                                                     |   |   | 52,408  |   |   |   |    |   |   |   |   |   |
| Amortization of intangibles                                                             |   |   | 1,952   |   |   |   | 2,602   |   |   |   | 3,362 |   |
| Deposit insurance expense                                                               |   |   | 3,777   |   |   |   | 1,038   |   |   |   | 226 |   |
| Other real estate expenses, net                                                         |   |   | 2,074   |   |   |   | 606     |   |   |   | (155 | ) |
| Other                                                                                   |   |   | 8,206   |   |   |   | 9,355   |   |   |   | 8,900 |   |
| Total noninterest expense                                                               |   |   | 115,141 |   |   |   | 60,098  |   |   |   | 58,823 |   |
| (Loss) income before income taxes                                                       |   |   | (53,895 | )      |   |   | 3,181   |   |   |   | 19,914 |   |
| Income tax (benefit) expense                                                            |   |   | (9,153  | )      |   |   | (1,214  | )      |   |   | 4,287 |   |
| Net (loss) income                                                                       |   |   | (44,742 | )      |   |   | 4,395   |   |   |   | 15,627 |   |
| Dividends and accretion on preferred shares                                             |   |   | (1,802  | )      |   |   |    |   |   |   |   |   |
| Net (loss) income available to common shareholders                                      |   | $      | (46,544 | )      |   | $      | 4,395   |   |   | $ | 15,627 |   |
| Per Common Share                                                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Net (loss) income – basic and diluted                                             |   | $      | (6.32   | )      |   | $      | .60     |   |   | $ | 2.03 |   |
| Cash dividends declared                                                                 |   |   | .85     |   |   |   | 1.32    |   |   |   | 1.32 |   |
| Weighted Average Shares Outstanding                                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| Basic and diluted                                                                       |   |   | 7,365   |   |   |   | 7,357   |   |   |   | 7,706 |   |

----

Consolidated Statements of Comprehensive (Loss) Income

|                                                                                                                                                                                             |   |   |    |   |   |   |   |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
| (In thousands)                                                                                                                                                                                   |   |   |    |   |   |   |   |   |   |
| Years Ended December 31,                                                                                                                                                                         |   | 2009   |    |   | 2008   |   |   | 2007   |   |
| Net (loss) income                                                                                                                                                                                |   | $      | (44,742 | )      |   | $      | 4,395  |   |   | $ | 15,627 |   |
| Other comprehensive income:                                                                                                                                                                      |   |   |    |   |   |   |   |   |   |   |   |   |
| Unrealized holding gain on available for sale securities arising during the period on securities held at end of period, net of tax of $2,028, $2,613, and $830, respectively                     |   |   | 3,767   |   |   |   | 4,853  |   |   |   | 1,542 |   |
| Reclassification adjustment for prior period unrealized loss previously reported in other comprehensive income recognized during current period, net of tax of $1,187, $85, and $5, respectively |   |   | (2,204  | )      |   |   | (158   | )      |   |   | 10 |   |
| Change in unfunded portion of postretirement benefit obligations, net of tax of $234, $613 and $603, respectively                                                                                |   |   | (434    | )      |   |   | 1,146  |   |   |   | 1,120 |   |
| Other comprehensive income                                                                                                                                                                       |   |   | 1,129   |   |   |   | 5,841  |   |   |   | 2,672 |   |
| Comprehensive (loss) income                                                                                                                                                                      |   | $      | (43,613 | )      |   | $      | 10,236 |   |   | $ | 18,299 |   |

----

Consolidated Statements of Changes in Shareholders’ Equity

|                                                              |   |      |   |   |         |   |   |    |   |   |     |   |   |              |   |   |                |    |
|-------------------------------------------------------------------|--------|-----------|--------|--------|--------------|--------|--------|---------|--------|--------|----------|--------|--------|-------------------|--------|--------|---------------------|---------|
| (In thousands, except per share data)                             |   |      |   |   |         |   |   |    |   |   |     |   |   | Accumulated Other |   |   | Total               |    |
| Years Ended                                                       |   | Preferred |   |   | Common Stock |   |   | Capital |   |   | Retained |   |   | Comprehensive     |   |   | Shareholders’ |    |
| December 31, 2009, 2008, and 2007                                 |   | Stock     |   |   | Shares       |   |   | Amount  |   |   | Surplus  |   |   | Earnings          |   |   | (Loss) Income       |    |   | Equity |   |
| Balance at January 1, 2007                                        |   |      |   |   |         | 7,895  |   |    | $      | 988    |     |   | $      | 53,201            |   |   | $                   | 128,652 |   |   | $ | (5,778 | ) |   | $ | 177,063 |   |
| Net income                                                        |   |      |   |   |         |   |   |    |   |   |     |   |   |              |   |   |                | 15,627  |   |   |   |   |   |   |   | 15,627 |   |
| Other comprehensive income                                        |   |      |   |   |         |   |   |    |   |   |     |   |   |              |   |   |                |    |   |   |   | 2,672 |   |   |   | 2,672 |   |
| Cash dividends declared, $1.32 per share                          |   |      |   |   |         |   |   |    |   |   |     |   |   |              |   |   |                | (10,082 | ) |   |   |   |   |   |   | (10,082 | ) |
| Purchase of common stock                                          |   |      |   |   |         | (584   | )      |    |   | (73    | )        |   |   | (6,877            | )      |   |                | (11,699 | ) |   |   |   |   |   |   | (18,649 | ) |
| Stock options exercised, including related tax benefits           |   |      |   |   |         | 63     |   |    |   | 7      |     |   |   | 1,540             |   |   |                |    |   |   |   |   |   |   |   | 1,547 |   |
| Shares issued pursuant to Employee Stock Purchase Plan            |   |      |   |   |         | 11     |   |    |   | 1      |     |   |   | 253               |   |   |                |    |   |   |   |   |   |   |   | 254 |   |
| Expense related to employee stock purchase plan and stock options |   |      |   |   |         |   |   |    |   |   |     |   |   | 59                |   |   |                |    |   |   |   |   |   |   |   | 59 |   |
| Balance at December 31, 2007                                      |   |      |   |   |         | 7,385  |   |    |   | 923    |     |   |   | 48,176            |   |   |                | 122,498 |   |   |   | (3,106 | ) |   |   | 168,491 |   |
| Net income                                                        |   |      |   |   |         |   |   |    |   |   |     |   |   |              |   |   |                | 4,395   |   |   |   |   |   |   |   | 4,395 |   |
| Other comprehensive income                                        |   |      |   |   |         |   |   |    |   |   |     |   |   |              |   |   |                |    |   |   |   | 5,841 |   |   |   | 5,841 |   |
| Cash dividends declared, $1.32 per share                          |   |      |   |   |         |   |   |    |   |   |     |   |   |              |   |   |                | (9,711  | ) |   |   |   |   |   |   | (9,711 | ) |
| Purchase of common stock                                          |   |      |   |   |         | (43    | )      |    |   | (5     | )        |   |   | (281              | )      |   |                | (763    | ) |   |   |   |   |   |   | (1,049 | ) |
| Stock options exercised, including related tax benefits           |   |      |   |   |         | 1      |   |    |   |   |     |   |   | 30                |   |   |                |    |   |   |   |   |   |   |   | 30 |   |
| Shares issued pursuant to Employee Stock Purchase Plan            |   |      |   |   |         | 14     |   |    |   | 2      |     |   |   | 250               |   |   |                |    |   |   |   |   |   |   |   | 252 |   |
| Expense related to employee stock purchase plan                   |   |      |   |   |         |   |   |    |   |   |     |   |   | 47                |   |   |                |    |   |   |   |   |   |   |   | 47 |   |
| Balance at December 31, 2008                                      |   |      |   |   |         | 7,357  |   |    |   | 920    |     |   |   | 48,222            |   |   |                | 116,419 |   |   |   | 2,735 |   |   |   | 168,296 |   |
| Issuance of 30,000 shares of Series A preferred stock             |   | $         | 28,008 |   |         |   |   |    |   |   |     |   |   |              |   |   |                |    |   |   |   |   |   |   |   |   | 28,008 |   |
| Issuance of common stock warrant                                  |   |      |   |   |         |   |   |    |   |   |     |   |   |              | 1,952  |   |                |    |   |   |   |   |   |   |   |   | 1,952 |   |
| Net loss                                                          |   |      |   |   |         |   |   |    |   |   |     |   |   |              |   |   |                |    | (44,742 | ) |   |   |   |   |   |   | (44,742 | ) |
| Other comprehensive income                                        |   |      |   |   |         |   |   |    |   |   |     |   |   |              |   |   |                |    |   |   |   |   | 1,129 |   |   |   | 1,129 |   |
| Cash dividends declared-common, $.85 per share                    |   |      |   |   |         |   |   |    |   |   |     |   |   |              |   |   |                |    | (6,258 | ) |   |   |   |   |   |   | (6,258 | ) |
| Preferred stock dividends                                         |   |      |   |   |         |   |   |    |   |   |     |   |   |              |   |   |                |    | (1,462 | ) |   |   |   |   |   |   | (1,462 | ) |
| Preferred stock discount accretion                                |   |      | 340    |   |         |   |   |    |   |   |     |   |   |              |   |   |                |    | (340 | ) |   |   |   |   |   |   |   |   |
| Shares issued pursuant to Employee Stock Purchase Plan            |   |      |   |   |         |   | 22     |    |   |   | 2        |   |   |              | 247    |   |                |    |   |   |   |   |   |   |   |   | 249 |   |
| Expense related to employee stock purchase plan                   |   |      |   |   |         |   |   |    |   |   |     |   |   |              | 55     |   |                |    |   |   |   |   |   |   |   |   | 55 |   |
| Balance at December 31, 2009                                      |   | $         | 28,348 |   |         |   | 7,379  |    |   | $      | 922      |   |   | $                 | 50,476 |   |                | $       | 63,617 |   |   | $ | 3,864 |   |   | $ | 147,227 |   |

----

Consolidated Statements of Cash Flows

| Years Ended December 31, (In thousands)                                           |   | 2009   |     |   | 2008   |   |     | 2007   |   |
|-----------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
| Cash Flows from Operating Activities                                              |   |   |     |   |   |   |     |   |   |
| Net (loss) income                                                                 |   | $      | (44,742  | )      |   | $      | 4,395    |   |   | $ | 15,627 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |   |     |   |   |   |     |   |   |   |   |   |
| Depreciation and amortization                                                     |   |   | 6,077    |   |   |   | 6,642    |   |   |   | 7,477 |   |
| Net amortization (accretion) of investment security discounts:                    |   |   |     |   |   |   |     |   |   |   |   |   |
| Available for sale                                                                |   |   | 955      |   |   |   | (179     | )      |   |   | (1,132 | ) |
| Held to maturity                                                                  |   |   | (1       | )      |   |   |     |   |   |   | 1 |   |
| Provision for loan losses                                                         |   |   | 20,768   |   |   |   | 5,321    |   |   |   | 3,638 |   |
| Goodwill impairment                                                               |   |   | 52,408   |   |   |   |     |   |   |   |   |   |
| Deferred income tax benefit                                                       |   |   | (9,905   | )      |   |   | (2,046   | )      |   |   | (1,807 | ) |
| Noncash stock option expense and employee stock purchase plan expense             |   |   | 55       |   |   |   | 47       |   |   |   | 59 |   |
| Mortgage loans originated for sale                                                |   |   | (45,806  | )      |   |   | (17,347  | )      |   |   | (19,684 | ) |
| Proceeds from sale of mortgage loans                                              |   |   | 46,994   |   |   |   | 16,185   |   |   |   | 21,081 |   |
| Gains on sale of mortgage loans, net                                              |   |   | (1,034   | )      |   |   | (407     | )      |   |   | (591 | ) |
| Loss on disposal of premises and equipment, net                                   |   |   | 183      |   |   |   | 17       |   |   |   | 89 |   |
| Loss (gain) on sale of repossessed assets                                         |   |   | 1,074    |   |   |   | (149     | )      |   |   | (365 | ) |
| Net (gain) loss on sale of available for sale investment securities               |   |   | (3,488   | )      |   |   | 166      |   |   |   |   |   |
| Other-than-temporary impairment of investment securities                          |   |   |     |   |   |   | 13,962   |   |   |   |   |   |
| Decrease (increase) in accrued interest receivable                                |   |   | 2,787    |   |   |   | 1,169    |   |   |   | (1,602 | ) |
| Income from company-owned life insurance                                          |   |   | (1,230   | )      |   |   | (1,225   | )      |   |   | (1,242 | ) |
| (Increase) decrease in other assets                                               |   |   | (1,027   | )      |   |   | (5,666   | )      |   |   | 1,874 |   |
| (Decrease) increase in accrued interest payable                                   |   |   | (1,126   | )      |   |   | (634     | )      |   |   | 1,672 |   |
| Increase (decrease) increase in other liabilities                                 |   |   | 2,095    |   |   |   | 432      |   |   |   | (2,656 | ) |
| Net cash provided by operating activities                                         |   |   | 25,037   |   |   |   | 20,683   |   |   |   | 22,439 |   |
| Cash Flows from Investing Activities                                              |   |   |     |   |   |   |     |   |   |   |   |   |
| Proceeds from maturities and calls of investment securities:                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Available for sale                                                                |   |   | 239,192  |   |   |   | 219,724  |   |   |   | 323,155 |   |
| Held to maturity                                                                  |   |   | 840      |   |   |   | 2,030    |   |   |   | 3,943 |   |
| Proceeds from sale of available for sale investment securities                    |   |   | 183,002  |   |   |   | 34,055   |   |   |   | 20,009 |   |
| Purchases of available for sale investment securities                             |   |   | (439,983 | )      |   |   | (252,167 | )      |   |   | (555,792 | ) |
| Loans originated for investment, net of principal collected                       |   |   | 5,920    |   |   |   | (36,357  | )      |   |   | (100,328 | ) |
| Purchase of PNC Military Allotment operations, net of cash acquired               |   |   |     |   |   |   |     |   |   |   | (1,943 | ) |
| Purchase price refinements of previous acquisitions                               |   |   |     |   |   |   |     |   |   |   | 50 |   |
| Investment in unconsolidated trusts                                               |   |   |     |   |   |   |     |   |   |   | (696 | ) |
| Purchases of premises and equipment                                               |   |   | (2,165   | )      |   |   | (10,640  | )      |   |   | (5,245 | ) |
| Proceeds from sale of repossessed assets                                          |   |   | 3,978    |   |   |   | 6,348    |   |   |   | 3,473 |   |
| Proceeds from disposals of equipment                                              |   |   | 422      |   |   |   | 2,357    |   |   |   | 330 |   |
| Net cash used in investing activities                                             |   |   | (8,794   | )      |   |   | (34,650  | )      |   |   | (313,044 | ) |
|  (table continues on next page)                                              |   |   |     |   |   |   |     |   |   |   |   |   |

----

|                                                                                |   |   |    |   |   |   |    |   |   |   |    |   |
|-------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
| Cash Flows from Financing Activities                                                |   |   |    |   |   |   |    |   |   |   |    |   |
| Net increase in deposits                                                            |   |   | 39,318  |   |   |   | 120,018 |   |   |   | 8,407   |   |
| Net (decrease) increase in federal funds purchased and other short-term borrowings  |   |   | (30,259 | )      |   |   | (3,281  | )      |   |   | 4,037   |   |
| Proceeds from securities sold under agreements to purchase and other long-term debt |   |   |    |   |   |   | 27,000  |   |   |   | 249,196 |   |
| Repayments of securities sold under agreements to purchase and other long-term debt |   |   | (18,729 | )      |   |   | (7,648  | )      |   |   | (20,879 | )      |
| Proceeds from issuance of preferred stock, net of issue costs                       |   |   | 29,961  |   |   |   |    |   |   |   |    |   |
| Dividends paid, common and preferred stock                                          |   |   | (9,222  | )      |   |   | (9,720  | )      |   |   | (11,118 | )      |
| Purchase of common stock                                                            |   |   |    |   |   |   | (1,049  | )      |   |   | (18,649 | )      |
| Shares issued under Employee Stock Purchase Plan                                    |   |   | 249     |   |   |   | 252     |   |   |   | 254     |   |
| Stock options exercised and related tax benefits                                    |   |   |    |   |   |   | 30      |   |   |   | 1,669   |   |
| Net cash provided by financing activities                                           |   |   | 11,318  |   |   |   | 125,602 |   |   |   | 212,917 |   |
| Net increase (decrease) in cash and cash equivalents                                |   |   | 27,561  |   |   |   | 111,635 |   |   |   | (77,688 | )      |
| Cash and cash equivalents at beginning of year                                      |   |   | 190,775 |   |   |   | 79,140  |   |   |   | 156,828 |   |
| Cash and cash equivalents at end of year                                            |   | $      | 218,336 |   |   | $      | 190,775 |   |   | $      | 79,140  |   |
| Supplemental Disclosures                                                            |   |   |    |   |   |   |    |   |   |   |    |   |
| Cash paid during the year for:                                                      |   |   |    |   |   |   |    |   |   |   |    |   |
| Interest                                                                            |   | $      | 48,191  |   |   | $      | 55,764  |   |   | $      | 54,367  |   |
| Income taxes                                                                        |   |   | 2,450   |   |   |   | 6,600   |   |   |   | 9,854   |   |
| Transfers from loans to other real estate                                           |   |   | 20,332  |   |   |   | 14,622  |   |   |   | 3,952   |   |
| Transfers from premises to other real estate                                        |   |   | 1,506   |   |   |   |    |   |   |   |    |   |
| See accompanying notes to consolidated financial statements.                        |   |   |    |   |   |   |    |   |   |   |    |   |

----

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 1.   |  Summary of Significant Accounting Policies |
|----------------|--------------------------------------------------|

----

----

----

Note 18

Note 21 

----

|                                                                  |   |   |    |   |   |   |   |   |   |
|-----------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
| (In thousands, except per share data)Years Ended December 31,         |   | 2009   |    |   | 2008   |   |   | 2007   |   |
| Net (loss) income, basic and diluted                                  |   | $      | (44,742 | )      |   | $      | 4,395  |   |   | $ | 15,627 |   |
| Preferred stock dividends and discount accretion                      |   |   | (1,802  | )      |   |   |   |   |   |   |   |   |
| Net (loss) income available to common shareholders, basic and diluted |   | $      | (46,544 | )      |   | $      | 4,395  |   |   | $ | 15,627 |   |
|                                                                  |   |   |    |   |   |   |   |   |   |   |   |   |
| Average common shares outstanding, basic and diluted                  |   |   | 7,365   |   |   |   | 7,357  |   |   |   | 7,706 |   |
|                                                                  |   |   |    |   |   |   |   |   |   |   |   |   |
| Net (loss) income per common share, basic and diluted                 |   | $      | (6.32   | )      |   | $      | .60    |   |   | $ | 2.03 |   |

----

|                     |   |   |   |
|--------------------------|--------|--------|--------|
|                     |   | ESPP   |   |
|                     |   | 2009   |   |   | 2008 |   |   | 2007 |   |
| Dividend yield           |   |   | 4.63   | % |   |   | 4.24 | % |   |   | 3.97 | % |
| Expected volatility      |   |   | 56.8   |   |   |   | 24.1 |   |   |   | 15.3 |   |
| Risk-free interest rate  |   |   | .14    |   |   |   | 1.85 |   |   |   | 4.75 |   |
| Expected life (in years) |   |   | .25    |   |   |   | .25 |   |   |   | .25 |   |
|                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value               |   | $      | 3.67   |   |   | $ | 4.05 |   |   | $ | 5.12 |   |

----

|   | · | Affirms that the objective of fair value when the market for an asset is not active is the price that would be received to sell the asset in an orderly transaction. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Clarifies and includes additional factors for determining whether there has been a significant decrease in market activity for an asset when the market for that asset is not active. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Eliminates the proposed presumption that all transactions are distressed (not orderly) unless proven otherwise. The new guidance instead requires an entity to base its conclusion about whether a transaction was not orderly on the weight of the evidence. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Includes an example that provides additional explanation on estimating fair value when the market activity for an asset has declined significantly. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Requires an entity to disclose a change in valuation technique (and the related inputs) resulting from the application of the new guidance and to quantify its effects, if practicable. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Applies to all fair value measurements when appropriate. |
|--------|--------|----------------------------------------------------------|

|   | · | Changes existing guidance for determining whether impairment is other than temporary for debt securities; |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | Replaces the existing requirement that the entity’s management assert it has both the intent and ability to hold an impaired security until recovery with a requirement that management assert: (a) it does not have the intent to sell the security; and (b) it is more likely than not it will not have to sell the security before recovery of its cost basis; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Incorporates examples of factors from existing literature that should be considered in determining whether a debt security is other-than-temporarily impaired; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

Note 2

Note 18 

Recently Issued But Not Yet Effective Accounting Standards

----

     2.  Investment Securities

|                                              |   |      |    |   |             |   |   |              |   |   |       |   |
|---------------------------------------------------|--------|-----------|---------|--------|------------------|--------|--------|-------------------|--------|--------|------------|--------|
|                                              |   | Amortized |    |   | Gross            |   |   | Gross             |   |   | Estimated  |   |
| December 31, 2009 (In thousands)                  |   | Cost      |    |   | Unrealized Gains |   |   | Unrealized Losses |   |   | Fair Value |   |
| Available For Sale                                |   |      |    |   |             |   |   |              |   |   |       |   |
| Obligations of U.S. government-sponsored entities |   | $         | 90,889  |   |             | $      | 162    |              |   | $      | 299        |   |   | $ | 90,752 |   |
| Obligations of states and political subdivisions  |   |      | 107,190 |   |             |   | 2,423  |              |   |   | 655        |   |   |   | 108,958 |   |
| Mortgage-backed securities – residential    |   |      | 315,546 |   |             |   | 10,446 |              |   |   | 473        |   |   |   | 325,519 |   |
| U.S. Treasury securities                          |   |      | 2,997   |   |             |   | 5      |              |   |   |       |   |   |   | 3,002 |   |
| Money market mutual funds                         |   |      | 910     |   |             |   |   |              |   |   |       |   |   |   | 910 |   |
| Corporate debt securities                         |   |      | 20,341  |   |             |   | 195    |              |   |   | 1,804      |   |   |   | 18,732 |   |
| Equity securities                                 |   |      | 9,148   |   |             |   |   |              |   |   |       |   |   |   | 9,148 |   |
| Total securities – available for sale       |   | $         | 547,021 |   |             | $      | 13,231 |              |   | $      | 3,231      |   |   | $ | 557,021 |   |
| Held To Maturity                                  |   |      |    |   |             |   |   |              |   |   |       |   |   |   |   |   |
| Obligations of states and political subdivisions  |   | $         | 975     |   |             | $      | 0      |              |   | $      | 53         |   |   | $ | 922 |   |

|                                              |   |      |    |   |             |   |   |              |   |   |       |   |
|---------------------------------------------------|--------|-----------|---------|--------|------------------|--------|--------|-------------------|--------|--------|------------|--------|
|                                              |   | Amortized |    |   | Gross            |   |   | Gross             |   |   | Estimated  |   |
| December 31, 2008 (In thousands)                  |   | Cost      |    |   | Unrealized Gains |   |   | Unrealized Losses |   |   | Fair Value |   |
| Available For Sale                                |   |      |    |   |             |   |   |              |   |   |       |   |
| Obligations of U.S. government-sponsored entities |   | $         | 34,068  |   |             | $      | 507    |              |   | $      | 8          |   |   | $ | 34,567 |   |
| Obligations of states and political subdivisions  |   |      | 89,268  |   |             |   | 1,894  |              |   |   | 324        |   |   |   | 90,838 |   |
| Mortgage-backed securities – residential    |   |      | 364,563 |   |             |   | 10,771 |              |   |   | 7          |   |   |   | 375,327 |   |
| U.S. Treasury securities                          |   |      | 10,218  |   |             |   | 38     |              |   |   |       |   |   |   | 10,256 |   |
| Money market mutual funds                         |   |      | 374     |   |             |   |   |              |   |   |       |   |   |   | 374 |   |
| Corporate debt securities                         |   |      | 19,265  |   |             |   |   |              |   |   | 5,274      |   |   |   | 13,991 |   |
| Equity securities                                 |   |      | 8,942   |   |             |   |   |              |   |   |       |   |   |   | 8,942 |   |
| Total securities – available for sale       |   | $         | 526,698 |   |             | $      | 13,210 |              |   | $      | 5,613      |   |   | $ | 534,295 |   |
| Held To Maturity                                  |   |      |    |   |             |   |   |              |   |   |       |   |   |   |   |   |
| Obligations of states and political subdivisions  |   | $         | 1,814   |   |             | $      | 9      |              |   | $      | 156        |   |   | $ | 1,667 |   |

----

|                                           |   |               |    |   |             |   |
|------------------------------------------------|--------|--------------------|---------|--------|------------------|--------|
|                                           |   | Available For Sale |    |   | Held To Maturity |   |
|                                           |   | Amortized          |    |   | Estimated        |   |   | Amortized |   |   | Estimated |   |
| December 31, 2009 (In thousands)               |   | Cost               |    |   | Fair Value       |   |   | Cost |   |   | Fair Value |   |
| Due in one year or less                        |   | $                  | 25,472  |   |             | $      | 25,582 |   |   |   |   |   |   |   |
| Due after one year through five years          |   |               | 73,270  |   |             |   | 74,199 |   |   |   |   |   |   |   |
| Due after five years through ten years         |   |               | 55,606  |   |             |   | 56,011 |   |   |   |   |   |   |   |
| Due after ten years                            |   |               | 67,979  |   |             |   | 66,562 |   |   | $ | 975 |   |   | $ | 922 |   |
| Mortgage-backed securities – residential |   |               | 315,546 |   |             |   | 325,519 |   |   |   |   |   |   |   |   |   |
| Total                                          |   | $                  | 537,873 |   |             | $      | 547,873 |   |   | $ | 975 |   |   | $ | 922 |   |

| (In thousands)                                                            |   | 2009   |        |   | 2008  |   |       | 2007   |   |
|---------------------------------------------------------------------------|--------|--------|-------------|--------|------------|--------|------------|--------|--------|
| Gross realized gains                                                      |   | $      |  3,560 |   |       | $      | 713        |   |   | $ |  0 |   |
| Gross realized losses                                                     |   |   | 72          |   |       |   | 879   |   |   |   |   |   |
| Net realized gain (loss)                                                  |   | $      | 3,488       |   |       | $      |  (166 | )      |   | $ | 0 |   |
| Income tax provision (benefit) related to net realized gains (losses)     |   | $      | 1,221       |   |       | $      | (58        | )      |   | $ | 0 |   |
|                                                                      |   |   |        |   |       |   |       |   |   |   |   |   |
| Proceeds from sales and calls of available for sale investment securities |   | $      | 314,623     |   |       | $      | 94,039     |   |   | $ | 70,022 |   |

|                                              |   |                |    |   |              |   |   |       |   |
|---------------------------------------------------|--------|---------------------|---------|--------|-------------------|--------|--------|------------|--------|
|                                              |   | Less than 12 Months |    |   | 12 Months or More |   |   | Total      |   |
|  December 31, 2009 (In thousands)            |   | Fair Value          |    |   | UnrealizedLosses  |   |   | Fair Value |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |
| Obligations of U.S. government-sponsored entities |   | $                   | 39,445  |   |              | $      | 299    |       |   |   |   |   |   |   |   | $ | 39,445 |   |   | $ | 299 |   |
| Obligations of states and political subdivisions  |   |                | 22,795  |   |              |   | 552    |       |   | $ | 3,605 |   |   | $ | 156 |   |   |   | 26,400 |   |   |   | 708 |   |
| Mortgage-backed securities – residential    |   |                | 41,120  |   |              |   | 473    |       |   |   |   |   |   |   |   |   |   |   | 41,120 |   |   |   | 473 |   |
| Corporate debt securities                         |   |                |    |   |              |   |   |       |   |   | 11,710 |   |   |   | 1,804 |   |   |   | 11,710 |   |   |   | 1,804 |   |
| Total                                             |   | $                   | 103,360 |   |              | $      | 1,324  |       |   | $ | 15,315 |   |   | $ | 1,960 |   |   | $ | 118,675 |   |   | $ | 3,284 |   |

|                                              |   |                |   |   |              |   |   |       |   |
|---------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|------------|--------|
|                                              |   | Less than 12 Months |   |   | 12 Months or More |   |   | Total      |   |
|  December 31, 2008 (In thousands)            |   | Fair Value          |   |   | UnrealizedLosses  |   |   | Fair Value |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |
| Obligations of U.S. government-sponsored entities |   | $                   | 2,237  |   |              | $      | 8      |       |   |   |   |   |   |   |   | $ | 2,237 |   |   | $ | 8 |   |
| Obligations of states and political subdivisions  |   |                | 8,870  |   |              |   | 404    |       |   | $ | 6,545 |   |   | $ | 76 |   |   |   | 15,415 |   |   |   | 480 |   |
| Mortgage-backed securities – residential    |   |                | 4,417  |   |              |   | 6      |       |   |   | 410 |   |   |   | 1 |   |   |   | 4,827 |   |   |   | 7 |   |
| Corporate debt securities                         |   |                | 10,573 |   |              |   | 2,500  |       |   |   | 3,029 |   |   |   | 2,774 |   |   |   | 13,602 |   |   |   | 5,274 |   |
| Total                                             |   | $                   | 26,097 |   |              | $      | 2,918  |       |   | $ | 9,984 |   |   | $ | 2,851 |   |   | $ | 36,081 |   |   | $ | 5,769 |   |

----

|   | 3.  Loans |
|--------|---------------------|

|                                                                   |   |   |      |   |   |   |
|------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| December 31, (In thousands)                                            |   | 2009   |      |   | 2008   |   |
| Commercial, financial, and agricultural                                |   | $      | 146,530   |   |   | $      | 144,788 |   |
| Real estate – construction                                       |   |   | 211,744   |   |   |   | 260,524 |   |
| Real estate mortgage – residential                               |   |   | 466,018   |   |   |   | 444,487 |   |
| Real estate mortgage – farmland and other commercial enterprises |   |   | 386,626   |   |   |   | 390,424 |   |
| Installment loans                                                      |   |   | 36,727    |   |   |   | 45,135 |   |
| Lease financing                                                        |   |   | 26,765    |   |   |   | 30,234 |   |
|      Total loans                              |   |   | 1,274,410 |   |   |   | 1,315,592 |   |
| Less unearned income                                                   |   |   | (2,468    | )      |   |   | (3,012 | ) |
|      Total loans, net of unearned income      |   | $      | 1,271,942 |   |   | $      | 1,312,580 |   |

----

|                                                                                                                   |   |   |   |
|------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| (In thousands)                                                                                                         |   | Amount |   |
| Balance, December 31, 2008                                                                                             |   | $      | 23,574 |   |
| New loans                                                                                                              |   |   | 4,164  |   |
| Repayments                                                                                                             |   |   | (5,477 | ) |
| Loans no longer meeting disclosure requirements, new loans meeting disclosure requirements, and other adjustments, net |   |   | 2,506  |   |
|      Balance, December 31, 2009                                                               |   | $      | 24,767 |   |

|   | 4.  Allowance for Loan Losses |
|--------|-----------------------------------------|

|                                    |   |   |    |   |   |   |   |   |   |
|-----------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
| Years Ended December 31, (In thousands) |   | 2009   |    |   | 2008   |   |   | 2007   |   |
| Balance, beginning of year              |   | $      | 16,828  |   |   | $      | 14,216 |   |   | $ | 11,999 |   |
| Provision for loan losses               |   |   | 20,768  |   |   |   | 5,321  |   |   |   | 3,638 |   |
| Recoveries                              |   |   | 536     |   |   |   | 1,833  |   |   |   | 733 |   |
| Loans charged off                       |   |   | (14,768 | )      |   |   | (4,542 | )      |   |   | (2,154 | ) |
| Balance, end of year                    |   | $      | 23,364  |   |   | $      | 16,828 |   |   | $ | 14,216 |   |

|                                                       |   |   |    |   |   |   |
|------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Years Ended December 31, (In thousands)                    |   | 2009   |    |   | 2008   |   |
| Year-end loans with no allocated allowance for loan losses |   | $      | 47,746  |   |   | $      | 4,684 |   |
| Year-end loans with allocated allowance for loan losses    |   |   | 60,723  |   |   |   | 43,670 |   |
| Total                                                      |   | $      | 108,469 |   |   | $      | 48,354 |   |
|                                                       |   |   |    |   |   |   |   |   |
| Amount of the allowance for loan losses allocated          |   | $      | 7,374   |   |   | $      | 3,619 |   |

|                                               |   |   |   |   |   |   |   |   |   |
|----------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Years Ended December 31, (In thousands)            |   | 2009   |   |   | 2008   |   |   | 2007   |   |
| Average of individually impaired loans during year |   | $      | 70,845 |   |   | $      | 34,364 |   |   | $ | 13,037 |   |
| Interest income recognized during impairment       |   |   | 3,866  |   |   |   | 1,070  |   |   |   | 1,382 |   |
| Cash-basis interest income recognized              |   |   | 3,257  |   |   |   | 880    |   |   |   | 683 |   |

|                                              |   |   |   |   |   |   |
|---------------------------------------------------|--------|--------|--------|--------|--------|--------|
| December 31, (In thousands)                       |   | 2009   |   |   | 2008   |   |
| Nonaccrual loans                                  |   | $      | 56,630 |   |   | $      | 21,545 |   |
| Restructured loans                                |   |   | 17,911 |   |   |   |   |   |
| Loans past due 90 days or more and still accruing |   |   | 1,807  |   |   |   | 3,913 |   |
| Total nonperforming loans                         |   | $      | 76,348 |   |   | $      | 25,458 |   |

----

|   | 5.  Premises and Equipment |
|--------|--------------------------------------|

|                                           |   |   |    |   |   |   |
|------------------------------------------------|--------|--------|---------|--------|--------|--------|
| December 31, (In thousands)                    |   | 2009   |    |   | 2008   |   |
| Land, buildings, and leasehold improvements    |   | $      | 53,324  |   |   | $      | 54,564 |   |
| Furniture and equipment                        |   |   | 20,406  |   |   |   | 20,607 |   |
| Total premises and equipment                   |   |   | 73,730  |   |   |   | 75,171 |   |
| Less accumulated depreciation and amortization |   |   | (34,609 | )      |   |   | (32,125 | ) |
| Premises and equipment, net                    |   | $      | 39,121  |   |   | $      | 43,046 |   |

|   | 6.  Deposit Liabilities |
|--------|-----------------------------------|

|           |   |   |    |
|----------------|--------|--------|---------|
| (In thousands) |   | Amount |    |
| 2010           |   | $      | 667,915 |   |
| 2011           |   |   | 116,999 |   |
| 2012           |   |   | 75,845  |   |
| 2013           |   |   | 31,643  |   |
| 2014           |   |   | 5,509   |   |
| Thereafter     |   |   | 7,067   |   |
| Total          |   | $      | 904,978 |   |

|   | 7.  Federal Funds Purchased and Other Short-term Borrowings |
|--------|-----------------------------------------------------------------------|

|                                                                      |   |   |    |   |   |   |
|---------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| December 31, (Dollars in thousands)                                       |   | 2009   |    |   | 2008   |   |
| Federal funds purchased and securities sold under agreement to repurchase |   | $      | 46,941  |   |   | $      | 73,187 |   |
| Overnight FHLB advances                                                   |   |   |    |   |   |   | 3,500 |   |
| Other                                                                     |   |   | 274     |   |   |   | 787 |   |
| Total short-term                                                          |   | $      | 47,215  |   |   | $      | 77,474 |   |
|                                                                      |   |   |    |   |   |   |   |   |
| Average balance during the year                                           |   | $      | 62,946  |   |   | $      | 81,180 |   |
| Maximum month-end balance during the year                                 |   |   | 105,844 |   |   |   | 125,096 |   |
| Average interest rate during the year                                     |   |   | .72     | %      |   |   | 2.20 | % |
| Average interest rate at year-end                                         |   |   | .79     |   |   |   | .74 |   |

----

|   | 8.  Term Securities Sold Under Agreements to Repurchase and Other Long-term Borrowings |
|--------|--------------------------------------------------------------------------------------------------|

|                                           |   |   |    |   |    |   |   |   |   |   |    |   |
|------------------------------------------------|--------|--------|---------|--------|---------|--------|--------|--------|--------|--------|---------|--------|
|                                           |   |   |    |   | Average |   |   |   |   |   | Average |   |
| December 31,  (Dollars in thousands) |   | 2009   |    |   | Rate    |   |   | 2008   |   |   | Rate    |   |
| FHLB advances                                  |   | $      | 67,630  |   |    |   | 3.98   | %      |   | $      | 86,116  |   |   |   | 3.85 | % |
| Subordinated notes payable                     |   |   | 48,970  |   |    |   | 4.11   |   |   |   | 48,970  |   |   |   | 5.94 |   |
| Securities sold under agreements to repurchase |   |   | 200,000 |   |    |   | 3.95   |   |   |   | 200,000 |   |   |   | 3.95 |   |
| Other                                          |   |   | 332     |   |    |   | 2.32   |   |   |   | 575     |   |   |   | 2.32 |   |
| Total long-term                                |   | $      | 316,932 |   |    |   | 3.98   | %      |   | $      | 335,661 |   |   |   | 4.21 | % |

----

|           |   |   |    |
|----------------|--------|--------|---------|
| (In thousands) |   | Amount |    |
| 2010           |   | $      | 64,248  |   |
| 2011           |   |   | 12,084  |   |
| 2012           |   |   | 61,814  |   |
| 2013           |   |   | 2,000   |   |
| 2014           |   |   | 8,083   |   |
| Thereafter     |   |   | 168,703 |   |
| Total          |   | $      | 316,932 |   |

     9.  Income Taxes

|                                                                         |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| December 31, (In thousands)                                                  |   | 2009   |   |   | 2008   |   |   | 2007   |   |
| Currently payable                                                            |   | $      | 752    |   |   | $      | 832    |   |   | $ | 6,094 |   |
| Deferred                                                                     |   |   | (9,905 | )      |   |   | (2,046 | )      |   |   | (1,807 | ) |
| Total applicable to operations                                               |   |   | (9,153 | )      |   |   | (1,214 | )      |   |   | 4,287 |   |
| Deferred tax (credited) charged to components of shareholders’ equity: |   |   |   |   |   |   |   |   |   |   |   |   |
|   Unfunded status of postretirement benefits                       |   |   | (234   | )      |   |   | 617    |   |   |   | (139 | ) |
|   Net unrealized securities gains                                  |   |   | 841    |   |   |   | 2,528  |   |   |   | 836 |   |
| Total income taxes                                                           |   | $      | (8,546 | )      |   | $      | 1,931  |   |   | $ | 4,984 |   |

|                                                   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| December 31,                                           |   | 2009   |   |   | 2008   |   |   | 2007   |   |
| Federal statutory rate                                 |   |   | 35.0   | %      |   |   | 35.0   | %      |   |   | 35.0 | % |
| Changes from statutory rates resulting from:           |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt interest                                    |   |   | 3.0    |   |   |   | (48.1  | )      |   |   | (8.1 | ) |
| Nondeductible interest to carry tax-exempt obligations |   |   | (.3    | )      |   |   | 5.7    |   |   |   | 1.1 |   |
| Goodwill impairment                                    |   |   | (22.7  | )      |   |   |   |   |   |   |   |   |
| Tax credits                                            |   |   | .8     |   |   |   | (14.6  | )      |   |   | (2.7 | ) |
| Premium income not subject to tax                      |   |   | .6     |   |   |   | (9.2   | )      |   |   | (1.9 | ) |
| Company-owned life insurance                           |   |   | .8     |   |   |   | (13.5  | )      |   |   | (2.1 | ) |
| Dividend exclusion                                     |   |   |   |   |   |   | (4.8   | )      |   |   |   |   |
| Other, net                                             |   |   | (.2    | )      |   |   | 11.3   |   |   |   | .2 |   |
| Effective tax rate on pretax income                    |   |   | 17.0   | %      |   |   | (38.2  | )%     |   |   | 21.5 | % |

----

|                                                              |   |   |   |   |   |   |
|-------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| December 31, (In thousands)                                       |   | 2009   |   |   | 2008   |   |
| Assets                                                            |   |   |   |   |   |   |
| Allowance for loan losses                                         |   | $      | 8,192  |   |   | $      | 5,901 |   |
| Deferred directors’ fees                                    |   |   | 269    |   |   |   | 263 |   |
| Postretirement benefit obligations                                |   |   | 4,419  |   |   |   | 3,727 |   |
| Other real estate owned                                           |   |   | 307    |   |   |   | 82 |   |
| Partnership investments                                           |   |   | 337    |   |   |   |   |   |
| Self-funded insurance                                             |   |   | 167    |   |   |   | 175 |   |
| Paid time off                                                     |   |   | 712    |   |   |   | 712 |   |
| Alternative minimum tax credits                                   |   |   | 814    |   |   |   | 587 |   |
| Low income housing credits                                        |   |   | 38     |   |   |   | 193 |   |
| Intangibles                                                       |   |   | 4,002  |   |   |   |   |   |
| Other                                                             |   |   | 63     |   |   |   | 39 |   |
| Total deferred tax assets                                         |   |   | 19,320 |   |   |   | 11,679 |   |
| Liabilities                                                       |   |   |   |   |   |   |   |   |
| Depreciation                                                      |   |   | 360    |   |   |   | 564 |   |
| Unrealized gains on available for sale investment securities, net |   |   | 3,500  |   |   |   | 2,659 |   |
| Life insurance income                                             |   |   |   |   |   |   | 144 |   |
| Prepaid expenses                                                  |   |   | 616    |   |   |   | 664 |   |
| Discount on investment securities                                 |   |   | 1,098  |   |   |   | 1,111 |   |
| Deferred loan fees                                                |   |   | 1,187  |   |   |   | 1,209 |   |
| Lease financing operations                                        |   |   | 1,996  |   |   |   | 1,886 |   |
| Intangibles                                                       |   |   |   |   |   |   | 2,177 |   |
| Total deferred tax liabilities                                    |   |   | 8,757  |   |   |   | 10,414 |   |
| Net deferred tax asset                                            |   | $      | 10,563 |   |   | $      | 1,265 |   |

     10.  Retirement Plans

----

|                            |   |   |   |
|---------------------------------|--------|--------|--------|
| (In thousands)                  |   | 2009   |   |   | 2008 |   |
| Change in Benefit Obligation    |   |   |   |   |   |   |
| Obligation at beginning of year |   | $      | 498    |   |   | $ | 462 |   |
| Service cost                    |   |   | 34     |   |   |   | 33 |   |
| Interest cost                   |   |   | 30     |   |   |   | 26 |   |
| Actuarial loss (gain)           |   |   | 8      |   |   |   | (18 | )   |
| Benefit payments                |   |   | (5     | ) |   |   | (5 | ) |
| Obligation at end of year       |   | $      | 565    |   |   | $ | 498 |   |

|                          |   |   |   |
|-------------------------------|--------|--------|--------|
| (In thousands)                |   | 2009   |   |   | 2008 |   |
| Service cost                  |   | $      | 34     |   |   | $ | 33 |   |
| Interest cost                 |   |   | 30     |   |   |   | 26 |   |
| Recognized net actuarial loss |   |   | 6      |   |   |   | 8 |   |
| Net periodic benefit cost     |   | $      | 70     |   |   | $ | 67 |   |
| Major assumptions:            |   |   |   |   |   |   |   |   |
| Discount rate                 |   |   | 6.0    | % |   |   | 6.0 | % |

|            |   |                         |   |
|-----------------|--------|------------------------------|--------|
| (In thousands)  |   | Supplemental Retirement Plan |   |
| 2010            |   | $                            | 5      |   |
| 2011            |   |                         | 5      |   |
| 2012            |   |                         | 48     |   |
| 2013            |   |                         | 48     |   |
| 2014            |   |                         | 48     |   |
|  2015-2019 |   |                         | 237    |   |
| Total           |   | $                            | 391    |   |

|                            |   |   |   |   |   |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|
| (In thousands)                  |   | 2009   |   |   | 2008   |   |
| Unrecognized net actuarial loss |   | $      | 100    |   |   | $      | 99 |   |
| Total                           |   | $      | 100    |   |   | $      | 99 |   |

|                            |   |                         |   |
|---------------------------------|--------|------------------------------|--------|
| (In thousands)                  |   | Supplemental Retirement Plan |   |
| Unrecognized net actuarial loss |   | $                            | 4      |   |
| Total                           |   | $                            | 4      |   |

     11.  Common Stock Options

----

|                            |   |   |   |
|---------------------------------|--------|--------|--------|
|                            |   | 2009   |   |
|                            |   |   |   |   | Weighted |   |
|                            |   |   |   |   | Average |   |
|                            |   | Shares |   |   | Price |   |
| Outstanding at January 1        |   |   | 59,621 |   |   | $ | 32.63 |   |
| Forfeited                       |   |   | (2,000 | ) |   |   | 34.80 |   |
| Outstanding at December 31      |   |   | 57,621 |   |   | $ | 32.56 |   |
|                            |   |   |   |   |   |   |   |   |
| Options exercisable at year-end |   |   | 57,621 |   |   | $ | 32.56 |   |

|                    |   |   |        |   |   |                  |   |
|-------------------------|--------|--------|-------------|--------|--------|-----------------------|--------|
|                    |   |   | Outstanding |   |   | Exercisable           |   |
|                    |   |   |        |   |   | Weighted Average      |   |   |   |   |   |   |   |   |   |   |
|                    |   |   |        |   |   | Remaining Contractual |   |   | Weighted Average |   |   |   |   |   | Weighted Average |   |
| Exercise Price          |   |   | Number      |   |   | Life (Years)          |   |   | Exercise Price |   |   | Number |   |   | Exercise Price |   |
| $29.75                  |   |   |        | 25,572 |   |                  |   | .06 |   |   | $ | 29.75 |   |   |   | 25,572 |   |   | $ | 29.75 |   |
| $34.80                  |   |   |        | 32,049 |   |                  |   | 4.83 |   |   |   | 34.80 |   |   |   | 32,049 |   |   |   | 34.80 |   |
| Outstanding at year-end |   |   |        | 57,621 |   |                  |   | 2.69 |   |   | $ | 32.56 |   |   |   | 57,621 |   |   | $ | 32.56 |   |

|                                        |   |   |   |   |   |   |   |   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (In thousands)                              |   | 2009   |   |   | 2008   |   |   | 2007   |   |
| Tax benefit realized from options exercised |   | $      | 0      |   |   | $      | 0      |   |   | $ | 123 |   |
| Total intrinsic value of options exercised  |   |   | 0      |   |   |   | 1      |   |   |   | 353 |   |
| Cash received from options exercised        |   |   | 0      |   |   |   | 30     |   |   |   | 1,546 |   |

     12.  Postretirement Medical Benefits

----

|                            |   |   |   |
|---------------------------------|--------|--------|--------|
| (In thousands)                  |   | 2009   |   |   | 2008 |   |
| Change in Benefit Obligation    |   |   |   |   |   |   |
| Obligation at beginning of year |   | $      | 10,550 |   |   | $ | 11,003 |   |
| Service cost                    |   |   | 454    |   |   |   | 442 |   |
| Interest cost                   |   |   | 695    |   |   |   | 622 |   |
| Actuarial gain                  |   |   | 1,104  |   |   |   | (1,244 | )   |
| Participant contributions       |   |   | 71     |   |   |   | 64 |   |
| Benefit payments                |   |   | (350   | ) |   |   | (337 | ) |
| Obligation at end of year       |   | $      | 12,524 |   |   | $ | 10,550 |   |

|                                  |   |   |   |
|---------------------------------------|--------|--------|--------|
| (In thousands)                        |   | 2009   |   |   | 2008 |   |
| Service cost                          |   | $      | 454    |   |   | $ | 442 |   |
| Interest cost                         |   |   | 695    |   |   |   | 622 |   |
| Amortization of transition obligation |   |   | 101    |   |   |   | 101 |   |
| Recognized prior service cost         |   |   | 257    |   |   |   | 299 |   |
| Recognized net actuarial loss         |   |   | 81     |   |   |   | 93 |   |
| Net periodic benefit cost             |   | $      | 1,588  |   |   | $ | 1,557 |   |
| Major assumptions:                    |   |   |   |   |   |   |   |   |
| Discount rate                         |   |   | 6.00   | % |   |   | 6.00 | % |
| Retiree participation rate (Plan 1)   |   |   | 100.00 |   |   |   | 100.00 |   |
| Retiree participation rate (Plan 2)   |   |   | 72.00  |   |   |   | 72.00 |   |

|                                                                                                            |   |        |   |   |        |   |
|-----------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|-------------|--------|
| (In thousands)                                                                                                  |   | 1% Increase |   |   | 1% Decrease |   |
| Effect on total of service and interest cost components of net periodic postretirement health care benefit cost |   | $           | 255    |   |        | $      | (197 | ) |
| Effect on accumulated postretirement benefit obligation                                                         |   |        | 2,311  |   |        |   | (1,840 | ) |

|           |   |   |                            |   |
|----------------|--------|--------|---------------------------------|--------|
| (In thousands) |   |   | Postretirement Medical Benefits |   |
| 2010           |   |   | $                               | 437    |   |
| 2011           |   |   |                            | 457    |   |
| 2012           |   |   |                            | 469    |   |
| 2013           |   |   |                            | 500    |   |
| 2014           |   |   |                            | 541    |   |
| 2015-2019      |   |   |                            | 3,133  |   |
| Total          |   |   | $                               | 5,537  |   |

|                               |   |   |   |   |   |   |
|------------------------------------|--------|--------|--------|--------|--------|--------|
| (In thousands)                     |   | 2009   |   |   | 2008   |   |
| Unrecognized net actuarial loss    |   | $      | 2,242  |   |   | $      | 1,218 |   |
| Unrecognized transition obligation |   |   | 305    |   |   |   | 406 |   |
| Unrecognized prior service cost    |   |   | 1,410  |   |   |   | 1,667 |   |
| Total                              |   | $      | 3,957  |   |   | $      | 3,291 |   |

----

|                            |   |                            |   |
|---------------------------------|--------|---------------------------------|--------|
| (In thousands)                  |   | Postretirement Medical Benefits |   |
| Transition obligation           |   | $                               | 101    |   |
| Unrecognized prior service cost |   |                            | 257    |   |
| Total                           |   | $                               | 358    |   |

     13.  Leases

|                                     |   |             |   |   |          |   |
|------------------------------------------|--------|------------------|--------|--------|---------------|--------|
| (In thousands)                           |   | Operating Leases |   |   | Capital Lease |   |
| 2010                                     |   | $                | 639    |   |          | $      | 254 |   |
| 2011                                     |   |             | 586    |   |          |   | 84 |   |
| 2012                                     |   |             | 467    |   |          |   |   |   |
| 2013                                     |   |             | 448    |   |          |   |   |   |
| 2014                                     |   |             | 433    |   |          |   |   |   |
| Thereafter                               |   |             | 3,461  |   |          |   |   |   |
| Total                                    |   | $                | 6,034  |   |          |   | 338 |   |
| Less: amount representing interest       |   |             |   |   |          |   | 6 |   |
| Long-term obligation under capital lease |   |             |   |   |          | $      | 332 |   |

|       14. |  Financial Instruments With Off-Balance Sheet Risk |
|------------------------------------|---------------------------------------------------------|

----

|                                                           |   |       |   |   |          |   |
|----------------------------------------------------------------|--------|------------|--------|--------|---------------|--------|
| December 31,                                                   |   | 2009       |   |   | 2008          |   |
| (In thousands)                                                 |   | Fixed Rate |   |   | Variable Rate |   |   | Fixed Rate |   |   | Variable Rate |   |
| Commitments to extend credit, including unused lines of credit |   | $          | 35,646 |   |          | $      | 103,892 |   |   | $ | 56,337 |   |   | $ | 128,042 |   |
| Standby letters of credit                                      |   |       | 3,812  |   |          |   | 14,309 |   |   |   | 5,751 |   |   |   | 23,997 |   |
| Total                                                          |   | $          | 39,458 |   |          | $      | 118,201 |   |   | $ | 62,088 |   |   | $ | 152,039 |   |

     15.  Concentration of Credit Risk

|       16. | Loss Contingencies |
|------------------------------------|--------------------|

|       17. | Regulatory Matters |
|------------------------------------|--------------------|

----

|                                      |   |   |    |   |              |   |   |                    |   |
|-------------------------------------------|--------|--------|---------|--------|-------------------|--------|--------|-------------------------|--------|
|                                      |   |   |    |   |              |   |   | To Be Well-Capitalized  |   |
|                                      |   |   |    |   | For Capital       |   |   | Under Prompt Corrective |   |
|                                      |   | Actual |    |   | Adequacy Purposes |   |   | Action Provisions       |   |
| December 31, 2009 (Dollars in thousands)  |   | Amount |    |   | Ratio             |   |   | Amount                  |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| Tier 1 Capital (to Risk-Weighted Assets)  |   |   |    |   |              |   |   |                    |   |   |   |   |   |   |   |   |   |   |
| Consolidated                              |   | $      | 185,874 |   |              |   | 13.95  | %                       |   | $ | 53,310 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| Farmers Bank & Capital Trust Company  |   |   | 48,178  |   |              |   | 14.40  |                    |   |   | 13,384 |   |   |   | 4.00 |   |   | $ | 20,075 |   |   |   | 6.00 | % |
| The Lawrenceburg Bank & Trust Company |   |   | 13,589  |   |              |   | 10.24  |                    |   |   | 5,308 |   |   |   | 4.00 |   |   |   | 7,961 |   |   |   | 6.00 |   |
| First Citizens Bank                       |   |   | 24,295  |   |              |   | 12.02  |                    |   |   | 8,082 |   |   |   | 4.00 |   |   |   | 12,124 |   |   |   | 6.00 |   |
| United Bank & Trust Company           |   |   | 56,376  |   |              |   | 12.49  |                    |   |   | 18,051 |   |   |   | 4.00 |   |   |   | 27,077 |   |   |   | 6.00 |   |
| Citizens Bank of Northern Kentucky, Inc.  |   |   | 18,443  |   |              |   | 9.70   |                    |   |   | 7,606 |   |   |   | 4.00 |   |   |   | 11,049 |   |   |   | 6.00 |   |
| Total Capital (to Risk-Weighted Assets)   |   |   |    |   |              |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                              |   | $      | 202,616 |   |              |   | 15.20  | %                       |   | $ | 106,620 |   |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A |   |
| Farmers Bank & Capital Trust Company  |   |   | 52,411  |   |              |   | 15.66  |                    |   |   | 26,767 |   |   |   | 8.00 |   |   | $ | 33,459 |   |   |   | 10.00 | % |
| The Lawrenceburg Bank & Trust Company |   |   | 15,253  |   |              |   | 11.50  |                    |   |   | 10,615 |   |   |   | 8.00 |   |   |   | 13,269 |   |   |   | 10.00 |   |
| First Citizens Bank                       |   |   | 25,787  |   |              |   | 12.76  |                    |   |   | 16,165 |   |   |   | 8.00 |   |   |   | 20,206 |   |   |   | 10.00 |   |
| United Bank & Trust Company           |   |   | 62,051  |   |              |   | 13.75  |                    |   |   | 36,103 |   |   |   | 8.00 |   |   |   | 45,128 |   |   |   | 10.00 |   |
| Citizens Bank of Northern Kentucky, Inc.  |   |   | 20,829  |   |              |   | 10.95  |                    |   |   | 15,213 |   |   |   | 8.00 |   |   |   | 19,016 |   |   |   | 10.00 |   |
| Tier 1 Capital (to Average Assets)        |   |   |    |   |              |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                              |   | $      | 185,874 |   |              |   | 8.15   | %                       |   | $ | 91,186 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| Farmers Bank & Capital Trust Company  |   |   | 48,178  |   |              |   | 7.68   |                    |   |   | 25,091 |   |   |   | 4.00 |   |   | $ | 31,364 |   |   |   | 5.00 | % |
| The Lawrenceburg Bank & Trust Company |   |   | 13,589  |   |              |   | 5.46   |                    |   |   | 9,958 |   |   |   | 4.00 |   |   |   | 12,447 |   |   |   | 5.00 |   |
| First Citizens Bank                       |   |   | 24,295  |   |              |   | 7.96   |                    |   |   | 12,214 |   |   |   | 4.00 |   |   |   | 15,268 |   |   |   | 5.00 |   |
| United Bank & Trust Company           |   |   | 56,376  |   |              |   | 7.35   |                    |   |   | 30,673 |   |   |   | 4.00 |   |   |   | 38,342 |   |   |   | 5.00 |   |
| Citizens Bank of Northern Kentucky, Inc.  |   |   | 18,443  |   |              |   | 6.23   |                    |   |   | 11,839 |   |   |   | 4.00 |   |   |   | 14,799 |   |   |   | 5.00 |   |

|                                     |   |   |    |   |              |   |   |                    |   |
|------------------------------------------|--------|--------|---------|--------|-------------------|--------|--------|-------------------------|--------|
|                                     |   |   |    |   |              |   |   | To Be Well-Capitalized  |   |
|                                     |   |   |    |   | For Capital       |   |   | Under Prompt Corrective |   |
|                                     |   | Actual |    |   | Adequacy Purposes |   |   | Action Provisions       |   |
| December 31, 2008 (Dollars in thousands) |   | Amount |    |   | Ratio             |   |   | Amount                  |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| Tier 1 Capital (to Risk-Weighted Assets) |   |   |    |   |              |   |   |                    |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   | $      | 155,317 |   |              |   | 11.32  | %                       |   | $ | 54,861 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| Farmers Bank & Capital Trust Co.     |   |   | 37,001  |   |              |   | 10.55  |                    |   |   | 14,026 |   |   |   | 4.00 |   |   | $ | 21,039 |   |   |   | 6.00 | % |
| The Lawrenceburg Bank & Trust Co.    |   |   | 11,665  |   |              |   | 9.34   |                    |   |   | 4,995 |   |   |   | 4.00 |   |   |   | 7,492 |   |   |   | 6.00 |   |
| First Citizens Bank                      |   |   | 19,885  |   |              |   | 10.38  |                    |   |   | 7,661 |   |   |   | 4.00 |   |   |   | 11,491 |   |   |   | 6.00 |   |
| United Bank & Trust Co.              |   |   | 47,910  |   |              |   | 9.66   |                    |   |   | 19,833 |   |   |   | 4.00 |   |   |   | 29,750 |   |   |   | 6.00 |   |
| Citizens Bank of Northern Kentucky       |   |   | 18,356  |   |              |   | 9.67   |                    |   |   | 7,594 |   |   |   | 4.00 |   |   |   | 11,390 |   |   |   | 6.00 |   |
| Total Capital (to Risk-Weighted Assets)  |   |   |    |   |              |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   | $      | 172,145 |   |              |   | 12.55  | %                       |   | $ | 109,722 |   |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A |   |
| Farmers Bank & Capital Trust Co.     |   |   | 41,397  |   |              |   | 11.81  |                    |   |   | 28,052 |   |   |   | 8.00 |   |   | $ | 35,066 |   |   |   | 10.00 | % |
| The Lawrenceburg Bank & Trust Co.    |   |   | 13,227  |   |              |   | 10.59  |                    |   |   | 9,989 |   |   |   | 8.00 |   |   |   | 12,487 |   |   |   | 10.00 |   |
| First Citizens Bank                      |   |   | 21,448  |   |              |   | 11.20  |                    |   |   | 15,321 |   |   |   | 8.00 |   |   |   | 19,151 |   |   |   | 10.00 |   |
| United Bank & Trust Co.              |   |   | 54,074  |   |              |   | 10.91  |                    |   |   | 39,667 |   |   |   | 8.00 |   |   |   | 49,583 |   |   |   | 10.00 |   |
| Citizens Bank of Northern Kentucky       |   |   | 20,390  |   |              |   | 10.74  |                    |   |   | 15,187 |   |   |   | 8.00 |   |   |   | 18,984 |   |   |   | 10.00 |   |
| Tier 1 Capital (to Average Assets)       |   |   |    |   |              |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                             |   | $      | 155,317 |   |              |   | 7.37   | %                       |   | $ | 84,256 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| Farmers Bank & Capital Trust Co.     |   |   | 37,001  |   |              |   | 6.05   |                    |   |   | 24,468 |   |   |   | 4.00 |   |   | $ | 30,585 |   |   |   | 5.00 | % |
| The Lawrenceburg Bank & Trust Co.    |   |   | 11,665  |   |              |   | 5.00   |                    |   |   | 9,336 |   |   |   | 4.00 |   |   |   | 11,670 |   |   |   | 5.00 |   |
| First Citizens Bank                      |   |   | 19,885  |   |              |   | 7.49   |                    |   |   | 10,618 |   |   |   | 4.00 |   |   |   | 13,272 |   |   |   | 5.00 |   |
| United Bank & Trust Co.              |   |   | 47,910  |   |              |   | 6.37   |                    |   |   | 30,081 |   |   |   | 4.00 |   |   |   | 37,601 |   |   |   | 5.00 |   |
| Citizens Bank of Northern Kentucky       |   |   | 18,356  |   |              |   | 7.28   |                    |   |   | 10,082 |   |   |   | 4.00 |   |   |   | 12,602 |   |   |   | 5.00 |   |

----

----

     18.  Fair Value Measurements

|   | Level 1: | Quoted prices for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date. |
|--------|----------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 2: | Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
|--------|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3: | Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. |
|--------|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | U.S. Treasury securities are priced using dealer quotes from active market makers and real-time trading systems. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | Marketable equity securities are priced utilizing real-time data feeds from active market exchanges for identical securities. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|

|   | · | Government-sponsored agency debt securities, obligations of states and political subdivisions, corporate bonds, and other similar investment securities are priced with available market information through processes using benchmark yields, matrix pricing, prepayment speeds, cash flows, live trading data, and market spreads sourced from new issues, dealer quotes, and trade prices, among others sources. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Investments in the Federal Reserve Bank, Federal Home Loan Bank, and other similar stock totaling $9.1 million and $8.9 million at December 31, 2009 and 2008, respectively, is carried at cost and not included in the table below, as they are outside the scope of ASC Topic 820. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                               |   |       |    |   | Fair Value Measurements Using                                 |   |
|--------------------------------------------------------------------|--------|------------|---------|--------|---------------------------------------------------------------|--------|
| (In thousands)  Available For Sale Investment Securities |   | Fair Value |    |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
|                                                               |   |       |    |   |                                                          |   |   |   |   |   |   |   |
| December 31, 2009                                                  |   |       |    |   |                                                          |   |   |   |   |   |   |   |
| U.S. Treasury securities                                           |   | $          | 3,002   |   |                                                          | $      | 3,002 |   |   |   |   |   |   |   |
| Obligations of U.S. government-sponsored entities                  |   |       | 90,752  |   |                                                          |   |   |   |   | $ | 90,752 |   |   |   |   |
| Obligations of states and political subdivisions                   |   |       | 108,958 |   |                                                          |   |   |   |   |   | 108,958 |   |   |   |   |
| Mortgage-backed securities – residential                     |   |       | 325,519 |   |                                                          |   |   |   |   |   | 325,519 |   |   |   |   |
| Money market mutual funds                                          |   |       | 910     |   |                                                          |   |   |   |   |   | 910 |   |   |   |   |
| Corporate debt securities                                          |   |       | 18,732  |   |                                                          |   |   |   |   |   | 18,732 |   |   |   |   |
| Total                                                              |   | $          | 547,873 |   |                                                          | $      | 3,002 |   |   | $ | 544,871 |   |   | $ | 0 |   |
|                                                               |   |       |    |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008                                                  |   |       |    |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury securities                                           |   | $          | 10,256  |   |                                                          | $      | 10,256 |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. government-sponsored entities                  |   |       | 34,567  |   |                                                          |   |   |   |   | $ | 34,567 |   |   |   |   |   |
| Obligations of states and political subdivisions                   |   |       | 90,838  |   |                                                          |   |   |   |   |   | 90,838 |   |   |   |   |   |
| Mortgage-backed securities – residential                     |   |       | 375,327 |   |                                                          |   |   |   |   |   | 375,327 |   |   |   |   |   |
| Money market mutual funds                                          |   |       | 374     |   |                                                          |   |   |   |   |   | 374 |   |   |   |   |   |
| Corporate debt securities                                          |   |       | 13,991  |   |                                                          |   |   |   |   |   | 13,991 |   |   |   |   |   |
| Total                                                              |   | $          | 525,353 |   |                                                          | $      | 10,256 |   |   | $ | 515,097 |   |   | $ | 0 |   |

----

|                                  |   |       |   | Fair Value Measurements Using                                       |                                               |   |                                     |   |
|---------------------------------------|--------|------------|--------|---------------------------------------------------------------------|----------------------------------------------------|--------|------------------------------------------|--------|
| (In thousands)  Description |   | Fair Value |   |  Quoted Prices in Active Markets for Identical Assets(Level 1) |  Significant Other Observable Inputs(Level 2) |   | Significant Unobservable Inputs(Level 3) |   |   | Impairment Charge |   |
|                                  |   |       |   |                                                                |                                               |   |                                     |   |   |   |   |
| December 31, 2009                     |   |       |   |                                                                |                                               |   |                                     |   |   |   |   |
| Impaired Loans                        |   | $          | 54,961 |                                                                |                                               |   |                                     | $      | 54,961 |   |   | $ | 5,762 |   |
| OREO                                  |   |       | 11,140 |                                                                |                                               |   |                                     |   | 11,140 |   |   |   | 877 |   |
| Total                                 |   | $          | 66,101 |                                                                |                                               |   |                                     | $      | 66,101 |   |   | $ | 6,639 |   |
|                                  |   |       |   |                                                                |                                               |   |                                     |   |   |   |   |   |   |   |
| December 31, 2008                     |   |       |   |                                                                |                                               |   |                                     |   |   |   |   |   |   |   |
| Impaired Loans                        |   | $          | 40,708 |                                                                |                                               |   |                                     | $      | 40,708 |   |   | $ | 2,962 |   |
| OREO                                  |   |       | 631    |                                                                |                                               |   |                                     |   | 631 |   |   |   | 117 |   |
| Total                                 |   | $          | 41,339 |                                                                |                                               |   |                                     | $      | 41,339 |   |   | $ | 3,079 |   |

----

|                                                                          |   |     |      |   |   |   |
|-------------------------------------------------------------------------------|--------|----------|-----------|--------|--------|--------|
| December 31,                                                                  |   | 2009     |      |   | 2008   |   |
|                                                                          |   | Carrying |      |   | Fair   |   |   | Carrying |   |   | Fair |   |
| (In thousands)                                                                |   | Amount   |      |   | Value  |   |   | Amount |   |   | Value |   |
| Assets                                                                        |   |     |      |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                     |   | $        | 218,336   |   |   | $      | 218,336 |   |   | $ | 190,775 |   |   | $ | 190,775 |   |
| Investment securities:                                                        |   |     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available for sale                                                            |   |     | 537,873   |   |   |   | 547,873 |   |   |   | 517,756 |   |   |   | 525,353 |   |
| FHLB and similar stock                                                        |   |     | 9,148     |   |   |   | N/A |   |   |   | 8,942 |   |   |   | N/A |   |
| Held to maturity                                                              |   |     | 975       |   |   |   | 922 |   |   |   | 1,814 |   |   |   | 1,667 |   |
| Loans, net                                                                    |   |     | 1,248,578 |   |   |   | 1,246,151 |   |   |   | 1,295,752 |   |   |   | 1,309,604 |   |
| Accrued interest receivable                                                   |   |     | 9,381     |   |   |   | 9,381 |   |   |   | 12,168 |   |   |   | 12,168 |   |
|                                                                          |   |     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                                                   |   |     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                      |   |     | 1,633,433 |   |   |   | 1,640,933 |   |   |   | 1,594,115 |   |   |   | 1,601,567 |   |
| Federal funds purchased and other short-term borrowings                       |   |     | 47,215    |   |   |   | 47,215 |   |   |   | 77,474 |   |   |   | 77,474 |   |
| Securities sold under agreements to repurchase and other long-term borrowings |   |     | 267,962   |   |   |   | 285,093 |   |   |   | 286,691 |   |   |   | 311,259 |   |
| Subordinated notes payable to unconsolidated trusts                           |   |     | 48,970    |   |   |   | 28,528 |   |   |   | 48,970 |   |   |   | 18,518 |   |
| Accrued interest payable                                                      |   |     | 4,685     |   |   |   | 4,685 |   |   |   | 5,811 |   |   |   | 5,811 |   |

     19.  Parent Company Financial Statements

|                                                |   |   |    |   |   |   |
|-----------------------------------------------------|--------|--------|---------|--------|--------|--------|
| December 31, (In thousands)                         |   | 2009   |    |   | 2008   |   |
| Assets                                              |   |   |    |   |   |   |
| Cash on deposit with subsidiaries                   |   | $      | 7,554   |   |   | $      | 4,302 |   |
| Investment in subsidiaries                          |   |   | 180,367 |   |   |   | 206,843 |   |
| Other assets                                        |   |   | 11,392  |   |   |   | 11,298 |   |
| Total assets                                        |   | $      | 199,313 |   |   | $      | 222,443 |   |
| Liabilities                                         |   |   |    |   |   |   |   |   |
| Dividends payable                                   |   | $      | 925     |   |   | $      | 2,427 |   |
| Subordinated notes payable to unconsolidated trusts |   |   | 48,970  |   |   |   | 48,970 |   |
| Other liabilities                                   |   |   | 2,191   |   |   |   | 2,750 |   |
| Total liabilities                                   |   |   | 52,086  |   |   |   | 54,147 |   |
| Shareholders’ Equity                          |   |   |    |   |   |   |   |   |
| Preferred stock                                     |   |   | 28,348  |   |   |   |   |   |
| Common stock                                        |   |   | 922     |   |   |   | 920 |   |
| Capital surplus                                     |   |   | 50,476  |   |   |   | 48,222 |   |
| Retained earnings                                   |   |   | 63,617  |   |   |   | 116,419 |   |
| Accumulated other comprehensive income              |   |   | 3,864   |   |   |   | 2,735 |   |
| Total shareholders’ equity                    |   |   | 147,227 |   |   |   | 168,296 |   |
| Total liabilities and shareholders’ equity    |   | $      | 199,313 |   |   | $      | 222,443 |   |

----

|                                                                                |   |   |    |   |   |   |   |   |   |
|-------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
| Years Ended December 31, (In thousands)                                             |   | 2009   |    |   | 2008   |   |   | 2007   |   |
| Income                                                                              |   |   |    |   |   |   |   |   |   |
| Dividends from subsidiaries                                                         |   | $      | 7,465   |   |   | $      | 9,566  |   |   | $ | 22,616 |   |
| Interest                                                                            |   |   | 53      |   |   |   | 60     |   |   |   | 64 |   |
| Other noninterest income                                                            |   |   | 3,457   |   |   |   | 3,217  |   |   |   | 3,170 |   |
| Total income                                                                        |   |   | 10,975  |   |   |   | 12,843 |   |   |   | 25,850 |   |
| Expense                                                                             |   |   |    |   |   |   |   |   |   |   |   |   |
| Interest expense-subordinated notes payable to unconsolidated trusts                |   |   | 2,178   |   |   |   | 2,865  |   |   |   | 2,394 |   |
| Interest expense on other borrowed funds                                            |   |   |    |   |   |   |   |   |   |   | 20 |   |
| Noninterest expense                                                                 |   |   | 4,097   |   |   |   | 3,986  |   |   |   | 4,391 |   |
| Total expense                                                                       |   |   | 6,275   |   |   |   | 6,851  |   |   |   | 6,805 |   |
| Income before income tax benefit and equity in undistributed income of subsidiaries |   |   | 4,700   |   |   |   | 5,992  |   |   |   | 19,045 |   |
| Income tax benefit                                                                  |   |   | (949    | )      |   |   | (1,189 | )      |   |   | (1,375 | ) |
| Income before equity in undistributed income of subsidiaries                        |   |   | 5,649   |   |   |   | 7,181  |   |   |   | 20,420 |   |
| Equity in undistributed income of subsidiaries                                      |   |   | (50,391 | )      |   |   | (2,786 | )      |   |   | (4,793 | ) |
| Net (loss) income                                                                   |   | $      | (44,742 | )      |   | $      | 4,395  |   |   | $ | 15,627 |   |

|                                                                              |   |   |    |   |   |   |    |   |   |
|-----------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Years Ended December 31, (In thousands)                                           |   | 2009   |    |   | 2008   |   |    | 2007   |   |
| Cash Flows From Operating Activities                                              |   |   |    |   |   |   |    |   |   |
| Net (loss) income                                                                 |   | $      | (44,742 | )      |   | $      | 4,395   |   |   | $ | 15,627 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |   |    |   |   |   |    |   |   |   |   |   |
| Equity in undistributed income of subsidiaries                                    |   |   | 50,391  |   |   |   | 2,786   |   |   |   | 4,793 |   |
| Noncash stock option expense and employee stock purchase plan expense             |   |   | 5       |   |   |   | 5       |   |   |   | 13 |   |
| Change in other assets and liabilities, net                                       |   |   | (1,043  | )      |   |   | (891    | )      |   |   | (3,767 | )   |
| Deferred income tax expense (benefit)                                             |   |   | 253     |   |   |   | (67     | )      |   |   | 555 |   |
| Net cash provided by operating activities                                         |   |   | 4,864   |   |   |   | 6,228   |   |   |   | 17,221 |   |
| Cash Flows From Investing Activities                                              |   |   |    |   |   |   |    |   |   |   |   |   |
| Proceeds from sale of available for sale investment securities                    |   |   |    |   |   |   | 1,000   |   |   |   |   |   |
| Purchase of available for sale investment securities                              |   |   |    |   |   |   | (1,000  | )      |   |   |   |   |
| Investment in unconsolidated trusts                                               |   |   |    |   |   |   |    |   |   |   | (629 | ) |
| Investment in nonbank subsidiaries                                                |   |   | (100    | )      |   |   | (4,051  | )      |   |   |   |   |
| Investment in bank subsidiaries                                                   |   |   | (22,500 | )      |   |   | (2,362  | )      |   |   | (8,000 | ) |
| Purchase price refinements of previous acquisitions                               |   |   |    |   |   |   |    |   |   |   | 50 |   |
| Net cash used in investing activities                                             |   |   | (22,600 | )      |   |   | (6,413  | )      |   |   | (8,579 | ) |
| Cash Flows From Financing Activities                                              |   |   |    |   |   |   |    |   |   |   |   |   |
| Proceeds from short-term borrowings                                               |   |   |    |   |   |   |    |   |   |   | 2,500 |   |
| Repayment of short-term borrowings                                                |   |   |    |   |   |   |    |   |   |   | (2,500 | ) |
| Proceeds from issuance of preferred stock, net of issue costs                     |   |   | 29,961  |   |   |   |    |   |   |   |   |   |
| Dividends paid, common and preferred stock                                        |   |   | (9,222  | )      |   |   | (9,720  | )      |   |   | (11,118 | ) |
| Purchase of common stock                                                          |   |   |    |   |   |   | (1,049  | )      |   |   | (18,649 | ) |
| Shares issued under Employee Stock Purchase Plan                                  |   |   | 249     |   |   |   | 252     |   |   |   | 254 |   |
| Stock options exercised                                                           |   |   |    |   |   |   | 30      |   |   |   | 1,546 |   |
| Proceeds from long-term debt issued to unconsolidated trusts                      |   |   |    |   |   |   |    |   |   |   | 23,196 |   |
| Net cash provided by (used in) financing activities                               |   |   | 20,988  |   |   |   | (10,487 | )      |   |   | (4,771 | ) |
| Net increase (decrease) in cash and cash equivalents                              |   |   | 3,252   |   |   |   | (10,672 | )      |   |   | 3,871 |   |
| Cash and cash equivalents at beginning of year                                    |   |   | 4,302   |   |   |   | 14,974  |   |   |   | 11,103 |   |
| Cash and cash equivalents at end of year                                          |   | $      | 7,554   |   |   | $      | 4,302   |   |   | $ | 14,974 |   |

----

|       20. |  Quarterly Financial Data (Unaudited) |
|------------------------------------|--------------------------------------------|

|                                                         |   |     |   |   |    |   |   |     |   |   |    |   |
|--------------------------------------------------------------|--------|----------|--------|--------|---------|--------|--------|----------|--------|--------|---------|--------|
| (In thousands, except per share data)                        |   |     |   |   |    |   |   |     |   |   |    |   |
| Quarters Ended 2009                                          |   | March 31 |   |   | June 30 |   |   | Sept. 30 |   |   | Dec. 31 |   |
| Interest income                                              |   | $        | 26,329 |   |    | $      | 25,479 |     |   | $      | 25,381  |   |   | $ | 23,721 |   |
| Interest expense                                             |   |     | 12,090 |   |    |   | 12,076 |     |   |   | 11,879  |   |   |   | 11,020 |   |
| Net interest income                                          |   |     | 14,239 |   |    |   | 13,403 |     |   |   | 13,502  |   |   |   | 12,701 |   |
| Provision for loan losses                                    |   |     | 1,676  |   |    |   | 5,940  |     |   |   | 6,653   |   |   |   | 6,499 |   |
| Net interest income after provision for loan losses          |   |     | 12,563 |   |    |   | 7,463  |     |   |   | 6,849   |   |   |   | 6,202 |   |
| Noninterest income                                           |   |     | 6,725  |   |    |   | 7,825  |     |   |   | 6,528   |   |   |   | 7,091 |   |
| Noninterest expense1                                         |   |     | 15,112 |   |    |   | 16,163 |     |   |   | 15,299  |   |   |   | 68,567 |   |
| Income (loss) before income taxes                            |   |     | 4,176  |   |    |   | (875   | )        |   |   | (1,922  | )      |   |   | (55,274 | ) |
| Income tax expense (benefit)                                 |   |     | 871    |   |    |   | (74    | )        |   |   | (1,748  | )      |   |   | (8,202 | ) |
| Net income (loss)2                                           |   |     | 3,305  |   |    |   | (801   | )        |   |   | (174    | )      |   |   | (47,072 | ) |
| Dividends and accretion on preferred shares                  |   |     | (414   | )      |    |   | (462   | )        |   |   | (462    | )      |   |   | (464 | ) |
| Net income available to common shareholders                  |   | $        | 2,891  |   |    | $      | (1,263 | )        |   | $      | (636    | )      |   | $ | (47,536 | ) |
| Net income (loss) per common share – basic and diluted |   | $        | .39    |   |    | $      | (.17   | )        |   | $      | (.09    | )      |   | $ | (6.45 | ) |
| Weighted average shares outstanding, basic and diluted       |   |     | 7,357  |   |    |   | 7,363  |     |   |   | 7,367   |   |   |   | 7,371 |   |

|   | 1Noninterest expense for the quarter ended December 31, 2009 includes a one-time, non-cash goodwill impairment charge of $52,408. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | 2The net loss for the quarters ended June 30, 2009 and September 30, 2009 is due mainly to an increase in the provision for loans losses which is attributable to higher levels of nonperforming assets, primarily nonaccrual loans secured by real estate developments. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                   |   |     |   |   |    |   |   |      |   |   |    |   |
|--------------------------------------------------------|--------|----------|--------|--------|---------|--------|--------|-----------|--------|--------|---------|--------|
| (In thousands, except per share data)                  |   |     |   |   |    |   |   |      |   |   |    |   |
| Quarters Ended 2008                                    |   | March 31 |   |   | June 30 |   |   | Sept. 301 |   |   | Dec. 31 |   |
| Interest income                                        |   | $        | 30,035 |   |    | $      | 29,037 |      |   | $      | 27,859  |   |   | $ | 26,989 |   |
| Interest expense                                       |   |     | 15,280 |   |    |   | 13,686 |      |   |   | 13,085  |   |   |   | 13,079 |   |
| Net interest income                                    |   |     | 14,755 |   |    |   | 15,351 |      |   |   | 14,774  |   |   |   | 13,910 |   |
| Provision for loan losses                              |   |     | 1,102  |   |    |   | 483    |      |   |   | 1,780   |   |   |   | 1,956 |   |
| Net interest income after provision for loan losses    |   |     | 13,653 |   |    |   | 14,868 |      |   |   | 12,994  |   |   |   | 11,954 |   |
| Noninterest income                                     |   |     | 6,387  |   |    |   | 6,191  |      |   |   | (7,865  | )      |   |   | 5,097 |   |
| Noninterest expense                                    |   |     | 14,380 |   |    |   | 14,392 |      |   |   | 14,879  |   |   |   | 16,447 |   |
| Income before income taxes                             |   |     | 5,660  |   |    |   | 6,667  |      |   |   | (9,750  | )      |   |   | 604 |   |
| Income tax expense                                     |   |     | 1,284  |   |    |   | 1,767  |      |   |   | (2,865  | )      |   |   | (1,400 | ) |
| Net income                                             |   | $        | 4,376  |   |    | $      | 4,900  |      |   | $      | (6,885  | )      |   | $ | 2,004 |   |
| Net income per common share, basic and diluted         |   |     | .59    |   |    |   | .67    |      |   |   | (.94    | )      |   |   | .27 |   |
| Weighted average shares outstanding, basic and diluted |   |     | 7,374  |   |    |   | 7,350  |      |   |   | 7,349   |   |   |   | 7,354 |   |

|   | 1The reduction in noninterest income and net income during the third quarter is mainly attributed to a $14.0 million non-cash other-than-temporary impairment write-down related to the Company’s investments in preferred stocks issued by Federal Home Loan Mortgage Corporation and Federal National Mortgage Association. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

     21.  Goodwill and Intangible Assets

|                                             |   |   |    |   |   |   |   |   |   |
|--------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
| (In thousands)                                   |   | 2009   |    |   | 2008   |   |   | 2007   |   |
| Beginning of year                                |   | $      | 52,408  |   |   | $      | 52,408 |   |   | $ | 42,822 |   |
|                                             |   |   |    |   |   |   |   |   |   |   |   |   |
| Purchase price refinements of prior acquisitions |   |   |    |   |   |   |   |   |   |   | (77 | ) |
| Acquired goodwill                                |   |   |    |   |   |   |   |   |   |   | 9,663 |   |
| Impairment losses                                |   |   | (52,408 | )      |   |   |   |   |   |   |   |   |
| End of year                                      |   | $      | 0       |   |   | $      | 52,408 |   |   | $ | 52,408 |   |

----

|                                             |   | December 31,2009 |   |   | September 30, 2009 |   |   | June 30, 2009 |   |   | March 31, 2009 |   |   | December 31,2008 |   |
|--------------------------------------------------|--------|------------------|--------|--------|-------------------------|--------|--------|--------------------|--------|--------|---------------------|--------|--------|------------------|--------|
| Stock price at end of period                     |   | $                | 10.22  |   |                    | $      | 17.88  |               |   | $      | 25.17               |   |   | $                | 15.67  |   |   | $ | 24.42 |   |
| Weighted average closing stock price for quarter |   |             | 11.64  |   |                    |   | 20.23  |               |   |   | 21.36               |   |   |             | 17.80  |   |   |   | 22.07 |   |
| Book value per common share                      |   |             | 16.11  |   |                    |   | 23.13  |               |   |   | 22.60               |   |   |             | 23.08  |   |   |   | 22.87 |   |
|                                             |   |             |   |   |                    |   |   |               |   |   |                |   |   |             |   |   |   |   |   |   |

----

|                                      |   |                 |   |   |                    |   |
|-------------------------------------------|--------|----------------------|--------|--------|-------------------------|--------|
|                                      |   | 2009                 |   |   | 2008                    |   |
| Amortized Intangible Assets(In thousands) |   | Gross CarryingAmount |   |   | AccumulatedAmortization |   |   | GrossCarrying Amount |   |   | AccumulatedAmortization |   |
| Core deposit intangibles                  |   | $                    | 12,765 |   |                    | $      | 8,916 |   |   | $ | 12,765 |   |   | $ | 7,361 |   |
| Other customer relationship intangibles   |   |                 | 3,689  |   |                    |   | 2,549 |   |   |   | 3,689 |   |   |   | 2,152 |   |
| Total                                     |   | $                    | 16,454 |   |                    | $      | 11,465 |   |   | $ | 16,454 |   |   | $ | 9,513 |   |

|           |   |   |   |
|----------------|--------|--------|--------|
| (In thousands) |   | Amount |   |
| 2010           |   | $      | 1,437  |   |
| 2011           |   |   | 1,143  |   |
| 2012           |   |   | 1,014  |   |
| 2013           |   |   | 540    |   |
| 2014           |   |   | 405    |   |

     22.  Preferred Stock and Warrant

----

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

----

|   | · | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of Company assets; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that Company’s receipts and expenditures are being made only in accordance with the authorization of Company’s management and members of the Company’s Board of Directors; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, uses or dispositions of Company assets that could have a material effect on the Company’s financial statements. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

page 62

Item 9B.  Other Information

----

PART III

Item 10.  Directors, Executive Officers and Corporate Governance

|                  |   | Positions and                | Years of Service |
|-----------------------|--------|------------------------------|------------------|
|                  |   | Offices With                 | With the         |
| Executive Officer1    | Age    | the Registrant               | Registrant       |
|                  |   |                         |             |
| Lloyd C. Hillard, Jr. | 63     | President and CEO, Director2 | 17*              |
|                  |   |                         |             |

| * | Includes years of service with the Company and its subsidiaries. |
|---|------------------------------------------------------------------|

| 1 | For Regulation O purposes, Frank W. Sower, Jr., Chairman of the Company’s board of directors, is considered an executive officer in name only. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Also a director of Farmers Bank, United Bank (Chairman), Lawrenceburg Bank, First Citizens Bank, Citizens Northern, FCB Services, Farmers Insurance (Chairman), Leasing One (Chairman), Kentucky General (Chairman), FFKT Insurance, EG Properties, EKT Properties, and an administrative trustee of Farmers Capital Bank Trust I, Farmers Capital Bank Trust II, and Farmers Capital Bank Trust III. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions

Item 14.  Principal Accounting Fees and Services

PART IV

Item 15. Exhibits, Financial Statement Schedules

| (a)1. | Financial Statements |
|-------|----------------------|

Part II, Item 8

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Changes in Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

----

| (a)2. | Financial Statement Schedules |
|-------|-------------------------------|

| (a)3. | Exhibits: |
|-------|-----------|

| 3.1    | Articles of Incorporation of Farmers Capital Bank Corporation (incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2006, the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003, and Current Report on Form 8-K dated January 13, 2009).                                                                                                                  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 3.2    | Amended and Restated Bylaws of Farmers Capital Bank Corporation (incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009).                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.1*   | Junior Subordinated Indenture, dated as of July 21, 2005, between Farmers Capital Bank Corporation and Wilmington Trust Company, as Trustee, relating to unsecured junior subordinated deferrable interest notes that mature in 2035.                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.2*   | Amended and Restated Trust Agreement, dated as of July 21, 2005, among Farmers Capital Bank Corporation, as Depositor, Wilmington Trust Company, as Property and Delaware Trustee, the Administrative Trustees (as named therein), and the Holders (as defined therein).                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.3*   | Guarantee Agreement, dated as of July 21, 2005, between Farmers Capital Bank Corporation, as Guarantor, and Wilmington Trust Company, as Guarantee Trustee.                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.4*   | Junior Subordinated Indenture, dated as of July 26, 2005, between Farmers Capital Bank Corporation and Wilmington Trust Company, as Trustee, relating to unsecured junior subordinated deferrable interest notes that mature in 2035.                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.5*   | Amended and Restated Trust Agreement, dated as of July 26, 2005, among Farmers Capital Bank Corporation, as Depositor, Wilmington Trust Company, as Property and Delaware Trustee, the Administrative Trustees (as named therein), and the Holders (as defined therein).                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.6*   | Guarantee Agreement, dated as of July 26, 2005, between Farmers Capital Bank Corporation, as Guarantor, and Wilmington Trust Company, as Guarantee Trustee.                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.7*   | Indenture, dated as of August 14, 2007 between Farmers Capital Bank Corporation, as Issuer, and Wilmington Trust Company, as Trustee, relating to fixed/floating rate junior subordinated debt due 2037.                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.8*   | Amended and Restated Declaration of Trust, dated as of August 14, 2007, by Farmers Capital Bank Corporation, as Sponsor, Wilmington Trust Company, as Delaware and Institutional Trustee, the Administrative Trustees (as named therein), and the Holders (as defined therein).                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.9*   | Guarantee Agreement, dated as of August 14, 2007, between Farmers Capital Bank Corporation, as Guarantor, and Wilmington Trust Company, as Guarantee Trustee.                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.10   | Form of Certificate for Fixed Rate Cumulative Perpetual Preferred Stock, Series A(incorporated by reference to the Current Report on Form 8-K dated January 13, 2009).                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.11   | Warrant for Purchase of Shares of Common Stock(incorporated by reference to the Current Report on Form 8-K dated January 13, 2009).                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.1   | Agreement and Plan of Merger, Dated July 1, 2005, as Amended, by and among Citizens Bancorp, Inc., Citizens Acquisition Subsidiary Corp, and Farmers Capital Bank Corporation(incorporated by reference to Appendix A of Registration Statement filed on Form S-4 on October 11, 2005).                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.2   | Amended and Restated Plan of Merger of Citizens National Bancshares, Inc. with and into FCBC Acquisition Subsidiary, LLC (incorporated by reference to Appendix A of Proxy Statement for Special Meeting of Shareholders of Citizens National Bancshares, Inc. and Prospectus in connection with an offer of up to 600,000 shares of its common stock of Farmers Capital Bank Corporation filed on Form 424B3 on August 7, 2006). |

----

|   |                                                                                                                                                                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.3   | Stock Purchase Agreement Dated June 1, 2006 by and among Farmers Capital Bank Corporation, Kentucky Banking Centers, Inc. and Citizens First Corporation. (incorporated by reference to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008). |
|   |                                                                                                                                                                                                                                                                          |
| 21     | Subsidiaries of the Registrant                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                          |
| 23     | Consent of Independent Registered Public Accounting Firm                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                          |
| 31.1   | CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                          |
| 31.2   | CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                          |
| 32     | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                          |
| 99.1   | Annual Certification of Chief Executive Officer Pursuant to 31 C.F.R. 30.15                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                          |
| 99.2   | Annual Certification of Chief Financial Officer Pursuant to 31 C.F.R. 30.15                                                                                                                                                                                                   |

|   * | Exhibit not included pursuant to Item 601(b)(4)(iii) and (v) of Regulation S-K. The Company will provide a copy of such exhibit to the Securities and Exchange Commission upon request. |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

SIGNATURES

|   | FARMERS CAPITAL BANK CORPORATION |                                  |
|--------|----------------------------------|---------------------------------------|
|   |                             |                                  |   |
|   |                             |                                  |   |
|   | By:                              |   /s/ Lloyd C. Hillard, Jr. |   |
|   |                             | Lloyd C. Hillard, Jr.                 |   |
|   |                             | President and Chief Executive Officer |   |
|   |                             |                                  |   |
|   |                             |                                  |   |
|   | Date:                            |   March 12, 2010                 |   |

|   /s/ Lloyd C. Hillard, Jr.  | President, Chief Executive Officer |   March 12, 2010    |
|-----------------------------------|------------------------------------|--------------------------|
| Lloyd C. Hillard, Jr.             | and Director (principal executive  |                     |
|                              | officer of the Registrant)         |                     |
|                              |                               |                     |
|   /s/ Frank W. Sower, Jr.    | Chairman                           |   February 25, 2010 |
| Frank W. Sower, Jr.               |                               |                     |
|                              |                               |                     |
|   /s/ Ben F. Brown           | Director                           |   February 25, 2010 |
| Ben F. Brown                      |                               |                     |
|                              |                               |                     |
|   /s/ Daniel M. Sullivan     | Director                           |   March 2, 2010     |
| Daniel M. Sullivan                |                               |                     |
|                              |                               |                     |
|   /s/ R. Terry Bennett       | Director                           |   February 27, 2010 |
| R. Terry Bennett                  |                               |                     |
|                              |                               |                     |
|   /s/ Shelley S. Sweeney     | Director                           |   February 26, 2010 |
| Shelley S. Sweeney                |                               |                     |
|                              |                               |                     |
|   /s/ David R. O'Bryan       | Director                           |   March 2, 2010     |
| David R. O’Bryan            |                               |                     |
|                              |                               |                     |
|   /s/ Donald Saelinger  | Director                           |   February 25, 2010 |
| Dr. Donald A. Saelinger           |                               |                     |
|                              |                               |                     |
|   /s/ J. D. Sutterlin   | Director                           |   February 26,2010  |
| Dr. John D. Sutterlin             |                               |                     |
|                              |                               |                     |
|   /s/ Marvin E. Strong  | Director                           |   March 1, 2010     |
| Marvin E. Strong                  |                               |                     |
|                              |                               |                     |
|   /s/ J. Barry Banker   | Director                           |   March 2, 2010     |
| J. Barry Banker                   |                               |                     |
|                              |                               |                     |
|   /s/ Robert Roach, Jr. | Director                           |   February 25, 2010 |
| Robert Roach, Jr.                 |                               |                     |
|                              |                               |                     |
|   /s/ Doug Carpenter         | Senior Vice President, Secretary   |   March 12, 2010    |
| C. Douglas Carpenter              | and CFO (principal financial and   |                     |
|                              | accounting officer)                |                     |

----

INDEX OF EXHIBITS

| Exhibit |                                                                                                                    | Page   |
|---------|-------------------------------------------------------------------------------------------------------------------------|--------|
|    |                                                                                                                    |   |
|    |                                                                                                                    |   |
| 21      | Subsidiaries of the Registrant                                                                                          | 107    |
|    |                                                                                                                    |   |
| 23      | Consent of Independent Registered Public Accounting Firm                                                                | 108    |
|    |                                                                                                                    |   |
| 31.1    | CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                             | 109    |
|    |                                                                                                                    |   |
| 31.2    | CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                             | 110    |
|    |                                                                                                                    |   |
| 32      | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | 111    |
|    |                                                                                                                    |   |
| 99.1    | Annual Certification of Chief Executive Officer Pursuant to 31 C.F.R. 30.15                                             | 112    |
|    |                                                                                                                    |   |
| 99.2    | Annual Certification of Chief Financial Officer Pursuant to 31 C.F.R. 30.15                                             | 114    |

----