| 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 whichregistered) |

|   | 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 |
|------------|-----------|

PartIII

index of exhibits 

----

|              |                                                                                                                   | Page   |
|-------------------|------------------------------------------------------------------------------------------------------------------------|--------|
|              | Part      I                                                                                                            |   |
|              |                                                                                                                   |   |
| Item 1.           | Business                                                                                                               | 4      |
| Item 1A.          | Risk Factors                                                                                                           | 13     |
| Item 1B.          | Unresolved Staff Comments                                                                                              | 16     |
| Item 2.           | Properties                                                                                                             | 16     |
| Item 3.           | Legal Proceedings                                                                                                      | 17     |
| Item 4.           | Submission of Matters to a Vote of Security      Holders                                                               | 17     |
|              |                                                                                                                   |   |
|              | Part      II                                                                                                           |   |
|              |                                                                                                                   |   |
| Item 5.           | Market for Registrant's Common Equity,      Related Stockholder Matters and Issuer Purchases of Equity      Securities | 17     |
| Item 6.           | Selected Financial      Data                                                                                           | 20     |
| Item 7.           | Management's Discussion and Analysis of Financial      Condition and Results of Operations                             | 21     |
| Item 7A.          | Quantitative and Qualitative Disclosures About      Market Risk                                                        | 42     |
| Item 8.           | Financial Statements and Supplementary      Data                                                                       | 43     |
| Item 9.           | Changes in and Disagreements With      Accountants on Accounting and Financial Disclosure                              | 78     |
| Item 9A.          | Controls and    Procedures                                                                                             | 78     |
| Item 9B.          | Other Information                                                                                                      | 79     |
|              |                                                                                                                   |   |
|              | Part      III                                                                                                          |   |
|              |                                                                                                                   |   |
| Item 10.          | Directors, Executive Officers and Corporate      Governance                                                            | 79     |
| Item 11.          | Executive Compensation                                                                                                 | 79     |
| Item 12.          | Security Ownership of Certain Beneficial      Owners and  Management and Related Stockholder      Matters    | 79     |
| Item 13.          | Certain Relationships and Related      Transactions                                                                    | 79     |
| Item 14.          | Principal Accounting Fees and      Services                                                                            | 80     |
|              |                                                                                                                   |   |
|              | Part      IV                                                                                                           |   |
|              |                                                                                                                   |   |
| Item 15.          | Exhibits, Financial Statement      Schedules                                                                           | 80     |
|              |                                                                                                                   |   |
| Signatures        | 82                                                                                                                     |
| Index of Exhibits | 83                                                                                                                     |

----

Item 1.Business

Item 1A (“Risk Factors”)
Item 7

Organization

----

| Tier   | Entity                                               |
|--------|------------------------------------------------------|
| 1      | Farmers      Capital Bank Corporation, Frankfort, KY |
|   |                                                 |   |
| 2      |                                                 | United      Bank & Trust Co., 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 Co., 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      |                                                 |   | Frankfort      Apartments II, LTD, Frankfort, KY 99.9% |
| 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% |
| 3      |                                                 |   | KHL      Holdings, LLC, Frankfort, KY 45% (equity), 50% (voting) |
| 4      |                                                 |   |   | Kentucky      Home Life Insurance Company, 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) |

----

----

----

----

----

----

“Emergency Economic Stabilization Act of 2008 (“EESA”)"

|   | · | 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 bankingservices. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Emergency Economic Stabilization Act of 2008 (“EESA”)

----

----

Item 1A. Risk Factors

----

|   | · | unanticipated      declines in borrower income or cashflow; |
|--------|--------|-------------------------------------------------------------|

|   | · | changes      in economic and industryconditions; |
|--------|--------|--------------------------------------------------|

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

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

----

|   | · | a      regular review of the quality, mix and size of the overall loan      portfolio; |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | historical      loan loss experience; |
|--------|--------|---------------------------------------|

|   | · | evaluation      of non-performing loans; |
|--------|--------|------------------------------------------|

|   | · | assessment      of economic conditions and their effects on the bank’s existing portfolio;      and |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | the      amount and quality of collateral, including guarantees, securing      loans. |
|--------|--------|---------------------------------------------------------------------------------------|

----

Item 1B. Unresolved StaffComments

Item 2. Properties

Notes toConsolidated Financial Statements 

| 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)                               |
| 548      Lewis Hargett, Suite 150, Lexington, KY (administrative      offices) |
| 333      W. Vine Street, Suite 102, Lexington, KY (leased)                     |
| 3098      Harrodsburg Road, Lexington, KY (leased)                             |
| 100      United Bank Drive, Versailles, KY                                     |
| Locust      & Green Streets, Versailles, KY                                |
| 206      N. Gratz, Midway, KY                                                  |
| 128      S. Main Street, Lawrenceburg, KY                                      |
| West      Park Shopping Center, US 127 Bypass, 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 SecurityHolders

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

----

|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                          |   | 2003   |   |   | 2004   |   |   | 2005   |   |   | 2006   |   |   | 2007   |   |   | 2008   |
| Farmers      Capital Bank Corporation                         |   | $      | 100.00 |   |   | $      | 125.80 |   |   | $      | 97.65  |   |   | $      | 114.88 |   |   | $ | 95.02 |   |   | $ | 90.48 |
| NASDAQ      Composite                                         |   |   | 100.00 |   |   |   | 110.08 |   |   |   | 112.88 |   |   |   | 126.51 |   |   |   | 138.13 |   |   |   | 80.47 |
| Southeastern      Banks Under 1 Billion Market Capitalization |   |   | 100.00 |   |   |   | 118.02 |   |   |   | 118.12 |   |   |   | 137.21 |   |   |   | 102.03 |   |   |   | 91.79 |

----

| 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      |                               |

“Shareholder Information”
“Stock Prices”
Note 18 

----

Item 6. Selected FinancialData

| Selected      Financial Highlights                                             |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |
|--------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|
|                                                                           |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |
| December      31,(In      thousands, except per share data)                    |   | 2008   |      |   | 2007   |   |      | 2006   |   |   | 2005      |   |   | 2004   |      |
| Results      of Operations                                                     |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |
| Interest      income                                                           |   | $      | 113,920   |   |   | $      | 114,257   |   |   | $      | 92,340    |   |   | $      | 65,651    |   |   | $ | 55,296 |   |
| Interest      expense                                                          |   |   | 55,130    |   |   |   | 56,039    |   |   |   | 41,432    |   |   |   | 24,409    |   |   |   | 16,729 |   |
| Net      interest income                                                       |   |   | 58,790    |   |   |   | 58,218    |   |   |   | 50,908    |   |   |   | 41,242    |   |   |   | 38,567 |   |
| Provision      for loan losses                                                 |   |   | 5,321     |   |   |   | 3,638     |   |   |   | 965       |   |   |   | 622       |   |   |   | 856 |   |
| Noninterest      income                                                        |   |   | 9,810     |   |   |   | 24,157    |   |   |   | 20,459    |   |   |   | 19,867    |   |   |   | 17,164 |   |
| Noninterest      expense                                                       |   |   | 60,098    |   |   |   | 58,823    |   |   |   | 53,377    |   |   |   | 42,164    |   |   |   | 38,812 |   |
| Income      from continuing operations                                         |   |   | 4,395     |   |   |   | 15,627    |   |   |   | 13,665    |   |   |   | 14,532    |   |   |   | 13,064 |   |
| Income      from discontinued operations1                                      |   |   |      |   |   |   |      |   |   |   | 7,707     |   |   |   | 1,240     |   |   |   | 328 |   |
| Net      income                                                                |   |   | 4,395     |   |   |   | 15,627    |   |   |   | 21,372    |   |   |   | 15,772    |   |   |   | 13,392 |   |
| Per      Share Data                                                            |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Basic:                                                                         |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Income      from continuing operations                                         |   | $      | .60       |   |   | $      | 2.03      |   |   | $      | 1.82      |   |   | $      | 2.13      |   |   | $ | 1.94 |   |
| Net      income                                                                |   |   | .60       |   |   |   | 2.03      |   |   |   | 2.85      |   |   |   | 2.31      |   |   |   | 1.99 |   |
| Diluted:                                                                       |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Income      from continuing operations                                         |   |   | .60       |   |   |   | 2.03      |   |   |   | 1.82      |   |   |   | 2.12      |   |   |   | 1.93 |   |
| Net      income                                                                |   |   | .60       |   |   |   | 2.03      |   |   |   | 2.84      |   |   |   | 2.30      |   |   |   | 1.98 |   |
| Cash      dividends declared                                                   |   |   | 1.32      |   |   |   | 1.32      |   |   |   | 1.43      |   |   |   | 1.32      |   |   |   | 1.32 |   |
| Book      value                                                                |   |   | 22.87     |   |   |   | 22.82     |   |   |   | 22.43     |   |   |   | 20.87     |   |   |   | 19.38 |   |
| Selected      Ratios                                                           |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Percentage      of income from continuing operations to:                       |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Average      shareholders’ equity (ROE)                                  |   |   | 2.62      | %      |   |   | 8.88      | %      |   |   | 8.49      | %      |   |   | 10.81     | % |   |   | 10.21 | % |
| Average      total assets2      (ROA)                                          |   |   | .21       |   |   |   | .83       |   |   |   | .85       |   |   |   | 1.10      |   |   |   | 1.07 |   |
| Percentage      of dividends declared to income from continuing operations     |   |   | 220.96    |   |   |   | 64.52     |   |   |   | 78.89     |   |   |   | 61.67     |   |   |   | 68.10 |   |
| Percentage      of average shareholders’ equity to average total assets2 |   |   | 7.86      |   |   |   | 9.33      |   |   |   | 10.04     |   |   |   | 10.19     |   |   |   | 10.45 |   |
| Total      shareholders’ equity                                          |   | $      | 168,296   |   |   | $      | 168,491   |   |   | $      | 177,063   |   |   | $      | 154,236   |   |   | $ | 131,450 |   |
| Total      assets                                                              |   |   | 2,202,167 |   |   |   | 2,068,247 |   |   |   | 1,825,108 |   |   |   | 1,673,943 |   |   |   | 1,399,896 |   |
| Other      term borrowings and notes payable                                   |   |   | 335,661   |   |   |   | 316,309   |   |   |   | 87,992    |   |   |   | 75,291    |   |   |   | 51,265 |   |
| Weighted      Average Shares Outstanding                                       |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Basic                                                                          |   |   | 7,357     |   |   |   | 7,706     |   |   |   | 7,511     |   |   |   | 6,831     |   |   |   | 6,737 |   |
| Diluted                                                                        |   |   | 7,357     |   |   |   | 7,706     |   |   |   | 7,526     |   |   |   | 6,864     |   |   |   | 6,780 |   |

----

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

----

“Organization

----

Note 1

----

|   | · | The      overall economic environment that began to show signs of weakness during      2007 deteriorated significantly in 2008, particularly in the third and      fourth quarters. Financial markets experienced widespread illiquidity and      unprecedented levels of volatility. Slower economic growth (including      negative GDP growth in the third and fourth quarters), declines in credit      availability, lower consumer confidence, increasing unemployment rates,      and lower corporate earnings all contributed to significant economic      challenges for the Company in 2008. As a result of the unprecedented      market conditions, U.S. government agencies, including the U.S. Department      of Treasury (“Treasury”), the Federal Reserve Board, and others, has      intervened by enacting broad legislation and regulatory initiatives      attempting to stabilize the U.S. financial system. Efforts include      injecting hundreds of billions of dollars into banks and other financial      services firms, lowering overnight targeted interest rates to near zero      percent, increasing deposit insurance coverage, and guaranteeing certain      debt, among other actions. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

|   | · | Housing      market declines, falling home prices, increasing foreclosures, and higher      unemployment have negatively impacted the credit quality and certain      collateral values of the Company’s real estate loan portfolio,      particularly in real estate development. This has resulted in higher      nonperforming assets and charge-offs and negatively impacted net interest      margin. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                             |

|   | · | Extreme      market conditions and its placement into conservatorship led to a $14.0      million pre-tax impairment charge during the third quarter of the      Company’s aggregate investment in Federal National Mortgage Association      (“Fannie”) and Federal Home Loan Mortgage Corporation (“Freddie”,      collectively referred to as “GSE’s”) preferred stocks. The Company      subsequently sold its entire GSE holdings during the fourth quarter and      recorded an additional $766 thousand pre-tax loss. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

|   | · | During      the fourth quarter, the Company received preliminary approval from the      Treasury to receive $30 million of equity capital via the Treasury’s      Capital Purchase Program (“CPP”). Participation in the CPP will increase      the Company’s regulatory capital ratios, which are already in excess of      the “well capitalized” category, by approximately 200 basis points. The      transaction closed in the first quarter of2009. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Net      interest income increased $572 thousand or 1.0% as a result of a $909      thousand or 1.6% decrease in interest expense that outpaced a $337      thousand or .3% decrease in interest income. Net interest income for 2008      was helped by an additional $3.1 million attributed to the Company’s      leverage transaction that occurred during the fourth quarter of      2007. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                  |

|   | § | The      provision for loan losses increased $1.7 million or 46.3% as the Company      increased its allowance for loan losses as a result of continued credit      deterioration. The allowance for loan losses was 1.28% of net loans at      year-end 2008, up from 1.10% a year earlier. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                         |

|   | § | Excluding      investment securities related transactions, noninterest income was      relatively flat at $23.9 million for the current year compared to $24.2      million a year earlier. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                        |

|   | § | Noninterest      expenses increased $1.3 million or 2.2%. Lower salary and benefit expenses      of $1.2 million attributed mainly to lower benefit costs were offset by      higher net other expenses of $2.5 million. Higher expenses occurred across      a broad range of line items, led by increases in FDIC deposit insurance      premiums and Financing Corporation (“FICO”) assessments of $812 thousand,      higher net expenses related to properties acquired through foreclosure of      $761 thousand, and data processing and communication expenses of $653      thousand. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | § | Income      tax benefit was $1.2 million for the current twelve months compared to      income tax expense of $4.3 million in the prior year. The income tax      benefit recorded in the current year is due mainly to the impact of the      losses associated with the GSE preferred stock investments in the third      and fourth quarters of 2008. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                                                       |   |    |      |   |     |   |    |    |   |
|------------------------------------------------------------------------------------------------------------|--------|---------|-----------|--------|----------|--------|---------|---------|--------|
| Years      Ended December 31,                                                                              |   | 2008    |      |   | 2007     |   |    | 2006    |   |
|                                                                                                       |   | Average |      |   |     |   |    | Average |   |   | Average |   |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
| (In      thousands)                                                                                        |   | Balance |      |   | Interest |   |    | Rate    |   |   | Balance |   |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Earning      Assets                                                                                        |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities                                                                                 |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                    |   | $       | 425,206   |   |     | $      | 22,894  |    |   |   | 5.38 | % |   | $ | 253,423 |   |   | $ | 12,627 |   |   |   | 4.98 | % |   | $ | 212,357 |   |   | $ | 9,025 |   |   |   | 4.25 | % |
| Nontaxable1                                                                                                |   |    | 86,784    |   |     |   | 4,653   |    |   |   | 5.36 |   |   |   | 88,501 |   |   |   | 4,794 |   |   |   | 5.42 |   |   |   | 91,413 |   |   |   | 5,278 |   |   |   | 5.77 |   |
| Time      deposits with banks, federal funds sold and securities purchased under      agreements to resell |   |    | 65,477    |   |     |   | 1,199   |    |   |   | 1.83 |   |   |   | 70,062 |   |   |   | 3,333 |   |   |   | 4.76 |   |   |   | 62,378 |   |   |   | 2,355 |   |   |   | 3.78 |   |
| Loans      1,2,3                                                                                           |   |    | 1,302,394 |   |     |   | 87,509  |    |   |   | 6.72 |   |   |   | 1,250,423 |   |   |   | 95,825 |   |   |   | 7.66 |   |   |   | 1,051,002 |   |   |   | 77,836 |   |   |   | 7.41 |   |
| Total      earning assets                                                                                  |   |    | 1,879,861 |   |     | $      | 116,255 |    |   |   | 6.18 | % |   |   | 1,662,409 |   |   | $ | 116,579 |   |   |   | 7.01 | % |   |   | 1,417,150 |   |   | $ | 94,494 |   |   |   | 6.67 | % |
| Allowance      for loan losses                                                                             |   |    | (14,757   | )      |     |   |    |    |   |   |   |   |   |   | (11,486 | ) |   |   |   |   |   |   |   |   |   |   | (11,094 | ) |   |   |   |   |   |   |   |   |
| Total      earning assets, net of allowance forloan  losses                                      |   |    | 1,865,104 |   |     |   |    |    |   |   |   |   |   |   | 1,650,923 |   |   |   |   |   |   |   |   |   |   |   | 1,406,056 |   |   |   |   |   |   |   |   |   |
| Nonearning      Assets                                                                                     |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                                               |   |    | 72,373    |   |     |   |    |    |   |   |   |   |   |   | 78,810 |   |   |   |   |   |   |   |   |   |   |   | 77,509 |   |   |   |   |   |   |   |   |   |
| Premises      and equipment, net                                                                           |   |    | 40,649    |   |     |   |    |    |   |   |   |   |   |   | 38,860 |   |   |   |   |   |   |   |   |   |   |   | 32,029 |   |   |   |   |   |   |   |   |   |
| Other      assets                                                                                          |   |    | 159,228   |   |     |   |    |    |   |   |   |   |   |   | 117,459 |   |   |   |   |   |   |   |   |   |   |   | 88,044 |   |   |   |   |   |   |   |   |   |
| Assets      of discontinued operations                                                                     |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 129,827 |   |   |   |   |   |   |   |   |   |
| Total      assets                                                                                          |   | $       | 2,137,354 |   |     |   |    |    |   |   |   |   |   | $ | 1,886,052 |   |   |   |   |   |   |   |   |   |   | $ | 1,733,465 |   |   |   |   |   |   |   |   |   |
| Interest      Bearing Liabilities                                                                          |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                   |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      bearing demand                                                                               |   | $       | 256,129   |   |     | $      | 1,805   |    |   |   | .70 | % |   | $ | 258,992 |   |   | $ | 3,684 |   |   |   | 1.42 | % |   | $ | 260,417 |   |   | $ | 3,774 |   |   |   | 1.45 | % |
| Savings                                                                                                    |   |    | 261,692   |   |     |   | 3,499   |    |   |   | 1.34 |   |   |   | 244,299 |   |   |   | 5,299 |   |   |   | 2.17 |   |   |   | 212,948 |   |   |   | 4,437 |   |   |   | 2.08 |   |
| Time                                                                                                       |   |    | 793,561   |   |     |   | 33,741  |    |   |   | 4.25 |   |   |   | 748,939 |   |   |   | 36,174 |   |   |   | 4.83 |   |   |   | 587,047 |   |   |   | 24,343 |   |   |   | 4.15 |   |
| Federal      funds purchased and other short-term borrowings                                               |   |    | 81,180    |   |     |   | 1,785   |    |   |   | 2.20 |   |   |   | 97,192 |   |   |   | 4,504 |   |   |   | 4.63 |   |   |   | 97,489 |   |   |   | 4,676 |   |   |   | 4.80 |   |
| Securities      sold under agreements to repurchase and other long-term      borrowings                    |   |    | 330,468   |   |     |   | 14,300  |    |   |   | 4.33 |   |   |   | 127,277 |   |   |   | 6,378 |   |   |   | 5.01 |   |   |   | 79,472 |   |   |   | 4,202 |   |   |   | 5.29 |   |
| Total      interest bearing liabilities                                                                    |   |    | 1,723,030 |   |     | $      | 55,130  |    |   |   | 3.20 | % |   |   | 1,476,699 |   |   | $ | 56,039 |   |   |   | 3.79 | % |   |   | 1,237,373 |   |   | $ | 41,432 |   |   |   | 3.35 | % |
| Noninterest      Bearing Liabilities                                                                       |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commonwealth      of Kentucky deposits                                                                     |   |    | 37,025    |   |     |   |    |    |   |   |   |   |   |   | 37,119 |   |   |   |   |   |   |   |   |   |   |   | 38,627 |   |   |   |   |   |   |   |   |   |
| Other      demand deposits                                                                                 |   |    | 177,347   |   |     |   |    |    |   |   |   |   |   |   | 177,304 |   |   |   |   |   |   |   |   |   |   |   | 157,355 |   |   |   |   |   |   |   |   |   |
| Other      liabilities                                                                                     |   |    | 31,952    |   |     |   |    |    |   |   |   |   |   |   | 19,009 |   |   |   |   |   |   |   |   |   |   |   | 7,705 |   |   |   |   |   |   |   |   |   |
| Liabilities      of discontinued operations                                                                |   |    |      |   |     |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 131,437 |   |   |   |   |   |   |   |   |   |
| Total      liabilities                                                                                     |   |    | 1,969,354 |   |     |   |    |    |   |   |   |   |   |   | 1,710,131 |   |   |   |   |   |   |   |   |   |   |   | 1,572,497 |   |   |   |   |   |   |   |   |   |
| Shareholders’      equity                                                                            |   |    | 168,000   |   |     |   |    |    |   |   |   |   |   |   | 175,921 |   |   |   |   |   |   |   |   |   |   |   | 160,968 |   |   |   |   |   |   |   |   |   |
| Total      liabilities and shareholders’ equity                                                      |   | $       | 2,137,354 |   |     |   |    |    |   |   |   |   |   | $ | 1,886,052 |   |   |   |   |   |   |   |   |   |   | $ | 1,733,465 |   |   |   |   |   |   |   |   |   |
| Net      interest income                                                                                   |   |    |      |   |     |   | 61,125  |    |   |   |   |   |   |   |   |   |   |   | 60,540 |   |   |   |   |   |   |   |   |   |   |   | 53,062 |   |   |   |   |   |
| TE      basis adjustment                                                                                   |   |    |      |   |     |   | (2,335  | )       |   |   |   |   |   |   |   |   |   |   | (2,322 | ) |   |   |   |   |   |   |   |   |   |   | (2,154 | ) |   |   |   |   |
| Net      interest income                                                                                   |   |    |      |   |     | $      | 58,790  |    |   |   |   |   |   |   |   |   |   | $ | 58,218 |   |   |   |   |   |   |   |   |   |   | $ | 50,908 |   |   |   |   |   |
| Net      interest spread                                                                                   |   |    |      |   |     |   |    |    |   |   | 2.98 | % |   |   |   |   |   |   |   |   |   |   | 3.22 | % |   |   |   |   |   |   |   |   |   |   | 3.32 | % |
| Effect      of noninterest bearing sources of funds                                                        |   |    |      |   |     |   |    |    |   |   | .27 |   |   |   |   |   |   |   |   |   |   |   | .42 |   |   |   |   |   |   |   |   |   |   |   | .43 |   |
| Net      interest margin                                                                                   |   |    |      |   |     |   |    |    |   |   | 3.25 | % |   |   |   |   |   |   |   |   |   |   | 3.64 | % |   |   |   |   |   |   |   |   |   |   | 3.75 | % |

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

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

| 3 | Loan      fees included in interest income amounted to $2.3 million,      $2.7 million, and $2.0 million for 2008, 2007, and 2006,      respectively. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                       |   |     |       |   |                        |   |   |     |   |   |                        |   |
|------------------------------------------------------------------------------------------------------------|--------|----------|------------|--------|-----------------------------|--------|--------|----------|--------|--------|-----------------------------|--------|
|                                                                                                       |   | Variance |       |   | Variance      Attributed to |   |   | Variance |   |   | Variance      Attributed to |   |
| (In      thousands)                                                                                        |   |     | 2008/20071 |   |                        | Volume |   |     | Rate   |   |                        |   | 2007/20061 |   |   | Volume |   |   | Rate |   |
| Interest      Income                                                                                       |   |     |       |   |                        |   |   |     |   |   |                        |   |   |   |   |   |   |   |   |   |
| Taxable      investment securities                                                                         |   | $        | 10,267     |   |                        | $      | 9,179  |     |   | $      | 1,088                       |   |   | $ | 3,602 |   |   | $ | 1,908 |   |   | $ | 1,694 |   |
| Nontaxable      investment securities2                                                                     |   |     | (141       | )      |                        |   | (90    | )        |   |   | (51                         | )      |   |   | (484 | ) |   |   | (167 | ) |   |   | (317 | ) |
| Time      deposits with banks, federal funds sold and securities purchased under      agreements to resell |   |     | (2,134     | )      |                        |   | (205   | )        |   |   | (1,929                      | )      |   |   | 978 |   |   |   | 315 |   |   |   | 663 |   |
| Loans2                                                                                                     |   |     | (8,316     | )      |                        |   | 3,844  |     |   |   | (12,160                     | )      |   |   | 17,989 |   |   |   | 15,273 |   |   |   | 2,716 |   |
| Total      interest income                                                                                 |   |     | (324       | )      |                        |   | 12,728 |     |   |   | (13,052                     | )      |   |   | 22,085 |   |   |   | 17,329 |   |   |   | 4,756 |   |
| Interest      Expense                                                                                      |   |     |       |   |                        |   |   |     |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      bearing demand deposits                                                                      |   |     | (1,879     | )      |                        |   | (40    | )        |   |   | (1,839                      | )      |   |   | (90 | ) |   |   | (19 | ) |   |   | (71 | ) |
| Savings      deposits                                                                                      |   |     | (1,800     | )      |                        |   | 354    |     |   |   | (2,154                      | )      |   |   | 862 |   |   |   | 666 |   |   |   | 196 |   |
| Time      deposits                                                                                         |   |     | (2,433     | )      |                        |   | 2,074  |     |   |   | (4,507                      | )      |   |   | 11,831 |   |   |   | 7,422 |   |   |   | 4,409 |   |
| Federal      funds purchased and other short-term borrowings                                               |   |     | (2,719     | )      |                        |   | (649   | )        |   |   | (2,070                      | )      |   |   | (172 | ) |   |   | (13 | ) |   |   | (159 | ) |
| Securities      sold under agreements to repurchase and other long-term      borrowings                    |   |     | 7,922      |   |                        |   | 8,896  |     |   |   | (974                        | )      |   |   | 2,176 |   |   |   | 2,410 |   |   |   | (234 | ) |
| Total      interest expense                                                                                |   |     | (909       | )      |                        |   | 10,635 |     |   |   | (11,544                     | )      |   |   | 14,607 |   |   |   | 10,466 |   |   |   | 4,141 |   |
| Net      interest income                                                                                   |   | $        | 585        |   |                        | $      | 2,093  |     |   | $      | (1,508                      | )      |   | $ | 7,478 |   |   | $ | 6,863 |   |   | $ | 615 |   |
| Percentage      change                                                                                     |   |     | 100.0      | %      |                        |   | 357.8  | %        |   |   | (257.8                      | )%     |   |   | 100.0 | % |   |   | 91.8 | % |   |   | 8.2 | % |

| 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,                                       |   | 2008   |      |   | %      |   |   | 2007   |   |   | %         |   |   | 2006   |   |   | %      |   |      | 2005   |   |   | %      |   |   | 2004   |    |   | %      |   |
| Commercial,      financial, and agricultural                               |   | $      | 144,788   |   |   |   | 11.0   | %      |   | $      | 154,015   |   |   |   | 11.9   | %      |   | $      | 197,613   |   |   |   | 16.5   | %      |   | $      | 173,797 |   |   |   | 18.1 | % |   | $ | 119,004 |   |   |   | 15.3 | % |
| Real      estate  – construction                           |   |   | 260,524   |   |   |   | 19.9   |   |   |   | 254,788   |   |   |   | 19.7   |   |   |   | 176,779   |   |   |   | 14.7   |   |   |   | 88,693  |   |   |   | 9.2 |   |   |   | 62,111 |   |   |   | 8.0 |   |
| Real      estate mortgage – residential                              |   |   | 444,487   |   |   |   | 33.9   |   |   |   | 405,992   |   |   |   | 31.5   |   |   |   | 381,081   |   |   |   | 31.8   |   |   |   | 331,508 |   |   |   | 34.4 |   |   |   | 280,869 |   |   |   | 36.2 |   |
| Real      estate mortgage – farmland and other commercialenterprises |   |   | 390,424   |   |   |   | 29.7   |   |   |   | 394,900   |   |   |   | 30.6   |   |   |   | 351,793   |   |   |   | 29.4   |   |   |   | 274,411 |   |   |   | 28.5 |   |   |   | 210,701 |   |   |   | 27.2 |   |
| Installment                                                                |   |   | 45,135    |   |   |   | 3.4    |   |   |   | 52,028    |   |   |   | 4.0    |   |   |   | 57,116    |   |   |   | 4.8    |   |   |   | 56,169  |   |   |   | 5.8 |   |   |   | 63,684 |   |   |   | 8.2 |   |
| Lease      financing                                                       |   |   | 27,222    |   |   |   | 2.1    |   |   |   | 30,262    |   |   |   | 2.3    |   |   |   | 33,454    |   |   |   | 2.8    |   |   |   | 37,993  |   |   |   | 4.0 |   |   |   | 39,348 |   |   |   | 5.1 |   |
| Total                                                                      |   | $      | 1,312,580 |   |   |   | 100.0  | %      |   | $      | 1,291,985 |   |   |   | 100.0  | %      |   | $      | 1,197,836 |   |   |   | 100.0  | %      |   | $      | 962,571 |   |   |   | 100.0 | % |   | $ | 775,717 |   |   |   | 100.0 | % |

|                                         |   |                       |    |   |                                 |   |   |                  |   |   |   |   |
|----------------------------------------------|--------|----------------------------|---------|--------|--------------------------------------|--------|--------|-----------------------|--------|--------|--------|--------|
| (In      thousands)                          |   |  Within      One Year |    |   | After      One But Within Five Years |   |   | After      Five Years |   |   | Total  |   |
| Commercial,      financial, and agricultural |   | $                          | 63,259  |   |                                 | $      | 35,259 |                  |   | $      | 46,270 |   |   | $ | 144,788 |   |
| Real      estate – construction        |   |                       | 196,219 |   |                                 |   | 53,457 |                  |   |   | 10,848 |   |   |   | 260,524 |   |
| Total                                        |   | $                          | 259,478 |   |                                 | $      | 88,716 |                  |   | $      | 57,118 |   |   | $ | 405,312 |   |

----

|                                     |   |   |   |   |     |   |
|------------------------------------------|--------|--------|--------|--------|----------|--------|
|                                     |   | Fixed  |   |   | Variable |   |
| (In      thousands)                      |   | Rate   |   |   | Rate     |   |
| Due      after one but within five years |   | $      | 61,958 |   |     | $      | 26,758 |   |
| Due      after five years                |   |   | 20,731 |   |     |   | 36,387 |   |
| Total                                    |   | $      | 82,689 |   |     | $      | 63,145 |   |

----

----

|                                                                                               |   |   |      |   |   |   |      |   |   |   |      |   |   |   |    |
|----------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|---------|
| Years      Ended December 31, (In thousands)                                                       |   | 2008   |      |   | 2007   |   |      | 2006   |   |   | 2005      |   |   | 2004   |    |
| Balance      of allowance for loan losses at beginning of year                                     |   | $      | 14,216    |   |   | $      | 11,999    |   |   | $      | 11,069    |   |   | $      | 11,043  |   |   | $ | 10,088 |   |
| Acquisition      of Citizens Jessamine                                                             |   |   |      |   |   |   |      |   |   |   | 1,066     |   |   |   |    |   |   |   |   |   |
| Acquisition      of Citizens Northern                                                              |   |   |      |   |   |   |      |   |   |   |      |   |   |   | 1,410   |   |   |   |   |   |
| Acquisition      of Citizens Georgetown                                                            |   |   |      |   |   |   |      |   |   |   |      |   |   |   |    |   |   |   | 2,005 |   |
| Loans      charged off:                                                                            |   |   |      |   |   |   |      |   |   |   |      |   |   |   |    |   |   |   |   |   |
| Commercial,      financial, and agricultural                                                       |   |   | 1,273     |   |   |   | 520       |   |   |   | 486       |   |   |   | 301     |   |   |   | 678 |   |
| Real      estate                                                                                   |   |   | 1,824     |   |   |   | 626       |   |   |   | 200       |   |   |   | 288     |   |   |   | 462 |   |
| Installment      loans to individuals                                                              |   |   | 1,089     |   |   |   | 956       |   |   |   | 839       |   |   |   | 1,254   |   |   |   | 1,115 |   |
| Lease      financing                                                                               |   |   | 356       |   |   |   | 52        |   |   |   | 254       |   |   |   | 602     |   |   |   | 113 |   |
| Total      loans charged off                                                                       |   |   | 4,542     |   |   |   | 2,154     |   |   |   | 1,779     |   |   |   | 2,445   |   |   |   | 2,368 |   |
| Recoveries      of loans previously charged off:                                                   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |    |   |   |   |   |   |
| Commercial,      financial, and agricultural                                                       |   |   | 168       |   |   |   | 126       |   |   |   | 262       |   |   |   | 69      |   |   |   | 119 |   |
| Real      estate                                                                                   |   |   | 977       |   |   |   | 241       |   |   |   | 81        |   |   |   | 66      |   |   |   | 89 |   |
| Installment      loans to individuals                                                              |   |   | 316       |   |   |   | 319       |   |   |   | 294       |   |   |   | 260     |   |   |   | 229 |   |
| Lease      financing                                                                               |   |   | 372       |   |   |   | 47        |   |   |   | 41        |   |   |   | 44      |   |   |   | 25 |   |
| Total      recoveries                                                                              |   |   | 1,833     |   |   |   | 733       |   |   |   | 678       |   |   |   | 439     |   |   |   | 462 |   |
| Net      loans charged off                                                                         |   |   | 2,709     |   |   |   | 1,421     |   |   |   | 1,101     |   |   |   | 2,006   |   |   |   | 1,906 |   |
| Additions      to allowance charged to expense                                                     |   |   | 5,321     |   |   |   | 3,638     |   |   |   | 965       |   |   |   | 622     |   |   |   | 856 |   |
| Balance      at end of year                                                                        |   | $      | 16,828    |   |   | $      | 14,216    |   |   | $      | 11,999    |   |   | $      | 11,069  |   |   | $ | 11,043 |   |
| Average      loans net of unearned income                                                          |   | $      | 1,302,394 |   |   | $      | 1,250,423 |   |   | $      | 1,051,002 |   |   | $      | 805,014 |   |   | $ | 735,697 |   |
| Ratio      of net charge-offs  during year to average loans, net of      unearned income |   |   | .21       | %      |   |   | .11       | %      |   |   | .10       | %      |   |   | .25     | % |   |   | .26 | % |

|                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| December      31, (In thousands)             |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |
| Commercial,      financial, and agricultural |   | $      | 2,474  |   |   | $      | 2,505  |   |   | $      | 2,223  |   |   | $      | 2,840  |   |   | $ | 2,108 |   |
| Real      estate                             |   |   | 11,217 |   |   |   | 9,201  |   |   |   | 6,497  |   |   |   | 5,849  |   |   |   | 6,206 |   |
| Installment      loans to individuals        |   |   | 2,336  |   |   |   | 1,979  |   |   |   | 2,316  |   |   |   | 1,601  |   |   |   | 1,634 |   |
| Lease      financing                         |   |   | 801    |   |   |   | 531    |   |   |   | 963    |   |   |   | 779    |   |   |   | 1,095 |   |
| Total                                        |   | $      | 16,828 |   |   | $      | 14,216 |   |   | $      | 11,999 |   |   | $      | 11,069 |   |   | $ | 11,043 |   |

----

|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| December 31, (In thousands)                            |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |
| Loans      accounted for on nonaccrual basis           |   | $      | 21,545 |   |   | $      | 18,073 |   |   | $      | 1,462  |   |   | $      | 2,269  |   |   | $ | 4,990 |   |
| Loans      past due 90 days or more and still accruing |   |   | 3,913  |   |   |   | 2,977  |   |   |   | 2,856  |   |   |   | 2,383  |   |   |   | 2,831 |   |
| Total      nonperforming loans                         |   |   | 25,458 |   |   |   | 21,050 |   |   |   | 4,318  |   |   |   | 4,652  |   |   |   | 7,821 |   |
| Other      real estate owned                           |   |   | 14,446 |   |   |   | 6,044  |   |   |   | 5,031  |   |   |   | 8,786  |   |   |   | 3,719 |   |
| Other      foreclosed assets                           |   |   | 47     |   |   |   | 66     |   |   |   | 54     |   |   |   | 21     |   |   |   | 32 |   |
| Total      nonperforming assets                        |   | $      | 39,951 |   |   | $      | 27,160 |   |   | $      | 9,403  |   |   | $      | 13,459 |   |   | $ | 11,572 |   |

----

|                                                   |   |                   |    |   |                 |   |   |                   |   |
|--------------------------------------------------------|--------|------------------------|---------|--------|----------------------|--------|--------|------------------------|--------|
| December      31,                                      |   | 2008                   |    |   | 2007                 |   |   | 2006                   |   |
|  (In      thousands)                              |   | Availablefor      Sale |    |   | Held      toMaturity |   |   | Availablefor      Sale |   |   | Held      toMaturity |   |   | Availablefor      Sale |   |   | Held      toMaturity |   |
| Obligations      of states and political subdivisions  |   | $                      | 90,838  |   |                 | $      | 1,814  |                   |   | $ | 94,181 |   |   | $ | 3,844 |   |   | $ | 88,147 |   |   | $ | 7,788 |   |
| Obligations      of U.S. government-sponsored entities |   |                   | 34,567  |   |                 |   |   |                   |   |   | 88,522 |   |   |   |   |   |   |   | 141,832 |   |   |   |   |   |
| Mortgage-backed      securities                        |   |                   | 375,327 |   |                 |   |   |                   |   |   | 343,176 |   |   |   |   |   |   |   | 86,716 |   |   |   |   |   |
| U.S.      Treasury securities                          |   |                   | 10,256  |   |                 |   |   |                   |   |   | 863 |   |   |   |   |   |   |   | 484 |   |   |   |   |   |
| Money      market mutual funds                         |   |                   | 374     |   |                 |   |   |                   |   |   | 1,396 |   |   |   |   |   |   |   | 1,396 |   |   |   |   |   |
| Corporate      debt securities                         |   |                   | 13,991  |   |                 |   |   |                   |   |   | 5,132 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity      securities                                 |   |                   | 8,942   |   |                 |   |   |                   |   |   | 9,363 |   |   |   |   |   |   |   | 7,910 |   |   |   |   |   |
| Total                                                  |   | $                      | 534,295 |   |                 | $      | 1,814  |                   |   | $ | 542,633 |   |   | $ | 3,844 |   |   | $ | 326,485 |   |   | $ | 7,788 |   |

|                                                   |   |                 |   |   |                   |   |   |                  |   |   |                 |   |
|--------------------------------------------------------|--------|----------------------|--------|--------|------------------------|--------|--------|-----------------------|--------|--------|----------------------|--------|
|                                                   |   |                 |   |   | 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 |   | $                    | 1,103  |   |                   |   | 3.3    | %                     |   | $      | 24,886               |   |   |   | 4.0 | % |   | $ | 1,515 |   |   |   | 3.4 | % |   | $ | 7,063 |   |   |   | 5.2 | % |
| Obligations      of states and political subdivisions  |   |                 | 5,273  |   |                   |   | 5.7    |                  |   |   | 40,745               |   |   |   | 4.5 |   |   |   | 29,978 |   |   |   | 5.6 |   |   |   | 14,842 |   |   |   | 5.1 |   |
| Mortgage-backed      securities                        |   |                 | 514    |   |                   |   | 4.9    |                  |   |   | 19,709               |   |   |   | 4.6 |   |   |   | 37,986 |   |   |   | 4.7 |   |   |   | 317,118 |   |   |   | 5.4 |   |
| U.S.      Treasury securities                          |   |                 | 10,256 |   |                   |   | 1.5    |                  |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Money      market mutual funds                         |   |                 | 374    |   |                   |   | 1.1    |                  |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate      debt securities                         |   |                 | 391    |   |                   |   | 5.4    |                  |   |   | 888                  |   |   |   | 8.9 |   |   |   |   |   |   |   |   |   |   |   | 12,712 |   |   |   | 7.0 |   |
| Total                                                  |   | $                    | 17,911 |   |                   |   | 3.0    | %                     |   | $      | 86,228               |   |   |   | 4.4 | % |   | $ | 69,479 |   |   |   | 5.0 | % |   | $ | 351,735 |   |   |   | 5.5 | % |

----

|                                                  |   |                 |   |   |                   |   |   |                  |   |   |                 |   |
|-------------------------------------------------------|--------|----------------------|--------|--------|------------------------|--------|--------|-----------------------|--------|--------|----------------------|--------|
|                                                  |   |                 |   |   | 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 |   | $                    | 789    |   |                   |   | 4.5    | %                     |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 1,025 |   |   |   | 4.3 | % |

|                            |   |           |      |   |        |   |   |           |   |
|---------------------------------|--------|----------------|-----------|--------|-------------|--------|--------|----------------|--------|
| Years      Ended December 31,   |   | 2008           |      |   | 2007        |   |   | 2006           |   |
|  (In      thousands)       |   | AverageBalance |      |   | AverageRate |   |   | AverageBalance |   |   | AverageRate |   |   | AverageBalance |   |   | AverageRate |   |
| Noninterest      bearing demand |   | $              | 214,372   |   |        |   |   |           | $      | 214,423 |   |   |   |   |   | $ | 195,982 |   |   |   |   |
| Interest      bearing demand    |   |           | 256,129   |   |        |   | .70    | %              |   |   | 258,992 |   |   |   | 1.42 | % |   |   | 260,417 |   |   |   | 1.45 | % |
| Savings                         |   |           | 261,692   |   |        |   | 1.34   |           |   |   | 244,299 |   |   |   | 2.17 |   |   |   | 212,948 |   |   |   | 2.08 |   |
| Time                            |   |           | 793,561   |   |        |   | 4.25   |           |   |   | 748,939 |   |   |   | 4.83 |   |   |   | 587,047 |   |   |   | 4.15 |   |
| Total                           |   | $              | 1,525,754 |   |        |   | 2.56   | %              |   | $ | 1,466,653 |   |   |   | 3.08 | % |   | $ | 1,256,394 |   |   |   | 2.59 | % |

|                          |   |   |    |
|-------------------------------|--------|--------|---------|
| (In      thousands)           |   | Amount |    |
| 3      months or less         |   | $      | 53,773  |   |
| Over      3 through 6 months  |   |   | 41,304  |   |
| Over      6 through 12 months |   |   | 116,565 |   |
| Over      12 months           |   |   | 90,573  |   |
| Total                         |   | $      | 302,215 |   |

|                                       |   |   |    |   |   |   |    |   |   |
|--------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| (In      thousands)                        |   | 2008   |    |   | 2007   |   |    | 2006   |   |
| Amount      outstanding at year-end        |   | $      | 77,474  |   |   | $      | 80,755  |   |   | $ | 76,718 |   |
| Maximum      outstanding at any month-end  |   |   | 125,096 |   |   |   | 155,362 |   |   |   | 113,926 |   |
| Average      outstanding                   |   |   | 81,180  |   |   |   | 97,192  |   |   |   | 97,489 |   |
| Weighted      average rate at year-end     |   |   | .74     | %      |   |   | 3.71    | %      |   |   | 4.55 | % |
| Weighted      average rate during the year |   |   | 2.20    |   |   |   | 4.63    |   |   |   | 4.80 |   |

----

|                                                          |   |                        |      |
|---------------------------------------------------------------|--------|-----------------------------|-----------|
|                                                          |   | Payments      Due by Period |      |
|  Contractual      Obligations (In thousands)             |   | Total                       |      |   | Less      ThanOne      Year |   |   | One      to ThreeYears |   |   | Three      to FiveYears |   |   | More      Than FiveYears |   |
| Time      deposits                                            |   | $                           | 850,494   |   |   | $ | 557,787 |   |   | $ | 221,536 |   |   | $ | 66,398 |   |   | $ | 4,773 |   |
| Long-term      FHLB debt                                      |   |                        | 86,116    |   |   |   | 13,487 |   |   |   | 31,884 |   |   |   | 13,555 |   |   |   | 27,190 |   |
| 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              |   |                        | 5,153     |   |   |   | 369 |   |   |   | 809 |   |   |   | 920 |   |   |   | 3,055 |   |
| Operating      leases                                         |   |                        | 4,377     |   |   |   | 699 |   |   |   | 863 |   |   |   | 570 |   |   |   | 2,245 |   |
| Capital      lease obligations                                |   |                        | 575       |   |   |   | 243 |   |   |   | 332 |   |   |   |   |   |   |   |   |   |
| Total                                                         |   | $                           | 1,195,685 |   |   | $ | 572,585 |   |   | $ | 305,424 |   |   | $ | 131,443 |   |   | $ | 186,233 |   |

----

Market Risk Management

----

Note 18 

----

----

|                   |   |                                      |   |   |              |   |
|------------------------|--------|-------------------------------------------|--------|--------|-------------------|--------|
|                   |   | Farmers      CapitalBank      Corporation |   |   | RegulatoryMinimum |   |
| Tier      1 risk-based |   |                                      | 11.32  | %      |              |   | 4.00 | % |
| Total      risk-based  |   |                                      | 12.55  |   |              |   | 8.00 |   |
| Leverage               |   |                                      | 7.37   |   |              |   | 4.00 |   |

|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Years      Ended December 31,                                                  |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |   |
| Percentage      of dividends declared to income from continuing operations     |   |   | 220.96 | %      |   |   | 64.52  | %      |   |   | 78.89  | %      |   |   | 61.67  | %      |   |   | 68.10 | % |
| Percentage      of average shareholders’ equity to average total assets1 |   |   | 7.86   |   |   |   | 9.33   |   |   |   | 10.04  |   |   |   | 10.19  |   |   |   | 10.45 |   |

Shareholder Information

Stock Prices

----

|                |   |   |   |   |   |   |   |                    |   |
|---------------------|--------|--------|--------|--------|--------|--------|--------|-------------------------|--------|
|                |   | High   |   |   | Low    |   |   | Dividends      Declared |   |
| 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 |   |
|                |   |   |   |   |   |   |   |                    |   |   |   |   |
| 2007                |   |   |   |   |   |   |   |                    |   |   |   |   |
| Fourth      Quarter |   | $      | 30.72  |   |   | $      | 26.43  |                    |   | $ | .33 |   |
| Third      Quarter  |   |   | 33.50  |   |   |   | 28.35  |                    |   |   | .33 |   |
| Second      Quarter |   |   | 31.66  |   |   |   | 28.29  |                    |   |   | .33 |   |
| First      Quarter  |   |   | 35.35  |   |   |   | 29.00  |                    |   |   | .33 |   |

Item 7A.  Quantitative and QualitativeDisclosures About Market Risk

“Market Risk Management”

----

Item 8. Financial Statements and SupplementaryData

|                    |                                           |
|-------------------------|------------------------------------------------|
| G.      Anthony Busseni | C.      Douglas Carpenter                      |
| President      and CEO  | Senior      Vice President, Secretary, and CFO |
|                    |                                           |
|                    |                                           |
| March      11, 2009     |                                           |

----

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

----

Consolidated Balance Sheets

|                                                                                                                                                                                |   |   |      |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| December      31, (In thousands, except share data)                                                                                                                                 |   | 2008   |      |   | 2007   |   |
| Assets                                                                                                                                                                              |   |   |      |   |   |   |
| Cash      and cash equivalents:                                                                                                                                                     |   |   |      |   |   |   |
| Cash      and due from banks                                                                                                                                                        |   | $      | 87,656    |   |   | $      | 44,896 |   |
| Interest      bearing deposits in other banks                                                                                                                                       |   |   | 94,823    |   |   |   | 2,290 |   |
| Federal      funds sold and securities purchased under agreements to    resell                                                                                                      |   |   | 8,296     |   |   |   | 31,954 |   |
| Total      cash and cash equivalents                                                                                                                                                |   |   | 190,775   |   |   |   | 79,140 |   |
| Investment      securities:                                                                                                                                                         |   |   |      |   |   |   |   |   |
| Available      for sale, amortized cost of $526,698 (2008) and $542,259      (2007)                                                                                                 |   |   | 534,295   |   |   |   | 542,633 |   |
| Held      to maturity, fair value of $1,667 (2008) and $3,863 (2007)                                                                                                                |   |   | 1,814     |   |   |   | 3,844 |   |
| Total      investment securities                                                                                                                                                    |   |   | 536,109   |   |   |   | 546,477 |   |
| Loans,      net of unearned income                                                                                                                                                  |   |   | 1,312,580 |   |   |   | 1,291,985 |   |
| Allowance      for loan losses                                                                                                                                                      |   |   | (16,828   | )      |   |   | (14,216 | ) |
| Loans,      net                                                                                                                                                                     |   |   | 1,295,752 |   |   |   | 1,277,769 |   |
| Premises      and equipment, net                                                                                                                                                    |   |   | 43,046    |   |   |   | 38,663 |   |
| Company-owned      life insurance                                                                                                                                                   |   |   | 35,396    |   |   |   | 34,171 |   |
| Goodwill                                                                                                                                                                            |   |   | 52,408    |   |   |   | 52,408 |   |
| Other      intangible assets, net                                                                                                                                                   |   |   | 6,941     |   |   |   | 9,543 |   |
| Other      assets                                                                                                                                                                   |   |   | 41,740    |   |   |   | 30,076 |   |
| Total      assets                                                                                                                                                                   |   | $      | 2,202,167 |   |   | $      | 2,068,247 |   |
| Liabilities                                                                                                                                                                         |   |   |      |   |   |   |   |   |
| Deposits:                                                                                                                                                                           |   |   |      |   |   |   |   |   |
| Noninterest      bearing                                                                                                                                                            |   | $      | 241,518   |   |   | $      | 192,432 |   |
| Interest      bearing                                                                                                                                                               |   |   | 1,352,597 |   |   |   | 1,281,665 |   |
| Total      deposits                                                                                                                                                                 |   |   | 1,594,115 |   |   |   | 1,474,097 |   |
| Term      federal funds purchased and other short-term borrowings                                                                                                                   |   |   | 77,474    |   |   |   | 80,755 |   |
| Securities      sold under agreements to repurchase and other long-term      borrowings                                                                                             |   |   | 286,691   |   |   |   | 267,339 |   |
| Subordinated      notes payable to unconsolidated trusts                                                                                                                            |   |   | 48,970    |   |   |   | 48,970 |   |
| Dividends      payable                                                                                                                                                              |   |   | 2,427     |   |   |   | 2,436 |   |
| Other      liabilities                                                                                                                                                              |   |   | 24,194    |   |   |   | 26,159 |   |
| Total      liabilities                                                                                                                                                              |   |   | 2,033,871 |   |   |   | 1,899,756 |   |
|                                                                                                                                                                                |   |   |      |   |   |   |   |   |
| Commitments and contingencies      (Notes 15 and 17)                                                                                                                                |   |   |      |   |   |   |   |   |
|                                                                                                                                                                                |   |   |      |   |   |   |   |   |
| Shareholders’      Equity                                                                                                                                                     |   |   |      |   |   |   |   |   |
| Preferred      stock, no par value; 1,000,000 shares authorized; none    issued                                                                                                     |   |   |      |   |   |   |   |   |
| Common      stock, par value $.125 per share; 9,608,000 sharesauthorized;7,357,362      and 7,384,865 shares issued and outstanding atDecember      31, 2008 and 2007, respectively |   |   | 920       |   |   |   | 923 |   |
| Capital      surplus                                                                                                                                                                |   |   | 48,222    |   |   |   | 48,176 |   |
| Retained      earnings                                                                                                                                                              |   |   | 116,419   |   |   |   | 122,498 |   |
| Accumulated      other comprehensive income (loss)                                                                                                                                  |   |   | 2,735     |   |   |   | (3,106 | ) |
| Total      shareholders’ equity                                                                                                                                               |   |   | 168,296   |   |   |   | 168,491 |   |
| Total      liabilities and shareholders’ equity                                                                                                                               |   | $      | 2,202,167 |   |   | $      | 2,068,247 |   |

----

| Consolidated Statements of  Income |
|------------------------------------|

|                                                                                                      |   |   |    |   |   |   |    |   |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| (In      thousands, except per share data)                                                                |   |   |    |   |   |   |    |   |   |
| Years      Ended December 31,                                                                             |   | 2008   |    |   | 2007   |   |    | 2006   |   |
| Interest      Income                                                                                      |   |   |    |   |   |   |    |   |   |
| Interest      and fees on loans                                                                           |   | $      | 86,596  |   |   | $      | 94,941  |   |   | $ | 77,303 |   |
| Interest      on investment securities:                                                                   |   |   |    |   |   |   |    |   |   |   |   |   |
| Taxable                                                                                                   |   |   | 22,894  |   |   |   | 12,627  |   |   |   | 9,025 |   |
| Nontaxable                                                                                                |   |   | 3,231   |   |   |   | 3,356   |   |   |   | 3,657 |   |
| Interest      on deposits in other banks                                                                  |   |   | 133     |   |   |   | 64      |   |   |   | 53 |   |
| Interest      on federal funds sold and securities purchased under agreements to      resell              |   |   | 1,066   |   |   |   | 3,269   |   |   |   | 2,302 |   |
| Total      interest income                                                                                |   |   | 113,920 |   |   |   | 114,257 |   |   |   | 92,340 |   |
| Interest      Expense                                                                                     |   |   |    |   |   |   |    |   |   |   |   |   |
| Interest      on deposits                                                                                 |   |   | 39,045  |   |   |   | 45,157  |   |   |   | 32,554 |   |
| Interest      on federal funds purchased and other short-term borrowings                                  |   |   | 1,785   |   |   |   | 4,504   |   |   |   | 4,676 |   |
| Interest      on subordinated notes payable to unconsolidated trusts                                      |   |   | 2,865   |   |   |   | 2,394   |   |   |   | 1,747 |   |
| Interest      on securities sold under agreements to purchase and other long-term      borrowings         |   |   | 11,435  |   |   |   | 3,984   |   |   |   | 2,455 |   |
| Total      interest expense                                                                               |   |   | 55,130  |   |   |   | 56,039  |   |   |   | 41,432 |   |
| Net      interest income                                                                                  |   |   | 58,790  |   |   |   | 58,218  |   |   |   | 50,908 |   |
| Provision      for loan losses                                                                            |   |   | 5,321   |   |   |   | 3,638   |   |   |   | 965 |   |
| Net      interest income after provision for loan losses                                                  |   |   | 53,469  |   |   |   | 54,580  |   |   |   | 49,943 |   |
| Noninterest      Income                                                                                   |   |   |    |   |   |   |    |   |   |   |   |   |
| Service      charges and fees on deposits                                                                 |   |   | 9,847   |   |   |   | 10,320  |   |   |   | 7,984 |   |
| Allotment      processing fees                                                                            |   |   | 4,791   |   |   |   | 4,363   |   |   |   | 2,601 |   |
| Other      service charges, commissions, and fees                                                         |   |   | 4,346   |   |   |   | 4,164   |   |   |   | 3,824 |   |
| Data      processing income                                                                               |   |   | 1,087   |   |   |   | 1,227   |   |   |   | 1,719 |   |
| Trust      income                                                                                         |   |   | 2,032   |   |   |   | 2,053   |   |   |   | 1,790 |   |
| Investment      securities losses, net                                                                    |   |   | (166    | )      |   |   |    |   |   |   | (195 | ) |
| Other-than-temporary      impairment of investment securities                                             |   |   | (13,962 | )      |   |   |    |   |   |   |   |   |
| Gains      on sale of mortgage loans, net                                                                 |   |   | 407     |   |   |   | 591     |   |   |   | 649 |   |
| Income      from company-owned life insurance                                                             |   |   | 1,235   |   |   |   | 1,278   |   |   |   | 1,343 |   |
| Other                                                                                                     |   |   | 193     |   |   |   | 161     |   |   |   | 744 |   |
| Total      noninterest income                                                                             |   |   | 9,810   |   |   |   | 24,157  |   |   |   | 20,459 |   |
| Noninterest      Expense                                                                                  |   |   |    |   |   |   |    |   |   |   |   |   |
| Salaries      and employee benefits                                                                       |   |   | 30,174  |   |   |   | 31,420  |   |   |   | 28,978 |   |
| Occupancy      expenses, net                                                                              |   |   | 4,515   |   |   |   | 4,261   |   |   |   | 3,664 |   |
| Equipment      expenses                                                                                   |   |   | 3,187   |   |   |   | 3,232   |   |   |   | 2,929 |   |
| Data      processing and communications expenses                                                          |   |   | 5,423   |   |   |   | 4,770   |   |   |   | 5,018 |   |
| Bank      franchise tax                                                                                   |   |   | 2,158   |   |   |   | 2,086   |   |   |   | 1,831 |   |
| Correspondent      bank fees                                                                              |   |   | 1,040   |   |   |   | 721     |   |   |   | 692 |   |
| Amortization      of intangibles                                                                          |   |   | 2,602   |   |   |   | 3,362   |   |   |   | 2,009 |   |
| Other                                                                                                     |   |   | 10,999  |   |   |   | 8,971   |   |   |   | 8,256 |   |
| Total      noninterest expense                                                                            |   |   | 60,098  |   |   |   | 58,823  |   |   |   | 53,377 |   |
| Income      from continuing operations before income taxes                                                |   |   | 3,181   |   |   |   | 19,914  |   |   |   | 17,025 |   |
| Income      tax (benefit) expense from continuing operations                                              |   |   | (1,214  | )      |   |   | 4,287   |   |   |   | 3,360 |   |
| Income      from continuing operations                                                                    |   |   | 4,395   |   |   |   | 15,627  |   |   |   | 13,665 |   |
| Income      from discontinued operations before income taxes (including gain on      disposals of $9,873) |   |   |    |   |   |   |    |   |   |   | 11,842 |   |
| Income      tax expense from discontinued operations (including $3,456 related to gain      on disposals) |   |   |    |   |   |   |    |   |   |   | 4,135 |   |
| Income      from discontinued operations                                                                  |   |   |    |   |   |   |    |   |   |   | 7,707 |   |
| Net      income                                                                                           |   | $      | 4,395   |   |   | $      | 15,627  |   |   | $ | 21,372 |   |
| Net      Income Per Common Share                                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
| Income      from continuing operations – basic                                                      |   | $      | .60     |   |   | $      | 2.03    |   |   | $ | 1.82 |   |
| Income      from discontinued operations – basic                                                    |   |   |    |   |   |   |    |   |   |   | 1.03 |   |
| Net      income per common share – basic                                                            |   |   | .60     |   |   |   | 2.03    |   |   |   | 2.85 |   |
| Income      from continuing operations – diluted                                                    |   |   | .60     |   |   |   | 2.03    |   |   |   | 1.82 |   |
| Income      from discontinued operations - diluted                                                        |   |   |    |   |   |   |    |   |   |   | 1.02 |   |
| Net      income per common share - diluted                                                                |   |   | .60     |   |   |   | 2.03    |   |   |   | 2.84 |   |
| Weighted      Average Shares Outstanding                                                                  |   |   |    |   |   |   |    |   |   |   |   |   |
| Basic                                                                                                     |   |   | 7,357   |   |   |   | 7,706   |   |   |   | 7,511 |   |
| Diluted                                                                                                   |   |   | 7,357   |   |   |   | 7,706   |   |   |   | 7,526 |   |

----

Consolidated Statements of ComprehensiveIncome

|                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (In      thousands)                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
| Years      Ended December 31,                                                                                                                                                                                |   | 2008   |   |   | 2007   |   |   | 2006   |   |
| Net      income                                                                                                                                                                                              |   | $      | 4,395  |   |   | $      | 15,627 |   |   | $ | 21,372 |   |
| 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 $2,613, $830, and $306,      respectively                    |   |   | 4,853  |   |   |   | 1,542  |   |   |   | 568 |   |
| Reclassification      adjustment for prior period unrealized loss previously reported in other      comprehensive income recognized during current period, net of tax of $85,      $5, and $22, respectively |   |   | (158   | )      |   |   | 10     |   |   |   | 40 |   |
| Change      in unfunded portion of postretirement benefit obligation, net of tax of      $613 and $603, respectively                                                                                         |   |   | 1,146  |   |   |   | 1,120  |   |   |   |   |   |
| Other      comprehensive income                                                                                                                                                                              |   |   | 5,841  |   |   |   | 2,672  |   |   |   | 608 |   |
| Comprehensive      income                                                                                                                                                                                    |   | $      | 10,236 |   |   | $      | 18,299 |   |   | $ | 21,980 |   |

----

Consolidated Statements of Changes in Shareholders'Equity

|                                                                                                                                 |   |              |   |   |    |   |   |     |   |   |                   |   |   |                |    |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|---------|--------|--------|----------|--------|--------|------------------------|--------|--------|---------------------|---------|
| (In      thousands, except per share data)                                                                                           |   |              |   |   |    |   |   |     |   |   | Accumulated      Other |   |   | Total               |    |
| Years      Ended                                                                                                                     |   | Common      Stock |   |   | Capital |   |   | Retained |   |   | Comprehensive          |   |   | Shareholders’ |    |
| December      31, 2008, 2007, and 2006                                                                                               |   | Shares            |   |   | Amount  |   |   | Surplus  |   |   | Earnings               |   |   | (Loss)      Income  |    |   | Equity |   |
| Balance      at January 1, 2006                                                                                                      |   |              | 7,389  |   |    | $      | 924    |     |   | $      | 36,468                 |   |   | $                   | 118,761 |   |   | $ | (1,917 | ) |   | $ | 154,236 |   |
| Net      income                                                                                                                      |   |              |   |   |    |   |   |     |   |   |                   |   |   |                | 21,372  |   |   |   |   |   |   |   | 21,372 |   |
| Other      comprehensive income                                                                                                      |   |              |   |   |    |   |   |     |   |   |                   |   |   |                |    |   |   |   | 608 |   |   |   | 608 |   |
| Cash      dividends declared, $1.43 per share                                                                                        |   |              |   |   |    |   |   |     |   |   |                   |   |   |                | (10,781 | ) |   |   |   |   |   |   | (10,781 | ) |
| Purchase      of common stock                                                                                                        |   |              | (26    | )      |    |   | (3     | )        |   |   | (117                   | )      |   |                | (700    | ) |   |   |   |   |   |   | (820 | ) |
| Stock      options exercised, including related tax benefits                                                                         |   |              | 60     |   |    |   | 8      |     |   |   | 1,536                  |   |   |                |    |   |   |   |   |   |   |   | 1,544 |   |
| Shares      issued pursuant to Employee Stock Purchase Plan                                                                          |   |              | 8      |   |    |   | 1      |     |   |   | 222                    |   |   |                |    |   |   |   |   |   |   |   | 223 |   |
| Expense      related to employee stock purchase plan and stock options                                                               |   |              |   |   |    |   |   |     |   |   | 154                    |   |   |                |    |   |   |   |   |   |   |   | 154 |   |
| Shares      issued in connection with the   purchase      of Citizens National   Bancshares,      Inc. |   |              | 464    |   |    |   | 58     |     |   |   | 14,938                 |   |   |                |    |   |   |   |   |   |   |   | 14,996 |   |
| Adjustment      to initially apply SFASNo.158,      net of tax of $2,407                                                             |   |              |   |   |    |   |   |     |   |   |                   |   |   |                |    |   |   |   | (4,469 | ) |   |   | (4,469 | ) |
| Balance      at December 31, 2006                                                                                                    |   |              | 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 |   |

----

Consolidated Statements of Cash Flows

|                                                                                          |   |   |     |   |   |   |     |   |   |
|-----------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
| Years      Ended December 31, (In thousands)                                                  |   | 2008   |     |   | 2007   |   |     | 2006   |   |
| Cash      Flows from Operating Activities                                                     |   |   |     |   |   |   |     |   |   |
| Net      income                                                                               |   | $      | 4,395    |   |   | $      | 15,627   |   |   | $ | 21,372 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities:   |   |   |     |   |   |   |     |   |   |   |   |   |
| Depreciation      and amortization                                                            |   |   | 6,642    |   |   |   | 7,477    |   |   |   | 5,826 |   |
| Net      accretion of investment security discounts:                                          |   |   |     |   |   |   |     |   |   |   |   |   |
| Available      for sale                                                                       |   |   | (179     | )      |   |   | (1,132   | )      |   |   | (424 | ) |
| Held      to maturity                                                                         |   |   |     |   |   |   | 1        |   |   |   | (25 | ) |
| Provision      for loan losses                                                                |   |   | 5,321    |   |   |   | 3,638    |   |   |   | 965 |   |
| Deferred      income tax benefit                                                              |   |   | (2,046   | )      |   |   | (1,807   | )      |   |   | (1,848 | ) |
| Noncash      stock option expense                                                             |   |   | 47       |   |   |   | 59       |   |   |   | 125 |   |
| Mortgage      loans originated for sale                                                       |   |   | (17,347  | )      |   |   | (19,684  | )      |   |   | (29,539 | ) |
| Proceeds      from sale of mortgage loans                                                     |   |   | 16,185   |   |   |   | 21,081   |   |   |   | 26,973 |   |
| Gains      on sale of mortgage loans, net                                                     |   |   | (407     | )      |   |   | (591     | )      |   |   | (649 | ) |
| Loss      (gain) on sale of premises and equipment, net                                       |   |   | 17       |   |   |   | 89       |   |   |   | (174 | ) |
| (Gain)      loss on sale of repossessed assets                                                |   |   | (149     | )      |   |   | (365     | )      |   |   | 376 |   |
| Loss      on sale of available for sale investment securities, net                            |   |   | 166      |   |   |   |     |   |   |   | 195 |   |
| Other-than-temporary      impairment of investment securities                                 |   |   | 13,962   |   |   |   |     |   |   |   |   |   |
| Decrease      (increase) in accrued interest receivable                                       |   |   | 1,169    |   |   |   | (1,602   | )      |   |   | (3,450 | ) |
| Income      from company-owned life insurance                                                 |   |   | (1,225   | )      |   |   | (1,242   | )      |   |   | (1,301 | ) |
| (Increase)      decrease in other assets                                                      |   |   | (5,589   | )      |   |   | 1,968    |   |   |   | 1,422 |   |
| (Decrease)      increase in accrued interest payable                                          |   |   | (634     | )      |   |   | 1,672    |   |   |   | 2,594 |   |
| Increase      (decrease) increase in other liabilities                                        |   |   | 432      |   |   |   | (2,656   | )      |   |   | 4,409 |   |
| Gain      on sales of discontinued operations                                                 |   |   |     |   |   |   |     |   |   |   | (9,873 | ) |
| Net      cash provided by discontinued operating activities                                   |   |   |     |   |   |   |     |   |   |   | 1,390 |   |
| Net      cash provided by operating activities                                                |   |   | 20,760   |   |   |   | 22,533   |   |   |   | 18,364 |   |
| Cash      Flows from Investing Activities                                                     |   |   |     |   |   |   |     |   |   |   |   |   |
| Proceeds      from maturities and calls of investment securities:                             |   |   |     |   |   |   |     |   |   |   |   |   |
| Available      for sale                                                                       |   |   | 219,724  |   |   |   | 323,155  |   |   |   | 121,699 |   |
| Held      to maturity                                                                         |   |   | 2,030    |   |   |   | 3,943    |   |   |   | 5,847 |   |
| Proceeds      from sale of available for sale investment securities                           |   |   | 34,055   |   |   |   | 20,009   |   |   |   | 19,263 |   |
| Purchases      of available for sale investment securities                                    |   |   | (252,167 | )      |   |   | (555,792 | )      |   |   | (138,081 | ) |
| Loans      originated for investment, net of principal collected                              |   |   | (36,357  | )      |   |   | (100,328 | )      |   |   | (114,216 | ) |
| Purchase      of company-owned life insurance                                                 |   |   |     |   |   |   |     |   |   |   | (1,579 | ) |
| Payment      of prior year accrued purchase price-Citizens Bancorp,Inc.                       |   |   |     |   |   |   |     |   |   |   | (21,846 | ) |
| Net      cash acquired in purchase of Citizens National Bancshares,      Inc.                 |   |   |     |   |   |   |     |   |   |   | 1,066 |   |
| Purchase      of PNC Military Allotment operations, net of cash acquired                      |   |   |     |   |   |   | (1,943   | )      |   |   |   |   |
| Purchase      price refinements of previous acquisitions                                      |   |   |     |   |   |   | 50       |   |   |   | (29 | ) |
| Investment      in unconsolidated trusts                                                      |   |   |     |   |   |   | (696     | )      |   |   |   |   |
| Additions      to mortgage servicing rights, net                                              |   |   | (77      | )      |   |   | (94      | )      |   |   | (47 | ) |
| Purchases      of premises and equipment                                                      |   |   | (10,640  | )      |   |   | (5,245   | )      |   |   | (9,682 | ) |
| Proceeds      from sale of repossessed assets                                                 |   |   | 6,348    |   |   |   | 3,473    |   |   |   | 6,149 |   |
| Proceeds      from sale of equipment                                                          |   |   | 2,357    |   |   |   | 330      |   |   |   | 720 |   |
| Net      cash received on disposal of discontinued operations                                 |   |   |     |   |   |   |     |   |   |   | 47 |   |
| Net      cash provided by discontinued investing activities                                   |   |   |     |   |   |   |     |   |   |   | 9,384 |   |
| Net      cash used in investing activities                                                    |   |   | (34,727  | )      |   |   | (313,138 | )      |   |   | (121,305 | ) |
| Cash      Flows from Financing Activities                                                     |   |   |     |   |   |   |     |   |   |   |   |   |
| Net      increase in deposits                                                                 |   |   | 120,018  |   |   |   | 8,407    |   |   |   | 123,728 |   |
| Net      (decrease) increase in federal funds purchased and other short-term      borrowings  |   |   | (3,281   | )      |   |   | 4,037    |   |   |   | 1,722 |   |
| Proceeds      from securities sold under agreements to purchase and other long-term      debt |   |   | 27,000   |   |   |   | 249,196  |   |   |   | 26,198 |   |
| Repayments      of securities sold under agreements to purchase and other long-term      debt |   |   | (7,648   | )      |   |   | (20,879  | )      |   |   | (13,496 | ) |
| Dividends      paid on common stock                                                           |   |   | (9,720   | )      |   |   | (11,118  | )      |   |   | (9,553 | ) |
| Purchase      of common stock                                                                 |   |   | (1,049   | )      |   |   | (18,649  | )      |   |   | (820 | ) |
| Shares      issued under Employee Stock Purchase Plan                                         |   |   | 252      |   |   |   | 254      |   |   |   | 223 |   |
| Stock      options exercised and related tax benefits                                         |   |   | 30       |   |   |   | 1,669    |   |   |   | 1,697 |   |
| Net      cash provided by discontinued financing activities                                   |   |   |     |   |   |   |     |   |   |   | 3,710 |   |
| Net      cash provided by financing activities                                                |   |   | 125,602  |   |   |   | 212,917  |   |   |   | 133,409 |   |
| Net      increase (decrease) in cash and cash equivalents                                     |   |   | 111,635  |   |   |   | (77,688  | )      |   |   | 30,468 |   |
| Less:      net increase in cash and cash equivalents of discontinued      operations          |   |   |     |   |   |   |     |   |   |   | (4,658 | ) |
| Net      increase (decrease) in cash and cash equivalents from continuing      operations     |   |   | 111,635  |   |   |   | (77,688  | )      |   |   | 25,810 |   |
| Cash      and cash equivalents from continuing operations at beginning of      year           |   |   | 79,140   |   |   |   | 156,828  |   |   |   | 131,018 |   |
| Cash      and cash equivalents from continuing operations at end of    year                   |   | $      | 190,775  |   |   | $      | 79,140   |   |   | $ | 156,828 |   |
| (table      continues on next page)                                                           |   |   |     |   |   |   |     |   |   |   |   |   |

----

|                                                                                                                                            |   |   |   |   |   |   |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Supplemental      Disclosures                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Cash      paid during the year for:                                                                                                             |   |   |   |   |   |   |   |   |   |
| Interest                                                                                                                                        |   | $      | 55,764 |   |   | $      | 54,367 |   |   | $ | 42,685 |   |
| Income      taxes                                                                                                                               |   |   | 6,600  |   |   |   | 9,854  |   |   |   | 4,900 |   |
| Transfers      from loans to repossessed assets                                                                                                 |   |   | 14,622 |   |   |   | 3,952  |   |   |   | 1,973 |   |
| Cash      dividend declared and unpaid at year-end                                                                                              |   |   | 2,427  |   |   |   | 2,436  |   |   |   | 3,472 |   |
| Issuance      of 464 and 584 shares of common stock to acquire Citizens National      Bancshares, Inc. and Citizens Bancorp, Inc., respectively |   |   |   |   |   |   |   |   |   |   | 14,996 |   |

----

NOTES TO CONSOLIDATED FINANCIALSTATEMENTS

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

----

----

----

Note19

----

|                                                                    |   |   |   |   |   |   |   |   |   |
|-------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (In      thousands, except per share data)Years      Ended December 31, |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|                                                                    |   |   |   |   |   |   |   |   |   |
| Net      income, basic and diluted                                      |   | $      | 4,395  |   |   | $      | 15,627 |   |   | $ | 21,372 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Average      shares outstanding                                         |   |   | 7,357  |   |   |   | 7,706  |   |   |   | 7,511 |   |
| Effect      of dilutive stock options                                   |   |   |   |   |   |   |   |   |   |   | 15 |   |
| Average      diluted shares outstanding                                 |   |   | 7,357  |   |   |   | 7,706  |   |   |   | 7,526 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income per share, basic                                        |   | $      | .60    |   |   | $      | 2.03   |   |   | $ | 2.85 |   |
| Net      income per share, diluted                                      |   |   | .60    |   |   |   | 2.03   |   |   |   | 2.84 |   |

| Income      from continuing operations, basic and diluted |   | $      | 4,395  |   |   | $      | 15,627 |   |   | $      | 13,665 |   |
|-----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      per share from continuing operations, basic   |   | $      | .60    |   |   | $      | 2.03   |   |   | $      | 1.82   |   |
| Income      per share from continuing operations, diluted |   |   | .60    |   |   |   | 2.03   |   |   |   | 1.82   |   |

| Income      from discontinued operations, basic and diluted |   | $      | 0      |   |   | $      | 0      |   |   | $      | 7,707  |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      per share from discontinued operations, basic   |   | $      | 0      |   |   | $      | 0      |   |   | $      | 1.03   |   |
| Income      per share from discontinued operations, diluted |   |   | 0      |   |   |   | 0      |   |   |   | 1.02   |   |

----

|                          |   |   |   |
|-------------------------------|--------|--------|--------|
|                          |   | ESPP   |   |
|                          |   | 2008   |   |   | 2007 |   |   | 2006 |   |
| Dividend      yield           |   |   | 4.24   | % |   |   | 3.97 | % |   |   | 3.88 | % |
| Expected      volatility      |   |   | 24.1   |   |   |   | 15.3 |   |   |   | 14.0 |   |
| Risk-free      interest rate  |   |   | 1.85   |   |   |   | 4.75 |   |   |   | 4.70 |   |
| Expected      life (in years) |   |   | .25    |   |   |   | .25 |   |   |   | .25 |   |
|                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value               |   | $      | 4.05   |   |   | $ | 5.12 |   |   | $ | 5.75 |   |

|   | · | FASB      SFAS and Interpretations, FASB Statement 133 Implementation Issues, FASB      Staff Positions, AICPA Accounting Research Bulletins and Accounting      Principles Board Opinions that are not superseded by actions of the FASB,      and Rules and interpretive releases of the SEC for SEC      registrants. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | FASB      Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and      Accounting Guides and Statements ofPosition. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | AICPA      Accounting Standards Executive Committee Practice Bulletins that have been      cleared by the FASB, consensus positions of the EITF, and Appendix D EITF      topics. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Implementation      guides (Q&A's) published by the FASB staff, AICPA Accounting      Interpretations, AICPA Industry Audit and Accounting Guides and Statements      of Position not cleared by the FASB, and practices that are widely      recognized and prevalent either generally or in the    industry. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (In      thousands)            |   | Eleven      months ended November      30, 2006 |   |
|--------------------------------|--------|------------------------------------------------------|--------|
| Interest      income           |   | $                                                    | 9,008  |   |
| Interest      expense          |   |                                                 | 3,696  |   |
| Net      interest income       |   |                                                 | 5,312  |   |
| Provision      for loan losses |   |                                                 | 17     |   |
| Noninterest      income        |   |                                                 | 1,272  |   |
| Noninterest      expense       |   |                                                 | 4,597  |   |
| Income      tax expense        |   |                                                 | 679    |   |
| Net      income                |   | $                                                    | 1,291  |   |

| 3.       Investment Securities |
|-------------------------------------|

|                                                   |   |      |    |   |                  |   |   |                   |   |   |            |   |
|--------------------------------------------------------|--------|-----------|---------|--------|-----------------------|--------|--------|------------------------|--------|--------|-----------------|--------|
|                                                   |   | 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                        |   |      | 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 |   |

|                                                   |   |      |    |   |                  |   |   |                   |   |   |            |   |
|--------------------------------------------------------|--------|-----------|---------|--------|-----------------------|--------|--------|------------------------|--------|--------|-----------------|--------|
|                                                   |   | Amortized |    |   | Gross                 |   |   | Gross                  |   |   | Estimated       |   |
| December      31, 2007 (In thousands)                  |   | Cost      |    |   | Unrealized      Gains |   |   | Unrealized      Losses |   |   | Fair      Value |   |
| Available      For Sale                                |   |      |    |   |                  |   |   |                   |   |   |            |   |
| Obligations      of U.S. government-sponsored entities |   | $         | 88,226  |   |                  | $      | 332    |                   |   | $      | 36              |   |   | $ | 88,522 |   |
| Obligations      of states and political subdivisions  |   |      | 93,430  |   |                  |   | 1,165  |                   |   |   | 414             |   |   |   | 94,181 |   |
| Mortgage-backed      securities                        |   |      | 343,189 |   |                  |   | 1,042  |                   |   |   | 1,055           |   |   |   | 343,176 |   |
| U.S.      Treasury securities                          |   |      | 863     |   |                  |   |   |                   |   |   |            |   |   |   | 863 |   |
| Money      market mutual funds                         |   |      | 1,396   |   |                  |   |   |                   |   |   |            |   |   |   | 1,396 |   |
| Corporate      debt securities                         |   |      | 5,792   |   |                  |   |   |                   |   |   | 660             |   |   |   | 5,132 |   |
| Equity      securities                                 |   |      | 9,363   |   |                  |   |   |                   |   |   |            |   |   |   | 9,363 |   |
| Total      securities – available for sale       |   | $         | 542,259 |   |                  | $      | 2,539  |                   |   | $      | 2,165           |   |   | $ | 542,633 |   |
| Held      To Maturity                                  |   |      |    |   |                  |   |   |                   |   |   |            |   |   |   |   |   |
| Obligations      of states and political subdivisions  |   | $         | 3,844   |   |                  | $      | 19     |                   |   | $      | 0               |   |   | $ | 3,863 |   |

----

|                                        |   |                    |    |   |                  |   |
|---------------------------------------------|--------|-------------------------|---------|--------|-----------------------|--------|
|                                        |   | Available      For Sale |    |   | Held      To Maturity |   |
|                                        |   | Amortized               |    |   | Estimated             |   |   | Amortized |   |   | Estimated |   |
| December      31, 2008 (In thousands)       |   | Cost                    |    |   | Fair      Value       |   |   | Cost |   |   | Fair      Value |   |
| Due      in one year or less                |   | $                       | 17,293  |   |                  | $      | 17,397 |   |   | $ | 789 |   |   | $ | 798 |   |
| Due      after one year through five years  |   |                    | 65,149  |   |                  |   | 66,519 |   |   |   |   |   |   |   |   |   |
| Due      after five years through ten years |   |                    | 30,879  |   |                  |   | 31,493 |   |   |   |   |   |   |   |   |   |
| Due      after ten years                    |   |                    | 39,872  |   |                  |   | 34,617 |   |   |   | 1,025 |   |   |   | 869 |   |
| Mortgage-backed      securities             |   |                    | 364,563 |   |                  |   | 375,327 |   |   |   |   |   |   |   |   |   |
| Total                                       |   | $                       | 517,756 |   |                  | $      | 525,353 |   |   | $ | 1,814 |   |   | $ | 1,667 |   |

|                                                   |   |                     |   |   |                   |   |   |            |   |
|--------------------------------------------------------|--------|--------------------------|--------|--------|------------------------|--------|--------|-----------------|--------|
|                                                   |   | 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                        |   |                     | 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 |   |

|                                                   |   |                     |   |   |                   |   |   |            |   |
|--------------------------------------------------------|--------|--------------------------|--------|--------|------------------------|--------|--------|-----------------|--------|
|                                                   |   | Less      than 12 Months |   |   | 12      Months or More |   |   | Total           |   |
|  December      31, 2007 (In thousands)            |   | Fair      Value          |   |   | UnrealizedLosses       |   |   | Fair      Value |   |   | UnrealizedLosses |   |   | Fair      Value |   |   | UnrealizedLosses |   |
| Obligations      of U.S. government-sponsored entities |   | $                        | 999    |   |                   | $      | 4      |            |   | $ | 11,159 |   |   | $ | 33 |   |   | $ | 12,158 |   |   | $ | 37 |   |
| Obligations      of states and political subdivisions  |   |                     | 7,734  |   |                   |   | 82     |            |   |   | 21,323 |   |   |   | 331 |   |   |   | 29,057 |   |   |   | 413 |   |
| Mortgage-backed      securities                        |   |                     | 11,004 |   |                   |   | 46     |            |   |   | 45,740 |   |   |   | 1,009 |   |   |   | 56,744 |   |   |   | 1,055 |   |
| Corporate      debt securities                         |   |                     | 5,132  |   |                   |   | 660    |            |   |   |   |   |   |   |   |   |   |   | 5,132 |   |   |   | 660 |   |
| Total                                                  |   | $                        | 24,869 |   |                   | $      | 792    |            |   | $ | 78,222 |   |   | $ | 1,373 |   |   | $ | 103,091 |   |   | $ | 2,165 |   |

----

| 4.  Loans |
|---------------------|

|                                                                       |   |   |      |   |   |   |
|----------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| December      31, (In thousands)                                           |   | 2008   |      |   | 2007   |   |
| Commercial,      financial, and agricultural                               |   | $      | 144,788   |   |   | $      | 154,015 |   |
| Real      estate – construction                                      |   |   | 260,524   |   |   |   | 254,788 |   |
| Real      estate mortgage – residential                              |   |   | 444,487   |   |   |   | 405,992 |   |
| Real      estate mortgage – farmland and other commercialenterprises |   |   | 390,424   |   |   |   | 394,900 |   |
| Installment      loans                                                     |   |   | 45,135    |   |   |   | 52,028 |   |
| Lease      financing                                                       |   |   | 30,234    |   |   |   | 34,109 |   |
|      Total      loans                             |   |   | 1,315,592 |   |   |   | 1,295,832 |   |
| Less      unearned income                                                  |   |   | (3,012    | )      |   |   | (3,847 | ) |
|      Total      loans, net of unearned income     |   | $      | 1,312,580 |   |   | $      | 1,291,985 |   |

|                                                                                                                             |   |   |    |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|
| (In      thousands)                                                                                                              |   | Amount |    |
| Balance,      December 31, 2007                                                                                                  |   | $      | 29,275  |   |
| New      loans                                                                                                                   |   |   | 9,610   |   |
| Repayments                                                                                                                       |   |   | (11,256 | ) |
| Loans      no longer meeting disclosure requirements, new loans meeting disclosure      requirements, and other adjustments, net |   |   | (4,055  | ) |
|      Balance,      December 31, 2008                                                                    |   | $      | 23,574  |   |

| 5.  Allowance      for Loan Losses |
|----------------------------------------------|

|                                                   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Years      Ended December 31, (In thousands)           |   | 2008   |   |   | 2007   |   |   | 2006   |   |
| Balance,      beginning of year                        |   | $      | 14,216 |   |   | $      | 11,999 |   |   | $ | 11,069 |   |
| Acquisition      of Citizens National Bancshares, Inc. |   |   |   |   |   |   |   |   |   |   | 1,066 |   |
| Provision      for loan losses                         |   |   | 5,321  |   |   |   | 3,638  |   |   |   | 965 |   |
| Recoveries                                             |   |   | 1,833  |   |   |   | 733    |   |   |   | 678 |   |
| Loans      charged off                                 |   |   | (4,542 | )      |   |   | (2,154 | )      |   |   | (1,779 | ) |
| Balance,      end of year                              |   | $      | 16,828 |   |   | $      | 14,216 |   |   | $ | 11,999 |   |

----

|                                                            |   |   |   |   |   |   |
|-----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Years      Ended December 31, (In thousands)                    |   | 2008   |   |   | 2007   |   |
| Year-end      loans with no allocated allowance for loan losses |   | $      | 4,684  |   |   | $      | 1,877 |   |
| Year-end      loans with allocated allowance for loan losses    |   |   | 43,670 |   |   |   | 28,127 |   |
| Total                                                           |   | $      | 48,354 |   |   | $      | 30,004 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Amount      of the allowance for loan losses allocated          |   | $      | 3,619  |   |   | $      | 1,834 |   |

|                                                    |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Years      Ended December 31, (In thousands)            |   | 2008   |   |   | 2007   |   |   | 2006   |   |
| Average      of individually impaired loans during year |   | $      | 34,364 |   |   | $      | 13,037 |   |   | $ | 5,151 |   |
| Interest      income recognized during impairment       |   |   | 1,070  |   |   |   | 1,382  |   |   |   | 323 |   |
| Cash-basis      interest income recognized              |   |   | 880    |   |   |   | 683    |   |   |   |   |   |

|                                                   |   |   |   |   |   |   |
|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| December      31, (In thousands)                       |   | 2008   |   |   | 2007   |   |
| Nonaccrual      loans                                  |   | $      | 21,545 |   |   | $      | 18,073 |   |
| Loans      past due 90 days or more and still accruing |   |   | 3,913  |   |   |   | 2,977 |   |
| Total      nonperforming loans                         |   | $      | 25,458 |   |   | $      | 21,050 |   |

| 6.  Premises      and Equipment |
|-------------------------------------------|

|                                                |   |   |    |   |   |   |
|-----------------------------------------------------|--------|--------|---------|--------|--------|--------|
| December      31, (In thousands)                    |   | 2008   |    |   | 2007   |   |
| Land,      buildings, and leasehold improvements    |   | $      | 54,564  |   |   | $      | 48,767 |   |
| Furniture      and equipment                        |   |   | 20,607  |   |   |   | 20,180 |   |
| Total      premises and equipment                   |   |   | 75,171  |   |   |   | 68,947 |   |
| Less      accumulated depreciation and amortization |   |   | (32,125 | )      |   |   | (30,284 | ) |
| Premises      and equipment, net                    |   | $      | 43,046  |   |   | $      | 38,663 |   |

| 7. Deposit      Liabilities |
|----------------------------------|

|                |   |   |    |
|---------------------|--------|--------|---------|
| (In      thousands) |   | Amount |    |
| 2009                |   | $      | 557,787 |   |
| 2010                |   |   | 183,698 |   |
| 2011                |   |   | 37,838  |   |
| 2012                |   |   | 57,026  |   |
| 2013                |   |   | 9,372   |   |
| Thereafter          |   |   | 4,773   |   |
| Total               |   | $      | 850,494 |   |

----

| 8.  Federal      Funds Purchased and Other Short-termBorrowings |
|---------------------------------------------------------------------------|

|                                                                                |   |   |    |   |   |   |
|-------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| December      31, (Dollars in thousands)                                            |   | 2008   |    |   | 2007   |   |
| Federal      funds purchased and securities sold under agreement to      repurchase |   | $      | 73,187  |   |   | $      | 80,315 |   |
| Overnight      FHLB advances                                                        |   |   | 3,500   |   |   |   |   |   |
| Other                                                                               |   |   | 787     |   |   |   | 440 |   |
| Total      short-term                                                               |   | $      | 77,474  |   |   | $      | 80,755 |   |
|                                                                                |   |   |    |   |   |   |   |   |
| Average      balance during the year                                                |   | $      | 81,180  |   |   | $      | 97,192 |   |
| Maximum      month-end balance during the year                                      |   |   | 125,096 |   |   |   | 155,362 |   |
| Average      interest rate during the year                                          |   |   | 2.20    | %      |   |   | 4.63 | % |
| Average      interest rate at year-end                                              |   |   | .74     |   |   |   | 3.71 |   |

| 9.  Term      Securities Sold Under Agreements to Repurchase and Other Long-term      Borrowings |
|------------------------------------------------------------------------------------------------------------|

|                                                |   |   |    |   |    |   |   |   |   |   |    |   |
|-----------------------------------------------------|--------|--------|---------|--------|---------|--------|--------|--------|--------|--------|---------|--------|
|                                                |   |   |    |   | Average |   |   |   |   |   | Average |   |
| December      31,  (Dollars in thousands) |   | 2008   |    |   | Rate    |   |   | 2007   |   |   | Rate    |   |
| FHLB      advances                                  |   | $      | 86,116  |   |    |   | 3.85   | %      |   | $      | 66,526  |   |   |   | 4.65 | % |
| Subordinated      notes payable                     |   |   | 48,970  |   |    |   | 5.94   |   |   |   | 48,970  |   |   |   | 6.71 |   |
| Securities      sold under agreements to repurchase |   |   | 200,000 |   |    |   | 3.95   |   |   |   | 200,000 |   |   |   | 3.95 |   |
| Other                                               |   |   | 575     |   |    |   | 2.32   |   |   |   | 813     |   |   |   | 2.32 |   |
| Total      long-term                                |   | $      | 335,661 |   |    |   | 4.21   | %      |   | $      | 316,309 |   |   |   | 4.52 | % |

----

|                |   |   |    |
|---------------------|--------|--------|---------|
| (In      thousands) |   | Amount |    |
| 2009                |   | $      | 13,730  |   |
| 2010                |   |   | 59,693  |   |
| 2011                |   |   | 22,523  |   |
| 2012                |   |   | 61,388  |   |
| 2013                |   |   | 2,167   |   |
| Thereafter          |   |   | 176,160 |   |
| Total               |   | $      | 335,661 |   |

----

|                                                                                 |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| December      31, (In thousands)                                                     |   | 2008   |   |   | 2007   |   |   | 2006   |   |
| Currently      payable                                                               |   | $      | 832    |   |   | $      | 6,094  |   |   | $ | 5,208 |   |
| Deferred                                                                             |   |   | (2,046 | )      |   |   | (1,807 | )      |   |   | (1,848 | ) |
| Total      applicable to continuing operations                                       |   |   | (1,214 | )      |   |   | 4,287  |   |   |   | 3,360 |   |
| Deferred      tax (credited) charged to components of shareholders’    equity: |   |   |   |   |   |   |   |   |   |   |   |   |
|   Unfunded      status of postretirement benefits                          |   |   | 617    |   |   |   | (139   | )      |   |   | 1,664 |   |
|   Net      unrealized securities gains                                     |   |   | 2,528  |   |   |   | 836    |   |   |   | 237 |   |
| Total      income taxes from continuing operations                                   |   | $      | 1,931  |   |   | $      | 4,984  |   |   | $ | 5,261 |   |

|                                                                   |   |   |   |
|------------------------------------------------------------------------|--------|--------|--------|
| December      31, (In thousands)                                       |   | 2006   |   |
| Currently      payable                                                 |   | $      | 4,287  |   |
| Deferred                                                               |   |   | (152   | ) |
| Total      applicable to discontinued operations                       |   |   | 4,135  |   |
| Deferred      tax charged to components of shareholders’ equity: |   |   |   |   |
|   Net      unrealized securities gains                       |   |   | 90     |   |
| Total      income taxes from discontinued operations                   |   | $      | 4,225  |   |

|                                                                |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| December      31,                                                   |   | 2008   |   |   | 2007   |   |   | 2006   |   |
| Federal      statutory rate                                         |   |   | 35.0   | %      |   |   | 35.0   | %      |   |   | 35.0 | % |
| Changes      from statutory rates resulting from:                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt      interest                                            |   |   | (48.1  | )      |   |   | (8.1   | )      |   |   | (9.7 | ) |
| Nondeductible      interest to carry tax-exempt obligations         |   |   | 5.7    |   |   |   | 1.1    |   |   |   | 1.2 |   |
| Tax      credits                                                    |   |   | (14.6  | )      |   |   | (2.7   | )      |   |   | (3.8 | ) |
| Premium      income not subject to tax                              |   |   | (9.2   | )      |   |   | (1.9   | )      |   |   | (2.4 | ) |
| Company-owned      life insurance                                   |   |   | (13.5  | )      |   |   | (2.1   | )      |   |   | (2.4 | ) |
| Dividend      exclusion                                             |   |   | (4.8   | )      |   |   |   |   |   |   |   |   |
| Other,      net                                                     |   |   | 11.3   |   |   |   | .2     |   |   |   | 1.8 |   |
| Effective      tax rate on pretax income from continuing operations |   |   | (38.2  | )%     |   |   | 21.5   | %      |   |   | 19.7 | % |

|                                                                  |   |   |   |
|-----------------------------------------------------------------------|--------|--------|--------|
| December      31,                                                     |   | 2006   |   |
| Federal      statutory rate                                           |   |   | 35.0   | % |
| Changes      from statutory rates resulting from:                     |   |   |   |   |
| Tax-exempt      interest                                              |   |   | (.7    | ) |
| Nondeductible      interest to carry tax-exempt obligations           |   |   | .1     |   |
| Company-owned      life insurance                                     |   |   | (.2    | ) |
| Other,      net                                                       |   |   | .7     |   |
| Effective      tax rate on pretax income from discontinued operations |   |   | 34.9   | % |

----

|                                                                   |   |   |   |   |   |   |
|------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| December      31, (In thousands)                                       |   | 2008   |   |   | 2007   |   |
| Assets                                                                 |   |   |   |   |   |   |
| Allowance      for loan losses                                         |   | $      | 5,901  |   |   | $      | 4,891 |   |
| Deferred      directors’ fees                                    |   |   | 263    |   |   |   | 242 |   |
| Postretirement      benefit obligations                                |   |   | 3,727  |   |   |   | 3,894 |   |
| Other      real estate owned                                           |   |   | 82     |   |   |   | 89 |   |
| Self-funded      insurance                                             |   |   | 175    |   |   |   | 269 |   |
| Paid      time off                                                     |   |   | 712    |   |   |   | 614 |   |
| Alternative      minimum tax credits                                   |   |   | 587    |   |   |   |   |   |
| Low      income housing credits                                        |   |   | 193    |   |   |   |   |   |
| Other                                                                  |   |   | 39     |   |   |   | 45 |   |
| Total      deferred tax assets                                         |   |   | 11,679 |   |   |   | 10,044 |   |
| Liabilities                                                            |   |   |   |   |   |   |   |   |
| Depreciation                                                           |   |   | 564    |   |   |   | 533 |   |
| Unrealized      gains on available for sale investment securities, net |   |   | 2,659  |   |   |   | 131 |   |
| Life      insurance income                                             |   |   | 144    |   |   |   | 92 |   |
| Prepaid      expenses                                                  |   |   | 664    |   |   |   | 636 |   |
| Discount      on investment securities                                 |   |   | 1,111  |   |   |   | 1,012 |   |
| Deferred      loan fees                                                |   |   | 1,209  |   |   |   | 1,197 |   |
| Lease      financing operations                                        |   |   | 1,886  |   |   |   | 1,502 |   |
| Intangibles                                                            |   |   | 2,177  |   |   |   | 2,577 |   |
| Total      deferred tax liabilities                                    |   |   | 10,414 |   |   |   | 7,680 |   |
| Net      deferred tax asset                                            |   | $      | 1,265  |   |   | $      | 2,364 |   |

----

|                                 |   |   |   |
|--------------------------------------|--------|--------|--------|
| (In      thousands)                  |   | 2008   |   |   | 2007 |   |
| Change      in Benefit Obligation    |   |   |   |   |   |   |
| Obligation      at beginning of year |   | $      | 462    |   |   | $ | 561 |   |
| Service      cost                    |   |   | 33     |   |   |   | 31 |   |
| Interest      cost                   |   |   | 26     |   |   |   | 32 |   |
| Actuarial      gain                  |   |   | (18    | )   |   |   | (157 | )   |
| Benefit      payments                |   |   | (5     | ) |   |   | (5 | ) |
| Obligation      at end of year       |   | $      | 498    |   |   | $ | 462 |   |

|                               |   |   |   |
|------------------------------------|--------|--------|--------|
| (In      thousands)                |   | 2008   |   |   | 2007 |   |
| Service      cost                  |   | $      | 33     |   |   | $ | 31 |   |
| Interest      cost                 |   |   | 26     |   |   |   | 32 |   |
| Recognized      net actuarial loss |   |   | 8      |   |   |   | 22 |   |
| Net      periodic benefit cost     |   | $      | 67     |   |   | $ | 85 |   |
| Major      assumptions:            |   |   |   |   |   |   |   |   |
| Discount      rate                 |   |   | 6.00   | % |   |   | 5.75 | % |

|                |   |   |                                   |   |
|---------------------|--------|--------|----------------------------------------|--------|
| (In      thousands) |   |   | Supplemental      Retirement      Plan |   |
| 2009                |   |   | $                                      | 5      |   |
| 2010                |   |   |                                   | 5      |   |
| 2011                |   |   |                                   | 5      |   |
| 2012                |   |   |                                   | 5      |   |
| 2013                |   |   |                                   | 49     |   |
| 2014-2018      |   |   |                                   |   | 435 |   |
| Total               |   |   | $                                      | 504    |   |

|                                 |   |   |   |   |   |   |
|--------------------------------------|--------|--------|--------|--------|--------|--------|
| (In      thousands)                  |   | 2008   |   |   | 2007   |   |
| Unrecognized      net actuarial loss |   | $      | 99     |   |   | $      | 125 |   |
| Total                                |   | $      | 99     |   |   | $      | 125 |   |

|                                 |   |                              |   |
|--------------------------------------|--------|-----------------------------------|--------|
| (In      thousands)                  |   | Supplemental      Retirement Plan |   |
| Unrecognized      net actuarial loss |   | $                                 | 6      |   |
| Total                                |   | $                                 | 6      |   |

----

|                                 |   |   |   |
|--------------------------------------|--------|--------|--------|
|                                 |   | 2008   |   |
|                                 |   |   |   |   | Weighted |   |
|                                 |   |   |   |   | Average |   |
|                                 |   | Shares |   |   | Price |   |
| Outstanding      at January 1        |   |   | 62,621 |   |   | $ | 32.66 |   |
| Exercised                            |   |   | (1,000 | ) |   |   | 29.75 |   |
| Forfeited                            |   |   | (2,000 | ) |   |   | 34.80 |   |
| Outstanding      at December 31      |   |   | 59,621 |   |   | $ | 32.63 |   |
|                                 |   |   |   |   |   |   |   |   |
| Options      exercisable at year-end |   |   | 59,621 |   |   | $ | 32.63 |   |

|                         |   |   |        |   |   |                       |   |
|------------------------------|--------|--------|-------------|--------|--------|----------------------------|--------|
|                         |   |   | Outstanding |   |   | Exercisable                |   |
|                         |   |   |        |   |   | Weighted      Average      |   |   |   |   |   |   |   |   |   |   |
|                         |   |   |        |   |   | Remaining      Contractual |   |   | Weighted      Average |   |   |   |   |   | Weighted      Average |   |
| Exercise      Price          |   |   | Number      |   |   | Life      (Years)          |   |   | Exercise      Price |   |   | Number |   |   | Exercise      Price |   |
| $                            | 29.75  |   |        |   | 25,572 |                       |   |   | 1.00 |   |   | $ | 29.75 |   |   |   | 25,572 |   |   | $ | 29.75 |   |
| $                            | 34.80  |   |        |   | 34,049 |                       |   |   | 5.83 |   |   |   | 34.80 |   |   |   | 34,049 |   |   |   | 34.80 |   |
| Outstanding      at year-end |   |   |        | 59,621 |   |                       |   | 3.76 |   |   | $ | 32.63 |   |   |   | 59,621 |   |   | $ | 32.63 |   |

|                                             |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (In      thousands)                              |   | 2008   |   |   | 2007   |   |   | 2006   |   |
| Tax      benefit realized from options exercised |   | $      | 0      |   |   | $      | 123    |   |   | $ | 168 |   |
| Total      intrinsic value of options exercised  |   |   | 1      |   |   |   | 353    |   |   |   | 479 |   |
| Cash      received from options exercised        |   |   | 30     |   |   |   | 1,546  |   |   |   | 1,529 |   |

| 13. | Postretirement      Medical Benefits |
|-----|--------------------------------------|

----

|                                 |   |   |   |
|--------------------------------------|--------|--------|--------|
| (In      thousands)                  |   | 2008   |   |   | 2007 |   |
| Change      in Benefit Obligation    |   |   |   |   |   |   |
| Obligation      at beginning of year |   | $      | 11,003 |   |   | $ | 11,164 |   |
| Service      cost                    |   |   | 442    |   |   |   | 441 |   |
| Interest      cost                   |   |   | 622    |   |   |   | 632 |   |
| Actuarial      gain                  |   |   | (1,244 | ) |   |   | (981 | )   |
| Participant      contributions       |   |   | 64     |   |   |   | 55 |   |
| Benefit      payments                |   |   | (337   | ) |   |   | (308 | ) |
| Obligation      at end of year       |   | $      | 10,550 |   |   | $ | 11,003 |   |

|                                       |   |   |   |
|--------------------------------------------|--------|--------|--------|
| (In      thousands)                        |   | 2008   |   |   | 2007 |   |
| Service      cost                          |   | $      | 442    |   |   | $ | 441 |   |
| Interest      cost                         |   |   | 622    |   |   |   | 632 |   |
| Amortization      of transition obligation |   |   | 101    |   |   |   | 101 |   |
| Recognized      prior service cost         |   |   | 299    |   |   |   | 299 |   |
| Recognized      net actuarial loss         |   |   | 93     |   |   |   | 162 |   |
| Net      periodic benefit cost             |   | $      | 1,557  |   |   | $ | 1,635 |   |
| Major      assumptions:                    |   |   |   |   |   |   |   |   |
| Discount      rate                         |   |   | 6.00   | % |   |   | 5.75 | % |
| 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 |   | $                | 222    |   |             | $      | (171 | ) |
| Effect      on accumulated postretirement benefit obligation                                                              |   |             | 1,959  |   |             |   | (1,558 | ) |

|                |   |   |                                      |   |
|---------------------|--------|--------|-------------------------------------------|--------|
| (In      thousands) |   |   | Postretirement Medical      Benefits |   |
| 2009                |   |   | $                                         | 364    |   |
| 2010                |   |   |                                      | 391    |   |
| 2011                |   |   |                                      | 408    |   |
| 2012                |   |   |                                      | 420    |   |
| 2013                |   |   |                                      | 446    |   |
| 2014-2018      |   |   |                                      |   | 2,620 |   |
| Total               |   |   | $                                         | 4,649  |   |

|                                    |   |   |   |   |   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|
| (In      thousands)                     |   | 2008   |   |   | 2007   |   |
| Unrecognized      net actuarial loss    |   | $      | 1,218  |   |   | $      | 2,554 |   |
| Unrecognized      transition obligation |   |   | 406    |   |   |   | 507 |   |
| Unrecognized      prior service cost    |   |   | 1,667  |   |   |   | 1,966 |   |
| Total                                   |   | $      | 3,291  |   |   | $      | 5,027 |   |

----

|                                 |   |                                 |   |
|--------------------------------------|--------|--------------------------------------|--------|
| (In      thousands)                  |   | Postretirement      Medical Benefits |   |
| Unrecognized      net actuarial loss |   | $                                    | 80     |   |
| Transition      obligation           |   |                                 | 101    |   |
| Unrecognized      prior service cost |   |                                 | 257    |   |
| Total                                |   | $                                    | 438    |   |

|                                          |   |                  |   |   |               |   |
|-----------------------------------------------|--------|-----------------------|--------|--------|--------------------|--------|
| (In      thousands)                           |   | Operating      Leases |   |   | Capital      Lease |   |
| 2009                                          |   | $                     | 699    |   |               | $      | 254 |   |
| 2010                                          |   |                  | 447    |   |               |   | 254 |   |
| 2011                                          |   |                  | 416    |   |               |   | 84 |   |
| 2012                                          |   |                  | 295    |   |               |   |   |   |
| 2013                                          |   |                  | 275    |   |               |   |   |   |
| Thereafter                                    |   |                  | 2,245  |   |               |   |   |   |
| Total                                         |   | $                     | 4,377  |   |               |   | 592 |   |
| Less:      amount representing interest       |   |                  |   |   |               |   | 17 |   |
| Long-term      obligation under capital lease |   |                  |   |   |               | $      | 575 |   |

| 15. | Financial Instruments With Off-Balance Sheet      Risk |
|-----|--------------------------------------------------------|

----

|                                                                |   |            |   |   |               |   |
|---------------------------------------------------------------------|--------|-----------------|--------|--------|--------------------|--------|
| December      31,                                                   |   | 2008            |   |   | 2007               |   |
| (In      thousands)                                                 |   | Fixed      Rate |   |   | Variable      Rate |   |   | Fixed      Rate |   |   | Variable      Rate |   |
| Commitments      to extend credit, including unused lines of credit |   | $               | 56,337 |   |               | $      | 128,042 |   |   | $ | 75,053 |   |   | $ | 158,445 |   |
| Standby      letters of credit                                      |   |            | 5,751  |   |               |   | 23,997 |   |   |   | 14,982 |   |   |   | 3,355 |   |
| Total                                                               |   | $               | 62,088 |   |               | $      | 152,039 |   |   | $ | 90,035 |   |   | $ | 161,800 |   |

| 17. | Loss Contingencies |
|-----|--------------------|

| 18. | Regulatory Matters |
|-----|--------------------|

----

|                                          |   |   |    |   |                   |   |   |                         |   |
|-----------------------------------------------|--------|--------|---------|--------|------------------------|--------|--------|------------------------------|--------|
|                                          |   |   |    |   |                   |   |   | 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 |   |

|                                          |   |   |    |   |                   |   |   |                         |   |
|-----------------------------------------------|--------|--------|---------|--------|------------------------|--------|--------|------------------------------|--------|
|                                          |   |   |    |   |                   |   |   | To      Be Well Capitalized  |   |
|                                          |   |   |    |   | For      Capital       |   |   | Under      Prompt Corrective |   |
|                                          |   | Actual |    |   | Adequacy      Purposes |   |   | Action      Provisions       |   |
| December      31, 2007 (Dollars in thousands) |   | Amount |    |   | Ratio                  |   |   | Amount                       |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| Tier      1 Capital (to Risk-Weighted Assets) |   |   |    |   |                   |   |   |                         |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                  |   | $      | 157,146 |   |                   |   | 11.55  | %                            |   | $ | 54,405 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| Farmers      Bank & Capital Trust Co.     |   |   | 34,058  |   |                   |   | 9.90   |                         |   |   | 13,764 |   |   |   | 4.00 |   |   | $ | 20,646 |   |   |   | 6.00 | % |
| The      Lawrenceburg Bank & Trust Co.    |   |   | 11,211  |   |                   |   | 9.30   |                         |   |   | 4,820 |   |   |   | 4.00 |   |   |   | 7,230 |   |   |   | 6.00 |   |
| First      Citizens Bank                      |   |   | 16,929  |   |                   |   | 10.01  |                         |   |   | 6,767 |   |   |   | 4.00 |   |   |   | 10,151 |   |   |   | 6.00 |   |
| United      Bank & Trust Co.              |   |   | 50,612  |   |                   |   | 9.44   |                         |   |   | 21,452 |   |   |   | 4.00 |   |   |   | 32,177 |   |   |   | 6.00 |   |
| Citizens      Bank of Northern Kentucky       |   |   | 17,891  |   |                   |   | 9.86   |                         |   |   | 7,256 |   |   |   | 4.00 |   |   |   | 10,884 |   |   |   | 6.00 |   |
| Total      Capital (to Risk-Weighted Assets)  |   |   |    |   |                   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                  |   | $      | 171,362 |   |                   |   | 12.60  | %                            |   | $ | 108,809 |   |   |   | 8.00 | % |   |   | N/A |   |   |   | N/A |   |
| Farmers      Bank & Capital Trust Co.     |   |   | 38,342  |   |                   |   | 11.14  |                         |   |   | 27,528 |   |   |   | 8.00 |   |   | $ | 34,410 |   |   |   | 10.00 | % |
| The      Lawrenceburg Bank & Trust Co.    |   |   | 12,570  |   |                   |   | 10.43  |                         |   |   | 9,640 |   |   |   | 8.00 |   |   |   | 12,050 |   |   |   | 10.00 |   |
| First      Citizens Bank                      |   |   | 18,334  |   |                   |   | 10.84  |                         |   |   | 13,534 |   |   |   | 8.00 |   |   |   | 16,918 |   |   |   | 10.00 |   |
| United      Bank & Trust Co.              |   |   | 56,324  |   |                   |   | 10.50  |                         |   |   | 42,903 |   |   |   | 8.00 |   |   |   | 53,629 |   |   |   | 10.00 |   |
| Citizens      Bank of Northern Kentucky       |   |   | 19,347  |   |                   |   | 10.67  |                         |   |   | 14,512 |   |   |   | 8.00 |   |   |   | 18,140 |   |   |   | 10.00 |   |
| Tier      1 Capital (to Average Assets)       |   |   |    |   |                   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                  |   | $      | 157,146 |   |                   |   | 8.08   | %                            |   | $ | 77,828 |   |   |   | 4.00 | % |   |   | N/A |   |   |   | N/A |   |
| Farmers      Bank & Capital Trust Co.     |   |   | 34,058  |   |                   |   | 5.56   |                         |   |   | 24,511 |   |   |   | 4.00 |   |   | $ | 30,639 |   |   |   | 5.00 | % |
| The      Lawrenceburg Bank & Trust Co.    |   |   | 11,211  |   |                   |   | 5.87   |                         |   |   | 7,635 |   |   |   | 4.00 |   |   |   | 9,544 |   |   |   | 5.00 |   |
| First      Citizens Bank                      |   |   | 16,929  |   |                   |   | 7.09   |                         |   |   | 9,548 |   |   |   | 4.00 |   |   |   | 11,934 |   |   |   | 5.00 |   |
| United      Bank & Trust Co.              |   |   | 50,612  |   |                   |   | 6.93   |                         |   |   | 29,197 |   |   |   | 4.00 |   |   |   | 36,497 |   |   |   | 5.00 |   |
| Citizens      Bank of Northern Kentucky       |   |   | 17,891  |   |                   |   | 7.98   |                         |   |   | 8,964 |   |   |   | 4.00 |   |   |   | 11,205 |   |   |   | 5.00 |   |

----

19. 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 tradingsystems. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

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

|   | · | 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 $8.9 million at December 31, 2008 is carried at cost and      not included in the table below, as they are outside the scope of SFAS No.      157. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                             |   |                                  |    |   | Fair      Value Measurements at December 31, 2008 Using                 |   |
|--------------------------------------------------|--------|---------------------------------------|---------|--------|-------------------------------------------------------------------------|--------|
| (In      thousands)   Description |   | Fair      ValueDecember      31, 2008 |    |   | Quoted      Prices in Active Markets for Identical Assets(Level      1) |   |   | Significant      Other Observable Inputs(Level      2) |   |   | Significant      Unobservable Inputs(Level      3) |   |
|                                             |   |                                  |    |   |                                                                    |   |   |   |   |   |   |   |
| Available      for sale investment securities    |   | $                                     | 525,353 |   |                                                                    | $      | 10,256 |   |   | $ | 515,097 |   |   | $ | 0 |   |

----

|                                                                                    |   |     |      |   |   |   |
|-----------------------------------------------------------------------------------------|--------|----------|-----------|--------|--------|--------|
| December      31,                                                                       |   | 2008     |      |   | 2007   |   |
|                                                                                    |   | Carrying |      |   | Fair   |   |   | Carrying |   |   | Fair |   |
| (In      thousands)                                                                     |   | Amount   |      |   | Value  |   |   | Amount |   |   | Value |   |
| Assets                                                                                  |   |     |      |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                                          |   | $        | 190,775   |   |   | $      | 190,775 |   |   | $ | 79,140 |   |   | $ | 79,140 |   |
| Investment      securities:                                                             |   |     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLB      and similar stock                                                             |   |     | 8,942     |   |   |   | N/A |   |   |   | 9,363 |   |   |   | N/A |   |
| Held      to maturity                                                                   |   |     | 1,814     |   |   |   | 1,667 |   |   |   | 3,844 |   |   |   | 3,863 |   |
| Loans,      net                                                                         |   |     | 1,295,752 |   |   |   | 1,309,604 |   |   |   | 1,277,769 |   |   |   | 1,275,746 |   |
| Accrued      interest receivable                                                        |   |     | 12,168    |   |   |   | 12,168 |   |   |   | 13,337 |   |   |   | 13,337 |   |
|                                                                                    |   |     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                                                             |   |     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                |   |     | 1,594,115 |   |   |   | 1,601,567 |   |   |   | 1,474,097 |   |   |   | 1,475,010 |   |
| Federal      funds purchased and other short-term borrowings                            |   |     | 77,474    |   |   |   | 77,474 |   |   |   | 80,755 |   |   |   | 80,755 |   |
| Securities      sold under agreements to repurchase and other long-term      borrowings |   |     | 286,691   |   |   |   | 311,259 |   |   |   | 267,339 |   |   |   | 272,396 |   |
| Subordinated      notes payable to unconsolidated trusts                                |   |     | 48,970    |   |   |   | 18,518 |   |   |   | 48,970 |   |   |   | 37,857 |   |
| Accrued      interest payable                                                           |   |     | 5,811     |   |   |   | 5,811 |   |   |   | 6,445 |   |   |   | 6,445 |   |

----

|                                                     |   |   |    |   |   |   |
|----------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| December      31, (In thousands)                         |   | 2008   |    |   | 2007   |   |
| Assets                                                   |   |   |    |   |   |   |
| Cash      on deposit with subsidiaries                   |   | $      | 4,302   |   |   | $      | 14,974 |   |
| Investment      in subsidiaries                          |   |   | 206,843 |   |   |   | 197,422 |   |
| Other      assets                                        |   |   | 11,298  |   |   |   | 11,115 |   |
| Total      assets                                        |   | $      | 222,443 |   |   | $      | 223,511 |   |
| Liabilities                                              |   |   |    |   |   |   |   |   |
| Dividends      payable                                   |   | $      | 2,427   |   |   | $      | 2,436 |   |
| Subordinated      notes payable to unconsolidated trusts |   |   | 48,970  |   |   |   | 48,970 |   |
| Other      liabilities                                   |   |   | 2,750   |   |   |   | 3,614 |   |
| Total      liabilities                                   |   |   | 54,147  |   |   |   | 55,020 |   |
| Shareholders’      Equity                          |   |   |    |   |   |   |   |   |
| Common      stock                                        |   |   | 920     |   |   |   | 923 |   |
| Capital      surplus                                     |   |   | 48,222  |   |   |   | 48,176 |   |
| Retained      earnings                                   |   |   | 116,419 |   |   |   | 122,498 |   |
| Accumulated      other comprehensive income (loss )      |   |   | 2,735   |   |   |   | (3,106 | ) |
| Total      shareholders’ equity                    |   |   | 168,296 |   |   |   | 168,491 |   |
| Total      liabilities and shareholders’ equity    |   | $      | 222,443 |   |   | $      | 223,511 |   |

|                                                                                          |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Years      Ended December 31, (In thousands)                                                  |   | 2008   |   |   | 2007   |   |   | 2006   |   |
| Income                                                                                        |   |   |   |   |   |   |   |   |   |
| Dividends      from subsidiaries                                                              |   | $      | 9,566  |   |   | $      | 22,616 |   |   | $ | 9,086 |   |
| Interest      and other dividend income                                                       |   |   | 60     |   |   |   | 64     |   |   |   | 74 |   |
| Gain      on sale of discontinued operations                                                  |   |   |   |   |   |   |   |   |   |   | 9,442 |   |
| Other      noninterest income                                                                 |   |   | 3,217  |   |   |   | 3,170  |   |   |   | 2,732 |   |
| Total      income                                                                             |   |   | 12,843 |   |   |   | 25,850 |   |   |   | 21,334 |   |
| Expense                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense-subordinated notes payable to unconsolidatedtrusts                      |   |   | 2,865  |   |   |   | 2,394  |   |   |   | 1,747 |   |
| Interest      expense on other borrowed funds                                                 |   |   |   |   |   |   | 20     |   |   |   | 186 |   |
| Noninterest      expense                                                                      |   |   | 3,986  |   |   |   | 4,391  |   |   |   | 4,021 |   |
| Total      expense                                                                            |   |   | 6,851  |   |   |   | 6,805  |   |   |   | 5,954 |   |
| Income      before income tax benefit and equity in undistributed income of      subsidiaries |   |   | 5,992  |   |   |   | 19,045 |   |   |   | 15,380 |   |
| Income      tax (benefit) expense                                                             |   |   | (1,189 | )      |   |   | (1,375 | )      |   |   | 2,321 |   |
| Income      before equity in undistributed income of subsidiaries                             |   |   | 7,181  |   |   |   | 20,420 |   |   |   | 13,059 |   |
| Equity      in undistributed income of subsidiaries1                                          |   |   | (2,786 | )      |   |   | (4,793 | )      |   |   | 8,313 |   |
| Net      income                                                                               |   | $      | 4,395  |   |   | $      | 15,627 |   |   | $ | 21,372 |   |

----

|                                                                                        |   |   |    |   |   |   |    |   |   |
|---------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Years      Ended December 31, (In thousands)                                                |   | 2008   |    |   | 2007   |   |    | 2006   |   |
| Cash      Flows From Operating Activities                                                   |   |   |    |   |   |   |    |   |   |
| Net      income                                                                             |   | $      | 4,395   |   |   | $      | 15,627  |   |   | $ | 21,372 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |   |    |   |   |   |    |   |   |   |   |   |
| Gain      on sale of discontinued operations                                                |   |   |    |   |   |   |    |   |   |   | (9,442 | ) |
| Equity      in undistributed income of subsidiaries                                         |   |   | 2,786   |   |   |   | 4,793   |   |   |   | (8,313 | ) |
| Noncash      stock option expense                                                           |   |   | 5       |   |   |   | 13      |   |   |   | 52 |   |
| Change      in other assets and liabilities, net                                            |   |   | (891    | )      |   |   | (3,767  | )      |   |   | 3,925 |   |
| Deferred      income tax (benefit) expense                                                  |   |   | (67     | )      |   |   | 555     |   |   |   | (742 | ) |
| Net      cash provided by operating activities                                              |   |   | 6,228   |   |   |   | 17,221  |   |   |   | 6,852 |   |
| Cash      Flows From Investing Activities                                                   |   |   |    |   |   |   |    |   |   |   |   |   |
| Proceeds      from disposal of discontinued operations                                      |   |   |    |   |   |   |    |   |   |   | 19,875 |   |
| 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                                                     |   |   | (4,051  | )      |   |   |    |   |   |   |   |   |
| Investment      in bank subsidiaries                                                        |   |   | (2,362  | )      |   |   | (8,000  | )      |   |   | (629 | ) |
| Payment      of prior year accrued purchase price-Citizens Bancorp,Inc.                     |   |   |    |   |   |   |    |   |   |   | (21,846 | ) |
| Purchase      of Citizens National Bancshares, Inc.                                         |   |   |    |   |   |   |    |   |   |   | (15,041 | ) |
| Purchase      price refinements of previous acquisitions                                    |   |   |    |   |   |   | 50      |   |   |   | (29 | ) |
| Purchase      of company-owned life insurance                                               |   |   |    |   |   |   |    |   |   |   | (1,579 | ) |
| Net      cash used in investing activities                                                  |   |   | (6,413  | )      |   |   | (8,579  | )      |   |   | (19,249 | ) |
| Cash      Flows From Financing Activities                                                   |   |   |    |   |   |   |    |   |   |   |   |   |
| Proceeds      from short-term borrowings                                                    |   |   |    |   |   |   | 2,500   |   |   |   | 15,000 |   |
| Repayment      of short-term borrowings                                                     |   |   |    |   |   |   | (2,500  | )      |   |   | (15,000 | ) |
| Dividends      paid                                                                         |   |   | (9,720  | )      |   |   | (11,118 | )      |   |   | (9,553 | ) |
| Purchase      of common stock                                                               |   |   | (1,049  | )      |   |   | (18,649 | )      |   |   | (820 | ) |
| Shares      issued under Employee Stock Purchase Plan                                       |   |   | 252     |   |   |   | 254     |   |   |   | 223 |   |
| Stock      options exercised                                                                |   |   | 30      |   |   |   | 1,546   |   |   |   | 1,529 |   |
| Proceeds      from long-term debt issued to unconsolidated trusts                           |   |   |    |   |   |   | 23,196  |   |   |   |   |   |
| Net      cash used in financing activities                                                  |   |   | (10,487 | )      |   |   | (4,771  | )      |   |   | (8,621 | ) |
| Net      (decrease) increase in cash and cash equivalents                                   |   |   | (10,672 | )      |   |   | 3,871   |   |   |   | (21,018 | ) |
| Cash      and cash equivalents at beginning of year                                         |   |   | 14,974  |   |   |   | 11,103  |   |   |   | 32,121 |   |
| Cash      and cash equivalents at end of year                                               |   | $      | 4,302   |   |   | $      | 14,974  |   |   | $ | 11,103 |   |

| 21. | Quarterly      Financial Data (Unaudited) |
|-----|-------------------------------------------|

|                                                              |   |          |   |   |         |   |   |           |   |   |         |   |
|-------------------------------------------------------------------|--------|---------------|--------|--------|--------------|--------|--------|----------------|--------|--------|--------------|--------|
| (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      (loss) before income taxes                            |   |          | 5,660  |   |         |   | 6,667  |           |   |   | (9,750       | )      |   |   | 604 |   |
| Income      tax expense (benefit)                                 |   |          | 1,284  |   |         |   | 1,767  |           |   |   | (2,865       | )      |   |   | (1,400 | ) |
| Net      income (loss)                                            |   | $             | 4,376  |   |         | $      | 4,900  |           |   | $      | (6,885       | )      |   | $ | 2,004 |   |
| Net      income (loss) 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 |   |

----

|                                                     |   |          |   |   |         |   |   |          |   |   |          |   |
|----------------------------------------------------------|--------|---------------|--------|--------|--------------|--------|--------|---------------|--------|--------|---------------|--------|
| (In      thousands, except per share data)               |   |          |   |   |         |   |   |          |   |   |          |   |
| Quarters      Ended 2007                                 |   | March      31 |   |   | June      30 |   |   | Sept.      30 |   |   | Dec.      311 |   |
| Interest      income                                     |   | $             | 27,402 |   |         | $      | 28,511 |          |   | $      | 28,494        |   |   | $ | 29,850 |   |
| Interest      expense                                    |   |          | 13,307 |   |         |   | 13,661 |          |   |   | 13,872        |   |   |   | 15,199 |   |
| Net      interest income                                 |   |          | 14,095 |   |         |   | 14,850 |          |   |   | 14,622        |   |   |   | 14,651 |   |
| Provision      for loan losses                           |   |          | (496   | )      |         |   | 330    |          |   |   | 595           |   |   |   | 3,209 |   |
| Net      interest income after provision for loan losses |   |          | 14,591 |   |         |   | 14,520 |          |   |   | 14,027        |   |   |   | 11,442 |   |
| Noninterest      income                                  |   |          | 5,667  |   |         |   | 6,108  |          |   |   | 6,119         |   |   |   | 6,263 |   |
| Noninterest      expense                                 |   |          | 14,338 |   |         |   | 14,309 |          |   |   | 14,356        |   |   |   | 15,820 |   |
| Income      before income taxes                          |   |          | 5,920  |   |         |   | 6,319  |          |   |   | 5,790         |   |   |   | 1,885 |   |
| Income      tax expense                                  |   |          | 1,310  |   |         |   | 1,407  |          |   |   | 1,633         |   |   |   | (63 | ) |
| Net      income                                          |   | $             | 4,610  |   |         | $      | 4,912  |          |   | $      | 4,157         |   |   | $ | 1,948 |   |
| Net      income per common share, basic and diluted      |   |          | .58    |   |         |   | .62    |          |   |   | .54           |   |   |   | .26 |   |
| Weighted      average shares outstanding, basic          |   |          | 7,893  |   |         |   | 7,884  |          |   |   | 7,672         |   |   |   | 7,382 |   |
| Weighted      average shares outstanding, diluted        |   |          | 7,908  |   |         |   | 7,892  |          |   |   | 7,672         |   |   |   | 7,382 |   |

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

|                                                |   |        |   |   |                    |   |
|-----------------------------------------------------|--------|-------------|--------|--------|-------------------------|--------|
|                                                |   | 2008        |   |   | 2007                    |   |
| Amortized      Intangible Assets(In      thousands) |   | GrossAmount |   |   | AccumulatedAmortization |   |   | GrossAmount |   |   | AccumulatedAmortization |   |
| Core      deposit intangibles                       |   | $           | 12,765 |   |                    | $      | 7,361 |   |   | $ | 12,765 |   |   | $ | 5,274 |   |
| Other      customer relationship intangibles        |   |        | 3,689  |   |                    |   | 2,152 |   |   |   | 3,689 |   |   |   | 1,637 |   |
| Total                                               |   | $           | 16,454 |   |                    | $      | 9,513 |   |   | $ | 16,454 |   |   | $ | 6,911 |   |

|                |   |   |   |
|---------------------|--------|--------|--------|
| (In      thousands) |   | Amount |   |
| 2009                |   | $      | 1,952  |   |
| 2010                |   |   | 1,437  |   |
| 2011                |   |   | 1,143  |   |
| 2012                |   |   | 1,014  |   |
| 2013                |   |   | 540    |   |

----

| 23. | Subsequent      Event |
|-----|-----------------------|

Item 9. Changes in and Disagreements withAccountants on Accounting and Financial Disclosure

Item 9A. Controls andProcedures

|   | · | 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. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

audit report 

Item9B.  Other Information

PART III

Item 10. Directors, Executive Officers and CorporateGovernance

|                    |   | Positions      and                | Years      of Service |
|-------------------------|--------|-----------------------------------|-----------------------|
|                    |   | Offices      With                 | With      the         |
| Executive      Officer1 | Age    | the      Registrant               | Registrant            |
|                    |   |                              |                  |
| G.      Anthony Busseni | 60     | President      and CEO, Director2 | 24*                   |
|                    |   |                              |                  |
| Allison      Razor      | 45     | Senior      Vice President3       | 22*                   |

| * | 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), The Lawrenceburg Bank      and Trust, First Citizens, Citizens Northern, FCB Services, Farmers      Insurance (Chairman), Leasing One (Chairman), Kentucky General (Chairman),      FFKT Insurance, Kentucky Home Life Insurance Company, 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. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Also      a director of Farmers Bank, FCB Services, and an administrative trustee of      Farmers Capital Bank Trust I, Farmers Capital Bank Trust II, and Farmers      Capital Bank Trust III. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 11. ExecutiveCompensation

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

----

Item 13. Certain Relationships and RelatedTransactions

Item 14.  Principal Accountant Fees andServices

Item 15. Exhibits, Financial StatementSchedules

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

The following consolidated financial statements and report ofindependent registered accounting firm of the Company is included in Part II,Item 8 on pages 43 through 78:

Report of Independent Registered Public AccountingFirm

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of ComprehensiveIncome

Consolidated Statements of Changes in Shareholders’Equity

Consolidated Statements of Cash Flows

Notes to Consolidated FinancialStatements

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

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

| 3.1 | Amended      and Restated Articles of Incorporation of the Registrant (incorporated by      reference to Quarterly Report on Form 10-Q for the quarterly period ended      June 30, 2006).                                                                                                                                                                                                                          |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2 | Articles      of Amendment to Second Amended and Restated Articles of Incorporation      (incorporated by reference to Current Report on Form 8-K dated January 13,      2009)                                                                                                                                                                                                                                      |
| 3.3 | Amended      and Restated Bylaws of the Registrant (incorporated by reference to Annual      Report of Form 10-K for the fiscal year ended December 31,      1997).                                                                                                                                                                                                                                                 |
| 3.4 | Amendments      to Bylaws of the Registrant (incorporated by reference to Quarterly Report      of Form 10-Q for the quarterly period ended March 31,    2003).                                                                                                                                                                                                                                                     |
| 4   | Articles      of Incorporation and Bylaws of the Registrant (incorporated by reference      to Quarterly Report on Form 10-Q for the quarterly period ended June 30,      2006, the Annual Report on Form 10-K for the fiscal year ended December      31, 1997, 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). |
| 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.* |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 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.*                                                                                                                                                                                                                                                                                   |
| 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 Quarterly Report of 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 of2002                                                                                                                                                                                                                                                                                                                                |

|   | *      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. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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SIGNATURES

|   | FARMERS      CAPITAL BANK CORPORATION |                                       |
|--------|---------------------------------------|--------------------------------------------|
|   |                                  |                                       |   |
|   |                                  |                                       |   |
|   | By:                                   |  /s/      G. Anthony Busseni     |   |
|   |                                  | G.      Anthony Busseni                    |   |
|   |                                  | President      and Chief Executive Officer |   |
|   |                                  |                                       |   |
|   |                                  |                                       |   |
|   | Date:                                 |        March 11, 2009                 |   |

| /s/      G. Anthony Busseni         | President,      Chief Executive Officer |        March 11, 2009    |
|-------------------------------------|-----------------------------------------|-------------------------------|
| G.      Anthony Busseni             | and      Director (principal executive  |                          |
|                                | officer      of the Registrant)         |                          |
|                                |                                    |                          |
| /s/      Frank W. Sower, Jr.        | Chairman                                |        February 24, 2009 |
| Frank      W. Sower, Jr.            |                                    |                          |
|                                |                                    |                          |
| /s/      Ben F. Brown               | Director                                |        February 27, 2009 |
| Ben      F. Brown                   |                                    |                          |
|                                |                                    |                          |
| /s/      Lloyd C. Hillard, Jr.      | Director                                |        February 24, 2009 |
| Lloyd      C. Hillard, Jr.          |                                    |                          |
|                                |                                    |                          |
|                                | Director                                |                          |
| R.      Terry Bennett               |                                    |                          |
|                                |                                    |                          |
| /s/      Shelley S. Sweeney         | Director                                |        February 26, 2009 |
| Shelley      S. Sweeney             |                                    |                          |
|                                |                                    |                          |
| /s/       Donald J. Mullineaux | Director                                |        February 27, 2009 |
| Dr.      Donald J. Mullineaux       |                                    |                          |
|                                |                                    |                          |
| /s/      Donald Saelinger      | Director                                |        February 24, 2009 |
| Dr.      Donald A. Saelinger        |                                    |                          |
|                                |                                    |                          |
| /s/      J D. Sutterlin             | Director                                |        February 24, 2009 |
| Dr.      John D. Sutterlin          |                                    |                          |
|                                |                                    |                          |
| /s/      Marvin E. Strong, Jr.      | Director                                |        February 25, 2009 |
| Marvin      E. Strong, Jr.          |                                    |                          |
|                                |                                    |                          |
| /s/      J. Barry Banker            | Director                                |        February 24, 2009 |
| J.      Barry Banker                |                                    |                          |
|                                |                                    |                          |
| /s/      Robert Roach, Jr.          | Director                                |        February 26, 2009 |
| Robert      Roach, Jr.              |                                    |                          |
|                                |                                    |                          |
| /s/      C. Douglas Carpenter       | Senior      Vice President, Secretary   |        March 11, 2009    |
| C.      Douglas Carpenter           | and      CFO (principal financial and   |                          |
|                                | accounting      officer)                |                          |

----

INDEX OF EXHIBITS

| Exhibit |                                                                                                                              | Page   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------|--------|
|    |                                                                                                                              |   |
|    |                                                                                                                              |   |
| 21      | Subsidiaries of the Registrant                                                                                                    | 84     |
|    |                                                                                                                              |   |
| 23      | Consent of Independent Registered Public      Accounting Firm                                                                     | 85     |
|    |                                                                                                                              |   |
| 31.1    | CEO Certification Pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002                                                  | 86     |
|    |                                                                                                                              |   |
| 31.2    | CFO Certification Pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002                                                  | 87     |
|    |                                                                                                                              |   |
| 32      | Certifications      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant      to Section 906 of the Sarbanes-Oxley Act of 2002 | 88     |

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