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

|   | 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    Operations                                                                  | 4      |
| Unaudited Consolidated Statements of Comprehensive      Income/Loss                                                 | 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                                  | 27     |
|                                                                                                                |   |
| 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                                 | 28     |
|                                                                                                                |   |
| Item 6.  Exhibits                                                                                         | 28     |
|                                                                                                                |   |
| SIGNATURES                                                                                                          | 30     |

----

Unaudited Consolidated Balance Sheets

|                                                                                                                                                                                                                     |   | September      30, |      |   | December      31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
| (In thousands, except share data)                                                                                                                                                                    |   | 2008               |      |   | 2007              |   |
| Assets                                                                                                                                                                                                                   |   |               |      |   |              |   |
| Cash      and cash equivalents:                                                                                                                                                                                          |   |               |      |   |              |   |
| Cash      and due from banks                                                                                                                                                                                             |   | $                  | 106,177   |   |              | $      | 44,896 |   |
| Interest      bearing deposits in other banks                                                                                                                                                                            |   |               | 7,025     |   |              |   | 2,290 |   |
| Federal      funds sold and securities purchased under agreements to    resell                                                                                                                                           |   |               | 52,141    |   |              |   | 31,954 |   |
| Total      cash and cash equivalents                                                                                                                                                                                     |   |               | 165,343   |   |              |   | 79,140 |   |
| Investment      securities:                                                                                                                                                                                              |   |               |      |   |              |   |   |   |
| Available      for sale, amortized cost of $519,491 (2008) and $542,259      (2007)                                                                                                                                      |   |               | 516,114   |   |              |   | 542,633 |   |
| Held      to maturity, fair value of $2,306 (2008) and $3,863 (2007)                                                                                                                                                     |   |               | 2,539     |   |              |   | 3,844 |   |
| Total      investment securities                                                                                                                                                                                         |   |               | 518,653   |   |              |   | 546,477 |   |
| Loans,      net of unearned income                                                                                                                                                                                       |   |               | 1,303,419 |   |              |   | 1,291,985 |   |
| Allowance      for loan losses                                                                                                                                                                                           |   |               | (15,602   | )      |              |   | (14,216 | ) |
| Loans,      net                                                                                                                                                                                                          |   |               | 1,287,817 |   |              |   | 1,277,769 |   |
| Premises      and equipment, net                                                                                                                                                                                         |   |               | 41,108    |   |              |   | 38,663 |   |
| Company-owned      life insurance                                                                                                                                                                                        |   |               | 35,084    |   |              |   | 34,171 |   |
| Goodwill                                                                                                                                                                                                                 |   |               | 52,405    |   |              |   | 52,408 |   |
| Other      intangibles, net                                                                                                                                                                                              |   |               | 7,591     |   |              |   | 9,543 |   |
| Other      assets                                                                                                                                                                                                        |   |               | 46,456    |   |              |   | 30,076 |   |
| Total      assets                                                                                                                                                                                                        |   | $                  | 2,154,457 |   |              | $      | 2,068,247 |   |
| Liabilities                                                                                                                                                                                                              |   |               |      |   |              |   |   |   |
| Deposits:                                                                                                                                                                                                                |   |               |      |   |              |   |   |   |
| Noninterest      bearing                                                                                                                                                                                                 |   | $                  | 244,316   |   |              | $      | 192,432 |   |
| Interest      bearing                                                                                                                                                                                                    |   |               | 1,303,160 |   |              |   | 1,281,665 |   |
| Total      deposits                                                                                                                                                                                                      |   |               | 1,547,476 |   |              |   | 1,474,097 |   |
| Federal      funds purchased and other short-term borrowings                                                                                                                                                             |   |               | 83,247    |   |              |   | 80,755 |   |
| Securities      sold under agreements to repurchase and other long-term      borrowings                                                                                                                                  |   |               | 286,821   |   |              |   | 267,339 |   |
| Subordinated      notes payable to unconsolidated trusts                                                                                                                                                                 |   |               | 48,970    |   |              |   | 48,970 |   |
| Dividends      payable                                                                                                                                                                                                   |   |               | 2,425     |   |              |   | 2,436 |   |
| Other      liabilities                                                                                                                                                                                                   |   |               | 24,900    |   |              |   | 26,159 |   |
| Total      liabilities                                                                                                                                                                                                   |   |               | 1,993,839 |   |              |   | 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;  7,354,223 and 7,384,865 shares issued and      outstanding at September 30, 2008 and December 31, 2007,      respectively |   |               | 919       |   |              |   | 923 |   |
| Capital      surplus                                                                                                                                                                                                     |   |               | 48,156    |   |              |   | 48,176 |   |
| Retained      earnings                                                                                                                                                                                                   |   |               | 116,843   |   |              |   | 122,498 |   |
| Accumulated      other comprehensive loss                                                                                                                                                                                |   |               | (5,300    | )      |              |   | (3,106 | ) |
| Total      shareholders’ equity                                                                                                                                                                                    |   |               | 160,618   |   |              |   | 168,491 |   |
| Total      liabilities and shareholders’ equity                                                                                                                                                                    |   | $                  | 2,154,457 |   |              | $      | 2,068,247 |   |

----

Unaudited Consolidated Statements of Operations

|                                                                                                |   | Three      Months Ended |    |    | Nine      Months Ended |   |
|-----------------------------------------------------------------------------------------------------|--------|-------------------------|---------|---------|------------------------|--------|
|                                                                                                |   | September      30,      |    |    | September      30,     |   |
| (In      thousands, except per share data)                                                          |   | 2008                    |    |    | 2007                   |   |   | 2008 |   |   | 2007 |   |
| Interest      Income                                                                                |   |                    |    |    |                   |   |   |   |   |   |   |   |
| Interest      and fees on loans                                                                     |   | $                       | 21,458  |    |                   | $      | 24,402 |   |   | $ | 66,194 |   |   | $ | 71,154 |   |
| Interest      on investment securities:                                                             |   |                    |    |    |                   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                             |   |                    | 5,411   |    |                   |   | 2,721 |   |   |   | 17,242 |   |   |   | 8,242 |   |
| Nontaxable                                                                                          |   |                    | 795     |    |                   |   | 826 |   |   |   | 2,446 |   |   |   | 2,527 |   |
| Interest      on deposits in other banks                                                            |   |                    | 20      |    |                   |   | 18 |   |   |   | 44 |   |   |   | 47 |   |
| Interest      of federal funds sold and securities purchased under agreements to      resell        |   |                    | 175     |    |                   |   | 527 |   |   |   | 1,005 |   |   |   | 2,437 |   |
| Total      interest income                                                                          |   |                    | 27,859  |    |                   |   | 28,494 |   |   |   | 86,931 |   |   |   | 84,407 |   |
| Interest      Expense                                                                               |   |                    |    |    |                   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      on deposits                                                                           |   |                    | 9,082   |    |                   |   | 11,478 |   |   |   | 29,791 |   |   |   | 33,683 |   |
| Interest      on federal funds purchased and other short-term borrowings                            |   |                    | 453     |    |                   |   | 995 |   |   |   | 1,606 |   |   |   | 3,494 |   |
| Interest      on securities sold under agreements to repurchase and other long-term      borrowings |   |                    | 2,879   |    |                   |   | 737 |   |   |   | 8,523 |   |   |   | 2,099 |   |
| Interest      on subordinated notes payable to unconsolidated trusts                                |   |                    | 671     |    |                   |   | 662 |   |   |   | 2,131 |   |   |   | 1,564 |   |
| Total      interest expense                                                                         |   |                    | 13,085  |    |                   |   | 13,872 |   |   |   | 42,051 |   |   |   | 40,840 |   |
| Net      interest income                                                                            |   |                    | 14,774  |    |                   |   | 14,622 |   |   |   | 44,880 |   |   |   | 43,567 |   |
| Provision      for loan losses                                                                      |   |                    | 1,780   |    |                   |   | 595 |   |   |   | 3,365 |   |   |   | 429 |   |
| Net      interest income after provision for loan losses                                            |   |                    | 12,994  |    |                   |   | 14,027 |   |   |   | 41,515 |   |   |   | 43,138 |   |
| Noninterest      Income                                                                             |   |                    |    |    |                   |   |   |   |   |   |   |   |   |   |   |   |
| Service      charges and fees on deposits                                                           |   |                    | 2,539   |    |                   |   | 2,627 |   |   |   | 7,403 |   |   |   | 7,744 |   |
| Allotment      processing fees                                                                      |   |                    | 1,199   |    |                   |   | 1,114 |   |   |   | 3,530 |   |   |   | 3,239 |   |
| Other      service charges, commissions, and fees                                                   |   |                    | 1,098   |    |                   |   | 1,067 |   |   |   | 3,324 |   |   |   | 3,087 |   |
| Data      processing income                                                                         |   |                    | 258     |    |                   |   | 283 |   |   |   | 843 |   |   |   | 867 |   |
| Trust      income                                                                                   |   |                    | 535     |    |                   |   | 516 |   |   |   | 1,585 |   |   |   | 1,489 |   |
| Investment      securities gains, net                                                               |   |                    | 5       |    |                   |   |   |   |   |   | 585 |   |   |   |   |   |
| Other-than-temporary      impairment of investment securities                                       |   |                    | (13,962 | )       |                   |   |   |   |   |   | (13,962 | ) |   |   |   |   |
| Gains      on sale of mortgage loans, net                                                           |   |                    | 128     |    |                   |   | 141 |   |   |   | 354 |   |   |   | 433 |   |
| Income      from company-owned life insurance                                                       |   |                    | 310     |    |                   |   | 304 |   |   |   | 923 |   |   |   | 972 |   |
| Other                                                                                               |   |                    | 25      |    |                   |   | 67 |   |   |   | 128 |   |   |   | 63 |   |
| Total      noninterest income                                                                       |   |                    | (7,865  | )       |                   |   | 6,119 |   |   |   | 4,713 |   |   |   | 17,894 |   |
| Noninterest      Expense                                                                            |   |                    |    |    |                   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries      and employee benefits                                                                 |   |                    | 7,411   |    |                   |   | 7,536 |   |   |   | 22,519 |   |   |   | 22,665 |   |
| Occupancy      expenses, net                                                                        |   |                    | 1,140   |    |                   |   | 1,055 |   |   |   | 3,340 |   |   |   | 3,144 |   |
| Equipment      expenses                                                                             |   |                    | 824     |    |                   |   | 851 |   |   |   | 2,291 |   |   |   | 2,393 |   |
| Data      processing and communication expenses                                                     |   |                    | 1,417   |    |                   |   | 1,251 |   |   |   | 3,980 |   |   |   | 3,577 |   |
| Bank      franchise tax                                                                             |   |                    | 574     |    |                   |   | 528 |   |   |   | 1,470 |   |   |   | 1,567 |   |
| Correspondent      bank fees                                                                        |   |                    | 259     |    |                   |   | 194 |   |   |   | 767 |   |   |   | 539 |   |
| Amortization      of intangibles                                                                    |   |                    | 651     |    |                   |   | 848 |   |   |   | 1,952 |   |   |   | 2,514 |   |
| Other                                                                                               |   |                    | 2,603   |    |                   |   | 2,093 |   |   |   | 7,332 |   |   |   | 6,604 |   |
| Total      noninterest expense                                                                      |   |                    | 14,879  |    |                   |   | 14,356 |   |   |   | 43,651 |   |   |   | 43,003 |   |
| (Loss)      income before income taxes                                                              |   |                    | (9,750  | )       |                   |   | 5,790 |   |   |   | 2,577 |   |   |   | 18,029 |   |
| Income      tax (benefit) expense                                                                   |   |                    | (2,865  | )       |                   |   | 1,633 |   |   |   | 186 |   |   |   | 4,350 |   |
| Net      (loss) income                                                                              |   | $                       | (6,885  | )       |                   | $      | 4,157 |   |   | $ | 2,391 |   |   | $ | 13,679 |   |
| Per      Common Share                                                                               |   |                    |    |    |                   |   |   |   |   |   |   |   |   |   |   |   |
| Net      (loss) income, basic and diluted                                                           |   | $                       | (.94    | )  |                   | $      | .54 |   |   | $ |  .32 |   |   | $ | 1.75 |   |
| Cash      dividends declared                                                                        |   |                    | .33     |    |                   |   | .33 |   |   |   | .99 |   |   |   | .99 |   |
| Weighted      Average Shares Outstanding                                                            |   |                    |    |    |                   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted                                                                              |   |                    | 7,349   |    |                   |   | 7,672 |   |   |   | 7,358 |   |   |   | 7,816 |   |

----

Unaudited Consolidated Statements of ComprehensiveIncome/Loss

|                                                                                                                                                                    |   | Three      Months Ended |   |   | Nine      Months Ended |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|
|                                                                                                                                                                    |   | September      30,      |   |   | September      30,     |   |
| (In      thousands)                                                                                                                                                     |   | 2008                    |   |   | 2007                   |   |   | 2008 |   |   | 2007 |   |
| Net      (Loss) Income                                                                                                                                                  |   | $                       | (6,885 | )      |                   | $      | 4,157 |   |   | $ | 2,391 |   |   | $ | 13,679 |   |
| Other      comprehensive income:                                                                                                                                        |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Net      unrealized holding (loss) gain on available for sale securities arising      during the period, net of tax of $267, $1,340, $1,228 and $456,      respectively |   |                    | (496   | )      |                   |   | 2,488 |   |   |   | (2,280 | ) |   |   | 846 |   |
|                                                                                                                                                                    |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification      adjustment for prior period unrealized (gain) loss recognized during      current period, net of tax of $47, $85, and $5,    respectively         |   |                    | 88     |   |                   |   |   |   |   |   | (158 | ) |   |   | 10 |   |
|                                                                                                                                                                    |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Change      in unfunded portion of postretirement benefit obligation, net of tax of      $43, $35 $131, and $104, respectively                                          |   |                    | 81     |   |                   |   | 64 |   |   |   | 244 |   |   |   | 192 |   |
| Other      comprehensive (loss) income                                                                                                                                  |   |                    | (327   | )      |                   |   | 2,552 |   |   |   | (2,194 | ) |   |   | 1,048 |   |
| Comprehensive      (Loss) Income                                                                                                                                        |   | $                       | (7,212 | )      |                   | $      | 6,709 |   |   | $ | 197 |   |   | $ | 14,727 |   |

----

Unaudited Consolidated Statements of Cash Flows

| Nine      months ended September 30, (In thousands)                                          |   | 2008   |         |   | 2007   |   |
|----------------------------------------------------------------------------------------------|--------|--------|--------------|--------|--------|--------|
| Cash      Flows from Operating Activities                                                    |   |   |         |   |   |   |
| Net      income                                                                              |   | $      | 2,391        |   |   | $      | 13,679 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities:  |   |   |         |   |   |   |   |   |
| Depreciation      and amortization                                                           |   |   | 4,853        |   |   |   | 5,532 |   |
| Net      amortization of investment security premiums and    (discounts):                    |   |   |         |   |   |   |   |   |
| Available      for sale                                                                      |   |   | (94          | )      |   |   | (799 | ) |
| Held      to maturity                                                                        |   |   |         |   |   |   | 1 |   |
| Provision      for loan losses                                                               |   |   | 3,365        |   |   |   | 429 |   |
| Noncash      compensation expense                                                            |   |   | 41           |   |   |   | 42 |   |
| Mortgage      loans originated for sale                                                      |   |   | (13,525      | )      |   |   | (16,960 | ) |
| Proceeds      from sale of mortgage loans                                                    |   |   | 12,812       |   |   |   | 16,359 |   |
| Deferred      income tax (benefit) expense                                                   |   |   | (3,249       | )      |   |   | 3,096 |   |
| Gain      on sale of mortgage loans, net                                                     |   |   | (354         | )      |   |   | (433 | ) |
| Loss      on disposal of premises and equipment, net                                         |   |   | 12           |   |   |   | 104 |   |
| Loss      (gain) on sale of repossessed assets                                               |   |   | 87           |   |   |   | (352 | ) |
| Gain      on sale of available for sale investment securities, net                           |   |   | (585         | )      |   |   |   |   |
| Other-than-temporary      impairment of investment securities                                |   |   | 13,962       |   |   |   |   |   |
| Increase      (decrease) in accrued interest receivable                                      |   |   | 340          |   |   |   | (1,613 | ) |
| Income      from company-owned life insurance                                                |   |   | (913         | )      |   |   | (935 | ) |
| Decrease      in other assets                                                                |   |   | (3,364       | )      |   |   | (1,050 | ) |
| (Decrease)      increase in accrued interest payable                                         |   |   | (955         | )      |   |   | 1,074 |   |
| Increase      (decrease) in other liabilities                                                |   |   | 71           |   |   |   | (5,218 | ) |
| Net      cash provided by operating activities                                               |   |   | 14,895       |   |   |   | 12,956 |   |
| Cash      Flows from Investing Activities                                                    |   |   |         |   |   |   |   |   |
| Proceeds      from maturities and calls of investment securities:                            |   |   |         |   |   |   |   |   |
| Available      for sale                                                                      |   |   | 185,925      |   |   |   | 246,282 |   |
| Held      to maturity                                                                        |   |   | 1,305        |   |   |   | 2,318 |   |
| Proceeds      from sale of available for sale investment securities                          |   |   | 30,672       |   |   |   | 21,007 |   |
| Purchase      of available for sale investment securities                                    |   |   | (207,112     | )      |   |   | (246,149 | ) |
| Loans      originated for investment, net of principal collected                             |   |   | (25,448      | )      |   |   | (69,049 | ) |
| Purchase      of PNC Military Allotment operations, net of cash acquired                     |   |   |         |   |   |   | (1,916 | ) |
| Purchase      price refinements of previous acquisitions                                     |   |   |         |   |   |   | 51 |   |
| Investment      in unconsolidated trust                                                      |   |   |         |   |   |   | (696 | ) |
| Additions      to mortgage servicing rights, net                                             |   |   | (65          | )      |   |   | (62 | ) |
| Purchase      of premises and equipment                                                      |   |   | (7,596       | )      |   |   | (4,241 | ) |
| Proceeds      from sale of repossessed assets                                                |   |   | 4,040        |   |   |   | 3,377 |   |
| Proceeds      from sale of equipment                                                         |   |   | 2,356        |   |   |   | 315 |   |
| Net      cash used in investing activities                                                   |   |   | (15,923      | )      |   |   | (48,763 | ) |
| Cash      Flows from Financing Activities                                                    |   |   |         |   |   |   |   |   |
| Net      increase in deposits                                                                |   |   | 73,379       |   |   |   | 20,810 |   |
| Net      increase (decrease) in federal funds purchased and other short-term      borrowings |   |   | 2,492        |   |   |   | (1,514 | ) |
| Proceeds      from long-term debt issued to unconsolidated trusts                            |   |   |         |   |   |   | 23,196 |   |
| Proceeds      from other long-term debt                                                      |   |   | 27,000       |   |   |   | 26,000 |   |
| Repayments      of long-term debt                                                            |   |   | (7,518       | )      |   |   | (9,703 | ) |
| Dividends      paid                                                                          |   |   | (7,295       | )      |   |   | (8,685 | ) |
| Purchase      of common stock                                                                |   |   | (1,048       | )      |   |   | (18,649 | ) |
| Shares      issued under Employee Stock Purchase Plan                                        |   |   | 191          |   |   |   | 195 |   |
| Stock      options exercised                                                                 |   |   | 30           |   |   |   | 1,546 |   |
| Net      cash provided by financing activities                                               |   |   | 87,231       |   |   |   | 33,196 |   |
| Net      increase (decrease) in cash and cash equivalents                                    |   |   | 86,203       |   |   |   | (2,611 | ) |
| Cash      and cash equivalents at beginning of year                                          |   |   | 79,140       |   |   |   | 156,828 |   |
| Cash      and cash equivalents at end of period                                              |   | $      | 165,343      |   |   | $      | 154,217 |   |
| Supplemental      Disclosures                                                                |   |   |         |   |   |   |   |   |
| Cash      paid during the period for:                                                        |   |   |         |   |   |   |   |   |
| Interest                                                                                     |   | $      |  43,006 |   |   | $      | 39,766 |   |
| Income      taxes                                                                            |   |   | 5,600        |   |   |   | 8,800 |   |
| Transfers      from loans to repossessed assets                                              |   |   | 13,105       |   |   |   | 1,263 |   |
| Cash      dividend declared and unpaid                                                       |   |   | 2,425        |   |   |   | 2,433 |   |

----

| Unaudited Consolidated Statements of Changes in Shareholders'      Equity                                 |   |              |   |   |    |   |   |     |   |   |          |   |   |
|-----------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|---------|--------|--------|----------|--------|--------|---------------|--------|--------|
| (In      thousands, except per share data)                                                           |   |              |   |   |    |   |   |     |   |   | Accumulated   |   |   |   |   |
|                                                                                                      |   |              |   |   |    |   |   |     |   |   | Other         |   |   | Total |   |
| Nine      months ended                                                                                    |   | Common      Stock |   |   | Capital |   |   | Retained |   |   | Comprehensive |   |   | Shareholders’ |   |
| September      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                                                                                           |   |              |   |   |    |   |   |     |   |   |          |   |   |   | 2,391 |   |   |   |   |   |   |   | 2,391 |   |
| Other      comprehensive income                                                                           |   |              |   |   |    |   |   |     |   |   |          |   |   |   |   |   |   |   | (2,194 | ) |   |   | (2,194 | ) |
| Cash      dividends declared, $.99 per share                                                              |   |              |   |   |    |   |   |     |   |   |          |   |   |   | (7,284 | ) |   |   |   |   |   |   | (7,284 | ) |
| Purchase      of common stock                                                                             |   |              | (43    | )      |    |   | (5     | )        |   |   | (281          | )      |   |   | (762 | ) |   |   |   |   |   |   | (1,048 | ) |
| Stock      options exercised, including related tax benefits                                              |   |              | 1      |   |    |   |   |     |   |   | 30            |   |   |   |   |   |   |   |   |   |   |   | 30 |   |
| Shares      issued pursuant to Employee Stock Purchase Plan                                               |   |              | 11     |   |    |   | 1      |     |   |   | 190           |   |   |   |   |   |   |   |   |   |   |   | 191 |   |
| Noncash      compensation expense attributed to Employee Stock Purchase      Plan                         |   |              |   |   |    |   |   |     |   |   | 41            |   |   |   |   |   |   |   |   |   |   |   | 41 |   |
| Balance      at September 30, 2008                                                                        |   |              | 7,354  |   |    | $      | 919    |     |   | $      | 48,156        |   |   | $ | 116,843 |   |   | $ | (5,300 | ) |   | $ | 160,618 |   |
|                                                                                                      |   |              |   |   |    |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   |              |   |   |    |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   |              |   |   |    |   |   |     |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at January 1, 2007                                                                           |   |              | 7,895  |   |    | $      | 988    |     |   | $      | 53,201        |   |   | $ | 128,652 |   |   | $ | (5,778 | ) |   | $ | 177,063 |   |
| Net      income                                                                                           |   |              |   |   |    |   |   |     |   |   |          |   |   |   | 13,679 |   |   |   |   |   |   |   | 13,679 |   |
| Other      comprehensive income                                                                           |   |              |   |   |    |   |   |     |   |   |          |   |   |   |   |   |   |   | 1,048 |   |   |   | 1,048 |   |
| Cash      dividends declared, $.99 per share                                                              |   |              |   |   |    |   |   |     |   |   |          |   |   |   | (7,646 | ) |   |   |   |   |   |   | (7,646 | ) |
| Purchase      of common stock                                                                             |   |              | (584   | )      |    |   | (73    | )        |   |   | (6,877        | )      |   |   | (11,699 | ) |   |   |   |   |   |   | (18,649 | ) |
| Stock      options exercised, including related tax benefits                                              |   |              | 63     |   |    |   | 7      |     |   |   | 1,540         |   |   |   |   |   |   |   |   |   |   |   | 1,547 |   |
| Shares      issued pursuant to Employee Stock Purchase Plan                                               |   |              | 8      |   |    |   | 1      |     |   |   | 194           |   |   |   |   |   |   |   |   |   |   |   | 195 |   |
| Noncash      compensation expense attributed to stock option and Employee Stock      Purchase Plan grants |   |              |   |   |    |   |   |     |   |   | 42            |   |   |   |   |   |   |   |   |   |   |   | 42 |   |
| Balance      at September 30, 2007                                                                        |   |              | 7,382  |   |    | $      | 923    |     |   | $      | 48,100        |   |   | $ | 122,986 |   |   | $ | (4,730 | ) |   | $ | 167,279 |   |

----

Notes to Unaudited Consolidated Financial Statements

| 1. | Basis      of Presentation and Nature ofOperations |
|----|----------------------------------------------------|

----

| 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 EndedSeptember      30, |   |   | Nine      Months EndedSeptember      30, |   |
|-----------------------------------------------------|--------|-------------------------------------------|--------|--------|------------------------------------------|--------|
| (In      thousands, except per share data)          |   | 2008                                      |   |   | 2007                                     |   |   | 2008 |   |   | 2007 |   |
|                                                |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Net      (loss) income, basic and diluted           |   | $                                         | (6,885 | )      |                                     | $      | 4,157 |   |   | $ | 2,391 |   |   | $ | 13,679 |   |
|                                                |   |                                      |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Average      shares outstanding, basic and diluted  |   |                                      | 7,349  |   |                                     |   | 7,672 |   |   |   | 7,358 |   |   |   | 7,816 |   |
|                                                |   |                                      |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Net      (loss) income per share, basic and diluted |   | $                                         | (.94   | )      |                                     | $      | .54 |   |   | $ | .32 |   |   | $ | 1.75 |   |
|                                                |   |                                      |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |

----

|   | 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 $9.9 million at September 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 September 30, 2008 Using                |   |
|--------------------------------------------------|--------|----------------------------------------|---------|--------|-------------------------------------------------------------------------|--------|
| (In      thousands)   Description |   | Fair      ValueSeptember      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    |   | $                                      | 507,016 |   |                                                                    | $      | 1,344 |   |   | $ | 505,672 |   |   | $ | 0 |   |

----

----

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

|   | § | The      $1.48 decrease in per share earnings for the third quarter of 2008      compared to the same period a year ago is attributed to the $14.0 million      or $1.33 per share OTTI charge related to the GSE’s and a higher provision      for loan losses of $1.2 million. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Excluding      the non-cash OTTI charge, net income for the current quarter was $2.9      million or $.39 per share. This represents a $1.3 million or $.15 per      share decrease compared to the same period a year earlier driven in large      part to a $1.2 million higher provision for loan  losses. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Net      interest income increased $152 thousand or 1.0%, helped by the Company’s      leverage transaction that occurred during the fourth quarter of      2007. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Noninterest      expenses increased $523 thousand or 3.6% driven by higher net expenses      related to properties acquired through  foreclosure. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Income      tax expense decreased $4.5 million due mainly to the OTTI      charge. |
|--------|--------|------------------------------------------------------------------------------------|

|   | § | Return      on average assets (“ROA”) and equity (“ROE”) was -1.30% and -16.45%,      respectively compared to .90% and 9.43% for the previous-year third      quarter. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | § | Net      interest spread and margin for the current quarter was 3.03% and 3.27%,      respectively compared to 3.31% and 3.73% a year earlier. The 2007 balance      sheet leverage transaction negatively impacted net interest margin by 27      basis points in the current threemonths. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Quarter      Ended September 30,                                                                                                                  |   | 2008           |           |   | 2007     |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|----------------|--------|----------|--------|
|  (In      thousands)                                                                                                                         |   | AverageBalance |           |   | Interest |   |   | AverageRate |   |   | AverageBalance |   |   | Interest |   |   | AverageRate |   |
| Earning      Assets                                                                                                                               |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities                                                                                                                        |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                                           |   | $              | 418,043        |   |     | $      | 5,411 |   |   |   | 5.15 | % |   | $ | 220,135 |   |   | $ | 2,721 |   |   |   | 4.90 | % |
| Nontaxable1                                                                                                                                       |   |           | 85,489         |   |     |   | 1,148 |   |   |   | 5.34 |   |   |   | 87,746 |   |   |   | 1,179 |   |   |   | 5.33 |   |
| Time      deposits with banks, federal funds sold and securities purchased under      agreements to resell                                        |   |           | 41,782         |   |     |   | 195 |   |   |   | 1.86 |   |   |   | 42,788 |   |   |   | 545 |   |   |   | 5.05 |   |
| Loans1,2,3                                                                                                                                        |   |           | 1,308,192      |   |     |   | 21,583 |   |   |   | 6.56 |   |   |   | 1,264,490 |   |   |   | 24,622 |   |   |   | 7.73 |   |
| Total      earning assets                                                                                                                         |   |           | 1,853,506      |   |     | $      | 28,337 |   |   |   | 6.08 | % |   |   | 1,615,159 |   |   | $ | 29,067 |   |   |   | 7.14 | % |
| Allowance      for loan losses                                                                                                                    |   |           | (14,911        | )      |     |   |   |   |   |   |   |   |   |   | (11,239 | ) |   |   |   |   |   |   |   |   |
| Total      earning assets, net of allowance for loan losses                                                                                       |   |           | 1,838,595      |   |     |   |   |   |   |   |   |   |   |   | 1,603,920 |   |   |   |   |   |   |   |   |   |
| Nonearning      Assets                                                                                                                            |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                                                                                      |   |           | 66,765         |   |     |   |   |   |   |   |   |   |   |   | 75,762 |   |   |   |   |   |   |   |   |   |
| Premises      and equipment, net                                                                                                                  |   |           | 41,221         |   |     |   |   |   |   |   |   |   |   |   | 39,041 |   |   |   |   |   |   |   |   |   |
| Other      assets                                                                                                                                 |   |           | 165,172        |   |     |   |   |   |   |   |   |   |   |   | 123,845 |   |   |   |   |   |   |   |   |   |
| Total      assets                                                                                                                                 |   | $              | 2,111,753      |   |     |   |   |   |   |   |   |   |   | $ | 1,842,568 |   |   |   |   |   |   |   |   |   |
| Interest      Bearing Liabilities                                                                                                                 |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                                                          |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      bearing demand                                                                                                                      |   | $              | 246,453        |   |     | $      | 346 |   |   |   | .56 | % |   | $ | 249,231 |   |   | $ | 881 |   |   |   | 1.40 | % |
| Savings                                                                                                                                           |   |           | 267,191        |   |     |   | 895 |   |   |   | 1.33 |   |   |   | 239,744 |   |   |   | 1,329 |   |   |   | 2.20 |   |
| Time                                                                                                                                              |   |           | 774,127        |   |     |   | 7,841 |   |   |   | 4.03 |   |   |   | 757,294 |   |   |   | 9,268 |   |   |   | 4.86 |   |
| Federal      funds purchased and other short-term borrowings                                                                                      |   |           | 83,929         |   |     |   | 453 |   |   |   | 2.15 |   |   |   | 84,854 |   |   |   | 995 |   |   |   | 4.65 |   |
| Securities      sold under agreements to     repurchase      and other long-term     borrowings |   |           |   333,796 |   |     |   |   3,550 |   |   |   |   4.23 |   |   |   |   105,086 |   |   |   |   1,399 |   |   |   |   5.28 |   |
| Total      interest bearing liabilities                                                                                                           |   |           | 1,705,496      |   |     | $      | 13,085 |   |   |   | 3.05 | % |   |   | 1,436,209 |   |   | $ | 13,872 |   |   |   | 3.83 | % |
| Noninterest      Bearing Liabilities                                                                                                              |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commonwealth      of Kentucky deposits                                                                                                            |   |           | 34,144         |   |     |   |   |   |   |   |   |   |   |   | 32,324 |   |   |   |   |   |   |   |   |   |
| Other      demand deposits                                                                                                                        |   |           | 176,388        |   |     |   |   |   |   |   |   |   |   |   | 175,827 |   |   |   |   |   |   |   |   |   |
| Other      liabilities                                                                                                                            |   |           | 29,186         |   |     |   |   |   |   |   |   |   |   |   | 23,240 |   |   |   |   |   |   |   |   |   |
| Total      liabilities                                                                                                                            |   |           | 1,945,214      |   |     |   |   |   |   |   |   |   |   |   | 1,667,600 |   |   |   |   |   |   |   |   |   |
| Shareholders’      equity                                                                                                                   |   |           | 166,539        |   |     |   |   |   |   |   |   |   |   |   | 174,968 |   |   |   |   |   |   |   |   |   |
| Total      liabilities and shareholders’ equity                                                                                             |   | $              | 2,111,753      |   |     |   |   |   |   |   |   |   |   | $ | 1,842,568 |   |   |   |   |   |   |   |   |   |
| Net      interest income                                                                                                                          |   |           |           |   |     |   | 15,252 |   |   |   |   |   |   |   |   |   |   |   | 15,195 |   |   |   |   |   |
| TE      basis adjustment                                                                                                                          |   |           |           |   |     |   | (478 | ) |   |   |   |   |   |   |   |   |   |   | (573 | ) |   |   |   |   |
| Net      interest income                                                                                                                          |   |           |           |   |     | $      | 14,774 |   |   |   |   |   |   |   |   |   |   | $ | 14,622 |   |   |   |   |   |
| Net      interest spread                                                                                                                          |   |           |           |   |     |   |   |   |   |   | 3.03 | % |   |   |   |   |   |   |   |   |   |   | 3.31 | % |
| Impact      of noninterest bearing sources of funds                                                                                               |   |           |           |   |     |   |   |   |   |   | .24 |   |   |   |   |   |   |   |   |   |   |   | .42 |   |
| Net      interest margin                                                                                                                          |   |           |           |   |     |   |   |   |   |   | 3.27 | % |   |   |   |   |   |   |   |   |   |   | 3.73 | % |

----

| (In      thousands)                                                                                                  |   | Variance |      |          | Variance      Attributed to |   |
|----------------------------------------------------------------------------------------------------------------------|--------|----------|-----------|---------------|-----------------------------|--------|
| Quarter      Ended September 30,                                                                                     |   |     | 2008/2007 | 1             |                        | Volume |   |   | Rate |   |
| Interest      Income                                                                                                 |   |     |      |          |                        |   |   |   |   |   |
| Taxable      investment securities                                                                                   |   | $        | 2,690     |          |                        | $      | 2,546 |   |   | $ | 144 |   |
| Nontaxable      investment securities2                                                                               |   |     | (31       | )   |                        |   | (46 | )   |   |   | 15 |   |
| Time      deposits with banks, federal funds sold and securities purchased under      agreements to resell           |   |     | (350      | )   |                        |   | (13 | )   |   |   | (337 | )   |
| Loans2                                                                                                               |   |     | (3,039    | )   |                        |   | 4,935 |   |   |   | (7,974 | )   |
| Total      interest income                                                                                           |   |     | (730      | )   |                        |   | 7,422 |   |   |   | (8,152 | )   |
| Interest      Expense                                                                                                |   |     |      |          |                        |   |   |   |   |   |   |   |
| Interest      bearing demand deposits                                                                                |   |     | (535      | )   |                        |   | (10 | )   |   |   | (525 | )   |
| Savings      deposits                                                                                                |   |     | (434      | )   |                        |   | 839 |   |   |   | (1,273 | )   |
| Time      deposits                                                                                                   |   |     | (1,427    | )   |                        |   | 1,283 |   |   |   | (2,710 | )   |
| Federal      funds purchased and other short-term borrowings                                                         |   |     | (542      | )   |                        |   | (11 | )   |   |   | (531 | )   |
| Securities      sold under agreements to repurchase and     other      long-term borrowings |   |     | 2,151     |          |                        |   | 3,992 |   |   |   | (1,841 | )   |
| Total      interest expense                                                                                          |   |     | (787      | )   |                        |   | 6,093 |   |   |   | (6,880 | )   |
| Net      interest income                                                                                             |   | $        | 57        |          |                        | $      | 1,329 |   |   | $ | (1,272 | )  |
| Percentage      change                                                                                               |   |     | 100.0     | %             |                        |   | 2,331.6 | % |   |   | (2,231.6 | )% |

----

|   | § | The      $1.43 decrease in per share earnings for the nine-month period ended      September 30, 2008 compared to the same period for 2007 is due mainly to      the impact of the $14.0 million or $1.33 per share OTTI charge related to      the GSE’s and a higher provision for loan losses of $2.9      million. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | § | Net      income for the current nine months was $12.2 million or $1.65 per share      excluding the OTTI charge, a decline of $1.5 million or $.10 per share      compared to the same period a year earlier impacted primarily by the $2.9      million increase in the provision for loan  losses. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Net      interest income increased $1.3 million or 3.0%, driven by the Company’s      leverage transaction that occurred during the fourth quarter of      2007. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Excluding      investment securities related transactions, noninterest income increased      $196 thousand or 1.1%. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | § | Noninterest      expenses increased $648 thousand or 1.5% driven by higher net expenses      related to properties acquired through  foreclosure. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Income      tax expense decreased $4.2 million due mainly to the OTTI charge. The      effective income tax rate declined to 7.2% compared to 24.1% a year      earlier. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | ROA      and ROE was .15% and 1.87%, respectively compared to .99% and 10.26% for      the previous-year third quarter. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | § | Net      interest spread and margin for the current quarter was 3.06% and 3.33%,      respectively compared to 3.29% and 3.73% a year earlier. The 2007 balance      sheet leverage transaction negatively impacted net interest margin by 25      basis points in the current ninemonths. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Nine      Months Ended September 30,                                                                                                              |   | 2008           |           |   | 2007     |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|----------------|--------|----------|--------|
|  (In      thousands)                                                                                                                         |   | AverageBalance |           |   | Interest |   |   | AverageRate |   |   | AverageBalance |   |   | Interest |   |   | AverageRate |   |
| Earning      Assets                                                                                                                               |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities                                                                                                                        |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                                           |   | $              | 425,650        |   |     | $      | 17,242 |   |   |   | 5.41 | % |   | $ | 226,292 |   |   | $ | 8,242 |   |   |   | 4.87 | % |
| Nontaxable1                                                                                                                                       |   |           | 87,747         |   |     |   | 3,520 |   |   |   | 5.36 |   |   |   | 88,838 |   |   |   | 3,611 |   |   |   | 5.43 |   |
| Time      deposits with banks, federal funds sold and securities purchased under      agreements to resell                                        |   |           | 57,102         |   |     |   | 1,049 |   |   |   | 2.45 |   |   |   | 68,388 |   |   |   | 2,484 |   |   |   | 4.86 |   |
| Loans1,2,3                                                                                                                                        |   |           | 1,300,659      |   |     |   | 66,904 |   |   |   | 6.87 |   |   |   | 1,240,029 |   |   |   | 71,810 |   |   |   | 7.74 |   |
| Total      earning assets                                                                                                                         |   |           | 1,871,158      |   |     | $      | 88,715 |   |   |   | 6.33 | % |   |   | 1,623,547 |   |   | $ | 86,147 |   |   |   | 7.09 | % |
| Allowance      for loan losses                                                                                                                    |   |           | (14,518        | )      |     |   |   |   |   |   |   |   |   |   | (11,511 | ) |   |   |   |   |   |   |   |   |
| Total      earning assets, net of allowance for loan losses                                                                                       |   |           | 1,856,640      |   |     |   |   |   |   |   |   |   |   |   | 1,612,036 |   |   |   |   |   |   |   |   |   |
| Nonearning      Assets                                                                                                                            |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                                                                                      |   |           | 76,856         |   |     |   |   |   |   |   |   |   |   |   | 80,020 |   |   |   |   |   |   |   |   |   |
| Premises      and equipment, net                                                                                                                  |   |           | 40,327         |   |     |   |   |   |   |   |   |   |   |   | 38,939 |   |   |   |   |   |   |   |   |   |
| Other      assets                                                                                                                                 |   |           | 154,134        |   |     |   |   |   |   |   |   |   |   |   | 113,833 |   |   |   |   |   |   |   |   |   |
| Total      assets                                                                                                                                 |   | $              | 2,127,957      |   |     |   |   |   |   |   |   |   |   | $ | 1,844,828 |   |   |   |   |   |   |   |   |   |
| Interest      Bearing Liabilities                                                                                                                 |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                                                          |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      bearing demand                                                                                                                      |   | $              | 260,393        |   |     | $      | 1,520 |   |   |   | .78 | % |   | $ | 258,164 |   |   | $ | 2,832 |   |   |   | 1.47 | % |
| Savings                                                                                                                                           |   |           | 264,622        |   |     |   | 2,803 |   |   |   | 1.41 |   |   |   | 243,572 |   |   |   | 4,117 |   |   |   | 2.26 |   |
| Time                                                                                                                                              |   |           | 778,160        |   |     |   | 25,468 |   |   |   | 4.37 |   |   |   | 742,674 |   |   |   | 26,734 |   |   |   | 4.81 |   |
| Federal      funds purchased and other short-term borrowings                                                                                      |   |           | 84,791         |   |     |   | 1,606 |   |   |   | 2.53 |   |   |   | 99,115 |   |   |   | 3,494 |   |   |   | 4.71 |   |
| Securities      sold under agreements to     repurchase      and other long-term     borrowings |   |           |   328,716 |   |     |   |   10,654 |   |   |   |   4.33 |   |   |   |   93,673 |   |   |   |   3,663 |   |   |   |   5.23 |   |
| Total      interest bearing liabilities                                                                                                           |   |           | 1,716,682      |   |     | $      | 42,051 |   |   |   | 3.27 | % |   |   | 1,437,198 |   |   | $ | 40,840 |   |   |   | 3.80 | % |
| Noninterest      Bearing Liabilities                                                                                                              |   |           |           |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commonwealth      of Kentucky deposits                                                                                                            |   |           | 37,811         |   |     |   |   |   |   |   |   |   |   |   | 37,889 |   |   |   |   |   |   |   |   |   |
| Other      demand deposits                                                                                                                        |   |           | 175,771        |   |     |   |   |   |   |   |   |   |   |   | 175,562 |   |   |   |   |   |   |   |   |   |
| Other      liabilities                                                                                                                            |   |           | 27,255         |   |     |   |   |   |   |   |   |   |   |   | 15,859 |   |   |   |   |   |   |   |   |   |
| Total      liabilities                                                                                                                            |   |           | 1,957,519      |   |     |   |   |   |   |   |   |   |   |   | 1,666,508 |   |   |   |   |   |   |   |   |   |
| Shareholders’      equity                                                                                                                   |   |           | 170,438        |   |     |   |   |   |   |   |   |   |   |   | 178,320 |   |   |   |   |   |   |   |   |   |
| Total      liabilities and shareholders’ equity                                                                                             |   | $              | 2,127,957      |   |     |   |   |   |   |   |   |   |   | $ | 1,844,828 |   |   |   |   |   |   |   |   |   |
| Net      interest income                                                                                                                          |   |           |           |   |     |   | 46,664 |   |   |   |   |   |   |   |   |   |   |   | 45,307 |   |   |   |   |   |
| TE      basis adjustment                                                                                                                          |   |           |           |   |     |   | (1,784 | ) |   |   |   |   |   |   |   |   |   |   | (1,740 | ) |   |   |   |   |
| Net      interest income                                                                                                                          |   |           |           |   |     | $      | 44,880 |   |   |   |   |   |   |   |   |   |   | $ | 43,567 |   |   |   |   |   |
| Net      interest spread                                                                                                                          |   |           |           |   |     |   |   |   |   |   | 3.06 | % |   |   |   |   |   |   |   |   |   |   | 3.29 | % |
| Impact      of noninterest bearing sources of funds                                                                                               |   |           |           |   |     |   |   |   |   |   | .27 |   |   |   |   |   |   |   |   |   |   |   | .44 |   |
| Net      interest margin                                                                                                                          |   |           |           |   |     |   |   |   |   |   | 3.33 | % |   |   |   |   |   |   |   |   |   |   | 3.73 | % |

----

| (In      thousands)                                                                                        |   | Variance |      |          | Variance      Attributed to |   |
|------------------------------------------------------------------------------------------------------------|--------|----------|-----------|---------------|-----------------------------|--------|
| Nine      Months Ended September 30,                                                                       |   |     | 2008/2007 | 1             |                        | Volume |   |   | Rate |   |
| Interest      Income                                                                                       |   |     |      |          |                        |   |   |   |   |   |
| Taxable      investment securities                                                                         |   | $        | 9,001     |          |                        | $      | 7,995 |   |   | $ | 1,006 |   |
| Nontaxable      investment securities2                                                                     |   |     | (91       | )   |                        |   | (44 | )   |   |   | (47 | )   |
| Time      deposits with banks, federal funds sold and securities purchased under      agreements to resell |   |     | (1,435    | )   |                        |   | (358 | )   |   |   | (1,077 | )   |
| Loans2                                                                                                     |   |     | (4,906    | )   |                        |   | 5,053 |   |   |   | (9,959 | )   |
| Total      interest income                                                                                 |   |     | 2,569     |          |                        |   | 12,646 |   |   |   | (10,077 | )   |
| Interest      Expense                                                                                      |   |     |      |          |                        |   |   |   |   |   |   |   |
| Interest      bearing demand deposits                                                                      |   |     | (1,312    | )   |                        |   | 41 |   |   |   | (1,353 | )   |
| Savings      deposits                                                                                      |   |     | (1,314    | )   |                        |   | 528 |   |   |   | (1,842 | )   |
| Time      deposits                                                                                         |   |     | (1,266    | )   |                        |   | 1,808 |   |   |   | (3,074 | )   |
| Federal      funds purchased and other short-term borrowings                                               |   |     | (1,888    | )   |                        |   | (449 | )   |   |   | (1,439 | )   |
| Securities      sold under agreements to repurchase and   other      long-term borrowings   |   |     | 6,991     |          |                        |   | 8,120 |   |   |   | (1,129 | )   |
| Total      interest expense                                                                                |   |     | 1,211     |          |                        |   | 10,048 |   |   |   | (8,837 | )   |
| Net      interest income                                                                                   |   | $        | 1,358     |          |                        | $      | 2,598 |   |   | $ | (1,240 | )   |
| Percentage      change                                                                                     |   |     | 100.0     | %             |                        |   | 191.3 | % |   |   | (91.3 | )% |

----

----

----

----

|                                                                 |   | September      30, 2008 |      |   | December      31, 2007 |   |
|----------------------------------------------------------------------|--------|-------------------------|-----------|--------|------------------------|--------|
| (Dollars      in thousands)                                          |   | Amount                  |      |   | %                      |   |   | Amount |   |   | % |   |
| Commercial,      financial, and agriculture                          |   | $                       | 147,632   |   |                   |   | 11.3 | % |   | $ | 154,015 |   |   |   | 11.9 | % |
| Real      estate - construction                                      |   |                    | 247,005   |   |                   |   | 19.0 |   |   |   | 254,788 |   |   |   | 19.7 |   |
| Real      estate mortgage - residential                              |   |                    | 439,571   |   |                   |   | 33.7 |   |   |   | 405,992 |   |   |   | 31.5 |   |
| Real      estate mortgage - farmland and other commercialenterprises |   |                    | 394,355   |   |                   |   | 30.3 |   |   |   | 394,900 |   |   |   | 30.6 |   |
| Installment                                                          |   |                    | 46,914    |   |                   |   | 3.6 |   |   |   | 52,028 |   |   |   | 4.0 |   |
| Lease      financing                                                 |   |                    | 27,942    |   |                   |   | 2.1 |   |   |   | 30,262 |   |   |   | 2.3 |   |
| Total                                                                |   | $                       | 1,303,419 |   |                   |   | 100.0 | % |   | $ | 1,291,985 |   |   |   | 100.0 | % |

| (In      thousands)                              |   | September      30, 2008 |   |   | June      30,2008 |   |   | Change |   |   | %      |   |   | September      30,2008 |   |   | December      31,2007 |   |   | Change |   |   | %      |   |
|--------------------------------------------------|--------|------------------------------|--------|--------|-------------------|--------|--------|--------|--------|--------|--------|--------|--------|------------------------|--------|--------|-----------------------|--------|--------|--------|--------|--------|--------|--------|
| Nonaccrual                                       |   | $                            | 15,780 |   |              | $      | 19,479 |   |   | $      | (3,699 | )      |   |                   | (19.0  | )%     |                  | $      | 15,780 |   |   | $      | 18,073 |   |   | $ | (2,293 | ) |   |   | (12.7 | )% |
| Past      due 90 days or more and still accruing |   |                         | 8,204  |   |              |   | 4,482  |   |   |   | 3,722  |   |   |                   | 83.1   | %      |                  |   | 8,204  |   |   |   | 2,977  |   |   |   | 5,227 |   |   |   | 175.6 | % |
| Total      nonperforming loans                   |   | $                            | 23,984 |   |              | $      | 23,961 |   |   | $      | 23     |   |   |                   | 0.1    | %      |                  | $      | 23,984 |   |   | $      | 21,050 |   |   | $ | 2,934 |   |   |   | 13.9 | % |

----

|                     |   | End      of Period     |      |   | Average                     |   |
|--------------------------|--------|------------------------|-----------|--------|-----------------------------|--------|
| (In      thousands)      |   | September      30,2008 |      |   | December      31, 2007 |   |   | Difference |   |   | September      30, 2008 |   |   | December      31, 2007 |   |   | Difference |   |
| Noninterest      Bearing |   |                   |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commonwealth             |   | $                      | 65,862    |   |                        | $      | 15,367 |   |   | $ | 50,495 |   |   | $ | 37,811 |   |   | $ | 37,119 |   |   | $ | 692 |   |
| Other                    |   |                   | 178,454   |   |                        |   | 177,065 |   |   |   | 1,389 |   |   |   | 175,771 |   |   |   | 177,304 |   |   |   | (1,533 | ) |
| Total                    |   | $                      | 244,316   |   |                        | $      | 192,432 |   |   | $ | 51,884 |   |   | $ | 213,582 |   |   | $ | 214,423 |   |   | $ | (841 | ) |
|                     |   |                   |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Bearing    |   |                   |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand                   |   | $                      | 233,552   |   |                        | $      | 261,642 |   |   | $ | (28,090 | ) |   | $ | 260,393 |   |   | $ | 258,992 |   |   | $ | 1,401 |   |
| Savings                  |   |                   | 261,342   |   |                        |   | 250,002 |   |   |   | 11,340 |   |   |   | 264,622 |   |   |   | 244,299 |   |   |   | 20,323 |   |
| Time                     |   |                   | 808,266   |   |                        |   | 770,021 |   |   |   | 38,245 |   |   |   | 778,160 |   |   |   | 748,939 |   |   |   | 29,221 |   |
| Total                    |   | $                      | 1,303,160 |   |                        | $      | 1,281,665 |   |   | $ |  21,495 |   |   | $ | 1,303,175 |   |   | $ | 1,252,230 |   |   | $ | 50,945 |   |
|                     |   |                   |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Deposits      |   | $                      | 1,547,476 |   |                        | $      | 1,474,097 |   |   | $ | 73,379 |   |   | $ | 1,516,757 |   |   | $ | 1,466,653 |   |   | $ | 50,104 |   |

----

----

|                   |   | Farmers      Capital  |   |   | Regulatory |   |
|------------------------|--------|-----------------------|--------|--------|------------|--------|
|                   |   | Bank      Corporation |   |   | Minimum    |   |
| Tier      1 risk based |   |                  | 11.11  | %      |       |   | 4.00 | % |
| Total      risk based  |   |                  | 12.24  | %      |       |   | 8.00 | % |
| Leverage               |   |                  | 7.48   | %      |       |   | 4.00 | % |

Item 3.  Quantitative and Qualitative DisclosuresAbout Market Risk

----

Item 4.  Controls andProcedures

Item 1.  Legal Proceedings

Item 2.  Unregistered Sales of Equity Securities andUse of Proceeds

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). |
|             |   |

----

| 4.1    | Junior      Subordinated Indenture, dated as of July 21, 2005, between Farmers Capital      Bank Corporation and Wilmington Trust Company, as Trustee, relating to      unsecured junior subordinated deferrable interest notes that mature in      2035.*                                                                                                                                                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.2    | Amended      and Restated Trust Agreement, dated as of July 21, 2005, among Farmers      Capital Bank Corporation, as Depositor, Wilmington Trust Company, as      Property and Delaware Trustee, the Administrative Trustees (as named      therein), and the Holders (as defined therein).*                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.3    | Guarantee      Agreement, dated as of July 21, 2005, between Farmers Capital Bank      Corporation, as Guarantor, and Wilmington Trust Company, as Guarantee      Trustee.*                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.4    | Junior      Subordinated Indenture, dated as of July 26, 2005, between Farmers Capital      Bank Corporation and Wilmington Trust Company, as Trustee, relating to      unsecured junior subordinated deferrable interest notes that mature in      2035.*                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.5    | Amended      and Restated Trust Agreement, dated as of July 26, 2005, among Farmers      Capital Bank Corporation, as Depositor, Wilmington Trust Company, as      Property and Delaware Trustee, the Administrative Trustees (as named      therein), and the Holders (as defined therein).*                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.6    | Guarantee      Agreement, dated as of July 26, 2005, between Farmers Capital Bank      Corporation, as Guarantor, and Wilmington Trust Company, as Guarantee      Trustee.*                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.7    | Indenture,      dated as of August 14, 2007 between Farmers Capital Bank Corporation, as      Issuer, and Wilmington Trust Company, as Trustee, relating to      fixed/floating rate junior subordinated debt due 2037.*                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.8    | Amended      and Restated Declaration of Trust, dated as of August 14, 2007, by Farmers      Capital Bank Corporation, as Sponsor, Wilmington Trust Company, as      Delaware and Institutional Trustee, the Administrative Trustees (as named      therein), and the Holders (as defined therein).*                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.9    | Guarantee      Agreement, dated as of August 14, 2007, between Farmers Capital Bank      Corporation, as Guarantor, and Wilmington Trust Company, as Guarantee      Trustee.*                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.1   | Agreement      and Plan of Merger, Dated July 1, 2005, as Amended, by and among Citizens      Bancorp, Inc., Citizens Acquisition Subsidiary Corp, and Farmers Capital      Bank Corporation incorporated      by reference to Appendix A of Registration Statement filed on Form S-4 on      October 11, 2005).                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.2   | Amended      and Restated Plan of Merger of Citizens National Bancshares, Inc. with and      into FCBC Acquisition Subsidiary, LLC (incorporated by reference to      Appendix A of Proxy Statement for Special Meeting of Shareholders of      Citizens National Bancshares, Inc. and Prospectus in connection with an      offer of up to 600,000 shares of its common stock of Farmers Capital Bank      Corporation filed on Form 424B3 on August 7, 2006). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.3   | Stock Purchase Agreement Dated June 1, 2006 by and      among Farmers Capital Bank Corporation, Kentucky Banking Centers, Inc. and      Citizens First Corporation.                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 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                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

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

----

SIGNATURES

| Date:  | November      7, 2008  |   |  /s/ G. Anthony      Busseni            |
|--------|-----------------------------|--------|---------------------------------------------------|
|   |                        |   | G.      Anthony Busseni,                          |
|   |                        |   | President      and CEO                            |
|   |                        |   | (Principal      Executive Officer)                |
|   |                        |   |                                              |
| Date:  |  11-7-08               |   |        /s/ Doug Carpenter                    |
|   |                        |   | C.      Douglas Carpenter,                        |
|   |                        |   | Senior      Vice President, Secretary, and CFO    |
|   |                        |   | (Principal      Financial and Accounting Officer) |

----