Promissory Note between Premier Financial and First Guaranty Bank


    
      EXHIBIT
        10.7
PROMISSORY NOTE

    


    
      	
              Principal

            	
              Loan
                Date

            	
              Maturity

            	
              Loan
                No

            	
              Call
                / Coll

            	
              Account

            	
              Officer

            	
              Initials

            
	
              $7,000,000.00

            	
              01-31-2006

            	
              09-28-2017

            	
              25791389

            	
              220
                / 54

            	
               

            	
              MFL

            	
               

            
	
              References
                in the shaded area are for Lender’s use only and do not limit the
                applicability of this document to any particular loan or
                item.

              Any
                item above containing “ * * * “ has been omitted due to text length
                limitations

            


    

    


    
      	
              Grantor:

            	
              PREMIER
                FINANCIAL BANCORP, INC. (TIN:

              61-1206757)

              2883
                FIFTH AVE.

              HUNTINGTON,
                WV 25702

            	 	
              Lender:

            	
              FIRST
                GUARANTY BANK

              First
                Guaranty Square Banking Center - Commercial

              Lending

              400
                East Thomas Street

              P
                0
                Box 2009

              Hammond,
                LA 70404-2009

              (985)
                345-7685

            


    

    


    
      	
              Principal
                Amount: $7,000,000.00

            	
              Initial
                Rate: 7.250%

            	
              Date
                of Note: January 31, 2006

            


    

     

    PROMISE
      TO PAY. PREMIER FINANCIAL BANCORP, INC. ("Borrower") promises to pay to the
      order of FIRST GUARANTY BANK ("Lender"), in lawful money of the United States
      of
      America the sum of Seven Million & 00/100 Dollars (U.S. $7,000,000.00),
      together with simple interest assessed on a variable rate basis at the rate
      per
      annum equal to the index provided herein, as the index under this Note may
      be
      adjusted from time to time, one or more times, with interest being assessed
      on
      the unpaid principal balance of this Note as outstanding from time to time,
      commencing on January 31, 2006 and continuing until this Note Is paid in
      full.

     

    PAYMENT.
      Subject to any payment changes resulting from changes in the Index, Borrower
      will pay this loan in 139 principal payments of $50,000.00 each and one final
      principal and Interest payment of $50,312.15. Borrower's first principal payment
      is due February 28, 2006, with all subsequent principal payments are due on
      the
      same day of each month after that. In addition, Borrower will pay regular
      monthly payments of all accrued unpaid Interest due as of each payment date,
      beginning February 28. 2006, with all subsequent interest payments to be due
      on
      the same day of each month after that. Borrower's final payment due September
      28, 2017, will be for all principal and all accrued interest not yet paid.
      Unless otherwise agreed or required by applicable law, payments will be applied
      first to any accrued unpaid interest; then to principal; then to any unpaid
      collection costs; and then to any late charges. The annual interest rate for
      this Note is computed on a 365/360 basis; that is, by applying the ratio of
      the
      annual interest rate over a year of 360 days, multiplied by the outstanding
      principal balance, multiplied by the actual number of days the principal balance
      is outstanding, Borrower will pay Lender at Lender's address shown above or
      at
      such other place as Lender may designate in writing.

     

    VARIABLE
      INTEREST RATE. The
      interest rate on this Note is subject to change from time to time based on
      changes in an independent Index which is the Prime rate as published in the
      Money Section of the Wall Street Journal. When a range of rates has been
      published, the higher of the rates will be used. (the "Index"), The Index is
      not
      necessarily the lowest rate charged by Lender on its loans. If the Index becomes
      unavailable during the term of this loan, Lender may designate a substitute
      index after notice to Borrower. Lender will tell Borrower the current Index
      rate
      upon Borrower's request. The interest rate change will not occur more often
      than
      each day. Borrower understands that Lender may make loans based on other rates
      as well. The
      Index currently is 7.250% per annum. The interest rate to be applied to the
      unpaid principal balance of this Note will be at a rate equal to the Index,
      resulting in an Initial rate of 7.250% per annum.
      Under
      no circumstances will the interest rate on this Note be more than the maximum
      rate allowed by applicable law.

     

    PREPAYMENT.
      Other
      than Borrower's obligation to pay any prepayment penalty, Borrower may prepay
      this Note in full at any time by paying the then unpaid principal balance of
      this Note, plus accrued simple Interest and any unpaid late charges through
      date
      of prepayment. If Borrower prepays this Note in full, or if Lender accelerates
      payment, Borrower understands that, unless otherwise required by law, any
      prepaid fees or charges will not be subject to rebate and will be earned by
      Lender at the time this Note is signed. Early payments will not, unless agreed
      to by Lender in writing, relieve Borrower of Borrower's obligation to continue
      to make payments under the payment schedule. Rather, early payments will reduce
      the principal balance due and may result in Borrower's making fewer payments.
      Borrower agrees not to send Lender payments marked "paid in full", "without
      recourse", or similar language. If Borrower sends such a payment, Lender may
      accept it without losing any of Lender's rights under this Note, and Borrower
      will remain obligated to pay any further amount owed to Lender. All written
      communications concerning disputed amounts, including any check or other payment
      instrument that indicates that the payment constitutes “payment in full" of the
      amount owed or that is tendered with other conditions or limitations or as
      full
      satisfaction of a disputed amount must be mailed or delivered to: FIRST GUARANTY
      BANK, 400 East Thomas Street, P. 0. Box 2009 Hammond, LA
      70404-2009.

     

    LATE
      CHARGE.
      If
      Borrower fails to pay any payment under this Note in full within 10 days of
      when
      due, Borrower agrees to pay Lender a late payment fee in an amount equal to
      5.000% of the unpaid portion of the regularly scheduled payment or $25.00,
      whichever is greater with a maximum of $250.00. Late charges will not be
      assessed following declaration of default and acceleration of the maturity
      of
      this Note.

     

    INTEREST
      AFTER DEFAULT.
      If
      Lender declares this Note to be in default, Lender has the right prospectively
      to adjust and fix the simple interest rate under this Note until this Note
      is
      paid in full, as follows: (A) If the original principal amount of this Note
      is
      $250.000 or less, the fixed default interest rate shall be equal to eighteen
      (18%) percent per annum, or three (3%) percent per annum in excess of the
      interest rate under this Note, whichever is greater. 

     

    DEFAULT.
      Each of
      the following shall constitute an event of default ("Event of Default”) under
      this Note:

     

    Default
      Under Loan Agreement.
      If an
      event of default occurs or exists under the terms of Borrower's Loan Agreement
      in favor of Lender.

     

    Payment
      Default.
      Borrower fails to make any payment when due under this Note.

     

    Default
      Under Security Agreements.
      Should
      Borrower or any guarantor violate, or fail to comply fully with any of the
      terms
      and conditions of, or default under any security right, instrument, document,
      or
      agreement directly or indirectly securing repayment of this Note.

     

    Other
      Defaults in Favor of Lender. Should
      Borrower or any guarantor of this Note default under any other loan, extension
      of credit, security right, instrument, document, or agreement, or obligation
      in
      favor of Lender.

     

    Default
      in Favor of Third Parties.
      Should
      Borrower or any guarantor default under any loan, extension of credit, security
      agreement, purchase or sales agreement, or any other agreement, in favor of
      any
      other creditor or person that may affect any property or other collateral
      directly or indirectly securing repayment of this Note.

     

    Insolvency.
      Should
      the suspension, failure or insolvency, however evidenced, of Borrower or any
      Guarantor of this Note occur or exist.

     

    Death
      or Interdiction.
      Should
      any guarantor of this Note die or be interdicted.

     

    Readjustment
      of Indebtedness.
      Should
      proceedings for readjustment of indebtedness, reorganization, bankruptcy,
      composition or extension under any insolvency law be brought by or against
      Borrower or any guarantor.

     

    Assignment
      for Benefit of Creditors.
      Should
      Borrower or any guarantor file proceedings for a respite or make a general
      assignment for the benefit of creditors.

     

    Receivership.
      Should
      a receiver of all or any part of Borrower's property, or the property of any
      guarantor, be applied for or appointed. Dissolution
      Proceedings.
      Proceedings for the dissolution or appointment of a liquidator of Borrower
      or
      any guarantor are commenced.

     

    False
      Statements.
      Any
      warranty, representation or statement made or furnished to Lender by Borrower
      or
      on Borrower's behalf related documents is false or misleading in any material
      respect, either now or at the time made or furnished or becomes false or
      misleading at any time thereafter.

     

    Material
      Adverse Change.
      Should
      any material adverse change occur in the financial condition of Borrower or
      any
      guarantor of this Note or should any material discrepancy exist between the
      financial statements submitted by Borrower or any guarantor and the actual
      financial condition of Borrower or such guarantor.

     

    Insecurity.
      Lender
      in good faith believes itself Insecure with regard
      to repayment of this Note. 


    
       

      
        
          

        

      

       

    

     

    
      	
              PROMISSORY
                NOTE

            
	
              Loan
                No: 25791389

            	
              (Continued)

            	
              Page
                2

            


    

     

    LENDER'S
      RIGHTS UPON DEFAULT.
      Should
      any one or more default events occur or exist under this Note as provided above,
      Lender shall have the right, at Lender's sole option, to declare formally this
      Note to be in default and to accelerate the maturity and insist upon immediate
      payment in full of the unpaid principal balance then outstanding under this
      Note, plus accrued interest, together with reasonable attorneys' fees, costs,
      expenses and other fees and charges as provided herein. Lender shall have the
      further right, again at Lender's sole option, to declare formal default and
      to
      accelerate the maturity and to insist upon immediate payment in full of each
      and
      every other loan, extension of credit, debt, liability and/or obligation of
      every nature and kind that Borrower may then owe to Lender, whether direct
      or
      indirect or by way of assignment, and whether absolute or contingent, liquidated
      or unliquidated, voluntary or involuntary, determined or undetermined, secured
      or unsecured, whether Borrower is obligated alone or with others on a "solidary"
      or "joint and several" basis, as
      a
      principal obligor or otherwise, all without further notice or demand, unless
      Lender shall otherwise elect. 

     

    GOVERNING
      LAW. This Note will be governed by federal law applicable to Lender and, to
      the
      extent not preempted by federal law, the laws of the State of Louisiana without
      regard to its conflicts of law provisions. This Note has been accepted by Lender
      In the State of Louisiana. 

     

    NSF
      CHARGE.
      In the
      event that Borrower makes any payment under this Note by check or electronic
      payment and Borrower's check or electronic payment is returned to Lender unpaid
      due to non-sufficient funds in Borrower's deposit account or otherwise, Borrower
      agrees to pay Lender an NSF charge in an amount of $25.00 or 5.000% of the
      dishonored item (whether check or electronic payment), whichever is
      less.

     

    DEPOSIT
      ACCOUNTS.
      As
      collateral security for repayment of this Note and all renewals and extensions,
      as well as to secure any and all other loans, notes, indebtedness and
      obligations that Borrower may now and in the future owe to Lender or incur
      in
      Lender's favor, whether direct or indirect, absolute or contingent, due or
      to
      become due, of any nature and kind whatsoever (with the exception of any
      indebtedness under a consumer credit card account, and to the extent permitted
      by taw. Borrower is granting Lender a continuing security interest in any and
      all funds that Borrower may now and in the future have on deposit with Lender
      or
      in certificates of deposit or other deposit accounts as to which Borrower is
      an
      account holder (with the exception of IRA, pension, and other tax-deferred
      deposits). Borrower further agrees that, to the extent permitted by law, Lender
      may at any time apply any funds that Borrower may have on deposit with Lender
      or
      in certificates of deposit or other deposit accounts as to which Borrower is
      an
      account holder against the unpaid balance of this Note and any and all other
      present and future indebtedness and obligations that Borrower may then owe
      to
      Lender, in principal, interest, fees, costs, expenses, and reasonable attorneys'
      fees.

     

    COLLATERAL.
      Borrower acknowledges this Note is secured by COMMERCIAL SECURITY AGREEMENT
      DATED 01-31-2006 (STOCK). Collateral securing other loans with Lender may also
      secure this Note as the result of cross-collateralization.

     

    FINANCIAL
      STATEMENTS.
      Borrower agrees to provide Lender with such financial statements and other
      related information at
      such
      frequencies and In such detail as Lender may reasonably request.

     

    MODIFICATIONS
      TO THE PROMISSORY NOTE.
      1. In
      the section entitled "INTEREST AFTER DEFAULT" Item (B) Is revised to read as
      follows: (B) If the original principal amount of this Note is more than
      $250,000, the fixed default interest rate shall be equal to twelve (12%) percent
      per annum, or three (3%) percent per annum in excess of the interest rate under
      this Note at the time of default, whichever is greater. 2. In the section
      "ATTORNEYS' FEES; EXPENSES" this paragraph shall read as follows: "If Lender
      refers this Note to an attorney for collection, or files suit against Borrower
      to collect this Note, or if Borrower files for bankruptcy or other relief from
      creditors, Borrower agrees to pay Lender's reasonable attorneys' fees in an
      amount not exceeding 12.000% of the principal balance due on the
      loan.

     

    WAIVERS.
      Borrower and each guarantor of this Note hereby waive demand, presentment for
      payment, protest, notice of protest and notice of nonpayment, and all pleas
      of
      division and discussion, and severally agree that their obligations and
      liabilities to Lender hereunder shall be on a "solidary" or "joint and several"
      basis. Borrower and each guarantor further severally agree that discharge or
      release of any party who is or may be liable to Lender for the indebtedness
      represented hereby, or the release of any collateral directly or indirectly
      securing repayment hereof, shall not have the effect of releasing any other
      party or parties, who shall remain liable to Lender, or of releasing any other
      collateral that is not expressly released by Lender. Borrower and each guarantor
      additionally agree that Lender's acceptance of payment other than in accordance
      with the terms of this Note, or Lender's subsequent agreement to extend or
      modify such repayment terms, or Lender's failure or delay in exercising any
      rights or remedies granted to Lender, shall likewise not have the effect of
      releasing Borrower or any other party or parties from their respective
      obligations to Lender, or of releasing any collateral that directly or
      indirectly secures repayment hereof. In addition, any failure or delay on the
      part of Lender to exercise any of the rights and remedies granted to Lender
      shall not have the effect of waiving any of Lender's rights and remedies. Any
      partial exercise of any rights and/or remedies granted to Lender shall
      furthermore not be construed as a waiver of any other rights and remedies;
      it
      being Borrower's intent and agreement that Lender's rights and remedies shall
      be
      cumulative in nature. Borrower and each guarantor further agree that, should
      any
      default event occur or exist under this Note, any waiver or forbearance on
      the
      part of Lender to pursue the rights and remedies available to Lender, shall
      be
      binding upon Lender only to the extent that Lender's specifically agrees to
      any
      such waiver or forbearance in writing. A waiver or forbearance on the part
      of
      Lender as to one default event shall not be construed as a waiver or forbearance
      as to any other default. Borrower and each guarantor of this Note further agree
      that any late charges provided for under this Note will not be charges for
      deferral of time for payment and will not and are not intended to compensate
      Lender's for a grace or cure period, and no such deferral, grace or cure period
      has or will be granted to Borrower in return for the imposition of any late
      charge. Borrower recognizes that Borrower's failure to make timely payment
      of
      amounts due under this Note will result in damages to Lender, including but
      not
      limited to Lender's loss of the use of amounts due, and Borrower agrees that
      any
      late charges imposed by Lender hereunder will represent reasonable compensation
      to Lender for such damages. Failure to pay in full any installment or payment
      timely when due under this Note, whether or not a late charge is assessed,
      will
      remain and shall constitute an Event of Default hereunder.

     

    SUCCESSORS
      AND ASSIGNS LIABLE.
      Borrower's and each guarantor's obligations and agreements under this Note
      shall
      be binding upon Borrower's and each guarantor's respective successors, heirs,
      legatees, devisees, administrators, executors and assigns. The rights and
      remedies granted to Lender under this Note shall inure to the benefit of
      Lender's successors and assigns, as well as to any subsequent holder or holders
      of this Note.

     

    CAPTION
      HEADINGS.
      Caption headings in this Note are
      for
      convenience purposes only and are not to be used to
      interpret or define the provisions of this Note.

     

    SEVERABILITY.
      If any
      provision of this Note is held to be invalid, illegal or unenforceable by any
      court, that provision shall be deleted from this Note and the balance of this
      Note shall be interpreted as if the deleted provision never
      existed.

     

    SUCCESSOR
      INTERESTS.
      The
      terms of this Note shall be binding upon Borrower, and upon Borrower's
      successors, heirs, legatees, devisees, administrators, executors and assigns,
      and shall inure to the benefit of Lender and its successors and
      assigns.

     

    APPLICABLE
      LENDING LAW.
      To the
      extent not preempted by federal law, this business or commercial loan is
      being made
      under the terms and provisions
      of La. R.S. 9:3509, et seq.

     

    PRIOR
      TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS
      NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.

     

    BORROWER:

     

    PREMIER
      FINANCIAL BANCORP, INC.

    By: /S/
      Robert W. Walker            

         
      ROBERT W. WALKER, President & CEO of PREMIER FINANCIAL BANCORP.
      INC.