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

| Kentucky                          |   | 0-14412           |   | 61-1017851               |
|-----------------------------------|--------|-------------------|--------|--------------------------|
| (State      or other jurisdiction |   | (Commission       |   | (IRS      Employer       |
| of      incorporation)            |   | File      Number) |   | Identification      No.) |

| P.O.      Box 309  Frankfort, KY    |   | 40602           |
|-----------------------------------------------|--------|-----------------|
| (Address      of principal executive offices) |   | (Zip      Code) |

| Not      Applicable                                                  |
|----------------------------------------------------------------------|
| (Former      name or former address, if changed since last  report.) |

----

| PART I – FINANCIAL      INFORMATION                                                                           |   |
|---------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                |   |
| Item 1. Financial      Statements                                                                                   |   |
| Unaudited Consolidated Balance      Sheets                                                                          | 3      |
| Unaudited Consolidated Statements of      Income                                                                    | 4      |
| Unaudited Consolidated Statements of      Comprehensive Income                                                      | 5      |
| Unaudited Consolidated Statements of Cash      Flows                                                                | 6      |
| Unaudited Consolidated Statements of Changes      in Shareholders’ Equity                                     | 7      |
| Notes to Unaudited Consolidated Financial      Statements                                                           | 8      |
|                                                                                                                |   |
| Item 2.  Management’s Discussion and Analysis of      Financial Condition and Results of Operations | 13     |
|                                                                                                                |   |
| Item 3.  Quantitative and Qualitative      Disclosures About Market Risk                                  | 28     |
|                                                                                                                |   |
| Item 4.  Controls and      Procedures                                                                     | 28     |
|                                                                                                                |   |
| PART II - OTHER    INFORMATION                                                                                      |   |
|                                                                                                                |   |
| Item 1.  Legal      Proceedings                                                                           | 28     |
|                                                                                                                |   |
| Item 2.  Unregistered Sales of      Equity Securities and Use of Proceeds                                 | 29     |
|                                                                                                                |   |
| Item 4.  Submission of Matters to a Vote of      Security Holders                                         | 29     |
|                                                                                                                |   |
| Item    6.  Exhibits                                                                                      | 30     |
|                                                                                                                |   |
| SIGNATURES                                                                                                          | 31     |

----

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Unaudited Consolidated Balance Sheets

|                                                                                                 |   | June      30, |      |    | December      31, |   |
|------------------------------------------------------------------------------------------------------|--------|---------------|-----------|---------|-------------------|--------|
| (In thousands, except share data)                                                |   | 2008          |      |    | 2007              |   |
| Assets                                                                                               |   |          |      |    |              |   |
| Cash      and cash equivalents:                                                                      |   |          |      |    |              |   |
| Cash      and due from banks                                                                         |   | $             | 79,795    |    |              | $      | 44,896 |   |
| Interest      bearing deposits in other banks                                                        |   |          | 2,281     |    |              |   | 2,290 |   |
| Federal      funds sold and securities purchased under agreements to    resell                       |   |          | 29,631    |    |              |   | 31,954 |   |
| Total      cash and cash equivalents                                                                 |   |          | 111,707   |    |              |   | 79,140 |   |
| Investment      securities:                                                                          |   |          |      |    |              |   |   |   |
| Available      for sale, amortized cost of $547,016 (2008) and $542,259      (2007)                  |   |          | 544,267   |    |              |   | 542,633 |   |
| Held      to maturity, fair value of $3,053 (2008) and $3,863 (2007)                                 |   |          | 3,304     |    |              |   | 3,844 |   |
| Total      investment securities                                                                     |   |          | 547,571   |    |              |   | 546,477 |   |
| Loans,      net of unearned income                                                                   |   |          | 1,305,079 |    |              |   | 1,291,985 |   |
| Allowance      for loan losses                                                                       |   |          | (14,965   | )       |              |   | (14,216 | ) |
| Loans,      net                                                                                      |   |          | 1,290,114 |    |              |   | 1,277,769 |   |
| Premises      and equipment, net                                                                     |   |          | 40,808    |    |              |   | 38,663 |   |
| Company-owned      life insurance                                                                    |   |          | 34,775    |    |              |   | 34,171 |   |
| Goodwill                                                                                             |   |          | 52,408    |    |              |   | 52,408 |   |
| Other      intangibles, net                                                                          |   |          | 8,242     |    |              |   | 9,543 |   |
| Other      assets                                                                                    |   |          | 36,718    |    |              |   | 30,076 |   |
| Total      assets                                                                                    |   | $             | 2,122,343 |    |              | $      | 2,068,247 |   |
| Liabilities                                                                                          |   |          |      |    |              |   |   |   |
| Deposits:                                                                                            |   |          |      |    |              |   |   |   |
| Noninterest      bearing                                                                             |   | $             | 223,400   |    |              | $      | 192,432 |   |
| Interest      bearing                                                                                |   |          | 1,290,214 |    |              |   | 1,281,665 |   |
| Total      deposits                                                                                  |   |          | 1,513,614 |    |              |   | 1,474,097 |   |
| Federal      funds purchased and other short-term borrowings                                         |   |          | 83,926    |    |              |   | 80,755 |   |
| Securities      sold under agreements to repurchase and other long-term      borrowings              |   |          | 278,987   |    |              |   | 267,339 |   |
| Subordinated      notes payable to unconsolidated trusts                                             |   |          | 48,970    |    |              |   | 48,970 |   |
| Dividends      payable                                                                               |   |          | 2,426     |    |              |   | 2,436 |   |
| Other      liabilities                                                                               |   |          | 24,276    |    |              |   | 26,159 |   |
| Total      liabilities                                                                               |   |          | 1,952,199 |    |              |   | 1,899,756 |   |
| Shareholders’      Equity                                                                      |   |          |      |    |              |   |   |   |
| Preferred      Stock, no par value; 1,000,000 shares authorized; none    issued                      |   |          |      |    |              |   |   |   |
| Common      stock, par value $.125 per share; 9,608,000 shares      authorized;  7,348,744 |   |          |      |    |              |   |   |   |
| and      7,384,865 shares issued and outstanding at June 30, 2008                                    |   |          |      |    |              |   |   |   |
| and      December 31, 2007, respectively                                                             |   |          | 919       |    |              |   | 923 |   |
| Capital      surplus                                                                                 |   |          | 48,046    |    |              |   | 48,176 |   |
| Retained      earnings                                                                               |   |          | 126,152   |    |              |   | 122,498 |   |
| Accumulated      other comprehensive loss                                                            |   |          | (4,973    | )  |              |   | (3,106 | )  |
| Total      shareholders’ equity                                                                |   |          | 170,144   |    |              |   | 168,491 |   |
| Total      liabilities and shareholders’ equity                                                |   | $             | 2,122,343 |    |              | $      | 2,068,247 |   |

----

Unaudited Consolidated Statements ofIncome

|                                                                                                |   | Three      Months Ended |      |   | Six      Months Ended |   |
|-----------------------------------------------------------------------------------------------------|--------|-------------------------|-----------|--------|-----------------------|--------|
|                                                                                                |   | June      30,           |      |   | June      30,         |   |
| (In      thousands, except per share data)                                                          |   | 2008                    |      |   | 2007                  |   |   | 2008 |   |   | 2007 |   |
| Interest      Income                                                                                |   |                    |      |   |                  |   |   |   |   |   |   |   |
| Interest      and fees on loans                                                                     |   | $                       | 21,960    |   |                  | $      | 24,215 |   |   | $ | 44,736 |   |   | $ | 46,752 |   |
| Interest      on investment securities:                                                             |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                             |   |                    | 5,964     |   |                  |   | 2,897 |   |   |   | 11,831 |   |   |   | 5,521 |   |
| Nontaxable                                                                                          |   |                    | 827       |   |                  |   | 844 |   |   |   | 1,651 |   |   |   | 1,701 |   |
| Interest      on deposits in other banks                                                            |   |                    | 10        |   |                  |   | 15 |   |   |   | 24 |   |   |   | 29 |   |
| Interest      of federal funds sold and securities purchased under agreements to      resell        |   |                    | 276       |   |                  |   | 540 |   |   |   | 830 |   |   |   | 1,910 |   |
| Total      interest income                                                                          |   |                    | 29,037    |   |                  |   | 28,511 |   |   |   | 59,072 |   |   |   | 55,913 |   |
| Interest      Expense                                                                               |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Interest      on deposits                                                                           |   |                    | 9,757     |   |                  |   | 11,254 |   |   |   | 20,709 |   |   |   | 22,205 |   |
| Interest      on federal funds purchased and other short-term borrowings                            |   |                    | 447       |   |                  |   | 1,252 |   |   |   | 1,153 |   |   |   | 2,499 |   |
| Interest      on securities sold under agreements to repurchase and other long-term      borrowings |   |                    | 2,818     |   |                  |   | 701 |   |   |   | 5,644 |   |   |   | 1,362 |   |
| Interest      on subordinated notes payable to unconsolidated trusts                                |   |                    | 664       |   |                  |   | 454 |   |   |   | 1,460 |   |   |   | 902 |   |
| Total      interest expense                                                                         |   |                    | 13,686    |   |                  |   | 13,661 |   |   |   | 28,966 |   |   |   | 26,968 |   |
| Net      interest income                                                                            |   |                    | 15,351    |   |                  |   | 14,850 |   |   |   | 30,106 |   |   |   | 28,945 |   |
| Provision      for loan losses                                                                      |   |                    | 483       |   |                  |   | 330 |   |   |   | 1,585 |   |   |   | (166 | ) |
| Net      interest income after provision for loan losses                                            |   |                    | 14,868    |   |                  |   | 14,520 |   |   |   | 28,521 |   |   |   | 29,111 |   |
| Noninterest      Income                                                                             |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Service      charges and fees on deposits                                                           |   |                    | 2,486     |   |                  |   | 2,624 |   |   |   | 4,864 |   |   |   | 5,117 |   |
| Allotment      processing fees                                                                      |   |                    | 1,166     |   |                  |   | 1,168 |   |   |   | 2,331 |   |   |   | 2,125 |   |
| Other      service charges, commissions, and fees                                                   |   |                    | 1,119     |   |                  |   | 1,036 |   |   |   | 2,226 |   |   |   | 2,020 |   |
| Data      processing income                                                                         |   |                    | 305       |   |                  |   | 307 |   |   |   | 585 |   |   |   | 584 |   |
| Trust      income                                                                                   |   |                    | 533       |   |                  |   | 485 |   |   |   | 1,050 |   |   |   | 973 |   |
| Investment      securities gains, net                                                               |   |                    | 214       |   |                  |   |   |   |   |   | 580 |   |   |   |   |   |
| Gains      on sale of mortgage loans, net                                                           |   |                    | 101       |   |                  |   | 175 |   |   |   | 226 |   |   |   | 292 |   |
| Income      from company-owned life insurance                                                       |   |                    | 312       |   |                  |   | 321 |   |   |   | 613 |   |   |   | 668 |   |
| Other                                                                                               |   |                    | (45       | )      |                  |   | (8 | ) |   |   | 103 |   |   |   | (4 | ) |
| Total      noninterest income                                                                       |   |                    | 6,191     |   |                  |   | 6,108 |   |   |   | 12,578 |   |   |   | 11,775 |   |
| Noninterest      Expense                                                                            |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Salaries      and employee benefits                                                                 |   |                    | 7,557     |   |                  |   | 7,619 |   |   |   | 15,108 |   |   |   | 15,129 |   |
| Occupancy      expenses, net                                                                        |   |                    | 1,064     |   |                  |   | 1,023 |   |   |   | 2,200 |   |   |   | 2,089 |   |
| Equipment      expenses                                                                             |   |                    | 753       |   |                  |   | 761 |   |   |   | 1,467 |   |   |   | 1,542 |   |
| Data      processing and communications expense                                                     |   |                    | 1,252     |   |                  |   | 1,160 |   |   |   | 2,563 |   |   |   | 2,326 |   |
| Bank      franchise tax                                                                             |   |                    | 477       |   |                  |   | 525 |   |   |   | 896 |   |   |   | 1,039 |   |
| Correspondent      bank fees                                                                        |   |                    | 293       |   |                  |   | 186 |   |   |   | 508 |   |   |   | 345 |   |
| Amortization      of intangibles                                                                    |   |                    | 650       |   |                  |   | 848 |   |   |   | 1,301 |   |   |   | 1,666 |   |
| Other                                                                                               |   |                    | 2,346     |   |                  |   | 2,187 |   |   |   | 4,729 |   |   |   | 4,511 |   |
| Total      noninterest expense                                                                      |   |                    | 14,392    |   |                  |   | 14,309 |   |   |   | 28,772 |   |   |   | 28,647 |   |
| Income      before income taxes                                                                     |   |                    | 6,667     |   |                  |   | 6,319 |   |   |   | 12,327 |   |   |   | 12,239 |   |
| Income      tax expense                                                                             |   |                    | 1,767     |   |                  |   | 1,407 |   |   |   | 3,051 |   |   |   | 2,717 |   |
|            Net      Income                   |   | $                       | 4,900     |   |                  | $      | 4,912 |   |   | $ | 9,276 |   |   | $ | 9,522 |   |
| Per      Common Share                                                                               |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      income, basic and diluted                                                                  |   | $                       |  .67 |   |                  | $      |  .62 |   |   | $ | 1.26 |   |   | $ | 1.21 |   |
| Cash      dividends declared                                                                        |   |                    | .33       |   |                  |   | .33 |   |   |   | .66 |   |   |   | .66 |   |
| Weighted      Average Shares Outstanding                                                            |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                               |   |                    | 7,350     |   |                  |   | 7,884 |   |   |   | 7,362 |   |   |   | 7,888 |   |
| Diluted                                                                                             |   |                    | 7,350     |   |                  |   | 7,892 |   |   |   | 7,362 |   |   |   | 7,899 |   |

----

Unaudited Consolidated Statements of ComprehensiveIncome

|                                                                                                                                                                  |   | Three      Months Ended |   |    | Six      Months Ended |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|---------|-----------------------|--------|
|                                                                                                                                                                  |   | June      30,           |   |    | June      30,         |   |
| (In      thousands)                                                                                                                                                   |   | 2008                    |   |    | 2007                  |   |   | 2008 |   |   | 2007 |   |
| Net      Income                                                                                                                                                       |   | $                       | 4,900  |    |                  | $      | 4,912 |   |   | $ | 9,276 |   |   | $ | 9,522 |   |
| Other      comprehensive loss:                                                                                                                                        |   |                    |   |    |                  |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized      holding loss on available for sale securities arising during the period,      net of tax of $3,423, $110, $1,020, and $884, respectively              |   |                    | (6,357 | )       |                  |   | (2,061 | ) |   |   | (1,895 | ) |   |   | (1,642 | ) |
|                                                                                                                                                                  |   |                    |   |    |                  |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification      adjustment for prior period unrealized (gain) loss recognized during      current period, net of tax of $95, $4, $73, and $5,      respectively |   |                    | (176   | )  |                  |   | 8 |   |   |   | (135 | )  |   |   | 10 |   |
|                                                                                                                                                                  |   |                    |   |    |                  |   |   |   |   |   |   |   |   |   |   |   |
| Change      in unfunded portion of postretirement benefit obligation, net of tax of      $44 , $34, $88, and $69                                                      |   |                    | 82     |    |                  |   | 64 |   |   |   | 163 |   |   |   | 129 |   |
| Other      comprehensive loss                                                                                                                                         |   |                    | (6,451 | )       |                  |   | (1,989 | ) |   |   | (1,867 | ) |   |   | (1,503 | ) |
| Comprehensive      (Loss) Income                                                                                                                                      |   | $                       | (1,551 | )       |                  | $      | 2,923 |   |   | $ | 7,409 |   |   | $ | 8,019 |   |

----

Unaudited Consolidated Statements of Cash Flows

| Six      months ended June 30, (In thousands)                                               |   | 2008   |     |                | 2007   |   |
|---------------------------------------------------------------------------------------------|--------|--------|----------|---------------------|--------|--------|
| Cash      Flows from Operating Activities                                                   |   |   |     |                |   |   |
| Net      income                                                                             |   | $      | 9,276    |                |   | $      | 9,522 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |   |     |                |   |   |   |   |
| Depreciation      and amortization                                                          |   |   | 3,215    |                |   |   | 3,607 |   |
| Net      discount accretion available for sale investmentsecurities                         |   |   | (368     | )                   |   |   | (632 | )  |
| Provision      for loan losses                                                              |   |   | 1,585    |                |   |   | (166 | ) |
| Noncash      compensation expense                                                           |   |   | 27       |                |   |   | 30 |   |
| Mortgage      loans originated for sale                                                     |   |   | (11,436  | )                   |   |   | (12,177 | ) |
| Proceeds      from sale of mortgage loans                                                   |   |   | 8,127    |                |   |   | 10,005 |   |
| Deferred      income tax expense                                                            |   |   | 1,705    |                |   |   | 2,497 |   |
| Gain      on sale of mortgage loans, net                                                    |   |   | (226     | )                   |   |   | (292 | ) |
| Loss      on disposal of premises and equipment, net                                        |   |   | 19       |                |   |   | 104 |   |
| Gain      on sale of repossessed assets, net                                                |   |   | (44      | )              |   |   | (90 | ) |
| Gain      on sale of available for sale investment securities, net                          |   |   | (580     | )                   |   |   |   |   |
| Decrease      (increase) in accrued interest receivable                                     |   |   | 603      |                |   |   | (478 | ) |
| Income      from company-owned life insurance                                               |   |   | (604     | )                   |   |   | (631 | ) |
| Increase      in other assets                                                               |   |   | (3,568   | )                   |   |   | (296 | ) |
| (Decrease)      increase in accrued interest payable                                        |   |   | (944     | )                   |   |   | 579 |   |
| Decrease      in other liabilities                                                          |   |   | (689     | )                   |   |   | (5,527 | ) |
| Net      cash provided by operating activities                                              |   |   | 6,098    |                |   |   | 6,055 |   |
| Cash      Flows from Investing Activities                                                   |   |   |     |                |   |   |   |   |
| Proceeds      from maturities and calls of investment securities:                           |   |   |     |                |   |   |   |   |
| Available      for sale                                                                     |   |   | 140,078  |                |   |   | 209,054 |   |
| Held      to maturity                                                                       |   |   | 540      |                |   |   | 1,388 |   |
| Proceeds      from sale of available for sale investment securities                         |   |   | 21,512   |                |   |   | 20,785 |   |
| Purchase      of available for sale investment securities                                   |   |   | (165,399 | )                   |   |   | (209,764 | ) |
| Loans      originated for investment, net of principal collected                            |   |   | (16,289  | )    |   |   | (72,383 | ) |
| Purchase      of PNC Military Allotment operations, net of cash acquired                    |   |   |     |                |   |   | (1,876 | ) |
| Purchase      price refinements of previous acquisitions                                    |   |   |     |                |   |   | (18 | ) |
| Additions      to mortgage servicing rights, net                                            |   |   | (31      | )                   |   |   | (59 | ) |
| Purchase      of premises and equipment                                                     |   |   | (4,013   | )                   |   |   | (3,828 | ) |
| Proceeds      from sale of repossessed assets                                               |   |   | 1,509    |                |   |   | 1,547 |   |
| Proceeds      from sale of equipment                                                        |   |   | 19       |                |   |   | 315 |   |
| Net      cash used in investing activities                                                  |   |   | (22,074  | )                   |   |   | (54,839 | ) |
| Cash      Flows from Financing Activities                                                   |   |   |     |                |   |   |   |   |
| Net      increase (decrease) in deposits                                                    |   |   | 39,517   |                |   |   | (14,449 | ) |
| Net      increase in federal funds purchased and other short-term      borrowings           |   |   | 3,171    |                |   |   | 24,863 |   |
| Proceeds      from long-term debt                                                           |   |   | 19,000   |                |   |   | 8,000 |   |
| Repayments      of long-term debt                                                           |   |   | (7,352   | )                   |   |   | (5,521 | ) |
| Dividends      paid                                                                         |   |   | (4,869   | )                   |   |   | (6,078 | ) |
| Purchase      of common stock                                                               |   |   | (1,049   | )                   |   |   | (725 | ) |
| Shares      issued under Employee Stock Purchase Plan                                       |   |   | 125      |                |   |   | 126 |   |
| Stock      options exercised                                                                |   |   |     |                |   |   | 243 |   |
| Net      cash provided by financing activities                                              |   |   | 48,543   |                |   |   | 6,459 |   |
| Net      increase (decrease) in cash and cash equivalents                                   |   |   | 32,567   |                |   |   | (42,325 | ) |
| Cash      and cash equivalents at beginning of year                                         |   |   | 79,140   |                |   |   | 156,828 |   |
| Cash      and cash equivalents at end of period                                             |   | $      | 111,707  |                |   | $      | 114,503 |   |
|                                                                                        |   |   |     |                |   |   |   |   |
| Supplemental      Disclosures                                                               |   |   |     |                |   |   |   |   |
| Cash      paid during the period for:                                                       |   |   |     |                |   |   |   |   |
| Interest                                                                                    |   | $      | 29,910   |                |   | $      | 26,389 |   |
| Income      taxes                                                                           |   |   | 4,200    |                |   |   | 5,300 |   |
| Transfers      from loans to repossessed assets                                             |   |   | 5,894    |                |   |   | 997 |   |
| Cash      dividend declared and unpaid                                                      |   |   | 2,426    |                |   |   | 2,602 |   |

----

Unaudited Consolidated Statements of Changes inShareholders’ Equity

| (In      thousands, except per share data)                                                                  |   |              |   |   |    |   |   |     | Accumulated |   |          |   |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|---------|--------|--------|----------|-------------|--------|---------------|--------|--------|
|                                                                                                        |   |              |   |   |    |   |   |     | Other       |   |          | Total  |   |
| Six      months ended                                                                                       |   | Common      Stock |   |   | Capital |   |   | Retained |        |   | Comprehensive |   |   | Shareholders’ |
| June      30, 2008 and 2007                                                                                 |   | Shares            |   |   | Amount  |   |   | Surplus  |        |   | Earnings      |   |   | Loss |   |   | Equity |
| Balance      at January 1, 2008                                                                             |   |              | 7,385  |   |    | $      | 923    |     |        | $      | 48,176        |   |   | $ | 122,498 |   |   | $ | (3,106 | )  |   | $ | 168,491 |   |
| Net      income                                                                                             |   |              |   |   |    |   |   |     |        |   |          |   |   |   | 9,276 |   |   |   |   |   |   |   | 9,276 |   |
| Other      comprehensive loss                                                                               |   |              |   |   |    |   |   |     |        |   |          |   |   |   |   |   |   |   | (1,867 | )  |   |   | (1,867 | ) |
| Cash      dividends declared,$.66      per share                                                            |   |              |   |   |    |   |   |     |        |   |          |   |   |   | (4,859 | ) |   |   |   |   |   |   | (4,859 | ) |
| Purchase      of common stock                                                                               |   |              | (43    | )      |    |   | (5     | )        |        |   | (281          | )      |   |   | (763 | ) |   |   |   |   |   |   | (1,049 | ) |
| Shares      issued pursuant to Employee Stock Purchase plan                                                 |   |              | 7      |   |    |   | 1      |     |        |   | 124           |   |   |   |   |   |   |   |   |   |   |   | 125 |   |
| Noncash      compensation expense attributed to stock option & Employee Stock      Purchase Plan grants |   |              |   |   |    |   |   |     |        |   | 27            |   |   |   |   |   |   |   |   |   |   |   | 27 |   |
| Balance      at June 30, 2008                                                                               |   |              | 7,349  |   |    | $      | 919    |     |        | $      | 48,046        |   |   | $ | 126,152 |   |   | $ | (4,973 | )  |   | $ | 170,144 |   |
|                                                                                                        |   |              |   |   |    |   |   |     |        |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   |              |   |   |    |   |   |     |        |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   |              |   |   |    |   |   |     |        |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   |              |   |   |    |   |   |     |        |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at January 1, 2007                                                                             |   |              | 7,895  |   |    | $      | 988    |     |        | $      | 53,201        |   |   | $ | 128,652 |   |   | $ | (5,778 | )  |   | $ | 177,063 |   |
| Net      income                                                                                             |   |              |   |   |    |   |   |     |        |   |          |   |   |   | 9,522 |   |   |   |   |   |   |   | 9,522 |   |
| Other      comprehensive loss                                                                               |   |              |   |   |    |   |   |     |        |   |          |   |   |   |   |   |   |   | (1,503 | ) |   |   | (1,503 | ) |
| Cash      dividends declared,$.66      per share                                                            |   |              |   |   |    |   |   |     |        |   |          |   |   |   | (5,208 | ) |   |   |   |   |   |   | (5,208 | ) |
| Purchase      of common stock                                                                               |   |              | (23    | )      |    |   | (3     | )        |        |   | (144          | )      |   |   | (578 | ) |   |   |   |   |   |   | (725 | ) |
| Stock      options exercised,including      related tax benefits                                            |   |              | 10     |   |    |   | 1      |     |        |   | 243           |   |   |   |   |   |   |   |   |   |   |   | 244 |   |
| Shares      issued pursuant to Employee Stock Purchase plan                                                 |   |              | 5      |   |    |   |   |     |        |   | 126           |   |   |   |   |   |   |   |   |   |   |   | 126 |   |
| Noncash      compensation expense attributed to stock option & Employee Stock      Purchase Plan grants |   |              |   |   |    |   |   |     |        |   |   30     |   |   |   |   |   |   |   |   |   |   |   |   30 |   |
| Balance      at June 30, 2007                                                                               |   |              | 7,887  |   |    | $      | 986    |     |        | $      | 53,456        |   |   | $ | 132,388 |   |   | $ | (7,281 | ) |   | $ | 179,549 |   |

----

Notes to Unaudited Consolidated FinancialStatements

----

| 2. | Reclassifications |
|----|-------------------|

| 3. | Recently      Issued But Not Yet Effective Accounting  Standards |
|----|------------------------------------------------------------------|

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

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

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

----

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

| 4. | Adoption      of New Accounting Standards |
|----|-------------------------------------------|

|                                         |   | Three      Months EndedJune      30, |   |   | Six      Months EndedJune      30, |   |
|----------------------------------------------|--------|--------------------------------------|--------|--------|------------------------------------|--------|
| (In      thousands, except per share data)   |   | 2008                                 |   |   | 2007                               |   |   | 2008 |   |   | 2007 |   |
|                                         |   |                                 |   |   |                               |   |   |   |   |   |   |   |
| Net      income, basic and diluted           |   | $                                    | 4,900  |   |                               | $      | 4,912 |   |   | $ | 9,276 |   |   | $ | 9,522 |   |
|                                         |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Average      shares outstanding              |   |                                 | 7,350  |   |                               |   | 7,884 |   |   |   | 7,362 |   |   |   | 7,888 |   |
| Effect      of dilutive stock options        |   |                                 |   |   |                               |   | 8 |   |   |   |   |   |   |   | 11 |   |
| Average      diluted shares outstanding      |   |                                 | 7,350  |   |                               |   | 7,892 |   |   |   | 7,362 |   |   |   | 7,899 |   |
|                                         |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
|                                         |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Net      income per share, basic and diluted |   | $                                    | .67    |   |                               | $      | .62 |   |   | $ | 1.26 |   |   | $ | 1.21 |   |
|                                         |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |

----

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

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

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

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

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

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

|   | · | Investments      in the Federal Reserve Bank, Federal Home Loan Bank, and other similar      stock totaling $9.7 million at June 30, 2008 is carried at cost and not      included in the table below, as they are outside the scope of SFAS No.      157. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                             |   |                              |    |   | Fair      Value Measurements at June 30, 2008 Using                     |   |
|--------------------------------------------------|--------|-----------------------------------|---------|--------|-------------------------------------------------------------------------|--------|
| (In      thousands)   Description |   | Fair      ValueJune      30, 2008 |    |   | Quoted      Prices in Active Markets for Identical Assets(Level      1) |   |   | Significant      Other Observable Inputs(Level      2) |   |   | Significant      Unobservable Inputs(Level      3) |   |
|                                             |   |                              |    |   |                                                                    |   |   |   |   |   |   |   |
| Available      for sale investment securities    |   | $                                 | 534,537 |   |                                                                    | $      | 16,072 |   |   | $ | 518,465 |   |   | $ | 0 |   |

----

----

Item 2.  Management’s Discussion and Analysis of FinancialCondition and Results of Operations

|   | § | Net      income for the second quarter of 2008 was unchanged at $4.9 million      compared to the same quarter a yearearlier. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|

|   | § | The      $.05 or 8.1% increase in per share earnings in the comparison is the      result of the Company’s purchase of 559 thousand of its outstanding shares      through a tender offer during the third quarter of 2007, which      significantly reduced the weighted average number of shares      outstanding. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Net      interest income increased $501 thousand or 3.4% mainly as a result of the      Company’s leverage transaction that occurred during the fourth quarter of      2007. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The      provision for loan losses increased $153 thousand or 46.4% due to higher      nonperforming loans in the comparableperiods. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Income      tax expense was up $360 thousand or 25.6% due mainly to an increase in      taxable sources of income and, to a lesser extent, lower tax credits. The      effective income tax rate increased 424 basis points to    26.5%. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Return      on average assets (“ROA”) and equity (“ROE”) was .92% and 11.35%,      respectively in the current quarter. This represents a decrease of 14      basis points in ROA and an increase of 44 basis points in ROE compared to      the same quarter a year ago. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Net      interest spread and margin for the current quarter was 3.17% and 3.43%,      respectively compared to 3.35% and 3.79% a year ago. The 2007 balance      sheet leverage transaction negatively impacted net interest margin by 28      basis points in the current threemonths. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Quarter      Ended June 30,                                                                                                                       |   | 2008           |                 |   | 2007     |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|----------------------|--------|----------|--------|
|  (In      thousands)                                                                                                                         |   | AverageBalance |                 |   | Interest |   |   | AverageRate |   |   | AverageBalance |   |   | Interest |   |   | AverageRate |   |
| Earning      Assets                                                                                                                               |   |           |                 |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities                                                                                                                        |   |           |                 |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                                           |   | $              | 431,778              |   |     | $      | 5,964 |   |   |   | 5.54 | % |   | $ | 236,538 |   |   | $ | 2,897 |   |   |   | 4.91 | % |
| Nontaxable1                                                                                                                                       |   |           | 88,604               |   |     |   | 1,191 |   |   |   | 5.39 |   |   |   | 88,827 |   |   |   | 1,205 |   |   |   | 5.44 |   |
| Time      deposits with banks, federal funds sold and securities purchased under      agreements to resell                                        |   |           | 56,058               |   |     |   | 286 |   |   |   | 2.05 |   |   |   | 49,974 |   |   |   | 555 |   |   |   | 4.45 |   |
| Loans1,2,3                                                                                                                                        |   |           | 1,297,789            |   |     |   | 22,260 |   |   |   | 6.88 |   |   |   | 1,255,692 |   |   |   | 24,429 |   |   |   | 7.80 |   |
| Total      earning assets                                                                                                                         |   |           | 1,874,229            |   |     | $      | 29,701 |   |   |   | 6.36 | % |   |   | 1,631,031 |   |   | $ | 29,086 |   |   |   | 7.15 | % |
| Allowance      for loan losses                                                                                                                    |   |           | (14,517              | )      |     |   |   |   |   |   |   |   |   |   | (11,310 | ) |   |   |   |   |   |   |   |   |
| Total      earning assets, net of allowance for loan losses                                                                                       |   |           | 1,859,712            |   |     |   |   |   |   |   |   |   |   |   | 1,619,721 |   |   |   |   |   |   |   |   |   |
| Nonearning      Assets                                                                                                                            |   |           |                 |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                                                                                      |   |           | 83,623               |   |     |   |   |   |   |   |   |   |   |   | 86,269 |   |   |   |   |   |   |   |   |   |
| Premises      and equipment, net                                                                                                                  |   |           | 40,507               |   |     |   |   |   |   |   |   |   |   |   | 39,280 |   |   |   |   |   |   |   |   |   |
| Other      assets                                                                                                                                 |   |           | 151,801              |   |     |   |   |   |   |   |   |   |   |   | 121,383 |   |   |   |   |   |   |   |   |   |
| Total      assets                                                                                                                                 |   | $              | 2,135,643            |   |     |   |   |   |   |   |   |   |   | $ | 1,866,653 |   |   |   |   |   |   |   |   |   |
| Interest      Bearing Liabilities                                                                                                                 |   |           |                 |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                                                          |   |           |                 |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      bearing demand                                                                                                                      |   | $              | 267,294              |   |     | $      | 502 |   |   |   | 0.75 | % |   | $ | 257,773 |   |   | $ | 918 |   |   |   | 1.43 | % |
| Savings                                                                                                                                           |   |           | 267,405              |   |     |   | 876 |   |   |   | 1.31 |   |   |   | 244,759 |   |   |   | 1,387 |   |   |   | 2.27 |   |
| Time                                                                                                                                              |   |           | 777,327              |   |     |   | 8,379 |   |   |   | 4.32 |   |   |   | 744,876 |   |   |   | 8,949 |   |   |   | 4.82 |   |
| Federal      funds purchased and other short-term borrowings                                                                                      |   |           | 80,577               |   |     |   | 447 |   |   |   | 2.23 |   |   |   | 106,811 |   |   |   | 1,252 |   |   |   | 4.70 |   |
| Securities      sold under agreements to     repurchase      and other long-term     borrowings |   |           |    327,214 |   |     |   |   3,482 |   |   |   |   4.27 |   |   |   |   89,513 |   |   |   |   1,155 |   |   |   |   5.18 |   |
| Total      interest bearing liabilities                                                                                                           |   |           | 1,719,817            |   |     | $      | 13,686 |   |   |   | 3.19 | % |   |   | 1,443,732 |   |   | $ | 13,661 |   |   |   | 3.80 | % |
| Noninterest      Bearing Liabilities                                                                                                              |   |           |                 |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commonwealth      of Kentucky deposits                                                                                                            |   |           | 42,900               |   |     |   |   |   |   |   |   |   |   |   | 44,806 |   |   |   |   |   |   |   |   |   |
| Other      demand deposits                                                                                                                        |   |           | 176,702              |   |     |   |   |   |   |   |   |   |   |   | 175,332 |   |   |   |   |   |   |   |   |   |
| Other      liabilities                                                                                                                            |   |           | 22,640               |   |     |   |   |   |   |   |   |   |   |   | 22,157 |   |   |   |   |   |   |   |   |   |
| Total      liabilities                                                                                                                            |   |           | 1,962,059            |   |     |   |   |   |   |   |   |   |   |   | 1,686,027 |   |   |   |   |   |   |   |   |   |
| Shareholders’      equity                                                                                                                   |   |           | 173,584              |   |     |   |   |   |   |   |   |   |   |   | 180,626 |   |   |   |   |   |   |   |   |   |
| Total      liabilities and shareholders’                                                                                                    |   |           |                 |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| equity                                                                                                                                            |   | $              | 2,135,643            |   |     |   |   |   |   |   |   |   |   | $ | 1,866,653 |   |   |   |   |   |   |   |   |   |
| Net      interest income                                                                                                                          |   |           |                 |   |     |   | 16,015 |   |   |   |   |   |   |   |   |   |   |   | 15,425 |   |   |   |   |   |
| TE      basis adjustment                                                                                                                          |   |           |                 |   |     |   | (664 | ) |   |   |   |   |   |   |   |   |   |   | (575 | ) |   |   |   |   |
| Net      interest income                                                                                                                          |   |           |                 |   |     | $      | 15,351 |   |   |   |   |   |   |   |   |   |   | $ | 14,850 |   |   |   |   |   |
| Net      interest spread                                                                                                                          |   |           |                 |   |     |   |   |   |   |   | 3.17 | % |   |   |   |   |   |   |   |   |   |   | 3.35 | % |
| Impact      of noninterest bearing sources of funds                                                                                               |   |           |                 |   |     |   |   |   |   |   | .26 |   |   |   |   |   |   |   |   |   |   |   | .44 |   |
| Net      interest margin                                                                                                                          |   |           |                 |   |     |   |   |   |   |   | 3.43 | % |   |   |   |   |   |   |   |   |   |   | 3.79 | % |

----

| (In      thousands)                                                                                        |   | Variance |      |    | Variance      Attributed to |   |
|------------------------------------------------------------------------------------------------------------|--------|----------|-----------|---------|-----------------------------|--------|
| Quarter      Ended June 30,                                                                                |   |     | 2008/2007 | 1  |                        | Volume |   |   | Rate |   |
|                                                                                                       |   |     |      |    |                        |   |   |   |   |   |
| Interest      Income                                                                                       |   |     |      |    |                        |   |   |   |   |   |
| Taxable      investment securities                                                                         |   | $        | 3,067     |    |                        | $      | 2,654 |   |   | $ | 413 |   |
| Nontaxable      investment securities2                                                                     |   |     | (14       | )       |                        |   | (3 | ) |   |   | (11 | )  |
| Time      deposits with banks, federal funds sold and securities      purchased under agreements to resell |   |     | (269      | )       |                        |   | 392 |   |   |   | (661 | )  |
| Loans2                                                                                                     |   |     | (2,169    | )       |                        |   | 4,634 |   |   |   | (6,803 | )  |
| Total      interest income                                                                                 |   |     | 615       |    |                        |   | 7,677 |   |   |   | (7,062 | )  |
| Interest      Expense                                                                                      |   |     |      |    |                        |   |   |   |   |   |   |   |
| Interest      bearing demand deposits                                                                      |   |     | (416      | )       |                        |   | 222 |   |   |   | (638 | )  |
| Savings      deposits                                                                                      |   |     | (511      | )       |                        |   | 752 |   |   |   | (1,263 | )  |
| Time      deposits                                                                                         |   |     | (570      | )       |                        |   | 2,034 |   |   |   | (2,604 | )  |
| Federal      funds purchased and other short-term borrowings                                          |   |     | (805      | )       |                        |   | (256 | )   |   |   | (549 | )  |
| Securities      sold under agreements to repurchase and other      long-term borrowings               |   |     | 2,327     |    |                        |   | 3,711 |   |   |   | (1,384 | )  |
| Total      interest expense                                                                                |   |     | 25        |    |                        |   | 6,463 |   |   |   | (6,438 | )  |
| Net      interest income                                                                                   |   | $        | 590       |    |                        | $      | 1,214 |   |   | $ | (624 | ) |
| Percentage      change                                                                                     |   |     | 100.0     | %       |                        |   | 205.8 | % |   |   | -105.8 | % |

----

----

|   | § | The      $.05 or 4.1% increase in per share earnings for the current six-month      period compared to the same period for 2007 is due mainly to the impact of      the Company’s tender offer late in 2007. Net income declined $246 thousand      or 2.6%, but was more than offset by the 559 thousand decrease in the      number of shares outstanding from the tender  offer. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Net      interest income increased $1.2 million, driven by the Company’s leverage      transaction that occurred during the fourth quarter of    2007. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The      provision for loan losses jumped $1.8 million as overall economic      conditions continue to stress certain portions of the Company’s lending      portfolio, particularly real estate development and related      industries. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Noninterest      income increased $803 thousand or 6.8% driven by securities gains of $580      thousand. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | § | Noninterest      expenses were relatively unchanged at $28.8  million. |
|--------|--------|------------------------------------------------------------------------|

|   | § | Income      tax expense increased $334 thousand or 12.3% due mainly to an increase in      taxable sources of income and, to a lesser extent, lower tax credits. The      effective income tax rate increased 255 basis points to    24.8%. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | ROA      and ROE was .87% and 10.82%, respectively in the current six months. This      represents a decrease of 17 basis points in ROA and an increase of 11      basis points in ROE compared to the same period a year  ago. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Net      interest spread and margin for the current six months was 3.08% and 3.36%,      respectively compared to 3.29% and 3.73% a year ago. The 2007 balance      sheet leverage transaction negatively impacted net interest margin by 23      basis points in the current sixmonths. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Six      Months Ended June 30,                                                                                                                                |   | 2008           |           |   | 2007     |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|----------------|--------|----------|--------|
|  (In      thousands)                                                                                                                                     |   | AverageBalance |           |   | Interest |   |   | AverageRate |   |   | AverageBalance |   |   | Interest |   |   | AverageRate |   |
| Earning      Assets                                                                                                                                           |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities                                                                                                                                    |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                                                       |   | $              | 429,459        |   |     | $      | 11,831 |   |   |   | 5.54 | % |   | $ | 229,371 |   |   | $ | 5,521 |   |   |   | 4.85 | % |
| Nontaxable1                                                                                                                                                   |   |           | 88,876         |   |     |   | 2,372 |   |   |   | 5.37 |   |   |   | 89,384 |   |   |   | 2,432 |   |   |   | 5.49 |   |
| Time      deposits with banks, federal funds sold and securities purchased under      agreements to resell                                                    |   |           | 64,763         |   |     |   | 854 |   |   |   | 2.65 |   |   |   | 81,189 |   |   |   | 1,939 |   |   |   | 4.82 |   |
| Loans1,2,3                                                                                                                                                    |   |           | 1,296,851      |   |     |   | 45,321 |   |   |   | 7.03 |   |   |   | 1,227,574 |   |   |   | 47,182 |   |   |   | 7.75 |   |
| Total      earning assets                                                                                                                                     |   |           | 1,879,949      |   |     | $      | 60,378 |   |   |   | 6.46 | % |   |   | 1,627,518 |   |   | $ | 57,074 |   |   |   | 7.07 | % |
| Allowance      for loan losses                                                                                                                                |   |           | (14,321        | )      |     |   |   |   |   |   |   |   |   |   | (11,647 | ) |   |   |   |   |   |   |   |   |
| Total      earning assets, net of allowance for loan losses                                                                                                   |   |           | 1,865,628      |   |     |   |   |   |   |   |   |   |   |   | 1,615,871 |   |   |   |   |   |   |   |   |   |
| Nonearning      Assets                                                                                                                                        |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                                                                                                  |   |           | 81,901         |   |     |   |   |   |   |   |   |   |   |   | 82,149 |   |   |   |   |   |   |   |   |   |
| Premises      and equipment, net                                                                                                                              |   |           | 39,881         |   |     |   |   |   |   |   |   |   |   |   | 38,888 |   |   |   |   |   |   |   |   |   |
| Other      assets                                                                                                                                             |   |           | 148,738        |   |     |   |   |   |   |   |   |   |   |   | 109,325 |   |   |   |   |   |   |   |   |   |
| Total      assets                                                                                                                                             |   | $              | 2,136,148      |   |     |   |   |   |   |   |   |   |   | $ | 1,846,233 |   |   |   |   |   |   |   |   |   |
| Interest      Bearing Liabilities                                                                                                                             |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                                                                      |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      bearing demand                                                                                                                                  |   | $              | 267,364        |   |     | $      | 1,174 |   |   |   | 0.88 | % |   | $ | 262,630 |   |   | $ | 1,951 |   |   |   | 1.50 | % |
| Savings                                                                                                                                                       |   |           | 263,340        |   |     |   | 1,908 |   |   |   | 1.46 |   |   |   | 245,485 |   |   |   | 2,788 |   |   |   | 2.29 |   |
| Time                                                                                                                                                          |   |           | 780,273        |   |     |   | 17,627 |   |   |   | 4.54 |   |   |   | 735,682 |   |   |   | 17,466 |   |   |   | 4.79 |   |
| Federal      funds purchased and other short-term borrowings                                                                                                  |   |           | 85,225         |   |     |   | 1,153 |   |   |   | 2.72 |   |   |   | 106,245 |   |   |   | 2,499 |   |   |   | 4.74 |   |
| Securities      sold under agreements to      repurchase      and other long-term      borrowings |   |           |   326,175 |   |     |   |   7,104 |   |   |   |   4.38 |   |   |   |   87,967 |   |   |   |   2,264 |   |   |   |   5.19 |   |
| Total      interest bearing liabilities                                                                                                                       |   |           | 1,722,377      |   |     | $      | 28,966 |   |   |   | 3.38 | % |   |   | 1,438,009 |   |   | $ | 26,968 |   |   |   | 3.78 | % |
| Noninterest      Bearing Liabilities                                                                                                                          |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commonwealth      of Kentucky deposits                                                                                                                        |   |           | 39,645         |   |     |   |   |   |   |   |   |   |   |   | 40,671 |   |   |   |   |   |   |   |   |   |
| Other      demand deposits                                                                                                                                    |   |           | 175,463        |   |     |   |   |   |   |   |   |   |   |   | 175,430 |   |   |   |   |   |   |   |   |   |
| Other      liabilities                                                                                                                                        |   |           | 26,254         |   |     |   |   |   |   |   |   |   |   |   | 12,901 |   |   |   |   |   |   |   |   |   |
| Total      liabilities                                                                                                                                        |   |           | 1,963,739      |   |     |   |   |   |   |   |   |   |   |   | 1,667,011 |   |   |   |   |   |   |   |   |   |
| Shareholders’      equity                                                                                                                               |   |           | 172,409        |   |     |   |   |   |   |   |   |   |   |   | 179,222 |   |   |   |   |   |   |   |   |   |
| Total      liabilities and shareholders’                                                                                                                |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| equity                                                                                                                                                        |   | $              | 2,136,148      |   |     |   |   |   |   |   |   |   |   | $ | 1,846,233 |   |   |   |   |   |   |   |   |   |
| Net      interest income                                                                                                                                      |   |           |           |   |     |   | 31,412 |   |   |   |   |   |   |   |   |   |   |   | 30,106 |   |   |   |   |   |
| TE      basis adjustment                                                                                                                                      |   |           |           |   |     |   | (1,306 | ) |   |   |   |   |   |   |   |   |   |   | (1,161 | ) |   |   |   |   |
| Net      interest income                                                                                                                                      |   |           |           |   |     | $      | 30,106 |   |   |   |   |   |   |   |   |   |   | $ | 28,945 |   |   |   |   |   |
| Net      interest spread                                                                                                                                      |   |           |           |   |     |   |   |   |   |   | 3.08 | % |   |   |   |   |   |   |   |   |   |   | 3.29 | % |
| Impact      of noninterest bearing sources of funds                                                                                                           |   |           |           |   |     |   |   |   |   |   | .28 |   |   |   |   |   |   |   |   |   |   |   | .44 |   |
| Net      interest margin                                                                                                                                      |   |           |           |   |     |   |   |   |   |   | 3.36 | % |   |   |   |   |   |   |   |   |   |   | 3.73 | % |

----

| (In      thousands)                                                                                        |   | Variance |      |          | Variance      Attributed to |   |
|------------------------------------------------------------------------------------------------------------|--------|----------|-----------|---------------|-----------------------------|--------|
| Six      Months Ended June 30,                                                                             |   |     | 2008/2007 | 1        |                        | Volume |   |   | Rate |   |
|                                                                                                       |   |     |      |          |                        |   |   |   |   |   |
| Interest      Income                                                                                       |   |     |      |          |                        |   |   |   |   |   |
| Taxable      investment securities                                                                         |   | $        | 6,310     |          |                        | $      | 5,425 |   |   | $ | 885 |   |
| Nontaxable      investment securities2                                                                     |   |     | (60       | )   |                        |   | (12 | )  |   |   | (48 | ) |
| Time      deposits with banks, federal funds sold and securities      purchased under agreements to resell |   |     | (1,085    | )   |                        |   | (336 | )  |   |   | (749 | ) |
| Loans2                                                                                                     |   |     | (1,861    | )   |                        |   | 5,977 |   |   |   | (7,838 | ) |
| Total      interest income                                                                                 |   |     | 3,304     |          |                        |   | 11,054 |   |   |   | (7,750 | ) |
| Interest      Expense                                                                                      |   |     |      |          |                        |   |   |   |   |   |   |   |
| Interest      bearing demand deposits                                                                      |   |     | (777      | )   |                        |   | 104 |   |   |   | (881 | ) |
| Savings      deposits                                                                                      |   |     | (880      | )   |                        |   | 534 |   |   |   | (1,414 | ) |
| Time      deposits                                                                                         |   |     | 161       |          |                        |   | 2,063 |   |   |   | (1,902 | ) |
| Federal      funds purchased and other short-term borrowings                                          |   |     | (1,346    | )   |                        |   | (427 | )    |   |   | (919 | ) |
| Securities      sold under agreements to repurchase and other      long-term borrowings               |   |     | 4,840     |          |                        |   | 5,924 |   |   |   | (1,084 | ) |
| Total      interest expense                                                                                |   |     | 1,998     |          |                        |   | 8,198 |   |   |   | (6,200 | ) |
| Net      interest income                                                                                   |   | $        | 1,306     |          |                        | $      | 2,856 |   |   | $ | (1,550 | ) |
| Percentage      change                                                                                     |   |     | 100.0     | %             |                        |   | 218.7 | % |   |   | -118.7 | % |

----

----

----

|                                                                 |   | June      30, 2008 |      |   | December      31, 2007 |   |
|----------------------------------------------------------------------|--------|--------------------|-----------|--------|------------------------|--------|
| (Dollars      in thousands)                                          |   | Amount             |      |   | %                      |   |   | Amount |   |   | % |   |
|                                                                 |   |               |      |   |                   |   |   |   |   |   |   |   |
| Commercial,      financial, and agriculture                          |   | $                  | 148,390   |   |                   |   | 11.4 | % |   | $ | 154,015 |   |   |   | 11.9 | % |
| Real      estate - construction                                      |   |               | 246,021   |   |                   |   | 18.9 |   |   |   | 254,788 |   |   |   | 19.7 |   |
| Real      estate mortgage - residential                              |   |               | 428,564   |   |                   |   | 32.8 |   |   |   | 405,992 |   |   |   | 31.5 |   |
| Real      estate mortgage - farmland and other commercialenterprises |   |               | 406,891   |   |                   |   | 31.2 |   |   |   | 394,900 |   |   |   | 30.6 |   |
| Installment                                                          |   |               | 48,517    |   |                   |   | 3.7 |   |   |   | 52,028 |   |   |   | 4.0 |   |
| Lease      financing                                                 |   |               | 26,696    |   |                   |   | 2.0 |   |   |   | 30,262 |   |   |   | 2.3 |   |
| Total                                                                |   | $                  | 1,305,079 |   |                   |   | 100.0 | % |   | $ | 1,291,985 |   |   |   | 100.0 | % |

----

| (In      thousands)                              |   | June      30, 2008 |   |   | March      31,2008 |   |   | Change |   |   | %      |   |   |   | June      30, 2008 |   |   | December      31,2007 |   |   | Change |   |   | %      |   |
|--------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------------------|--------|--------|-----------------------|--------|--------|--------|--------|--------|--------|--------|
| Nonaccrual                                       |   | $                  | 19,479 |   |               | $      | 24,041 |   |   | $      | (4,562 | )      |   |   | (19.0              | )%     |   |                  | $      | 19,479 |   |   | $      | 18,073 |   |   | $ | 1,406 |   |   |   | 7.8 | % |
| Past      due 90 days or more and still accruing |   |               | 4,482  |   |               |   | 5,851  |   |   |   | (1,369 | )      |   |   | (23.4              | )%     |   |                  |   | 4,482  |   |   |   | 2,977  |   |   |   | 1,505 |   |   |   | 50.6 |   |
| Total      nonperforming loans                   |   | $                  | 23,961 |   |               | $      | 29,892 |   |   | $      | (5,931 | )      |   |   | (19.8              | )%     |   |                  | $      | 23,961 |   |   | $      | 21,050 |   |   | $ | 2,911 |   |   |   | 13.8 | % |

----

|                     |   | End      of Period |      |   | Average                     |   |
|--------------------------|--------|--------------------|-----------|--------|-----------------------------|--------|
| (In      thousands)      |   | June      30,2008  |      |   | December      31, 2007 |   |   | Difference |   |   | June      30, 2008 |   |   | December      31, 2007 |   |   | Difference |   |
| Noninterest      Bearing |   |               |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commonwealth             |   | $                  | 49,804    |   |                        | $      | 15,367 |   |   | $ | 34,437 |   |   | $ | 39,645 |   |   | $ | 37,119 |   |   | $ | 2,526 |   |
| Other                    |   |               | 173,596   |   |                        |   | 177,065 |   |   |   | (3,469 | ) |   |   | 175,463 |   |   |   | 177,304 |   |   |   | (1,841 | ) |
| Total                    |   | $                  | 223,400   |   |                        | $      | 192,432 |   |   | $ | 30,968 |   |   | $ | 215,108 |   |   | $ | 214,423 |   |   | $ | 685 |   |
|                     |   |               |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Bearing    |   |               |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand                   |   | $                  | 250,887   |   |                        | $      | 261,642 |   |   | $ | (10,755 | ) |   | $ | 267,364 |   |   | $ | 258,992 |   |   | $ | 8,372 |   |
| Savings                  |   |               | 268,252   |   |                        |   | 250,002 |   |   |   | 18,250 |   |   |   | 263,340 |   |   |   | 244,299 |   |   |   | 19,041 |   |
| Time                     |   |               | 771,075   |   |                        |   | 770,021 |   |   |   | 1,054 |   |   |   | 780,273 |   |   |   | 748,939 |   |   |   | 31,334 |   |
| Total                    |   | $                  | 1,290,214 |   |                        | $      | 1,281,665 |   |   | $ | 8,549 |   |   | $ | 1,310,977 |   |   | $ | 1,252,230 |   |   | $ | 58,747 |   |
|                     |   |               |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Deposits      |   | $                  | 1,513,614 |   |                        | $      | 1,474,097 |   |   | $ | 39,517 |   |   | $ | 1,526,085 |   |   | $ | 1,466,653 |   |   | $ | 59,432 |   |

----

----

|                   |   | Farmers      Capital  |   |   | Regulatory |   |
|------------------------|--------|-----------------------|--------|--------|------------|--------|
|                   |   | Bank      Corporation |   |   | Minimum    |   |
| Tier      1 risk based |   |                  | 11.58  | %      |       |   | 4.00 | % |
| Total      risk based  |   |                  | 12.66  | %      |       |   | 8.00 | % |
| Leverage               |   |                  | 7.78   | %      |       |   | 4.00 | % |

Item 3.  Quantitative and QualitativeDisclosures About Market Risk

Item 4.  Controls andProcedures

PART II - OTHER INFORMATION

Item 1.  LegalProceedings

----

Item 2.  Unregistered Sales of EquitySecurities and Use of Proceeds

|                                 |   |                                 |   |   |                             |   |   |                                                                                    |   |   |                                                                                  |   |
|--------------------------------------|--------|--------------------------------------|--------|--------|----------------------------------|--------|--------|-----------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------|--------|
| Period                               |   | Total      Number ofShares Purchased |   |   | Average      PricePaid per Share |   |   | Total      Number of SharesPurchased as Part ofPublicly      AnnouncedPlans or Programs |   |   | Maximum      Number ofShares that May Yet BePurchased Under      thePlans or Programs |   |
| April      1, 2008 to April 30, 2008 |   |                                 |   |   |                             |   |   |                                                                                    |   |   |                                                                                  | 89,971 |   |
| May      1, 2008 to May 31, 2008     |   |                                 |   |   |                             |   |   |                                                                                    |   |   |                                                                                  | 89,971 |   |
| June      1, 2008 to June 30, 2008   |   |                                 | 5,000  |   |                             | $      | 19.90  |                                                                                    |   |   | 5,000                                                                                 |   |   |   | 84,971 |   |
| Total                                |   |                                 | 5,000  |   |                             | $      | 19.90  |                                                                                    |   |   | 5,000                                                                                 |   |   |   |   |   |

Item 4.  Submission of Matters to a Vote of SecurityHolders

|   | The      outcome of the voting was asfollows: |
|--------|-----------------------------------------------|

| Election      of Directors |   |   |      |   |    |   |   |     |   |   |      |   |
|----------------------------|--------|--------|-----------|--------|---------|--------|--------|----------|--------|--------|-----------|--------|
| Name                       |   | For    |      |   | Against |   |   | Withheld |   |   | Abstained |   |
| G.      Anthony Busseni    |   |   | 5,391,670 |   |    |   | 0      |     |   |   | 342,122   |   |   |   | 0 |   |
| Shelley      S. Sweeney    |   |   | 5,684,012 |   |    |   | 0      |     |   |   | 49,780    |   |   |   | 0 |   |
| Ben      F. Brown          |   |   | 5,394,847 |   |    |   | 0      |     |   |   | 338,946   |   |   |   | 0 |   |
| Marvin      E. Strong, Jr. |   |   | 5,546,737 |   |    |   | 0      |     |   |   | 187,055   |   |   |   | 0 |   |

| Frank      W. Sower, Jr. | Lloyd      C. Hillard, Jr. |
|--------------------------|----------------------------|

| J.      Barry Banker       | Robert      Roach, Jr. |
|----------------------------|------------------------|
| Dr.      John D. Sutterlin | R.      Terry Bennett  |

| Dr.      Donald J. Mullineaux | Dr.      Donald A. Saelinger |
|-------------------------------|------------------------------|

----

Item 6.  Exhibits

| List of Exhibits |
|------------------|
|             |   |
| 3i.              | Amended      and Restated Articles of Incorporation of Farmers Capital Bank Corporation      (incorporated by reference to Quarterly Report on Form 10-Q for the      quarterly period ended June 30, 2006). |
|             |   |
| 3ii.             | Amended      and Restated By-Laws of Farmers Capital Bank Corporation (incorporated by      reference to Annual Report of Form 10-K for the fiscal year ended December      31, 1997). |
|             |   |
| 3iia             | Amendments      to By-Laws of Farmers Capital Bank Corporation (incorporated by reference      to Quarterly Report of Form 10-Q for the quarterly period ended March 31,      2003). |
|             |   |
| 31.1             | CEO Certification Pursuant to Section 302 of      the Sarbanes-Oxley Act of 2002 |
|             |   |
| 31.2             | CFO Certification Pursuant to Section 302 of      the Sarbanes-Oxley Act of 2002 |
|             |   |
| 32               | CEO & CFO Certifications Pursuant to      Section 906 of the Sarbanes-Oxley Act of 2002 |
|             |   |

----

SIGNATURES

| Date:  |        August 7, 2008 |   |  /s/ G. AnthonyBusseni                  |
|--------|----------------------------|--------|---------------------------------------------------|
|   |                       |   | G.      Anthony Busseni,                          |
|   |                       |   | President      and CEO                            |
|   |                       |   | (Principal      Executive Officer)                |
|   |                       |   |                                              |
| Date:  |        8-7-08         |   |        /s/ Doug Carpenter                    |
|   |                       |   | C.      Douglas Carpenter,                        |
|   |                       |   | Senior      Vice President, Secretary, and CFO    |
|   |                       |   | (Principal      Financial and Accounting Officer) |

----