**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION **

**Washington,      D.C. 20549 **

**FORM      10-QSB **

**[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) **

**OF      THE SECURITIES EXCHANGE ACT OF 1934 **

**OR      **

**[      **
**]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) **

**OF      THE SECURITIES EXCHANGE ACT OF 1934 **

**First      Security Bancorp, Inc. **

|   |                                                                                                                        |                                                                        |   |
|--------|-----------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------|--------|
|   | Kentucky(State                of jurisdiction of incorporation or organization)                                             | 61-1364206(I.R.S.                EmployerIdentification                No.) |   |
|   |  318                East Main Street, Lexington, Kentucky 40507(Address                of principal executive offices) |                                                                        |
|   |  (859)                367-3700(Issuer’s                telephone number)                                         |                                                                        |

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**PART      I - FINANCIAL INFORMATION**

**Item      1. Financial Statements**

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|                                                                                                                                                                                                                                       |   | (Unaudited)September                30,2005 |    |  December                31,2004 |   | (Unaudited)September                30,2004 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|---------|---------------------------------------|--------|---------------------------------------------|--------|
|                                                                                                                                                                                                                                       |   |                                        |    |                                  |   |                                        |   |
| ASSETS                                                                                                                                                                                                                                     |   |                                        |    |                                  |   |                                        |   |
| Cash                and due from banks                                                                                                                                                                                                     |   | $                                           | 4,103   |                                  | $      | 4,446                                       |   | $ | 4,753 |   |
| Federal                funds sold                                                                                                                                                                                                          |   |                                        | 4,304   |                                  |   | 18,568                                      |   |   | 7,216 |   |
| Total                cash and cash equivalent                                                                                                                                                                                              |   |                                        | 8,407   |                                  |   | 23,014                                      |   |   | 11,969 |   |
| Securities                available-for-sale                                                                                                                                                                                               |   |                                        | 36,800  |                                  |   | 33,748                                      |   |   | 36,265 |   |
| Loans                held for sale                                                                                                                                                                                                         |   |                                        | -       |                                  |   | -                                           |   |   | 853 |   |
| Loans,                net of allowance of $1,462, $1,720 and $1,796                                                                                                                                                                        |   |                                        | 148,505 |                                  |   | 150,856                                     |   |   | 154,833 |   |
| Federal                Home Loan Bank stock                                                                                                                                                                                                |   |                                        | 835     |                                  |   | 806                                         |   |   | 798 |   |
| Foreclosed                assets                                                                                                                                                                                                           |   |                                        | 124     |                                  |   | 110                                         |   |   | 110 |   |
| Premises                and equipment, net                                                                                                                                                                                                 |   |                                        | 6,979   |                                  |   | 7,141                                       |   |   | 7,245 |   |
| Accrued                interest receivable and other assets                                                                                                                                                                                |   |                                        | 1,865   |                                  |   | 1,759                                       |   |   | 1,937 |   |
|                                                                                                                                                                                                                                       |   |                                        |    |                                  |   |                                        |   |   |   |   |
|                                                                                                                                                                                                                                       |   | $                                           | 203,515 |                                  | $      | 217,434                                     |   | $ | 214,010 |   |
|                                                                                                                                                                                                                                       |   |                                        |    |                                  |   |                                        |   |   |   |   |
|                                                                                                                                                                                                                                       |   |                                        |    |                                  |   |                                        |   |   |   |   |
| LIABILITIES                AND SHAREHOLDERS’ EQUITY                                                                                                                                                                                  |   |                                        |    |                                  |   |                                        |   |   |   |   |
| Liabilities                                                                                                                                                                                                                                |   |                                        |    |                                  |   |                                        |   |   |   |   |
| Deposits                                                                                                                                                                                                                                   |   |                                        |    |                                  |   |                                        |   |   |   |   |
| Noninterest                bearing                                                                                                                                                                                                         |   | $                                           | 20,655  |                                  | $      | 22,670                                      |   | $ | 23,002 |   |
| Interest                bearing                                                                                                                                                                                                            |   |                                        | 148,388 |                                  |   | 156,192                                     |   |   | 147,644 |   |
| Total                deposits                                                                                                                                                                                                              |   |                                        | 169,043 |                                  |   | 178,862                                     |   |   | 170,646 |   |
| Federal                funds purchased and repurchase agreements                                                                                                                                                                           |   |                                        | 3,518   |                                  |   | 5,857                                       |   |   | 8,263 |   |
| Note                Payable                                                                                                                                                                                                                |   |                                        | 3,000   |                                  |   | 3,000                                       |   |   | 5,000 |   |
| Federal                Home Loan Bank advances                                                                                                                                                                                             |   |                                        | 5,330   |                                  |   | 8,246                                       |   |   | 8,821 |   |
| Accrued                interest payable and other liabilities                                                                                                                                                                              |   |                                        | 1,115   |                                  |   | 861                                         |   |   | 942 |   |
| Total                liabilities                                                                                                                                                                                                           |   |                                        | 182,006 |                                  |   | 196,826                                     |   |   | 193,672 |   |
|                                                                                                                                                                                                                                       |   |                                        |    |                                  |   |                                        |   |   |   |   |
| Commitments                and contingent liabilities                                                                                                                                                                                      |   |                                        |    |                                  |   |                                        |   |   |   |   |
|                                                                                                                                                                                                                                       |   |                                        |    |                                  |   |                                        |   |   |   |   |
| Shareholders’                equity                                                                                                                                                                                                  |   |                                        |    |                                  |   |                                        |   |   |   |   |
| Common                stock, no par value: 5,000,000 shares authorized; September 30, 2005                - 1,560,290 shares issued, December 31, 2004 and September                30, 2004 -                1,558,690 shares issued |   |                                        | 8,938   |                                  |   | 8,926                                       |   |   | 8,926 |   |
| Additional                paid-in capital                                                                                                                                                                                                  |   |                                        | 8,956   |                                  |   | 8,944                                       |   |   | 8,926 |   |
| Retained                earnings                                                                                                                                                                                                           |   |                                        | 3,943   |                                  |   | 2,736                                       |   |   | 2,455 |   |
| Accumulated                other comprehensive income (loss)                                                                                                                                                                               |   |                                        | (328    | )                                     |   | 2                                           |   |   | 31 |   |
| Total                shareholders’ equity                                                                                                                                                                                            |   |                                        | 21,509  |                                  |   | 20,608                                      |   |   | 20,338 |   |
|                                                                                                                                                                                                                                       |   | $                                           | 203,515 |                                  | $      | 217,434                                     |   | $ | 214,010 |   |

----

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|                                                                   |   |  Three                    Months EndedSeptember                    30 |   |  Nine                    Months EndedSeptember                    30 |   |
|------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
|                                                                   |   | 2005                                                                       |   | 2004                                                                      |   | 2005 |   | 2004 |   |
| Interest                    Income                                     |   |                                                                       |   |                                                                      |   |   |   |   |   |
| Loans,                    excluding fees                               |   | $                                                                          | 2,636  |                                                                      | $      | 2,232 |   | $ | 7,552 |   | $ | 6,855 |   |
| Taxable                    securities                                  |   |                                                                       | 373    |                                                                      |   | 382 |   |   | 1,098 |   |   | 1,077 |   |
| Tax                    exempt securities                               |   |                                                                       | 22     |                                                                      |   | 7 |   |   | 41 |   |   | 31 |   |
| Federal                    funds sold and other                        |   |                                                                       | 36     |                                                                      |   | 18 |   |   | 148 |   |   | 94 |   |
|                                                                   |   |                                                                       | 3,067  |                                                                      |   | 2,639 |   |   | 8,839 |   |   | 8,057 |   |
| Interest                    expense                                    |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Deposits                                                               |   |                                                                       | 1,125  |                                                                      |   | 883 |   |   | 3,146 |   |   | 2,845 |   |
| Federal                    funds purchased and repurchase agreements   |   |                                                                       | 20     |                                                                      |   | 19 |   |   | 56 |   |   | 45 |   |
| Federal                    Home Loan Bank advances                     |   |                                                                       | 62     |                                                                      |   | 98 |   |   | 231 |   |   | 339 |   |
| Note                    payable and other debt                         |   |                                                                       | 47     |                                                                      |   | 54 |   |   | 128 |   |   | 147 |   |
|                                                                   |   |                                                                       | 1,254  |                                                                      |   | 1,054 |   |   | 3,561 |   |   | 3,376 |   |
|                                                                   |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Net                    interest income                                 |   |                                                                       | 1,813  |                                                                      |   | 1,585 |   |   | 5,278 |   |   | 4,681 |   |
|                                                                   |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Provision                    for loan losses                           |   |                                                                       | -      |                                                                      |   | 222 |   |   | - |   |   | 297 |   |
|                                                                   |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Net                    interest income after provision for loan losses |   |                                                                       | 1,813  |                                                                      |   | 1,363 |   |   | 5,278 |   |   | 4,384 |   |
|                                                                   |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Noninterest                    income                                  |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Service                    charges on deposit accounts                 |   |                                                                       | 155    |                                                                      |   | 171 |   |   | 521 |   |   | 484 |   |
| Net                    gains on sales of loans                         |   |                                                                       | 3      |                                                                      |   | 96 |   |   | 6 |   |   | 332 |   |
| Net                    gains on sales of securities                    |   |                                                                       | -      |                                                                      |   | 50 |   |   | - |   |   | 293 |   |
| Other                                                                  |   |                                                                       | 57     |                                                                      |   | 44 |   |   | 121 |   |   | 163 |   |
|                                                                   |   |                                                                       | 215    |                                                                      |   | 361 |   |   | 648 |   |   | 1,272 |   |
| Noninterest                    expense                                 |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Salaries                    and employee benefits                      |   |                                                                       | 602    |                                                                      |   | 753 |   |   | 1,821 |   |   | 2,355 |   |
| Occupancy                    and equipment                             |   |                                                                       | 261    |                                                                      |   | 275 |   |   | 774 |   |   | 871 |   |
| Data                    processing                                     |   |                                                                       | 147    |                                                                      |   | 137 |   |   | 418 |   |   | 406 |   |
| Legal                    and professional fees                         |   |                                                                       | 143    |                                                                      |   | 138 |   |   | 267 |   |   | 307 |   |
| Advertising                                                            |   |                                                                       | 20     |                                                                      |   | 56 |   |   | 85 |   |   | 166 |   |
| Bankshares                    Tax                                      |   |                                                                       | 47     |                                                                      |   | 46 |   |   | 139 |   |   | 130 |   |
| Loss                    on Sale of Assets                              |   |                                                                       |   |                                                                      |   | 106 |   |   |   |   |   | 106 |   |
| Other                                                                  |   |                                                                       | 261    |                                                                      |   | 224 |   |   | 639 |   |   | 740 |   |
|                                                                   |   |                                                                       | 1,481  |                                                                      |   | 1,735 |   |   | 4,143 |   |   | 5,081 |   |
|                                                                   |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Income                    before income taxes                          |   |                                                                       | 547    |                                                                      |   | (11 | ) |   | 1,783 |   |   | 575 |   |
| Income                    tax expense                                  |   |                                                                       | 174    |                                                                      |   | (10 | ) |   | 576 |   |   | 172 |   |
|                                                                   |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Net                    income                                          |   | $                                                                          | 373    |                                                                      | $      | (1 | ) | $ | 1,207 |   | $ | 403 |   |
|                                                                   |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Weighted                    average common shares outstanding:         |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Basic                                                                  |   |                                                                       | 1,560  |                                                                      |   | 1,559 |   |   | 1,560 |   |   | 1,559 |   |
| Diluted                                                                |   |                                                                       | 1,567  |                                                                      |   | 1,563 |   |   | 1,565 |   |   | 1,560 |   |
|                                                                   |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Earnings                    per share                                  |   |                                                                       |   |                                                                      |   |   |   |   |   |   |   |   |   |
| Basic                                                                  |   | $                                                                          | .24    |                                                                      | $      | - |   | $ | .77 |   | $ | .26 |   |
| Diluted                                                                |   | $                                                                          | .24    |                                                                      | $      | - |   | $ | .77 |   | $ | .26 |   |

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|                                                                                                                                     |   |   Common                Stock |   |   Paid-In |   |   Retained |   | AccumulatedOtherComprehensive |   |  TotalShareholders’ |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|---------------------|--------|----------------------|--------|-------------------------------|--------|--------------------------------|--------|
|                                                                                                                                     |   | Shares                                  |   | Amount              |   | Capital              |   | Earnings                      |   | Income                         |   | Equity |   |
| Balance,                January 1, 2005                                                                                                  |   |                                    | 1,559  |                | $      | 8,926                |   | $                             | 8,944  |                           | $      | 2,736 |   | $ | 2 |   | $ | 20,608 |   |
|                                                                                                                                     |   |                                    |   |                |   |                 |   |                          |   |                           |   |   |   |   |   |   |   |   |   |
| Stock                options exercised                                                                                                   |   |                                    | 1      |                |   | 12                   |   |                          | 12     |                           |   |   |   |   |   |   |   | 24 |   |
|                                                                                                                                     |   |                                    |   |                |   |                 |   |                          |   |                           |   |   |   |   |   |   |   |   |   |
| Comprehensive                Income:                                                                                                     |   |                                    |   |                |   |                 |   |                          |   |                           |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                                |   |                                    |   |                |   |                 |   |                          |   |                           |   | 1,207 |   |   |   |   |   | 1,207 |   |
| Change                in unrealized gain (loss) on securities available for sale, net of                reclassification and tax effects |   |                                    |   |                |   |                 |   |                          |   |                           |   |   |   |   | (330 | ) |   | (330 | ) |
| Total                comprehensive income                                                                                                |   |                                    |   |                |   |                 |   |                          |   |                           |   |   |   |   |   |   |   | 877 |   |
|                                                                                                                                     |   |                                    |   |                |   |                 |   |                          |   |                           |   |   |   |   |   |   |   |   |   |
| Balance,                September 30, 2005                                                                                               |   |                                    | 1,560  |                | $      | 8,938                |   | $                             | 8,956  |                           | $      | 3,943 |   | $ | (328 | ) | $ | 21,509 |   |

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|                                                                                                                                                                                                      |   | 2005   |    | 2004   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|
| Cash                  flows from operating activities                                                                                                                                                     |   |   |    |   |   |
| Net                  income                                                                                                                                                                               |   | $      | 1,207   |   | $      | 03 |   |
| Adjustments                  to reconcile net income to net                                                                                                                                               |   |   |    |   |   |   |   |
| cash                  from operating activities:                                                                                                                                                          |   |   |    |   |   |   |   |
| Provision                  for loan losses                                                                                                                                                                |   |   | -       |   |   | 297 |   |
| Depreciation                  and amortization                                                                                                                                                            |   |   | 310     |   |   | 370 |   |
| Net                  amortization of securities                                                                                                                                                           |   |   | 140     |   |   | 260 |   |
| Net                  realized gain on sale of securities                                                                                                                                                  |   |   | -       |   |   | (293 | ) |
| Federal                  Home Loan Bank stock dividends                                                                                                                                                   |   |   | (29     | )      |   | (24 | ) |
| Originations                  of loans held for sale                                                                                                                                                      |   |   | -       |   |   | (18,666 | ) |
| Proceeds                  from sale of loans                                                                                                                                                              |   |   | -       |   |   | 18,552 |   |
|                            Net gains on sales of loans                                                                                                       |   |   | -       |   |   | (332 | ) |
| Net                  change in:                                                                                                                                                                           |   |   |    |   |   |   |   |
| Accrued                  interest receivable                                                                                                                                                              |   |   | (91     | )      |   | 126 |   |
| Other                  assets                                                                                                                                                                             |   |   | 41      |   |   | (207 | ) |
| Accrued                  interest payable                                                                                                                                                                 |   |   | 64      |   |   | (139 | ) |
| Other                  liabilities                                                                                                                                                                        |   |   | 357     |   |   | 51 |   |
| Net                  cash from operating activities                                                                                                                                                       |   |   | 1,999   |   |   | 398 |   |
|                                                                                                                                                                                                      |   |   |    |   |   |   |   |
| Cash                  flows from investing activities                                                                                                                                                     |   |   |    |   |   |   |   |
| Activity                  in available-for-sale securities:                                                                                                                                               |   |   |    |   |   |   |   |
|         Maturities                  and                  principal repayments                                                                                     |   |   | 3,643   |   |   | 9,773 |   |
|         Calls                                                                                                                                                     |   |   | 2,200   |   |   | 10,094 |   |
|         Purchases                                                                                                                                                 |   |   | (9,532  | )      |   | (17,742 | ) |
| Net                  change in loans                                                                                                                                                                      |   |   | 2,281   |   |   | 3,612 |   |
|         Proceeds                  of                  sale of goodwill and intangible assets                                                                      |   |   | -       |   |   | 33 |   |
|                        Loss                  on sale of goodwill and intangible assets |   |   | -       |   |   | 106 |   |
| Purchases                  of Federal Home Loan Bank advances                                                                                                                                             |   |   | -       |   |   | (2 | ) |
| Purchases                  of premises and equipment, net                                                                                                                                                 |   |   | (148    | )      |   | (20 | ) |
| Net                  cash from investing activities                                                                                                                                                       |   |   | (1,556  | )      |   | 5,854 |   |
|                                                                                                                                                                                                      |   |   |    |   |   |   |   |
| Cash                  flows from financing activities                                                                                                                                                     |   |   |    |   |   |   |   |
| Net                  change in deposits                                                                                                                                                                   |   |   | (9,819  | )      |   | (19,994 | ) |
| Net                  change in repurchase agreements and short-term borrowings                                                                                                                            |   |   | (2,339  | )      |   | (611 | ) |
| Repayments                  of Federal Home Loan Bank advances                                                                                                                                            |   |   | (2,916  | )      |   | (3,691 | ) |
| Proceeds                  from issuance of common stock                                                                                                                                                   |   |   | 24      |   |   | - |   |
| Net                  cash from financing activities                                                                                                                                                       |   |   | (15,050 | )      |   | (24,296 | ) |
|                                                                                                                                                                                                      |   |   |    |   |   |   |   |
| Net                  change in cash and cash equivalents                                                                                                                                                  |   | $      | (14,607 | )      | $      | (18,044 | ) |
|                                                                                                                                                                                                      |   |   |    |   |   |   |   |
| Cash                  and cash equivalents at beginning of period                                                                                                                                         |   |   | 23,014  |   |   | 30,013 |   |
|                                                                                                                                                                                                      |   |   |    |   |   |   |   |
| Cash                  and cash equivalents at end of period                                                                                                                                               |   | $      | 8,407   |   | $      | 11,969 |   |
|                                                                                                                                                                                                      |   |   |    |   |   |   |   |
| Supplemental                  cash flow information:                                                                                                                                                      |   |   |    |   |   |   |   |
| Interest                  paid                                                                                                                                                                            |   | $      | 3,497   |   | $      | 4,310 |   |
| Income                  tax paid                                                                                                                                                                          |   |   | 230     |   |   | 260 |   |
|                                                                                                                                                                                                      |   |   |    |   |   |   |   |
| Supplemental                  non-cash disclosure:                                                                                                                                                        |   |   |    |   |   |   |   |
| Transfers                  from loans to foreclosed assets                                                                                                                                                |   |   | 70      |   |   | - |   |

----

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**NOTE      1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

*Accounting      for Stock-Based Compensation.*

|                                                                                                            |   | Three                Months EndedSeptember                30 |   | Nine                Months EndedSeptember                30 |   |
|-----------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|-------------------------------------------------------------|--------|
|                                                                                                            |   | 2005                                                         |   | 2004                                                        |   | 2005 |   | 2004 |   |
| Net                income as reported                                                                           |   | $                                                            | 373    |                                                        | $      | (1 | ) | $ | 1,207 |   | $ | 403 |   |
| Deduct:                Stock-based compensation expense determined                under fair value based method |   |                                                         | (10    | )                                                           |   | 6 |   |   | (135 | ) |   | (43 | ) |
| Pro                forma net income                                                                             |   |                                                         | 363    |                                                        | $      | 5 |   | $ | 1,072 |   | $ | 360 |   |
|                                                                                                            |   |                                                         |   |                                                        |   |   |   |   |   |   |   |   |   |
| Basic                earnings per share as reported                                                             |   | $                                                            | .24    |                                                        | $      | - |   | $ | .77 |   | $ | .26 |   |
| Pro                forma basic earnings per share                                                               |   | $                                                            | .23    |                                                        | $      | - |   | $ | .69 |   | $ | .26 |   |
| Diluted                earnings per share as reported                                                           |   | $                                                            | .24    |                                                        | $      | - |   | $ | .77 |   | $ | .23 |   |
| Pro                forma diluted earnings per share                                                             |   | $                                                            | .23    |                                                        | $      | - |   | $ | .68 |   | $ | .23 |   |

----

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**NOTE      1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|                                                                                  | 2005                     | 2004                     |
|---------------------------------------------------------------------------------------|--------------------------|--------------------------|
|     Risk-free                interest rate                        | 4.25%                    | 3.50%                    |
|     Expected                option                life            | 5.0                years | 5.0                years |
|     Expected                stock                price volatility | 25%                      | 33%                      |
|     Dividend                yield                                 | -                        | -                        |

**NOTE      2 - SECURITIES**

|                                              |   |  FairValue |   | Gross                Unrealized                Gains |   | GrossUnrealized(Losses) |   |
|---------------------------------------------------|--------|-----------------|--------|------------------------------------------------------|--------|-------------------------|--------|
|                                              |   |            |   |                                                 |   |                    |   |
| September                30, 2005                 |   |            |   |                                                 |   |                    |   |
| U.S.                Government and federal agency |   | $               | 11,322 |                                                 | $      | -                       |   | $ | (187 | ) |
| State                and municipal                |   |            | 3,105  |                                                 |   | 4                       |   |   | (14 | ) |
| Mortgage-backed                                   |   |            | 22,373 |                                                 |   | 1                       |   |   | (301 | ) |
| Total                                             |   | $               | 36,800 |                                                 | $      | 5                       |   | $ | (502 | ) |
|                                              |   |            |   |                                                 |   |                    |   |   |   |   |
| December                31, 2004                  |   |            |   |                                                 |   |                    |   |   |   |   |
| U.S.                Government and federal agency |   | $               | 13,448 |                                                 | $      | 2                       |   | $ | (71 | ) |
| State                and municipal                |   |            | 882    |                                                 |   | 7                       |   |   | - |   |
| Mortgage-backed                                   |   |            | 19,418 |                                                 |   | 116                     |   |   | (51 | ) |
| Total                                             |   | $               | 33,748 |                                                 | $      | 125                     |   | $ | (122 | ) |
|                                              |   |            |   |                                                 |   |                    |   |   |   |   |
| September                30, 2004                 |   |            |   |                                                 |   |                    |   |   |   |   |
| U.S.                Government and federal agency |   | $               | 14,551 |                                                 | $      | 23                      |   | $ | (32 | )  |
| State                and municipal                |   |            | 888    |                                                 |   | 11                      |   |   | - |   |
| Mortgage-backed                                   |   |            | 20,826 |                                                 |   | 117                     |   |   | (71 | )  |
| Total                                             |   | $               | 36,265 |                                                 | $      | 151                     |   | $ | (103 | )  |

----

----

**NOTE      2 - SECURITIES **

|                                            |   | 12                Months or Less |   | More                than 12 Months |   | Total  |   |
|-------------------------------------------------|--------|----------------------------------|--------|------------------------------------|--------|--------|--------|
|                                            |   | Fair                             |   | Unrealized                         |   | Fair   |   | Unrealized |   | Fair |   | Unrealized |   |
|                                            |   | Value                            |   | (Loss)                             |   | Value  |   | (Loss) |   | Value |   | (Loss) |   |
| Description                of Securities        |   |                             |   |                               |   |   |   |   |   |   |   |   |   |
| U.S.                Government and              |   |                             |   |                               |   |   |   |   |   |   |   |   |   |
|   federal                agency       |   | $                                | 5,934  |                               | $      | (91    | )      | $ | 5,388 |   | $ | (96 | ) | $ | 11,322 |   | $ | (187 | ) |
| State                and municipal              |   |                             | 2,646  |                               |   | (14    | )      |   | - |   |   | - |   |   | 2,646 |   |   | (14 | ) |
| Mortgage-backed                                 |   |                             | 19,471 |                               |   | (217   | )      |   | 2,662 |   |   | (84 | ) |   | 22,133 |   |   | (301 | ) |
|                                            |   |                             |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                temporarily                |   |                             |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   impaired                with stated |   |                             |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   maturities                          |   | $                                | 28,051 |                               | $      | (322   | )      | $ | 8,050 |   | $ | (180 | ) | $ | 36,101 |   | $ | (502 | ) |

|                                                |   | September                30,2005 |   | December                31,2004 |   | September                30,2004 |   |
|-----------------------------------------------------|--------|----------------------------------|--------|---------------------------------|--------|----------------------------------|--------|
|     Proceeds                    |   | $                                | -      |                            | $      | 11,164                           |   | $ | 10,094 |   |
|     Gross                gains  |   |                             | -      |                            |   | 318                              |   |   | 293 |   |
|     Gross                losses |   |                             | -      |                            |   | -                                |   |   | - |   |

|                                                                                                          |   | FairValue |   |
|---------------------------------------------------------------------------------------------------------------|--------|-----------|--------|
|         Due                in                one year or less         |   | $         | 997    |   |
|         Due                from one to five years                     |   |      | 10,641 |   |
|         Due                from five to ten years                     |   |      | 2,137  |   |
|         Due                after ten years                            |   |      | 652    |   |
|         Total                securities due at a single maturity date |   |      | 14,427 |   |
|         Mortgage-backed                                               |   |      | 22,373 |   |
|                                                                                                          |   |      |   |   |
|         Total                                                         |   | $         | 36,800 |   |

----

----

**NOTE      3 - LOANS**

|                                          |   | September                30,2005 |    | December                31,2004 |   | September                30,2004 |   |
|-----------------------------------------------|--------|----------------------------------|---------|---------------------------------|--------|----------------------------------|--------|
|                                          |   |                             |    |                            |   |                             |   |
| Commercial                                    |   | $                                | 46,614  |                            | $      | 58,125                           |   | $ | 59,736 |   |
| Mortgage                loans on real estate: |   |                             |    |                            |   |                             |   |   |   |   |
| Commercial                                    |   |                             | 49,331  |                            |   | 40,087                           |   |   | 48,559 |   |
| Residential                                   |   |                             | 9,131   |                            |   | 10,069                           |   |   | 9,767 |   |
| Construction                                  |   |                             | 26,690  |                            |   | 26,299                           |   |   | 20,451 |   |
| Home                equity                    |   |                             | 12,143  |                            |   | 11,637                           |   |   | 11,393 |   |
| Consumer                Credit Card           |   |                             | 733     |                            |   | 828                              |   |   | 775 |   |
| Consumer                                      |   |                             | 5,325   |                            |   | 5,531                            |   |   | 5,948 |   |
| Subtotal                                      |   |                             | 149,967 |                            |   | 152,576                          |   |   | 156,629 |   |
| Less                allowance for loan losses |   |                             | (1,462  | )                               |   | (1,720                           | )      |   | (1,796 | ) |
| Loans,                net                     |   | $                                | 148,505 |                            | $      | 150,856                          |   | $ | 154,833 |   |

|                                                                            |   | September                30,2005 |   | December                31,2004 |   | September                30,2004 |   |
|---------------------------------------------------------------------------------|--------|----------------------------------|--------|---------------------------------|--------|----------------------------------|--------|
|                                                                            |   |                             |   |                            |   |                             |   |
|     Beginning                balance                        |   | $                                | 1,720  |                            | $      | 2,379                            |   | $ | 2,379 |   |
|     Loans                charged-off                        |   |                             | (339   | )                               |   | (962                             | )      |   | (886 | ) |
|     Recoveries                                              |   |                             | 81     |                            |   | 6                                |   |   | 6 |   |
|     Provision                for                loan losses |   |                             | -      |                            |   | 297                              |   |   | 297 |   |
|     Ending                balance                           |   | $                                | 1,462  |                            | $      | 1,720                            |   | $ | 1,796 |   |

**NOTE      4 - STOCK OPTIONS **

----

----

**NOTE      4 - STOCK OPTIONS (Continued)**

|                                                                                    |   | 2005   |    | 2004                                          |   |
|-----------------------------------------------------------------------------------------|--------|--------|---------|-----------------------------------------------|--------|
|                                                                                    |   | Shares |    | Weighted                Average ExercisePrice |   | Shares |   | Weighted                Average ExercisePrice |   |
|                                                                                    |   |   |    |                                          |   |   |   |   |   |
| Outstanding                at beginning of year                                         |   |   | 119,650 |                                          | $      | 18.23 |   |   | 87,750 |   | $ | 18.91 |   |
| Granted                                                                                 |   |   | 30,000  |                                          |   | 16.40 |   |   | 45,350 |   |   | 17.15 |   |
| Exercised                                                                               |   |   | (1,600  | )                                             |   | 15.50 |   |   | - |   |   | - |   |
| Forfeited                                                                               |   |   | (12,500 | )                                             |   | 16.41 |   |   | (9,800 | ) |   | 18.63 |   |
|                                                                                    |   |   |    |                                          |   |   |   |   |   |   |   |   |   |
| Outstanding                at end of period                                             |   |   | 135,550 |                                          | $      | 18.02 |   |   | 123,300 |   | $ | 18.29 |   |
|                                                                                    |   |   |    |                                          |   |   |   |   |   |   |   |   |   |
| Options                exercisable at end of period                                     |   |   | 125,160 |                                          | $      | 18.07 |   |   | 98,650 |   | $ | 18.44 |   |
| Weighted                average fair value of optionsgranted                during year |   | $      | 5.06    |                                          |   |   |   | $ | 6.04 |   |   |   |   |

|   |                                     |   | Outstanding |                         | Exercisable |
|--------|------------------------------------------|--------|-------------|------------------------------|-------------|
|   | Range                ofExercisePrices    |   | Number      | WeightedAverageExercisePrice |        | Number | WeightedAverageExercisePrice |
|   |                                     |   |        |                         |        |   |   |
|   | $13.75-$15.50                            |   | 12,250      | $15.50                       |        | 11,800 | $15.50 |
|   | $16.00-$22.00                            |   | 123,300     | 18.28                        |        | 113,360 | 18.34 |
|   |                                     |   |        |                         |        |   |   |
|   | Outstanding                at period-end |   | 135,550     | $18.02                       |        | 125,160 | $18.07 |

----

----

**NOTE      5 -**
**EARNINGS      PER SHARE**

|                                                                                                                                                                                                                         |   | Three                Months EndedSeptember                30 |   | Nine                Months EndedSeptember                30 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|-------------------------------------------------------------|--------|
|                                                                                                                                                                                                                         |   | 2005                                                         |   | 2004                                                        |   | 2005 |   | 2004 |   |
| Basic                                                                                                                                                                                                                        |   |                                                         |   |                                                        |   |   |   |   |   |
| Net                Income (Loss)                                                                                                                                                                                             |   | $                                                            | 373    |                                                        | $      | (1 | ) | $ | 1,207 |   | $ | 403 |   |
| Weighted                average common shares outstanding                                                                                                                                                                    |   |                                                         | 1,560  |                                                        |   | 1,559 |   |   | 1,560 |   |   | 1,559 |   |
|                                                                                                                                                                                                                         |   |                                                         |   |                                                        |   |   |   |   |   |   |   |   |   |
| Basic                earnings per common share                                                                                                                                                                               |   | $                                                            | .24    |                                                        | $      | - |   | $ | .77 |   | $ | .26 |   |
|                                                                                                                                                                                                                         |   |                                                         |   |                                                        |   |   |   |   |   |   |   |   |   |
| Diluted                                                                                                                                                                                                                      |   |                                                         |   |                                                        |   |   |   |   |   |   |   |   |   |
| Net                Income                                                                                                                                                                                                    |   | $                                                            | 373    |                                                        | $      | (1 | ) | $ | 1,207 |   | $ | 403 |   |
| Weighted                average common shares outstanding                                                                                                                                                                    |   |                                                         | 1,560  |                                                        |   | 1,559 |   |   | 1,560 |   |   | 1,559 |   |
| Add:                Dilutive effects of assumed exercises ofstock                warrants and options                                                                                                                        |   |                                                         | 7      |                                                        |   | 4 |   |   | 5 |   |   | 1 |   |
|                                                                                                                                                                                                                         |   |                                                         |   |                                                        |   |   |   |   |   |   |   |   |   |
| Average                shares and dilutive potential common shares                                                                                                                                                           |   |                                                         | 1,567  |                                                        |   | 1,563 |   |   | 1,565 |   |   | 1,560 |   |
|                                                                                                                                                                                                                         |   |                                                         |   |                                                        |   |   |   |   |   |   |   |   |   |
| Diluted                earnings per common share                                                                                                                                                                             |   | $                                                            | .24    |                                                        | $      | - |   | $ | .77 |   | $ | .26 |   |
|                                                                                                                                                                                                                         |   |                                                         |   |                                                        |   |   |   |   |   |   |   |   |   |
| Stock                options for shares of common stock that were not considered in computing                diluted earnings per common share because they were anti-dilutive                are as                follows: |   |                                                         | 58,000 |                                                        |   | 100 |   |   | 58,000 |   |   | 100 |   |

----

**PART      I - FINANCAL INFORMATION**

**Item      2. - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS **

**Forward-Looking      Statements **

**General**

----

**Executive      Summary**

**Results      of Operations**

*Net      Interest Income. *

----

|                                     |   | Three                  Months EndedSeptember                  30, |    | Nine                  Months EndedSeptember                  30, |   |
|------------------------------------------|--------|-------------------------------------------------------------------|---------|------------------------------------------------------------------|--------|
|                                     |   | 2005                                                              |    | 2004                                                             |   | 2005 |   | 2004 |   |
| Net                  interest income     |   | $                                                                 | 1,813   |                                                             | $      | 1,585 |   | $ | 5,278 |   | $ | 4,681 |   |
|                                     |   |                                                              |    |                                                             |   |   |   |   |   |   |   |   |   |
| Average                  balances        |   |                                                              |    |                                                             |   |   |   |   |   |   |   |   |   |
| Earning                  assets          |   |                                                              | 193,923 |                                                             |   | 205,236 |   |   | 197,160 |   |   | 213,110 |   |
| Funding                  sources (1)     |   |                                                              | 185,870 |                                                             |   | 199,454 |   |   | 189,089 |   |   | 205,819 |   |
|                                     |   |                                                              |    |                                                             |   |   |   |   |   |   |   |   |   |
| Average                  yields or costs |   |                                                              |    |                                                             |   |   |   |   |   |   |   |   |   |
| Loans                                    |   |                                                              | 6.92    | %                                                                |   | 5.52 | % |   | 6.62 | % |   | 5.68 | % |
| Earning                  assets          |   |                                                              | 6.28    | %                                                                |   | 5.10 | % |   | 5.99 | % |   | 5.05 | % |
| Deposits                  (2)            |   |                                                              | 2.56    | %                                                                |   | 2.00 | % |   | 2.39 | % |   | 2.09 | % |
| Funding                  sources         |   |                                                              | 2.58    | %                                                                |   | 2.10 | % |   | 2.43 | % |   | 2.19 | % |
|                                     |   |                                                              |    |                                                             |   |   |   |   |   |   |   |   |   |
| Spread                  (3, 4)           |   |                                                              | 3.70    | %                                                                |   | 2.73 | % |   | 3.57 | % |   | 2.58 | % |
| Margin                  (3, 5)           |   |                                                              | 3.81    | %                                                                |   | 3.06 | % |   | 3.67 | % |   | 2.94 | % |
|                                     |   |                                                              |    |                                                             |   |   |   |   |   |   |   |   |   |

| 1. | Funding                    sources, as used in the above table, is composed of interest                    bearing                    liabilities in the form of deposits, repurchase agreements, advances                    from                    the Federal Home Loan Bank and notes payable. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. | Deposits,                    as used in the above table, are composed solely of interest bearing                    deposits.                                                                                                                                                                       |
| 3. | The                    above calculations include the effects of tax-equivalent adjustments.                                                                                                                                                                                                        |
| 4. | Spread,                    as used in the above table, is the net interest spread, which                    is the                    difference between the average yield on earning assets and the                    average                    cost of interest bearing funding sources         |
| 5. | Margin,                    as used in the above table, is the net interest margin, which                    is a                    calculation of the ratio of net interest income to average earning                    assets.                                                                   |

|                                                                                                                                                                                   |   | Three                Months EndedSeptember                30, |   | Nine                Months EndedSeptember                30, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------|--------------------------------------------------------------|--------|
|                                                                                                                                                                                   |   | 2005                                                          |   | 2004                                                         |   | 2005 |   | 2004 |   |
|     Net                interest income (tax-equivalent)                                                                                                            |   | $                                                             | 1,832  |                                                         | $      | 1,587 |   | $ | 5,308 |   | $ | 4,690 |   |
|     Tax-equivalent                adjustment (1)                                                                                                                   |   |                                                          | (19    | )                                                            |   | (2 | ) |   | (30 | ) |   | (8 | ) |
|     Net                interest income as reported in the        financial statements                                 |   | $                                                             | 1,813  |                                                         | $      | 1,585 |   | $ | 5,278 |   | $ | 4,681 |   |
|                                                                                                                                                                                   |   |                                                          |   |                                                         |   |   |   |   |   |   |   |   |   |
| 1.     We                computed income based on the carrying value of tax exempt instruments                on a                fully tax equivalent basis. |

|                                                  |   | September                30, 2005 |    | December                31, 2004 |   | September                30, 2004 |   |
|-------------------------------------------------------|--------|-----------------------------------|---------|----------------------------------|--------|-----------------------------------|--------|
|                                                  |   | Amount                            |    | Percent                          |   | Amount                            |   | Percent |   | Amount |   | Percent |   |
| Daily                floating rate                    |   | $                                 | 91,035  |                             |   | 60.7                              | %      | $ | 97,922 |   |   | 64.2 | % | $ | 109,314 |   |   | 69.6 | % |
| Reprice                within one year                |   |                              | 22,243  |                             |   | 14.8                              | %      |   | 19,427 |   |   | 12.7 | % |   | 19,049 |   |   | 12.1 | % |
| Reprice                in one year through five years |   |                              | 33,534  |                             |   | 22.4                              | %      |   | 32,034 |   |   | 21.0 | % |   | 25,558 |   |   | 16.3 | % |
| Reprice                after five years               |   |                              | 3,155   |                             |   | 2.1                               | %      |   | 3,193 |   |   | 2.1 | % |   | 3,210 |   |   | 2.0 | % |
| Totals                                                |   | $                                 | 149,967 |                             |   | 100.0                             | %      | $ | 152,576 |   |   | 100.0 | % | $ | 157,131 |   |   | 100.0 | % |

----

*Provision      for Loan Losses. *

*Noninterest      Income. *

| ·   | Service                charges on deposit accounts are composed of various fees assessed                on                customers’ account activity including overdraft fees and generally reflect                FS Bank’s growth in its deposits and                customers. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net                gains on the sale of loans includes income from origination fees                and                points on residential loans made with the expectation that they will                be                later sold into the secondary market, and from service release fees                received on these loans from the purchasers. All loans are sold whereby                servicing rights transfer to the buyer. Generally, mortgage origination                fees increase in lower interest rate environments and decrease in                rising                interest rate environments. As a result, mortgage origination fees                may                fluctuate greatly in response to a changing rate environment. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net                gains on the sale of securities is the sum of gains and losses from                the                sale, prior to maturity, of securities held in our portfolio, and                since                the gains are directly related to the interest rate environment,                are                subject to wide fluctuations caused by changes in the interest rate                environment. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                               |   | Three                monthsended                September 30, |   |  Net                Change |   |
|----------------------------------------------------|--------|---------------------------------------------------------------|--------|---------------------------------|--------|
|                                               |   | 2005                                                          |   | 2004                            |   | Amount |   |
| Noninterest                income:                 |   |                                                          |   |                            |   |   |   |
| Service                charges on deposit accounts |   | $                                                             | 155    |                            | $      | 171 |   | $ | (16 | ) |
| Net                gains on the sale of loans      |   |                                                          | 3      |                            |   | 96 |   |   | (93 | ) |
| Net                gains on the sale of securities |   |                                                          | -      |                            |   | 50 |   |   | (50 | ) |
| Other                noninterest income            |   |                                                          | 57     |                            |   | 44 |   |   | 13 |   |
| Total                                              |   | $                                                             | 215    |                            | $      | 361 |   | $ | (146 | ) |

----

|                                               |   | Nine                monthsended                September 30, |   |  Net                Change |   |
|----------------------------------------------------|--------|--------------------------------------------------------------|--------|---------------------------------|--------|
|                                               |   | 2005                                                         |   | 2004                            |   | Amount |   |
| Noninterest                income:                 |   |                                                         |   |                            |   |   |   |
| Service                charges on deposit accounts |   | $                                                            | 521    |                            | $      | 484 |   | $ | 37 |   |
| Net                gains on the sale of loans      |   |                                                         | 6      |                            |   | 332 |   |   | (326 | ) |
| Net                gains on the sale of securities |   |                                                         | -      |                            |   | 293 |   |   | (293 | ) |
| Other                noninterest income            |   |                                                         | 121    |                            |   | 163 |   |   | (42 | ) |
| Total                                              |   | $                                                            | 648    |                            | $      | 1,272 |   | $ | (624 | ) |

*Noninterest      Expense. *

|                                          |   | Three                monthsended                September 30, |   |  Net                Change |   |
|-----------------------------------------------|--------|---------------------------------------------------------------|--------|---------------------------------|--------|
|                                          |   | 2005                                                          |   | 2004                            |   | Amount |   |
| Noninterest                expense:           |   |                                                          |   |                            |   |   |   |
| Salaries                and employee benefits |   | $                                                             | 602    |                            | $      | 753 |   | $ | (151 | ) |
| Occupancy                and equipment        |   |                                                          | 261    |                            |   | 275 |   |   | (14 | ) |
| Data                processing                |   |                                                          | 147    |                            |   | 137 |   |   | 10 |   |
| Legal                and professional fees    |   |                                                          | 143    |                            |   | 138 |   |   | 5 |   |
| Advertising                                   |   |                                                          | 20     |                            |   | 56 |   |   | (36 | ) |
| Bankshares                tax                 |   |                                                          | 47     |                            |   | 46 |   |   | 1 |   |
| Loss                on sale of assets         |   |                                                          | -      |                            |   | 106 |   |   | (106 | ) |
| Other                noninterest expense      |   |                                                          | 261    |                            |   | 224 |   |   | 37 |   |
| Total                                         |   | $                                                             | 1,481  |                            | $      | 1,735 |   | $ | (254 | ) |

----

|                                          |   | Nine                monthsended                September 30, |   | Net                Change |   |
|-----------------------------------------------|--------|--------------------------------------------------------------|--------|---------------------------|--------|
|                                          |   | 2005                                                         |   | 2004                      |   | Amount |   |
| Noninterest                expense:           |   |                                                         |   |                      |   |   |   |
| Salaries                and employee benefits |   | $                                                            | 1,821  |                      | $      | 2,355 |   | $ | (534 | ) |
| Occupancy                and equipment        |   |                                                         | 774    |                      |   | 871 |   |   | (97 | ) |
| Data                processing                |   |                                                         | 418    |                      |   | 406 |   |   | 12 |   |
| Legal                and professional fees    |   |                                                         | 267    |                      |   | 307 |   |   | (40 | ) |
| Advertising                                   |   |                                                         | 85     |                      |   | 166 |   |   | (81 | ) |
| Bankshares                tax                 |   |                                                         | 139    |                      |   | 130 |   |   | 9 |   |
| Loss                on sale of assets         |   |                                                         | -      |                      |   | 106 |   |   | (106 | ) |
| Other                noninterest expense      |   |                                                         | 639    |                      |   | 740 |   |   | (101 | ) |
| Total                                         |   | $                                                            | 4,143  |                      | $      | 5,081 |   | $ | (938 | ) |

| ·   | Of                the $534,000 decline in salaries and benefits expense in the first                nine                months of 2005, approximately $336,000 relates to the elimination                of                staffing positions, brought about by the sale of assets to and assumption                of former employees of the bank by First Mortgage Company, LLC, as                discussed above with the balance of the decline reflecting one vacant                lending officer position and the vacancy of the CFO position. In                addition,                the efforts to control the level of staffing through a more extensive                use                of part time employees, has reduced salaries and benefits. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                $97,000 decline in occupancy and equipment expense reflects lowered                maintenance expenses. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ·   | Data                processing expenses increased by $12,000 between the periods, reflecting                increased costs for computer software and computer                hardware. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Advertising                expenses decreased by $81,000 because we are utilizing more direct                mail                instead of mass media and television                advertising. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                decline in legal and professional fees is primarily attributable                to lower                legal fees incurred in problem loan                administration. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                increase of $9,000 in Bankshares tax is related to the increased                taxable                capital employed in the Bank. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Of                the $101,000 decline in other noninterest expense, approximately                $106,000                is related to the sale of assets. Also included in noninterest expense                for                2005 was $73,000 in director fees. This expense was for the nine                month                period ending September 30, 2005. No director fees had been paid                in                previous periods. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Income      Taxes. *

**Financial      Condition**

----

|                                                                                               |   | Quarter                EndedSeptember                30, 2005 |    | Year                EndedDecember                31, 2004 |   | Quarter                EndedSeptember                30, 2004 |   |
|----------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|---------|-----------------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                                                               |   |
| Average                interest earning assets                                                     |   |                                                          |    |                                                      |   |                                                          |   |
| Loans                (gross)                                                                       |   | $                                                             | 151,053 |                                                      | $      | 159,718                                                       |   | $ | 160,522 |   |
| Investment                securities (1)                                                           |   |                                                          | 38,217  |                                                      |   | 39,524                                                        |   |   | 41,797 |   |
| Federal                funds sold                                                                  |   |                                                          | 4,653   |                                                      |   | 9,201                                                         |   |   | 2,917 |   |
| Total                                                                                              |   | $                                                             | 193,923 |                                                      | $      | 208,443                                                       |   | $ | 205,236 |   |
|                                                                                               |   |                                                          |    |                                                      |   |                                                          |   |   |   |   |
| Total                average assets                                                                |   | $                                                             | 208,651 |                                                      | $      | 221,517                                                       |   | $ | 218,603 |   |
|                                                                                               |   |                                                          |    |                                                      |   |                                                          |   |   |   |   |
| Percentage                of earning assets to total assets                                        |   |                                                          | 92.9    | %                                                         |   | 94.1                                                          | %      |   | 93.8 | % |
|                                                                                               |   |                                                          |    |                                                      |   |                                                          |   |   |   |   |
| 1. Includes                available-for-sale securities and other                securities. |

*Investment      Securities*

*Loans*

----

*Non-Performing      Assets. *

|                                                                     |   | September                30, 2005 |   | December                31, 2004 |   | September                30, 2004 |   |
|--------------------------------------------------------------------------|--------|-----------------------------------|--------|----------------------------------|--------|-----------------------------------|--------|
|     Non-accrual                loans                 |   | $                                 | 1,731  |                             | $      | 2,969                             |   | $ | 3,217 |   |
|     Loans                past due 90 days or greater |   |                              | 76     |                             |   | 10                                |   |   | 11 |   |
|     Repossessed                assets                |   |                              | 124    |                             |   | 110                               |   |   | 110 |   |
|     Total                                            |   | $                                 | 1,931  |                             | $      | 3,089                             |   | $ | 3,338 |   |
|                                                                     |   |                              |   |                             |   |                              |   |   |   |   |

*Allowance      for Loan Losses (ALL). *

|                                                                                                                             |   | September                30, 2005 |    | December                31, 2004 |   | September                30, 2004 |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|----------------------------------|--------|-----------------------------------|--------|
|                                                                                                                             |   |                              |    |                             |   |                              |   |
| Allowance                for loan losses                                                                                         |   | $                                 | 1,462   |                             | $      | 1,720                             |   | $ | 1,796 |   |
|                                                                                                                             |   |                              |    |                             |   |                              |   |   |   |   |
| Total                loans                                                                                                       |   | $                                 | 149,967 |                             | $      | 152,576                           |   | $ | 156,629 |   |
| Percentage                of allowance for loan lossesto                total loans                                              |   |                              | 0.97    | %                                |   | 1.13                              | %      |   | 1.15 | % |
|                                                                                                                             |   |                              |    |                             |   |                              |   |   |   |   |
| Non-performing                assets                                                                                             |   | $                                 | 1,931   |                             | $      | 3,089                             |   | $ | 3,338 |   |
|                                                                                                                             |   |                              |    |                             |   |                              |   |   |   |   |
| Ratio                of allowance for loan losses to non-performing assets at the                endof                the period |        |                              | 75.7    | %                                |   | 55.7                              | %      |   | 53.8 | % |

*Deposits      and Other Borrowings. *

----

|                                            |   | September                30, 2005 |    | December                31,2004 |   | September                30, 2004 |   |
|-------------------------------------------------|--------|-----------------------------------|---------|---------------------------------|--------|-----------------------------------|--------|
|                                            |   |                              |    |                            |   |                              |   |
| Interest                bearing demand          |   | $                                 | 15,467  |                            | $      | 16,657                            |   | $ | 17,639 |   |
| Savings,                money market and NOW    |   |                              | 31,279  |                            |   | 38,523                            |   |   | 36,852 |   |
| Time                deposits less than $100,000 |   |                              | 63,738  |                            |   | 59,374                            |   |   | 53,652 |   |
| Time                deposits $100,000 and over  |   |                              | 37,904  |                            |   | 41,638                            |   |   | 39,501 |   |
| Total                interest bearing deposits  |   |                              | 148,388 |                            |   | 156,192                           |   |   | 147,644 |   |
| Noninterest                bearing              |   |                              | 20,655  |                            |   | 22,670                            |   |   | 23,002 |   |
| Total                deposits                   |   | $                                 | 169,043 |                            | $      | 178,862                           |   | $ | 170,646 |   |

*Note      Payable*

*Liquidity.      *

----

*Capital      Resources. *

**Critical      Accounting Estimates **

*Allowance      for Loan Losses (ALL). *

----

**Impact        of Inflation **

**Recent        Accounting Pronouncements **

----

**PART        I. - FINANCIAL INFORMATION**

**Item        3. - CONTROLS AND PROCEDURES **

**Evaluation        of Disclosure Controls and Procedures **

**Changes        in Internal Controls **

----

**PART        II - Other Information**

**Item        5. Other Information**

**Item        6. Exhibits**

----

|                                         |  First                Security Bancorp, Inc.                                                                                                                                                                                                                                       |   |
|----------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                         |                                                                                                                                                                                                                                                                                    |   |
|  Date:                November 14, 2005 |  /s/                R. Douglas                Hutcherson                                                                                                             |   |
|                                         | R.                  Douglas HutchersonPresident                  and Chief Executive Officer                                                                                                                                                                                            |   |
|                                         |                                                                                                                                                                                                                                                                                    |   |
|                                         |                                                                                                                                                                                                                                                                                    |   |
|  Date:                November 14, 2005 |  /s/                Kristie L.                Eubank                                      |   |
|                                         | Kristie                  L. EubankChief                  Financial Officer                                                                                                                                                                                                              |   |

----

| Exhibit                  10.1. | Salary                  Continuation Agreement, dated October 19, 2005, between Donald                  R. Shannon                  and First Security Bank of Lexington, Inc. (incorporated by reference                  to                  Exhibit 10.1 of the Form 8-K of First Security Bancorp, Inc. dated                  October                  18, 2005 (Commission File No.                  000-49781)) |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit                  10.2. | Salary                  Continuation Agreement, dated October 19, 2005, between David W.                  Chrisman                  and First Security Bank of Lexington, Inc. (incorporated by reference                  to                  Exhibit 10.2 of the Form 8-K of First Security Bancorp, Inc. dated                  October                  18, 2005 (Commission File No.                  000-49781)) |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit                  10.3. | Salary                  Continuation Agreement, dated October 19, 2005, between David A.                  Donaldson                  and First Security Bank of Lexington, Inc. (incorporated by reference                  to                  Exhibit 10.3 of the Form 8-K of First Security Bancorp, Inc. dated                  October                  18, 2005 (Commission File No.                  000-49781)) |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit                  10.4. | Letter                  Agreement dated September 15, 2005, among D. Hutcherson, First                  Security                  Bancorp, Inc. and First Security Bank of Lexington, Inc. (incorporated                  by                  reference to Exhibit 10.2 of the Form 8-K of First Security Bancorp,                  Inc.                  dated September 12, 2005 (Commission File No.                  000-49781)) |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit                  10.5. | Summary                  of Director Compensation Plan |
|--------------------------------|--------------------------------------------------------|

| Exhibit                    10.6 | Outsource                    Contract between BSC, Inc. and First Security Bank dated November                    14,                    2005 |
|---------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit                      10.7 | Contract                      between B S C, Inc. and First Security Bank dated November                      14,                      2005 |
|-----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit                    10.8. | Master                    Resource Managemenet Services Agreement between Precision Computer                    Systerms, Inc. and First Security Bank of Lexington, Inc. dated                    May 27,                    2005* |
|----------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit                          31. | Certifications                          Pursuant to Section 302 of the Sarbanes-Oxley Act of                          2002. |
|--------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|

| Exhibit                  32.1. | Certification                  of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350,                  As                  Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002. |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit                  32.2 | Certification                  of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350,                  As                  Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of                  2002. |
|-------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|